Energy Conservation Program: Energy Conservation Standards for Commercial Refrigerators, Freezers, and Refrigerator-Freezers, 70196-70307 [2023-21987]

Download as PDF 70196 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules DEPARTMENT OF ENERGY 10 CFR Part 431 [EERE–2017–BT–STD–0007] RIN 1904–AD82 Energy Conservation Program: Energy Conservation Standards for Commercial Refrigerators, Freezers, and Refrigerator-Freezers Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking and announcement of public meeting. AGENCY: The Energy Policy and Conservation Act, as amended (‘‘EPCA’’), prescribes energy conservation standards for various consumer equipment and certain commercial and industrial equipment, including commercial refrigerators, freezers, and refrigerator-freezers (‘‘commercial refrigeration equipment’’ or ‘‘CRE’’). EPCA also requires the U.S. Department of Energy (‘‘DOE’’ ‘‘the Department’’) to periodically determine whether more stringent standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking (‘‘NOPR’’), DOE proposes new and amended energy conservation standards for CRE, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results. DATES: Comments: DOE will accept comments, data, and information regarding this NOPR no later than December 11, 2023. Comments regarding the likely competitive impact of the proposed standard should be sent to the Department of Justice contact listed in the ADDRESSES section on or before November 9, 2023. Meeting: DOE will hold a public meeting on Tuesday, November 7th, 2023, from 10 a.m. to 4 p.m., in Washington, DC. This meeting will also be broadcast as a webinar. ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 6E–069, 1000 Independence Avenue SW, Washington, DC 20585. See section VII of this document, ‘‘Public Participation,’’ for further details, including procedures for attending the in-person meeting, webinar registration information, participant instructions, and information about the capabilities available to webinar participants. ddrumheller on DSK120RN23PROD with PROPOSALS2 SUMMARY: VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 Interested persons are encouraged to submit comments using the Federal Rulemaking Portal at www.regulations.gov under docket number EERE–2017–BT–STD–0007. Follow the instructions for submitting comments. Alternatively, interested persons may submit comments, identified by docket number EERE– 2017–BT–STD–0007, by any of the following methods: (1) Email: CRE2017STD0007@ ee.doe.gov. Include the docket number EERE–2017–BT–STD–0007 in the subject line of the message. (2) Postal Mail: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, Mailstop EE–5B, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 287–1445. If possible, please submit all items on a compact disc (‘‘CD’’), in which case it is not necessary to include printed copies. (3) Hand Delivery/Courier: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, 950 L’Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287–1445. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies. No telefacsimiles (‘‘faxes’’) will be accepted. For detailed instructions on submitting comments and additional information on this process, see section VII of this document. Docket: The docket for this activity, which includes Federal Register notices, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure. The docket web page can be found at www.regulations.gov/docket/EERE2017-BT-STD-0007. The docket web page contains instructions on how to access all documents, including public comments, in the docket. See section VII of this document for information on how to submit comments through www.regulations.gov. EPCA requires the Attorney General to provide DOE a written determination of whether the proposed standard is likely to lessen competition. The U.S. Department of Justice Antitrust Division invites input from market participants and other interested persons with views on the likely competitive impact of the proposed standards. Interested persons PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 may contact the Division at energy.standards@usdoj.gov on or before the date specified in the DATES section. Please indicate in the ‘‘Subject’’ line of your email the title and Docket Number of this proposed rulemaking. FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE–5B, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 586– 9870. Email: ApplianceStandards Questions@ee.doe.gov. Ms. Kristin Koernig, U.S. Department of Energy, Office of the General Counsel, GC–33, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 586–3593. Email: Kristin.Koernig@hq.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Synopsis of the Proposed Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits and Costs D. Conclusion II. Introduction A. Authority B. Background 1. Current Standards 2. History of Standards Rulemaking for CRE C. Deviation From Process Rule 1. Framework Document 2. Public Comment Period 3. Amended Test Procedures III. General Discussion A. General Comments B. Scope of Coverage C. Test Procedure D. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels E. Energy Savings 1. Determination of Savings 2. Significance of Savings F. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Savings in Operating Costs Compared To Increase in Price (LCC and PBP) c. Energy Savings d. Lessening of Utility or Performance of Equipment e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors 2. Rebuttable Presumption IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Equipment Classes and Definitions a. Current Equipment Classes b. New Definitions c. Equipment Class Modifications 2. CRE Market 3. Technology Options a. Compressors E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules b. R–290 c. Insulation d. Doors e. Evaporators and Condensers f. Fan Motors g. Defrost B. Screening Analysis 1. Screened-Out Technologies a. Increased Insulation Thickness b. Vacuum-Insulated Panels c. Linear Compressors d. Air Curtain Design 2. Remaining Technologies C. Engineering Analysis 1. Efficiency Analysis a. Baseline Energy Use b. Higher Efficiency Levels c. Engineering Spreadsheet Model d. Industry Trade Association Survey 2. Cost Analysis 3. Cost-Efficiency Results D. Markups Analysis E. Energy Use Analysis F. Life-Cycle Cost and Payback Period Analysis 1. Equipment Cost 2. Installation Cost 3. Annual Energy Consumption 4. Energy Prices 5. Repair and Maintenance Costs 6. Equipment Lifetime 7. Residual Value 8. Discount Rates 9. Energy Efficiency Distribution in the NoNew-Standards Case 10. Payback Period Analysis G. Shipments Analysis H. National Impact Analysis 1. Equipment Efficiency Trends 2. National Energy Savings 3. Net Present Value Analysis I. Consumer Subgroup Analysis J. Manufacturer Impact Analysis 1. Overview 2. Government Regulatory Impact Model and Key Inputs a. Manufacturer Production Costs b. Shipments Projections c. Product and Capital Conversion Costs d. Manufacturer Markup Scenarios 3. Manufacturer Interviews a. Changes to the Cabinet Structure b. Supply Chain Concerns 4. Discussion of MIA Comments K. Emissions Analysis 1. Air Quality Regulations Incorporated in DOE’s Analysis L. Monetizing Emissions Impacts 1. Monetization of Greenhouse Gas Emissions a. Social Cost of Carbon b. Social Cost of Methane and Nitrous Oxide 2. Monetization of Other Emissions Impacts M. Utility Impact Analysis N. Employment Impact Analysis V. Analytical Results and Conclusions A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers a. Life-Cycle Cost and Payback Period b. Consumer Subgroup Analysis c. Rebuttable Presumption Payback VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 2. Economic Impacts on Manufacturers a. Industry Cash Flow Analysis Results b. Direct Impacts on Employment c. Impacts on Manufacturing Capacity d. Impacts on Subgroups of Manufacturers e. Cumulative Regulatory Burden 3. National Impact Analysis a. Significance of Energy Savings b. Net Present Value of Consumer Costs and Benefits c. Indirect Impacts on Employment 4. Impact on Utility or Performance of Equipment 5. Impact of Any Lessening of Competition 6. Need of the Nation To Conserve Energy 7. Other Factors 8. Summary of Economic Impacts C. Conclusion 1. Benefits and Burdens of TSLs Considered for CRE Standards 2. Annualized Benefits and Costs of the Proposed Standards D. Reporting, Certification, and Sampling Plan VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866, 13563, and 14094 B. Review Under the Regulatory Flexibility Act 1. Description of Reasons Why Action Is Being Considered 2. Objectives of, and Legal Basis for, Rule 3. Description on Estimated Number of Small Entities Regulated 4. Description and Estimate of Compliance Requirements Including Differences in Cost, if Any, for Different Groups of Small Entities 5. Duplication, Overlap, and Conflict With Other Rules and Regulations 6. Significant Alternatives to the Rule C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Information Quality VII. Public Participation A. Participation in the Public Meeting and Webinar B. Procedure for Submitting Prepared General Statements for Distribution C. Conduct of the Public Meeting D. Submission of Comments E. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary I. Synopsis of the Proposed Rule The Energy Policy and Conservation Act, Public Law 94–163, as amended (‘‘EPCA’’),1 authorizes DOE to regulate 1 All references to EPCA in this document refer to the statute as amended through the Energy Act of 2020, Public Law 116–260 (December 27, 2020), which reflect the last statutory amendments that impact parts A and A–1 of EPCA. PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 70197 the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291– 6317) Title III, part C of EPCA established the Energy Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311–6317) Such equipment includes CRE, the subject of this proposed rulemaking. Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B)) EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)–(4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)). EPCA also provides that not later than 6 years after issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a notice of proposed rulemaking including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) In accordance with these and other statutory provisions discussed in this document, DOE analyzed the benefits and burdens of six trial standard levels (‘‘TSLs’’) for CRE. The TSLs and their associated benefits and burdens are discussed in detail in sections V.A through V.C of this document. As discussed in section V.C, DOE has tentatively determined that TSL 5 represents the maximum improvement in energy efficiency that is technologically feasible and economically justified and to establish new energy conservation standards for covered equipment not yet subject to energy conservation standards. The proposed standards, which are expressed in maximum daily energy consumption (‘‘MDEC’’), are shown in table I.1. These proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is (1) 3 years after the date on which the final new and amended standards are published or (2) if the Secretary determines, by rule, that 3 years is inadequate, not later than 5 years after the date on which the final E:\FR\FM\10OCP2.SGM 10OCP2 70198 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules rule is published. (42 U.S.C. 6313(c)(6)(C)). DOE notes that the U.S. Environmental Protection Agency (‘‘EPA’’) proposed refrigerant restrictions pursuant to the American Innovation and Manufacturing Act (‘‘AIM Act’’) 2 affecting CRE in a NOPR published on December 15, 2022 (‘‘December 2022 EPA NOPR’’). 87 FR 76738. The proposal would prohibit manufacture or import of such CRE starting January 1, 2025, and would ban sale, distribution, purchase, receipt, or export of such CRE starting January 1, 2026. Id. at 87 FR 76809. See section IV.C.1.a of this document for more details. DOE understands that it would be beneficial to CRE equipment manufacturers to align the compliance date of any DOE amended or established standards as closely as possible with the refrigerant prohibition dates proposed by the December 2022 EPA NOPR. Therefore, DOE is proposing that the proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is 3 years after the date on which the final new and amended standards are published. TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR CRE ddrumheller on DSK120RN23PROD with PROPOSALS2 Equipment class VOP.RC.H ........................... VOP.RC.M ........................... VOP.RC.L ............................ VOP.RC.I ............................. SVO.RC.H ........................... SVO.RC.M ........................... SVO.RC.L ............................ SVO.RC.I ............................. HZO.RC.H ........................... HZO.RC.M ........................... HZO.RC.L ............................ HZO.RC.I ............................. VCT.RC.H ........................... VCT.RC.M ........................... VCT.RC.L ............................ VCT.RC.I ............................. HCT.RC.M ........................... HCT.RC.L ............................ HCT.RC.I ............................. VCS.RC.H ........................... VCS.RC.M ........................... VCS.RC.L ............................ VCS.RC.I ............................. HCS.RC.M ........................... HCS.RC.L ............................ HCS.RC.I ............................. SOC.RC.H ........................... Maximum daily energy consumption (kWh/day) 0.31 × TDA 0.56 × TDA 2.04 × TDA 2.59 × TDA 0.32 × TDA 0.58 × TDA 2.04 × TDA 2.59 × TDA 0.19 × TDA 0.34 × TDA 0.54 × TDA 0.69 × TDA 0.07 × TDA 0.134 × TDA 0.47 × TDA 0.56 × TDA 0.16 × TDA 0.34 × TDA 0.38 × TDA 0.06 × V 0.1 × V 0.21 × V 0.25 × V 0.1 × V 0.21 × V 0.25 × V 0.22 × TDA + + + + + + + + + + + + + + + + + + + + + + + + + + + 1.99 3.57 6.36 8.08 1.55 2.79 6.36 8.08 1.56 2.81 6.81 8.64 0.97 1.74 2.51 2.97 0.13 0.26 0.29 0.14 0.26 0.54 0.63 0.26 0.54 0.63 0.05 2 Under subsection (i) of the AIM Act, entitled ‘‘Technology Transitions,’’ the EPA may by rule restrict the use of hydrofluorocarbons (‘‘HFCs’’) in sectors or subsectors where they are used. A person or entity may also petition EPA to promulgate such a rule. ‘‘H.R.133—116th Congress (2019–2020): Consolidated Appropriations Act, 2021.’’ Congress.gov, Library of Congress, December 27, VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR CRE— Continued Maximum daily energy consumption (kWh/day) Equipment class SOC.RC.M .......................... SOC.RC.L ........................... SOC.RC.I ............................ CB.RC.M ............................. CB.RC.L .............................. VOP.SC.H ........................... VOP.SC.M ........................... VOP.SC.L ............................ VOP.SC.I ............................. SVO.SC.H ........................... SVO.SC.M ........................... SVO.SC.L ............................ SVO.SC.I ............................. HZO.SC.H ........................... HZO.SC.M ........................... HZO.SC.L ............................ HZO.SC.I ............................. VCT.SC.H ............................ VCT.SC.M ........................... VCT.SC.L ............................ VCT.SC.I ............................. HCT.SC.M ........................... HCT.SC.L ............................ HCT.SC.I ............................. VCS.SC.H ........................... VCS.SC.M ........................... VCS.SC.L ............................ VCS.SC.I ............................. HCS.SC.M ........................... HCS.SC.L ............................ HCS.SC.I ............................. SOC.SC.H ........................... SOC.SC.M ........................... SOC.SC.L ............................ SOC.SC.I ............................. CB.SC.M ............................. CB.SC.L .............................. PD.SC.M ............................. VCT.RC.M.PT ..................... VCT.SC.M.PT ...................... VCT.SC.L.PT ....................... VCS.SC.M.PT ..................... VCS.SC.L.PT ...................... VCT.RC.M.SD ..................... VCT.SC.M.SD ..................... VCT.RC.M.SDPT ................ VCT.SC.M.SDPT ................. VCT.RC.M.RI ...................... VCT.SC.M.RI ....................... VCS.SC.M.RI ...................... VCS.SC.L.RI ....................... VCT.RC.M.RT ..................... VCT.SC.M.RT ..................... VCS.SC.M.RT ..................... VCS.SC.L.RT ...................... HCS.SC.L.FA ...................... 0.39 × TDA + 0.1 0.83 × TDA + 0.2 1.04 × TDA + 0.25 0.03 × V + 0.39 0.13 × V + 1.37 0.69 × TDA + 1.94 1.25 × TDA + 3.48 3.29 × TDA + 9.15 4.18 × TDA + 11.63 0.65 × TDA + 1.77 1.18 × TDA + 3.18 3.25 × TDA + 8.78 4.13 × TDA + 11.16 0.27 × TDA + 2.06 0.48 × TDA + 3.71 1.48 × TDA + 5.5 1.97 × TDA + 7.34 0.053 × V + 0.85 0.054 × V + 0.86 0.234 × V + 2.38 0.6 × TDA + 3.2 0.06 × V + 0.37 0.08 × V + 1.23 0.34 × TDA + 0.43 0.0082 × V + 0.21 0.02 × V + 0.54 0.155 × V + 0.97 0.25 × V + 0.88 0.022 × V + 0.41 0.043 × V + 0.81 0.31 × V + 0.81 0.17 × TDA + 0.33 0.304 × TDA + 0.59 1.1 × TDA + 2.1 1.53 × TDA + 0.36 0.049 × V + 0.54 0.180 × V + 1.92 0.11 × V + 0.81 0.139 × TDA + 1.81 0.056 × V + 0.86 0.243 × V + 2.47 0.02 × V + 0.56 0.161 × V + 1.01 0.143 × TDA + 1.86 0.058 × V + 0.86 0.149 × TDA + 1.93 0.060 × V + 0.86 0.140 × TDA + 1.83 0.057 × V + 0.86 0.02 × V + 0.57 0.162 × V + 1.02 0.146 × TDA + 1.9 0.059 × V + 0.86 0.02 × V + 0.59 0.169 × V + 1.06 0.052 × V + 0.97 TABLE I.2—DESCRIPTION OF COEFFICIENTS FOR PROPOSED MAXIMUM DAILY ENERGY CONSUMPTION STANDARDS FOR CRE Unique design characteristic Pass-through Door ........................ Sliding Door ................................... Sliding and Pass-through Doors ... Roll-in Door .................................... Roll-through Door .......................... Forced Air Evaporator ................... Abbreviation PT SD SDPT RI RT FA DOE requests comments on its proposal to require that the proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is 3 years after the date on which the final new and amended standards are published. More generally, DOE requests comment on whether it would be beneficial to CRE manufacturers to align the compliance date of any DOE amended or established standards as closely as possible with the refrigerant prohibition dates proposed by the December 2022 EPA NOPR. A. Benefits and Costs to Consumers Table I.3 presents DOE’s evaluation of the economic impacts of the proposed standards—represented by TSL 5—on consumers of CRE, as measured by the average life-cycle cost (‘‘LCC’’) savings and the simple payback period (‘‘PBP’’).3 The average LCC savings are positive for all equipment classes, and the PBP is less than the average lifetime for the vast majority of CRE equipment classes,4 which is estimated to be 13.9 years (see section IV.F.7 of this document). The equipment classes are separated by equipment family, condensing unit configuration, and operating temperature. Equipment Families: VOP— Vertical Open; SVO—Semi-Vertical Open; HZO— Horizontal Open; VCT—Vertical Closed Transparent; HCT—Horizontal Closed Transparent; VCS—Vertical Closed Solid; HCS—Horizontal Closed Solid; SOC— Service Over Counter; CB—Chef Base; PD—Pull Down. Condensing Unit Configurations: RC—Remote Condensing; SC—Self Contained. Operating Temperatures: H—High Temperature; M—Medium Temperature; L—Low Temperature; I—Ice Cream Temperature. 2020, available at www.congress.gov/bill/ 116thcongress/house-bill/133. 3 The average LCC savings refer to consumers that are affected by a standard and are measured relative to the efficiency distribution in the no-newstandards case, which depicts the market in the compliance year in the absence of new or amended standards (see section IV.F.8 of this document). The PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 simple PBP, which is designed to compare specific efficiency levels, is measured relative to the baseline product (see section IV.F.9 of this document). 4 For the HZO.RC.M equipment class, the estimated PBP at TSL 5 is 13.8 years for an estimated average lifetime of approximately 13 years. E:\FR\FM\10OCP2.SGM 10OCP2 70199 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE I.3—IMPACTS OF PROPOSED ENERGY CONSERVATION STANDARDS ON CONSUMERS OF CRE Equipment class Average LCC savings (2022$) Simple payback period (years) CB.SC.L ....................................................................................................................................................... CB.SC.M ...................................................................................................................................................... HCS.SC.L .................................................................................................................................................... HCS.SC.M ................................................................................................................................................... HCT.SC.I ...................................................................................................................................................... HCT.SC.L * ................................................................................................................................................... HCT.SC.M * .................................................................................................................................................. HZO.RC.L .................................................................................................................................................... HZO.RC.M ................................................................................................................................................... HZO.SC.L .................................................................................................................................................... HZO.SC.M ................................................................................................................................................... SOC.RC.M ................................................................................................................................................... SOC.SC.M ................................................................................................................................................... SVO.RC.M ................................................................................................................................................... SVO.SC.M ................................................................................................................................................... VCS.SC.H .................................................................................................................................................... VCS.SC.I ...................................................................................................................................................... VCS.SC.L ..................................................................................................................................................... VCS.SC.M .................................................................................................................................................... VCT.RC.L ..................................................................................................................................................... VCT.RC.M .................................................................................................................................................... VCT.SC.H * .................................................................................................................................................. VCT.SC.I ...................................................................................................................................................... VCT.SC.L ..................................................................................................................................................... VCT.SC.M .................................................................................................................................................... VOP.RC.L .................................................................................................................................................... VOP.RC.M ................................................................................................................................................... VOP.SC.M ................................................................................................................................................... 566.92 44.90 7.77 84.89 55.03 .............................. .............................. 46.57 40.29 841.89 199.91 929.51 698.37 406.59 602.17 162.47 486.70 260.73 128.81 331.04 133.62 .............................. 77.46 120.34 82.53 1524.52 707.13 992.17 2.2 5.0 5.1 1.8 7.1 .............................. .............................. 13.0 13.8 2.8 5.2 3.3 5.4 7.3 4.3 3.7 3.4 3.2 4.1 6.4 10.9 .............................. 8.3 5.8 7.6 3.6 5.7 3.6 ddrumheller on DSK120RN23PROD with PROPOSALS2 * For these equipment classes, TSL 5 corresponds to efficiency level 0. DOE’s analysis of the impacts of the proposed standards on consumers is described in section IV.F of this document. document. The analytic results of the manufacturer impact analysis (‘‘MIA’’) are presented in section V.B.2 of this document. B. Impact on Manufacturers 5 The industry net present value (‘‘INPV’’) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2023–2057). Using a real discount rate of 10.0 percent, DOE estimates that the INPV for manufacturers of CRE in the case without new and amended standards is $3,286.4 million. Under the proposed standards, the change in INPV is estimated to range from ¥4.8 percent to ¥0.9 percent, which is approximately ¥$159.3 million to ¥$30.9 million. In order to bring equipment into compliance with new and amended standards, it is estimated that the industry would incur total conversion costs of $226.4 million.6 DOE’s analysis of the impacts of the proposed standards on manufacturers is described in section IV.J of this C. National Benefits and Costs DOE’s analyses indicate that the proposed energy conservation standards for CRE would save a significant amount of energy. Relative to the case without new and amended standards, the lifetime energy savings for CRE purchased in the 30-year period that begins in the anticipated year of compliance with the new and amended standards (2028–2057) amount to 3.11 quadrillion British thermal units (‘‘Btu’’), or quads.7 This represents a savings of 16.8 percent relative to the energy use of these equipment in the case without new or amended standards (referred to as the ‘‘no-new-standards case’’). The cumulative net present value (‘‘NPV’’) of total consumer benefits of the proposed standards for CRE ranges from $2.4 billion (at a 7-percent 5 All monetary values in this document are expressed in 2022 dollars. 6 Conversion costs are incurred between the publication of the final rule (modeled as 2025) and the compliance year (modeled as 2028) and are included in the change in INPV presented in this section. VerDate Sep<11>2014 22:39 Oct 06, 2023 Jkt 262001 7 The quantity refers to full-fuel-cycle (‘‘FFC’’) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.2 of this document. PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 discount rate) to $7.1 billion (at a 3percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased equipment costs for CRE purchased in 2028–2057. In addition, the proposed standards for CRE are projected to yield significant environmental benefits. DOE estimates that the proposed standards would result in cumulative emission reductions (over the same period as for energy savings) of 55.8 million metric tons (‘‘Mt’’) 8 of carbon dioxide (‘‘CO2’’), 17.1 thousand tons of sulfur dioxide (‘‘SO2’’), 104.2 thousand tons of nitrogen oxides (‘‘NOX’’), 472 thousand tons of methane (‘‘CH4’’), 0.54 thousand tons of nitrous oxide (‘‘N2O’’), and 0.12 tons of mercury (‘‘Hg’’).9 DOE estimates the value of climate benefits from a reduction in greenhouse gases (‘‘GHG’’) using four different estimates of the social cost of CO2 (‘‘SC8 A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO2 are presented in short tons. 9 DOE calculated emissions reductions relative to the no-new-standards-case, which reflects key assumptions in the Annual Energy Outlook 2023 (‘‘AEO2023’’). AEO2023 reflects, to the extent possible, laws and regulations adopted through mid-November 2022, including the Inflation Reduction Act. See section IV.K of this document for further discussion of AEO2023 assumptions that effect air pollutant emissions. E:\FR\FM\10OCP2.SGM 10OCP2 70200 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules CO2’’), the social cost of methane (‘‘SCCH4’’), and the social cost of nitrous oxide (‘‘SC-N2O’’). Together these represent the social cost of GHG (‘‘SCGHG’’). DOE used interim SC-GHG values (in terms of benefit per ton of GHG emissions avoided) developed by an Interagency Working Group on the Social Cost of Greenhouse Gases (‘‘IWG’’).10 The derivation of these values is discussed in section IV.L of this document. For presentational purposes, the climate benefits associated with the average SC-GHG at a 3-percent discount rate are estimated to be $3.04 billion. DOE does not have a single central SC-GHG point estimate and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates. DOE estimated the monetary health benefits of SO2 and NOX emissions reductions using benefit per ton estimates from the Environmental Protection Agency,11 as discussed in section IV.L of this document. DOE estimated the present value of the health benefits would be $2.32 billion using a 7-percent discount rate, and $5.94 billion using a 3-percent discount rate.12 DOE is currently only monetizing health benefits from changes in ambient fine particulate matter (PM2.5) concentrations from two precursors (SO2 and NOX), and from changes in ambient ozone from one precursor (for NOX), but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. Table I.4 summarizes the monetized benefits and costs expected to result from the proposed standards for CRE. There are other important unquantified effects, including certain unquantified climate benefits, unquantified public health benefits from the reduction of toxic air pollutants and other emissions, unquantified energy security benefits, and distributional effects, among others. TABLE I.4—SUMMARY OF MONETIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR CRE (TSL 5) Billion 2022$ 3% discount rate Consumer Operating Cost Savings ............................................................................................................................................... Climate Benefits * ........................................................................................................................................................................... Health Benefits ** ........................................................................................................................................................................... 12.8 3.04 5.94 Total Benefits † ....................................................................................................................................................................... Consumer Incremental Equipment Costs ...................................................................................................................................... 21.8 5.74 Net Benefits ............................................................................................................................................................................ Change in Producer Cashflow (INPV‡‡) ....................................................................................................................................... 16.1 (0.16)–(0.03) 7% discount rate Consumer Operating Cost Savings ............................................................................................................................................... Climate Benefits * (3% discount rate) ............................................................................................................................................ Health Benefits ** ........................................................................................................................................................................... 5.55 3.04 2.32 Total Benefits † ....................................................................................................................................................................... Consumer Incremental Equipment Costs ...................................................................................................................................... 10.9 3.17 Net Benefits ............................................................................................................................................................................ Change in Producer Cashflow (INPV‡‡) ....................................................................................................................................... 7.74 (0.16)–(0.03) ddrumheller on DSK120RN23PROD with PROPOSALS2 Note: This table presents the costs and benefits associated with CRE shipped in 2028–2057. These results include consumer, climate, and health benefits that accrue after 2057 from the equipment shipped in 2028–2057. * Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5-percent, 3-percent, and 5-percent discount rates; 95th percentile at 3-percent discount rate) (see section IV.L of this document). Together these represent the global SC-GHG. For presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3-percent discount rate are shown; however, DOE emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG. ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total and net benefits include those consumer, climate, and health benefits that can be quantified and monetized. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate. 10 To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG. (‘‘February 2021 SC–GHG TSD’’). www.whitehouse.gov/wp- VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 content/uploads/2021/02/ TechnicalSupportDocument_ SocialCostofCarbonMethaneNitrousOxide.pdf. 11 U.S. EPA. Estimating the Benefit per Ton of Reducing Directly Emitted PM2.5, PM2.5 Precursors and Ozone Precursors from 21 Sectors. Available at PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 www.epa.gov/benmap/estimating-benefit-tonreducing-pm25-precursors-21-sectors. 12 DOE estimates the economic value of these emissions reductions resulting from the considered TSLs for the purpose of complying with the requirements of Executive Order 12866. E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70201 ‡‡ Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. Change in INPV is calculated using the industry weighted average cost of capital value of 10.0 percent that is estimated in the MIA (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For commercial refrigeration equipment, those values are ¥$159 million to ¥$31 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two manufacturer markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated INPV in the above table, drawing on the MIA explained further in section IV.J of this document, to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the net benefit calculation for this proposed rule, the net benefits would range from $15.94 billion to $16.07 billion at 3-percent discount rate and would range from $7.58 billion to $7.71 billion at 7-percent discount rate. Parentheses () indicate negative values. DOE seeks comment on this approach. The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the reduced consumer operating costs, minus (2) the increase in equipment purchase prices and installation costs, plus (3) the value of climate and health benefits of emission reductions, all annualized.13 The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered equipment and are measured for the lifetime of CRE shipped in 2028–2057. The benefits associated with reduced emissions achieved as a result of the proposed standards are also calculated based on the lifetime of CRE shipped in 2028– 2057. Total benefits for both the 3percent and 7-percent cases are presented using the average GHG social costs with 3-percent discount rate. Estimates of SC-GHG values are presented for all four discount rates in section V.L of this document. Table I.5 presents the total estimated monetized benefits and costs associated with the proposed standard, expressed in terms of annualized values. The results under the primary estimate are as follows. Using a 7-percent discount rate for consumer benefits and costs and health benefits from reduced NOX and SO2 emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated cost of the standards proposed in this rule is $334.6 million per year in increased equipment costs, while the estimated annual benefits are $586.1 million in reduced equipment operating costs, $174.4 million in climate benefits, and $245.5 million in health benefits. In this case, the net benefit would amount to $671.4 million per year. Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards is $329.8 million per year in increased equipment costs, while the estimated annual benefits are $737.7 million in reduced operating costs, $174.4 million in climate benefits, and $341.3 million in health benefits. In this case, the net benefit would amount to $923.5 million per year. TABLE I.5—ANNUALIZED MONETIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR CRE (TSL 5) Million 2022$/year Primary estimate Low-net-benefits estimate High-net-benefits estimate 3% discount rate Consumer Operating Cost Savings ............................................................................................. Climate Benefits * ......................................................................................................................... Health Benefits ** ......................................................................................................................... 737.7 174.4 341.4 714.3 173.5 339.7 773.7 178.9 349.9 Total Benefits † ..................................................................................................................... Consumer Incremental Equipment Costs .................................................................................... 1253.3 329.8 1227.5 337.9 1302.8 328.3 Net Benefits .......................................................................................................................... Change in Producer Cashflow (INPV ‡‡) .................................................................................... 923.5 (17)–(3) 889.5 (17)–(3) 974.1 (17)–(3) 586.1 174.4 245.5 1006.0 334.6 671.4 569.3 173.5 244.7 987.5 341.7 645.7 613.0 178.9 250.9 1042.8 333.5 709.3 ddrumheller on DSK120RN23PROD with PROPOSALS2 7% discount rate Consumer Operating Cost Savings ............................................................................................. Climate Benefits * (3% discount rate) .......................................................................................... Health Benefits ** ......................................................................................................................... Total Benefits † ..................................................................................................................... Consumer Incremental Equipment Costs .................................................................................... Net Benefits .......................................................................................................................... 13 To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2023, the year used for discounting the NPV of total consumer costs and savings. For the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 benefits, DOE calculated a present value associated with each year’s shipments in the year in which the shipments occur (e.g., 2030), and then discounted the present value from each year to 2023. Using the PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value. E:\FR\FM\10OCP2.SGM 10OCP2 70202 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE I.5—ANNUALIZED MONETIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR CRE (TSL 5)—Continued Million 2022$/year Primary estimate Change in Producer Cashflow (INPV ‡‡) .................................................................................... (17)–(3) Low-net-benefits estimate High-net-benefits estimate (17)–(3) (17)–(3) Note: This table presents the costs and benefits associated with CRE shipped in 2028–2057. These results include benefits to consumers which accrue after 2057 from the equipment shipped in 2028–2057. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections V.F.1 and V.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. * Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG. ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate. ‡‡ Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H. DOE’s NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated using the industry weighted average cost of capital value of 10.0 percent that is estimated in the MIA (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For commercial refrigeration equipment, those values are ¥$16.65 million to ¥$3.23 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C. DOE is presenting the range of impacts to the INPV under two manufacturer markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J, to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the annualized net benefits would range from $906.8 million to $920.3 million at 3-percent discount rate and would range from $654.7 million to $668.2 million at 7-percent discount rate. Parentheses ( ) indicate negative values. DOE seeks comment on this approach. DOE’s analysis of the national impacts of the proposed standards is described in sections V.H, V.K, and V.L of this document. ddrumheller on DSK120RN23PROD with PROPOSALS2 D. Conclusion DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. Specifically, with regards to technological feasibility, design options used to achieve these standard levels are already commercially available for all equipment classes covered by this proposal. As for economic justification, DOE’s analysis shows that the benefits of the proposed standard exceed, to a great extent, the burdens of the proposed standards. Using a 7-percent discount rate for consumer benefits and costs and NOX and SO2 reduction benefits, and a 3percent discount rate case for GHG social costs, the estimated cost of the proposed standards for CRE is $334.6 million per year in increased equipment VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 costs, while the estimated annual benefits are $586.1 million in reduced equipment operating costs, $174.4 million in climate benefits and $245.5 million in health benefits. The net benefit amounts to $671.4 million per year. The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.14 For example, some covered products and equipment have substantial energy consumption occur during periods of peak energy demand. The impacts of these equipment on the energy infrastructure can be more pronounced than equipment with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a caseby-case basis. As previously mentioned, the standards are projected to result in 14 Procedures, Interpretations, and Policies for Consideration in New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Commercial/Industrial Equipment, 86 FR 70892, 70901 (Dec. 13, 2021). PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 estimated national energy savings of 3.11 quad FFC, the equivalent of the primary annual energy use of 33 million homes. The NPV of consumer benefit for these projected energy savings is $2.38 billion using a discount rate of 7 percent, and $7.10 billion using a discount rate of 3 percent. The cumulative emissions reductions associated with these energy savings are 55.8 Mt of CO2, 17.1 thousand tons of SO2, 104.2 thousand tons of NOX, 0.12 tons of Hg, 472.0 thousand tons of CH4, and 0.54 thousand tons of N2O. The estimated monetary value of the climate benefits from reduced GHG emissions (associated with the average SC-GHG at a 3-percent discount rate) is $ 3.04 billion. The estimated monetary value of the health benefits from reduced SO2 and NOX emissions is $ 2.32 billion using a 7-percent discount rate and $ 5.94 billion using a 3-percent discount rate. As such, DOE has initially determined the energy savings from the proposed standard levels are ‘‘significant’’ within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for these tentative conclusions is contained in the E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules remainder of this document and the accompanying technical support document (‘‘NOPR TSD’’).15 DOE also considered more stringent energy efficiency levels as potential standards and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the more stringent energy efficiency levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this document and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this document that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part. II. Introduction The following section briefly discusses the statutory authority underlying this proposed rule, as well as some of the relevant historical background related to the establishment of standards for CRE. ddrumheller on DSK120RN23PROD with PROPOSALS2 A. Authority EPCA authorizes DOE to regulate the energy efficiency of a number of consumer equipment and certain industrial equipment. Title III, part C of EPCA, added by Public Law 95–619, title IV, section 441(a) (42 U.S.C. 6311– 6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. This equipment includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E)) EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)–(4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)) EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) The energy conservation program under EPCA consists essentially of four 15 The NOPR TSD is available in the docket for this rulemaking at www.regulations.gov/docket/ EERE-2017-BT-STD-0007. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), energy conservation standards (42 U.S.C. 6313), and the authority to require information and reports from manufacturers (42 U.S.C. 6316; 42 U.S.C. 6296). Federal energy efficiency requirements for covered equipment established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (See 42 U.S.C. 6316(a) and 42 U.S.C. 6316(e) (applying the preemption waiver provisions of 42 U.S.C. 6297)) Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered equipment must use the Federal test procedures as the basis for: (1) certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)), and (2) making representations about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE must use these test procedures to determine whether the equipment complies with relevant standards promulgated under EPCA. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) The DOE test procedures for CRE appear at title 10 of the Code of Federal Regulations (‘‘CFR’’) part 431, subpart C, appendix B (‘‘appendix B’’). DOE must follow specific statutory criteria for prescribing new or amended standards for covered equipment, including CRE. Any new or amended standard for a covered equipment must be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)) PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 70203 Moreover, DOE may not prescribe a standard: (1) for certain equipment, including CRE, if no test procedure has been established for the equipment, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(A)–(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors: (1) The economic impact of the standard on manufacturers and consumers of the equipment subject to the standard; (2) The savings in operating costs throughout the estimated average life of the covered equipment in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered equipment that are likely to result from the standard; (3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard; (4) Any lessening of the utility or the performance of the covered equipment likely to result from the standard; (5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; (6) The need for national energy and water conservation; and (7) Other factors the Secretary of Energy (‘‘Secretary’’) considers relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) Further, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing an equipment complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)) EPCA also contains what is known as an ‘‘anti-backsliding’’ provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(1)) Also, the Secretary E:\FR\FM\10OCP2.SGM 10OCP2 70204 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered equipment type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(4)) Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered equipment that has two or more subcategories. DOE must specify a different standard level for a type or class of equipment that has the same function or intended use, if DOE determines that equipment within such group: (A) consume a different kind of energy from that consumed by other covered equipment within such type (or class); or (B) have a capacity or other performance-related feature which other equipment within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)(1)) In determining whether a 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. 6316(e)(1); 42 U.S.C. 6295(q)(2)) B. Background 1. Current Standards On March 28, 2014, DOE published a final rule in the Federal Register that prescribed the current energy conservation standards for CRE manufactured on and after March 27, 2017 (‘‘March 2014 Final Rule’’). 79 FR 17725. These standards are set forth in DOE’s regulations at 10 CFR 431.66(e). For CRE with two or more compartments (i.e., hybrid refrigerators, hybrid freezers, hybrid refrigeratorfreezers, and non-hybrid refrigeratorfreezers), 10 CFR 431.66(e)(2) specifies that the maximum daily energy consumption for each model shall be the sum of the applicable standard for each of the compartments, as specified in 10 CFR 431.66(e)(1). For wedge cases, 10 CFR 431.66(e)(3) specifies instructions to comply with the applicable standards specified in 10 CFR 431.66(e)(1).16 Certain exclusions to the standards at 10 CFR 431.66(e)(1) are specified at 10 CFR 431.66(f) (i.e., the energy conservation standards do not apply to salad bars, buffet tables, and chef bases or griddle stands). 2. History of Standards Rulemaking for CRE On July 16, 2021, DOE published a request for information (‘‘RFI’’) in the Federal Register to undertake an early assessment review for amended energy conservation standards for CRE to determine whether to amend applicable energy conservation standards for this equipment. (‘‘July 2021 RFI’’) 86 FR 37708. Specifically, through the published notice and request for information, DOE sought data and information that could enable the agency to determine whether amended energy conservation standards would: (1) result in a significant savings of energy; (2) be technologically feasible; and (3) be economically justified. Id. On June 28, 2022, DOE published in the Federal Register a notification of the availability of a preliminary technical support document for CRE (‘‘June 2022 Preliminary Analysis’’). 87 FR 38296. In that notification, DOE sought comment on the analytical framework, models, and tools that DOE used to evaluate potential standards for CRE, the results of preliminary analyses performed, and the potential energy conservation standard levels derived from these analyses, which DOE presented in the accompanying Preliminary TSD (‘‘June 2022 Preliminary TSD’’).17 Id. DOE held a public meeting related to the June 2022 Preliminary Analysis on August 8, 2022 (hereafter, the ‘‘August 8, 2022, public meeting’’). DOE received comments in response to the June 2022 Preliminary Analysis from the interested parties listed in table II.1. TABLE II.1—WRITTEN COMMENTS RECEIVED IN RESPONSE TO THE JUNE 2022 PRELIMINARY ANALYSIS Comment No. in the docket Commenter(s) Abbreviation Commenter type AHT Cooling Systems .................................................................................. Air-Conditioning, Heating and Refrigeration Institute ................................... Appliance Standards Awareness Project, American Council for an Energy-Efficient Economy, and the Natural Resources Defense Council. California Investor-Owned Utilities ............................................................... Continental Refrigerator ............................................................................... Hillphoenix .................................................................................................... Hussmann Corporation ................................................................................. ITW-Food Equipment Group, LLC dba Traulsen/Kairak .............................. National Automatic Merchandising Association ........................................... North American Association of Food Equipment Manufacturers ................. Northwest Energy Efficiency Alliance ........................................................... Zero Zone, Inc .............................................................................................. AHT ............................... AHRI ............................. Joint Commenters ......... 48 46 39 Manufacturer. Trade Association. Efficiency Organizations. CA IOUs ........................ Continental .................... Hillphoenix .................... Hussmann ..................... ITW ............................... NAMA ............................ NAFEM ......................... NEEA ............................ Zero Zone ..................... 43 38 * 42 45 41 37 40 47 44 Energy Utilities. Manufacturer. Manufacturer. Manufacturer. Manufacturer. Trade Association. Trade Association. Efficiency Organizations. Manufacturer. ddrumheller on DSK120RN23PROD with PROPOSALS2 * Hillphoenix requested that its response be treated as Confidential Business Information. A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record.18 Where interested parties have provided written comments that are substantively consistent with their oral comments provided during the August 8, 2022, public meeting, DOE cites the written comments throughout this document. DOE did not identify any oral comments provided during the August 8, 2022, public 16 A wedge case is a CRE that forms the transition between two regularly shaped display cases. 10 CFR 431.62. 17 The June 2022 Preliminary TSD is available in the docket for this rulemaking at www.regulations.gov/document/EERE-2017-BTSTD-0007-0013. 18 The parenthetical reference provides a reference for information located in the docket of DOE’s rulemaking to develop energy conservation standards for CRE. (Docket No. EERE–2017–BT– STD–0007, which is maintained at www.regulations.gov). The references are arranged as follows: (commenter name, comment docket ID number, page of that document). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules meeting, that are substantively different from written comments provided by interested parties. C. Deviation From Process Rule In accordance with 10 CFR 431.4 and section 3(a) of 10 CFR part 430, subpart C, appendix A (‘‘Process Rule’’), DOE notes that it is deviating from the provision in the Process Rule regarding the pre-NOPR and NOPR stages for an energy conservation standard rulemaking. ddrumheller on DSK120RN23PROD with PROPOSALS2 1. Framework Document Section 6(a)(2) of the Process Rule states that if DOE determines it is appropriate to proceed with a rulemaking, the preliminary stages of a rulemaking to issue or amend an energy conservation standard that DOE will undertake will be a framework document and preliminary analysis, or an advance notice of proposed rulemaking. While DOE published a preliminary analysis for this rulemaking (see 87 FR 38296), DOE did not publish a framework document in conjunction with the preliminary analysis. DOE notes, however, that chapter 2 of the June 2022 Preliminary TSD that accompanied the June 2022 Preliminary Analysis—entitled Analytical Framework, Comments from Interested Parties, and DOE Responses—describes the general analytical framework that DOE used in evaluating and developing potential new and amended energy conservation standards.19 As such, publication of a separate framework document would be largely redundant of chapter 2 of the June 2022 Preliminary TSD. standards rulemaking for CRE. DOE requested comment in the June 2022 Preliminary Analysis on the analysis conducted in support of this current rulemaking. In this NOPR, DOE incorporated the most recent data inputs but largely relied on many of the same analytical assumptions and approaches used in the June 2022 Preliminary Analysis. Given that the analysis presented in this NOPR remains largely the same as the June 2022 Preliminary Analysis, and in light of the 45-day comment period DOE has already provided with the July 2021 RFI and the 60-day comment period DOE has already provided with its June 2022 Preliminary Analysis, DOE has determined that a 60-day comment period is appropriate and will provide interested parties with a meaningful opportunity to comment on the proposed rule. 3. Amended Test Procedures 2. Public Comment Period Section 6(f)(2) of the Process Rule specifies that the length of the public comment period for a NOPR will be not less than 75 calendar days. For this NOPR, DOE is instead providing a 60day comment period, consistent with EPCA requirements. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(p). As noted previously, DOE requested comment in the July 2021 RFI on the analysis conducted in support of the last energy conservation standard rulemaking for CRE and provided a 45day comment period. (See 86 FR 37708). In its June 2022 Preliminary Analysis and accompanying TSD, for which DOE provided a 60-day comment period, DOE’s analysis remained largely the same as the analysis conducted in support of the last energy conservation Section 8(d)(1) of the Process Rule specifies that test procedure rulemakings establishing methodologies used to evaluate proposed energy conservation standards will be finalized prior to publication of a NOPR proposing new or amended energy conservation standards. Additionally, new test procedures and amended test procedures that impact measured energy use or efficiency will be finalized at least 180 days prior to the close of the comment period for (1) a NOPR proposing new or amended energy conservation standards or (2) a notice of proposed determination that standards do not need to be amended. On September 26, 2023, DOE published a Federal Register notice amending and establishing test procedures for CRE (‘‘September 2023 Test Procedure Final Rule’’). 88 FR 66152. DOE determined that the amendments adopted in the September 2023 Test Procedure Final Rule will not alter the measured efficiency of CRE currently subject to energy conservation standards. 88 FR 66152, 66156. However, the measured energy use for chef bases or griddle stands and hightemperature refrigerators would likely change as a result of the September 2023 Test Procedure Final Rule. Nonetheless, the September 2023 Test Procedure Final Rule aligns with the requirements that the CRE industry has developed or proposed. Specifically, AHRI 1200– 2023 20 was approved by the American National Standards Institute on June 12, 19 The June 2022 Preliminary TSD is available in the docket for this rulemaking at www.regulations.gov/document/EERE-2017-BTSTD-0007-0013. 20 AHRI Standard 1200–2023 (I–P), 2023 Standard for Performance Rating of Commercial Refrigerated Display Merchandisers and Storage Cabinets, copyright 2023. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 70205 2023, and addendum B to ASHRAE 72– 2022 21 was proposed on September 15, 2023. AHRI 1200–2023 specifies that high-temperature refrigerators shall be tested at an integrated average temperature of 55 °F ± 2.0 °F, consistent with the September 2023 Test Procedure Final Rule. The addendum B to ASHRAE 72–2022 proposal specifies a dry-bulb temperature of 86.0 °F with a tolerance for the average over test period of ± 1.8 °F and a tolerance for the individual measurements of ± 3.6 °F; wet-bulb temperature of 73.7 °F with a tolerance for the average over test period of ± 1.8 °F and a tolerance for the individual measurements of ± 3.6 °F; and radiant heat temperature of greater than or equal to 81.0 °F, consistent with the September 2023 Test Procedure Final Rule. Both AHRI 1200–2023 and the proposed addendum B to ASHRAE 72–2022 were developed by the CRE industry over several years, and the September 2023 Test Procedure Final Rule aligns with the provisions included in both test standards for chef bases or griddle stands and hightemperature refrigerators. As such, DOE finds it appropriate to deviate from the requirement that the amended test procedures for chef bases or griddle stands and high-temperature refrigerators be finalized at least 180 days prior to the close of the comment period for this NOPR. III. General Discussion DOE developed this proposal after considering oral and written comments, data, and information from interested parties that represent a variety of interests. The following discussion addresses issues raised by these commenters. A. General Comments This section summarizes general comments received from interested parties regarding rulemaking timing and process. NEEA generally supported the process outlined in the June 2022 Preliminary Analysis. (NEEA, No. 47 at p. 5) NEEA commented that DOE’s analysis in the June 2022 Preliminary TSD showed a strong standard for CRE equipment would be economically justified and deliver significant energy savings to the Nation. (Id.) As a result, NEEA recommended DOE adopt increased efficiency standards for existing classes 21 Proposed Addendum b to Standard 72–2022, Method of Testing Open and Closed Commercial Refrigerators and Freezers. See https:// osr.ashrae.org/Online-Comment-Database/ ShowDoc2/Table/DocumentAttachments/ FileName/4130-72-2022%20Addendum%20b.21_ 072823_chair_approved.pdf/download/false. E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70206 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules of CRE and continue to push the industry toward more-efficient products and greater energy savings across all CRE equipment classes via technical, market, and economic analyses. (Id.) NEEA recommended further that DOE consider energy-saving technologies in CRE and that DOE collect additional data for analysis. (Id.) NEEA stated that they believe further analysis of specific features would help establish stronger standards, especially when the analysis improved representativeness of equipment in the market and appropriately characterized energy use and energy savings. (Id.) NEEA stated it recognized CRE as a complex energy conservation standard with many combinations of equipment and a variety of use cases and commended DOE for the depth of analysis and concerted efforts to incorporate new classes and utilize available data for analysis. (Id.) NEEA commented that DOE’s analysis demonstrated significant cost-effective savings, and NEEA recommended DOE adopt increased energy conservation standards for existing CRE equipment classes as supported by the analysis in the June 2022 Preliminary TSD. (Id.) Other commenters expressed concern with the rulemaking timeline. NAFEM commented that it had previously requested a comment period extension, which was denied, and requested to see the CRE engineering spreadsheets, which were provided on August 18, 2022, leaving an 11-calendar-day review period. (NAFEM, No. 40 at p. 2) NAFEM acknowledged that DOE had initiated multiple energy efficiency rulemakings on a compressed schedule, but NAFEM stated that this did not serve as justification for neglecting to provide important information and adequate time for review. (Id.) NAFEM disagreed with DOE’s justification that the comment period could be shortened due to similarities between the June 2022 Preliminary TSD and its 2014 counterpart. (Id.) NAFEM commented that many of its concerns regarding the July 2021 RFI were dismissed or remain unresolved in the June 2022 Preliminary TSD. (Id.) Furthermore, NAFEM commented that DOE’s claim was inaccurate that the engineering spreadsheets ‘‘do not contain any new or additional information that was not already published with the TSD in June.’’ (Id.) NAFEM added that it would have had two additional weeks to analyze the spreadsheets if DOE had adhered to the appendix A Process Rule permitting no less than a 75-day comment period. (Id. at pp. 2–3) NAFEM concluded that it was unable to VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 provide a complete list of errors or concerns due to insufficient time and presented its comments as representative, but not exhaustive, of the types of problems and inaccuracies contained in the spreadsheets. (Id. at p. 3) Hussmann commented that it supports the comments provided by AHRI and NAFEM and noted that it and other commenters were denied extensions to the August 29, 2022, comment deadline. (Hussmann, No. 45 at p. 1). Hussmann stated that it hopes discussions with DOE will improve this rulemaking. (Id.) NAMA shared its view that, despite this CRE rulemaking being one of the most complex DOE has undertaken within EERE, DOE reduced the time for public comment. (NAMA, No. 37 at p. 4) NAMA additionally commented that DOE released the engineering spreadsheets on August 8, 2022, leaving only 7 working days for review prior to the comment receipt deadline, and that this limited notice violated all elements of the notice and comment in the Administrative Procedure Act.22 (Id.) NAMA added that the United States has admonished other countries for similar regulatory actions. (Id.) ITW commented that the June 2022 Preliminary TSD made clear the importance of the CRE engineering spreadsheet, prompting ITW to request that DOE grant access to the spreadsheet. (ITW, No. 41 at p. 1). ITW stated that DOE provided the spreadsheet but did not extend the comment period to allow adequate time for review of information ITW considered critical. (Id.) In response to comments regarding timing and the 2022 Engineering Spreadsheet Related to the Preliminary Analysis for Commercial Refrigerators, Refrigerator-Freezers and Freezers Standards (‘‘engineering spreadsheet’’), DOE published this document in the rulemaking docket on August 18, 2022 after commenters requested its publication. This practice was consistent with prior rulemakings conducted for CRE, such as when DOE did not include an engineering spreadsheet with the notice of availability of preliminary technical support document published on March 30, 2011 (‘‘March 2011 Preliminary Analysis’’). Instead, DOE published the engineering spreadsheet with its NOPR on September 11, 2013. Similarly, in this rulemaking, DOE did not publish the engineering spreadsheet used for the preliminary analysis at the time of the June 2022 Preliminary Analysis 22 See PO 00000 5 U.S.C. 551–559. Frm 00012 Fmt 4701 Sfmt 4702 publication. Consistent with past practice, DOE is publishing the engineering spreadsheet that supports this NOPR analysis along with this NOPR. With respect to comments regarding the comment-period, DOE discusses deviations from the Process Rule, and the justifications for such deviations, in section II.C of this NOPR. In response to comments regarding the Administrative Procedure Act, 5 U.S.C. 553 provides requirements for a notice of proposed rulemaking. The June 2022 Preliminary Analysis was not a notice of proposed rulemaking as it was a notification that announced the availability of the preliminary analysis DOE had conducted for purposes of evaluating the need for amended energy conservation standards for CRE. However, DOE provided notice of that preliminary analysis and sought comment on the analysis. See 87 FR 38296. The June 2022 Preliminary Analysis was in compliance with EPCA and the Process Rule. Other commenters had general comments regarding the June 2022 Preliminary Analysis, the accompanying June 2022 Preliminary TSD, and the rulemaking process. NAMA commented that the June 2022 Preliminary TSD is flawed and should be re-written, with CRE categories split into ranges by size. (NAMA, No. 37 at p. 8) NAMA stated that if the engineering analysis were to be incorrect, then the technology screening would be incorrect also, which means the baseline machine design was incorrect and the rest of the report could not be used. (Id.) NAMA recommended that DOE begin the process again, using machines that are currently available on the market as its baseline. (Id.) NAMA also recommended that DOE use low-GWP refrigerants and incorporate most of the design options shown in table 5.8.10 of NAMA’s written submission, along with current costs. (Id.) NAMA added that if this approach is not possible, DOE should acknowledge the costs already incurred by manufacturers to meet the goals established by the Biden Administration to reduce global warming. (Id.) NAMA commented that while it appreciated DOE’s willingness to hold a hearing on the proposed energy efficiency standards levels, it believed that the August 8, 2022, public meeting was rushed and abruptly terminated before all questions were answered. (NAMA, No. 37 at p. 4) NAMA requested that DOE return to ‘‘inperson’’ meetings to support dialogue on these subjects. (Id.) E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules NAMA commented that the market dynamic was currently distorted due to the COVID–19 pandemic and a lack of available equipment, making efficiency a secondary priority to availability. (Id. at p. 16) NAMA recommended that DOE should cease the rulemaking on this category of CRE until after the beverage vending machines rulemaking is in the final rule stage and until the test procedure for CRE equipment is finalized. (Id. at p. 17) NAMA commented that due to the fact that the rulemakings for beverage vending machines and CRE affect the same manufacturers, overlapping comment periods result in result increased complexity to the responses. (Id.) NAMA also stated that a final test procedure should be established before setting future standard levels, and that the Process Rule requires DOE to finish the test procedure rulemaking before engaging in cost and energy calculations for a new standard. (Id.) NAMA further commented that DOE has requested comments on the CRE test procedure at the same time as it requested comments on the NOPR for future standards levels. (Id.) NAMA stated that, it is illogical to set future standards levels because the final test procedure for CRE is not yet known. (Id.) Finally, NAMA commented that it does not believe the June 2022 Preliminary TSD or other documents for this rulemaking reflect the state of the CRE industry in 2022 or the projections for equipment manufactured after this rule becomes effective. (Id. at p. 19) NAMA requested that DOE conduct a complete revision of all energy efficiency changes, the base case, the standards cases, and the economic analysis after the test procedure final standard is issued and the Cooperative Research and Development Agreement (‘‘CRADA’’) 23 extension is complete. (Id.) NAMA stated its belief that accurate information will show that a new set of standards levels for the classes of CRE covered by NAMA is unwarranted. (Id.) NAMA commented that the payback period will grow significantly when the net present value is re-calculated using accurate numbers. (Id.) NAMA recommended allowing manufacturers to complete the change to hydrocarbon refrigerants, which NAMA asserted would have up to 10 times the 23 Most of the activities of the 2019–2021 CRADA were directed toward reduction of the risk involved in a possible leak situation if it were ever to occur. ORNL did extensive testing on leak scenarios and proposed new methods to reduce the risk from such a leak in a public space. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 environmental impact of any new DOE standards. (Id.) In response to NAMA’s comments, DOE is maintaining the current equipment class structure in this NOPR, except for the new equipment classes which are proposed and discussed in section IV.A.1.c of this document. In accordance with section 6(d)(3) of the Process Rule, DOE may make any necessary changes to the engineering analysis or the candidate standard levels based on consideration of the comments received. DOE notes that it considered CRE that are currently available on the market when developing the NOPR engineering analysis. DOE acknowledges and accounts for the December 2022 EPA NOPR in this NOPR analysis. As noted in section I of this document, the December 2022 EPA NOPR would prohibit manufacture or import of such CRE starting January 1, 2025, and would ban sale, distribution, purchase, receipt, or export of such CRE starting January 1, 2026. 87 FR 76809. The December 2022 EPA NOPR compliance date would occur prior to the expected the compliance date of any DOE amended or established standards (i.e., on or after the date that is 3 years after the date on which the final new and amended standards are published). Thus, the transition to refrigerants in compliance with the December 2022 EPA NOPR (including hydrocarbon refrigerants) would have already occurred prior to the expected the compliance date of any DOE amended or established standards. Additionally, DOE considered the December 2022 EPA NOPR when developing the NOPR engineering analysis baseline as discussed in section IV.C.1.a of this document. In the no-new-standards case, DOE incorporated the cost of refrigerant transition as discussed in section IV.J.2.c of this document. DOE also revised the components considered in the engineering analysis baseline in this NOPR as discussed in section IV.C.1.a of this document and updated the costs as discussed in section IV.C.2. of this document. In response to market distortions, DOE used the latest shipments, market shares, and MPCs based on manufacturer feedback. Supply chain constraints are discussed in section V.B.2.c of this document. In response to the comments about the August 8, 2022, public meeting, DOE notes that it responded to all questions asked during the August 8, 2022, public meeting.24 Similar to the process with the June 2022 Preliminary Analysis, DOE welcomes comments in 24 See www.regulations.gov/document/EERE2017-BT-STD-0007-0049. PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 70207 response to this NOPR and participation in the public meeting, and DOE provides information on public participation in response to this NOPR in section VII. of this document. DOE notes that section 8(d)(1) of the Process Rule specifies that test procedure rulemakings establishing methodologies used to evaluate proposed energy conservation standards will be finalized prior to publication of a NOPR proposing new and amended energy conservation standards. Additionally, energy conservation standards for refrigerated bottled or canned beverage vending machines are separate from CRE, and evaluated through a separate rulemaking process, and are located at 10 CFR 431.296. AHT stated that there is a high risk of eliminating the entire equipment class if DOE were to further increase restrictions for horizontal closed transparent self-contained low temperature (‘‘HCT.SC.L’’), horizontal closed transparent self-contained medium temperature (‘‘HCT.SC.M’’), horizontal closed transparent selfcontained ice-cream freezer (‘‘HCT.SC.I’’), and vertical closed transparent self-contained low temperature (‘‘VCT.SC.L.’’) equipment classes and recommended that DOE maintain the current regulatory framework in design options and efficiency standards for these equipment classes. (AHT, No. 48 at p. 6) In response to AHT’s comments, DOE has revised the components considered in the engineering analysis baseline in this NOPR as discussed in section IV.C.1.a of this document and presented the results of this NOPR analysis in section V of this document. DOE also notes that it observed CRE models currently available and rated to the DOE Compliance Certification Database (‘‘CCD’’) that currently comply with the proposed energy conservation standards in this NOPR for the equipment classes listed in AHT’s comment. B. Scope of Coverage This NOPR covers those commercial refrigeration equipment that meet the definition of ‘‘commercial refrigerators, refrigerator-freezers, and freezers,’’ as codified at 10 CFR 431.62. A ‘‘commercial refrigerator, freezer, and refrigerator-freezer’’ means refrigeration equipment that—(1) is not consumer equipment (as defined in § 430.2); (2) is not designed and marketed exclusively for medical, scientific, or research purposes; (3) operates at a chilled, frozen, combination chilled and frozen, or variable temperature; (4) displays or stores merchandise and other perishable E:\FR\FM\10OCP2.SGM 10OCP2 70208 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules materials horizontally, semi-vertically, or vertically; (5) has transparent or solid doors, sliding or hinged doors, a combination of hinged, sliding, transparent, or solid doors, or no doors; (6) is designed for pull-down temperature applications or holding temperature applications; and (7) is connected to a self-contained condensing unit or to a remote condensing unit. 10 CFR 431.62. However, this NOPR does not include some types of commercial refrigerators, refrigerator-freezers, and freezers that meet the definition at 10 CFR 431.62. These include blast chillers, blast freezers, buffet tables or preparation tables, and mobile refrigerated cabinets. See section IV.A.1 of this document for discussion of the equipment classes analyzed in this NOPR. 2. Maximum Technologically Feasible Levels D. Technological Feasibility When DOE proposes to adopt a new or amended standard for a type or class of covered equipment, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (‘‘max-tech’’) improvements in energy efficiency for CRE, using the design parameters for the most efficient equipment available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.1.b of this proposed rule and in chapter 5 of the NOPR TSD. 1. General E. Energy Savings C. Test Procedure EPCA sets forth generally applicable criteria and procedures for DOE’s adoption and amendment of test procedures. (42 U.S.C. 6314(a)) Manufacturers of covered equipment must use these test procedures to certify to DOE that their equipment complies with energy conservation standards and to quantify the efficiency of their equipment. (42 U.S.C. 6314(d); 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) DOE’s current energy conservation standards for CRE are expressed in terms of maximum daily energy consumption as measured using appendix B. (See 10 CFR 431.66(e)) ddrumheller on DSK120RN23PROD with PROPOSALS2 screening criteria: (1) practicability to manufacture, install, and service; (2) adverse impacts on equipment utility or availability; (3) adverse impacts on health or safety, and (4) unique-pathway proprietary technologies. 10 CFR 431.4; sections 6(b)(3)(ii)–(v) and 7(b)(2)–(5) of the Process Rule. Section IV.B of this document discusses the results of the screening analysis for CRE, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR TSD. In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially-available equipment or in working prototypes to be technologically feasible. 10 CFR 431.4; sections 6(b)(3)(i) and 7(b)(1) of the Process Rule. After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 1. Determination of Savings For each TSL, DOE projected energy savings from application of the TSL to CRE purchased in the 30-year period that begins in the year 2028 with the proposed standards (2028–2057).25 The savings are measured over the entire lifetime of CRE purchased in the previous 30-year period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the no-new-standards case. The no-new-standards case represents a projection of energy consumption that reflects how the market for equipment would likely evolve in the absence of 25 Each TSL is composed of specific efficiency levels for each product class. The TSLs considered for this NOPR are described in section V.A of this document. DOE conducted a sensitivity analysis that considers impacts for products shipped in a 9year period. Note that the analysis does not consider benefits and costs resulting from the December 2022 EPA NOPR. PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 new and amended energy conservation standards. DOE used its national impact analysis (‘‘NIA’’) spreadsheet model to estimate national energy savings (‘‘NES’’) from potential amended and new standards for CRE. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by equipment at the locations where they are used. For electricity, DOE reports national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. DOE also calculates NES in terms of FFC energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy conservation standards.26 DOE’s approach is based on the calculation of an FFC multiplier for each of the energy types used by covered products or equipment. For more information on FFC energy savings, see section IV.H.1 of this document. 2. Significance of Savings To adopt any new or amended standards for covered equipment, DOE must determine that such action would result in significant energy savings. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B)) The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.27 For example, some covered products and equipment have most of their energy consumption occur during periods of peak energy demand. The impacts of these equipment on the energy infrastructure can be more pronounced than equipment with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a caseby-case basis, taking into account the significance of cumulative FFC national energy savings, the cumulative FFC emissions reductions, and the need to 26 The FFC metric is discussed in DOE’s statement of policy and notice of policy amendment. 76 FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 2012). 27 The numeric threshold for determining the significance of energy savings established in a final rule published on February 14, 2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule published on December 12, 2021 (86 FR 70892, 70906). E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules confront the global climate crisis, among other factors. As stated, the standard levels proposed in this document are projected to result in national energy savings of 3.11 quad FFC, the equivalent of the primary annual energy use of 33 million homes. Based on the amount of FFC savings, the corresponding reduction in emissions, and the need to confront the global climate crisis, DOE has initially determined the energy savings from the proposed standard levels are ‘‘significant’’ within the meaning of 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B). following section. For consumers in the aggregate, DOE also calculates the national net present value of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard; for CRE, DOE evaluated the impacts on small businesses. DOE requests comment on the impacts to CRE manufacturers and consumers from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). F. Economic Justification b. Savings in Operating Costs Compared To Increase in Price (LCC and PBP) EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered equipment in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered equipment that are likely to result from a standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis. The LCC is the sum of the purchase price of equipment (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the equipment. The LCC analysis requires a variety of inputs, such as equipment prices, equipment energy consumption, energy prices, maintenance and repair costs, equipment lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as equipment lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value. The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of more-efficient equipment through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more stringent standard by the change in annual operating cost for the year that standards are assumed to take effect. For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered equipment in the first full year of compliance with new and amended standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new and amended standards. DOE’s LCC and PBP analysis is 1. Specific Criteria As noted previously, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) The following sections discuss how DOE has addressed each of those seven factors in this proposed rulemaking. ddrumheller on DSK120RN23PROD with PROPOSALS2 a. Economic Impact on Manufacturers and Consumers In determining the impacts of a potential new or amended standard on manufacturers, DOE conducts an MIA, as discussed in section IV.J of this document. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include (1) INPV, which values the industry on the basis of expected future cash flows, (2) cash flows by year, (3) changes in revenue and income, and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers. For individual consumers, measures of economic impact include the changes in LCC and PBP associated with new and amended standards. These measures are discussed further in the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 70209 discussed in further detail in section IV.F of this document. c. Energy Savings Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section III.E of this document, DOE uses the NIA spreadsheet models to project national energy savings. d. Lessening of Utility or Performance of Equipment In establishing equipment classes and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards proposed in this document would not reduce the utility or performance of the equipment under consideration in this proposed rulemaking. e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the Department of Justice (‘‘DOJ’’) provide its determination on this issue. DOE will publish and respond to the Attorney General’s determination in the final rule. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the ADDRESSES section for information to send comments to DOJ. E:\FR\FM\10OCP2.SGM 10OCP2 70210 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules f. Need for National Energy Conservation DOE also considers the need for national energy and water conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the Nation’s energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation’s electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation’s needed power generation capacity, as discussed in section IV.M of this document. DOE maintains that environmental and public health benefits associated with the more efficient use of energy are important to take into account when considering the need for national energy conservation. The proposed standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and GHGs associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the estimated emissions impacts are reported in section V.B.6 of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document. g. Other Factors In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant information regarding economic justification that does not fit into the other categories described previously, DOE could consider such information under ‘‘other factors.’’ ddrumheller on DSK120RN23PROD with PROPOSALS2 2. Rebuttable Presumption EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the equipment that meets the standard is less than three times the value of the first year’s energy savings resulting from the standard, as calculated under the applicable DOE test procedure. (42 U.S.C. 6316(e(1)); 42 U.S.C. 6295(o)(2)(B)(iii)) DOE’s LCC and PBP VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE’s evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section V.B.1.c of this proposed rule. IV. Methodology and Discussion of Related Comments This section addresses the analyses DOE has performed for this rulemaking with regard to CRE. Separate subsections address each component of DOE’s analyses. DOE used several analytical tools to estimate the impact of the standards proposed in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended and new energy conservation standards. The national impacts analysis uses a second spreadsheet set that provides shipments projections and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (‘‘GRIM’’), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the DOE website for this proposed rulemaking: www.regulations.gov/docket/EERE2017-BT-STD-0007. Additionally, DOE used output from the 2023 version of the Energy Information Administration’s (‘‘EIA’s’’) Annual Energy Outlook (‘‘AEO’’), a widely known energy projection for the United States, for the emissions and utility impact analyses. A. Market and Technology Assessment DOE develops information in the market and technology assessment that provides an overall picture of the market for the equipment concerned, including the purpose of the equipment, the industry structure, manufacturers, market characteristics, and technologies used in the equipment. This activity PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 includes both quantitative and qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this rulemaking include (1) a determination of the scope of the rulemaking and equipment classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends; and (6) technologies or design options that could improve the energy efficiency of CRE. The key findings of DOE’s market assessment are summarized in the following sections. See chapter 3 of the NOPR TSD for further discussion of the market and technology assessment. 1. Equipment Classes and Definitions When evaluating and establishing energy conservation standards, DOE may establish separate standards for a group of covered equipment (i.e., establish a separate equipment class) if DOE determines that separate standards are justified based on the type of energy used, or if DOE determines that a product’s capacity or other performance-related feature justifies a different standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)) In making a determination whether a performancerelated feature justifies a different standard, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (Id.) a. Current Equipment Classes DOE currently separates CRE into 49 equipment classes, which are categorized according to the following performance-related features: (1) operating temperature—refrigerator (≥32 °F), freezer (<32 °F), or ice-cream freezer (≤¥5 °F); (2) presence of doors— open or closed; (3) door type—solid or transparent; (4) condensing unit— remote or self-contained; (5) configuration—horizontal, vertical, semi-vertical, or service over counter; (6) temperature pull-down capability. Definitions supporting the equipment classes are as follows: Closed solid means equipment with doors, and in which more than 75 percent of the outer surface area of all doors on a unit are not transparent. Closed transparent means equipment with doors, and in which 25 percent or more of the outer surface area of all doors on the unit are transparent. Commercial freezer means a unit of commercial refrigeration equipment in which all refrigerated compartments in the unit are capable of operating below 32 °F (±2 °F). E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules Commercial refrigerator means a unit of commercial refrigeration equipment in which all refrigerated compartments in the unit are capable of operating at or above 32 °F (±2 °F). Commercial refrigerator, freezer, and refrigerator-freezer means refrigeration equipment that—(1) Is not a consumer product (as defined in § 430.2); (2) Is not designed and marketed exclusively for medical, scientific, or research purposes; (3) Operates at a chilled, frozen, combination chilled and frozen, or variable temperature; (4) Displays or stores merchandise and other perishable materials horizontally, semi-vertically, or vertically; (5) Has transparent or solid doors, sliding or hinged doors, a combination of hinged, sliding, transparent, or solid doors, or no doors; (6) Is designed for pull-down temperature applications or holding temperature applications; and (7) Is connected to a self-contained condensing unit or to a remote condensing unit. Door means a movable panel that separates the interior volume of a unit of commercial refrigeration equipment from the ambient environment and is designed to facilitate access to the refrigerated space for the purpose of loading and unloading product. This includes hinged doors, sliding doors, and drawers. This does not include night curtains. Holding temperature application means a use of commercial refrigeration equipment other than a pull-down temperature application, except a blast chiller or freezer. Horizontal Closed means equipment with hinged or sliding doors and a door angle greater than or equal to 45°. Horizontal Open means equipment without doors and an air-curtain angle greater than or equal to 80° from the vertical. Ice-cream freezer means: (1) Prior to the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below ¥5.0 °F and that the manufacturer designs, markets, or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts; or (2) Upon the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below ¥13.0 °F and that the manufacturer designs, markets, or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts. Pull-down temperature application means a commercial refrigerator with doors that, when fully loaded with 12 ounce beverage cans at 90 degrees F, can cool those beverages to an average stable temperature of 38 degrees F in 12 hours or less. Remote condensing unit means a factory-made assembly of refrigerating components designed to compress and liquefy a specific refrigerant that is remotely located from the refrigerated equipment and consists of 1 or more refrigerant compressors, refrigerant condensers, condenser fans and motors, and factory supplied accessories. Self-contained condensing unit means a factory-made assembly of refrigerating components designed to compress and liquefy a specific refrigerant that is an integral part of the refrigerated 70211 equipment and consists of 1 or more refrigerant compressors, refrigerant condensers, condenser fans and motors, and factory supplied accessories. Semivertical open means equipment without doors and an air-curtain angle greater than or equal to 10° and less than 80° from the vertical. Service over counter means equipment that has sliding or hinged doors in the back intended for use by sales personnel, with glass or other transparent material in the front for displaying merchandise, and that has a height not greater than 66 inches and is intended to serve as a counter for transactions between sales personnel and customers. Transparent means greater than or equal to 45-percent light transmittance, as determined in accordance with the ASTM Standard E 1084–86 (Reapproved 2009), at normal incidence and in the intended direction of viewing. Vertical Closed means equipment with hinged or sliding doors and a door angle less than 45°. Vertical Open means equipment without doors and an air-curtain angle greater than or equal to 0° and less than 10° from the vertical. 10 CFR 431.62. On March 28, 2014, DOE published in the Federal Register the March 2014 Final Rule that established the current equipment classes and corresponding standards for CRE. 79 FR 17725. DOE currently sets forth energy conservation standards and relevant definitions for CRE equipment classes at 10 CFR 431.66 and 10 CFR 431.62, respectively. Table IV.1 shows the current CRE equipment classes and standards. TABLE IV.1—CURRENT CRE EQUIPMENT CLASSES Condensing unit configuration Remote Condensing (RC). Operating temperature (°F) Equipment family Vertical Open (VOP) .................................................... ddrumheller on DSK120RN23PROD with PROPOSALS2 Semivertical Open (SVO) ............................................ Horizontal Open (HZO) ............................................... Vertical Closed Transparent (VCT) ............................. Horizontal Closed Transparent (HCT) ......................... Vertical Closed Solid (‘‘VCS’’) ..................................... VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 Equipment class designation VOP.RC.M .......... VOP.RC.L ........... VOP.RC.I ............ SVO.RC.M .......... SVO.RC.L ........... SVO.RC.I ............ HZO.RC.M .......... HZO.RC.L ........... HZO.RC.I ............ VCT.RC.M ........... VCT.RC.L ............ VCT.RC.I ............. HCT.RC.M ........... HCT.RC.L ............ HCT.RC.I ............. VCS.RC.M ........... VCS.RC.L ............ E:\FR\FM\10OCP2.SGM 10OCP2 Maximum daily energy consumption (kilowatt-hours per day) * 0.64 × TDA + 4.07 2.2 × TDA + 6.85 2.79 × TDA + 8.7 0.66 × TDA + 3.18 2.2 × TDA + 6.85 2.79 × TDA + 8.7 0.35 × TDA + 2.88 0.55 × TDA + 6.88 0.7 × TDA + 8.74 0.15 × TDA + 1.95 0.49 × TDA + 2.61 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 70212 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE IV.1—CURRENT CRE EQUIPMENT CLASSES—Continued Condensing unit configuration Operating temperature (°F) Equipment family Horizontal Closed Solid (HCS) .................................... Service Over Counter (SOC) ...................................... Self-Contained (SC) ..... Vertical Open (VOP) .................................................... Semivertical Open (SVO) ............................................ Horizontal Open (HZO) ............................................... Vertical Closed Transparent (VCT) ............................. Vertical Closed Solid (VCS) ........................................ Horizontal Closed Transparent (HCT) ......................... Horizontal Closed Solid (HCS) .................................... Service Over Counter (SOC) ...................................... Pull-Down (PD) ............................................................ ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 <32 ≤¥5 ≥32 Equipment class designation VCS.RC.I ............. HCS.RC.M .......... HCS.RC.L ........... HCS.RC.I ............ SOC.RC.M .......... SOC.RC.L ........... SOC.RC.I ............ VOP.SC.M ........... VOP.SC.L ............ VOP.SC.I ............. SVO.SC.M ........... SVO.SC.L ............ SVO.SC.I ............. HZO.SC.M ........... HZO.SC.L ............ HZO.SC.I ............. VCT.SC.M ........... VCT.SC.L ............ VCT.SC.I ............. VCS.SC.M ........... VCS.SC.L ............ VCS.SC.I ............. HCT.SC.M ........... HCT.SC.L ............ HCT.SC.I ............. HCS.SC.M ........... HCS.SC.L ............ HCS.SC.I ............. SOC.SC.M .......... SOC.SC.L ........... SOC.SC.I ............ PD.SC.M ............. Maximum daily energy consumption (kilowatt-hours per day) * 0.25 × V + 0.63 0.1 × V + 0.26 0.21 × V + 0.54 0.25 × V + 0.63 0.44 × TDA + 0.11 0.93 × TDA + 0.22 1.09 × TDA + 0.26 1.69 × TDA + 4.71 4.25 × TDA + 11.82 5.4 × TDA + 15.02 1.7 × TDA + 4.59 4.26 × TDA + 11.51 5.41 × TDA + 14.63 0.72 × TDA + 5.55 1.9 × TDA + 7.08 2.42 × TDA + 9 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 0.06 × V + 0.37 0.08 × V + 1.23 0.56 × TDA + 0.43 0.05 × V + 0.91 0.06 × V + 1.12 0.34 × V + 0.88 0.52 × TDA + 1 1.1 × TDA + 2.1 1.53 × TDA + 0.36 0.11 × V + 0.81 ddrumheller on DSK120RN23PROD with PROPOSALS2 * The term ‘‘V’’ means the chilled or frozen compartment volume (ft3) as defined in the Association of Home Appliance Manufacturers (‘‘AHAM’’) Standard HRF 1–2008. The term ‘‘TDA’’ means the total display area (ft2) of the case, as defined in Air-Conditioning, Heating, and Refrigeration Institute (‘‘AHRI’’) Standard 1200–2006. b. New Definitions In the June 2022 Preliminary TSD, DOE sought comment on whether updates to the existing equipment class structure are appropriate. In response, ITW commented that DOE failed to recognize that manufacturers might use other options to produce cabinets with increased heat loads due to their physical features (other than those required by a simple reach-in refrigerator), citing the following applications as examples: (1) passthrough refrigerators—cabinets with doors on both sides, providing access to stored items from either side; (2) roll-in refrigerators—cabinets with ramps and door sweeps that allow for loading of bakery carts; and (3) roll-through refrigerators—cabinets with ramps and door sweeps on both sides that allow for bakery carts to move in and out from one side to the other. (ITW, No. 41 at p. 33) VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 NAFEM stated that it and other commenters recommended separating forced-air and cold-wall refrigeration systems into different categories in response to the July 2021 RFI, yet it appeared that DOE deferred making a decision until a future proposed rule. (NAFEM, No. 40 at p. 3) Continental commented that DOE should provide separate equipment classes and standard levels to segregate forced-air from cold-wall models, as well as roll-in from reach-in models, and pass-through from non-passthrough models, because these equipment types have differentiating characteristics that impact energy consumption, and separate energy standard levels are needed to avoid weighting standards in an unfair manner. (Continental, No. 38 at p. 2) In response to commenter’s suggestions and after a review of similar terms defined by the California Code of PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 Regulations,28 DOE is proposing to define the terms ‘‘cold-wall evaporator,’’ ‘‘forced-air evaporator,’’ ‘‘pass-through doors,’’ ‘‘roll-in door,’’ ‘‘roll-through doors,’’ and ‘‘sliding door’’ as follows: Cold-wall evaporator means an evaporator that comprises a portion or all of the commercial refrigerator, freezer, and refrigerator freezer cabinet’s interior surface that transfers heat through means other than fan-forced convection. Forced-air evaporator means an evaporator that employs the use of fanforced convection to transfer heat within the commercial refrigerator, freezer, and refrigerator freezer cabinet. 28 See https://govt.westlaw.com/calregs/ Document/I7AE76FC19E3011 EDA9D5EB8195EB4110? viewType=FullText&originationContext= documenttoc&transitionType= CategoryPageItem&contextData= (sc.Default)&bhcp=1. E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules Pass-through doors means doors located on both the front and rear of the commercial refrigerator, freezer, and refrigerator freezer. Roll-in door means a door that includes a door sweep to seal the bottom of the door and may include a ramp that allows wheeled racks of product to be rolled into the commercial refrigerator, freezer, and refrigerator freezer. Roll-through doors means doors located on both the front and rear of the commercial refrigerator, freezer, and refrigerator freezer, that includes a door sweep to seal the bottom of the door and may include a ramp that allows wheeled racks of product to be rolled into and through the commercial refrigerator, freezer, and refrigerator freezer. Sliding door means a door that opens when a portion of the door moves in a direction generally parallel to its surface. In addition to proposing to define the terms ‘‘cold-wall evaporator,’’ ‘‘forcedair evaporator,’’ ‘‘pass-through doors,’’ ‘‘roll-in door,’’ ‘‘roll-through doors,’’ and ‘‘sliding door,’’ DOE is proposing to allow certain equipment classes that contain CRE with forced-air evaporators, CRE with pass-through doors, CRE with roll-in doors, CRE with roll-through doors, and CRE with sliding doors to use a higher amount of energy use than the proposed standards, if the standard has been proposed to be amended for an equipment class, while also complying with EPCA’s ‘‘anti-backsliding’’ provision. This proposal recognizes the unique utility and different energy use characteristics of certain types of CRE. DOE discusses these unique utility and different energy use characteristics in further detail in section IV.C.1.a. DOE has also reviewed the current definitions for CRE at 10 CFR 431.62 and is proposing to revise the definition for ‘‘rating temperature’’ to update the reference to the required integrated average temperature (‘‘IAT’’) or lowest application product temperature (‘‘LAPT’’), as applicable, as follows: Rating temperature means the integrated average temperature a unit must maintain during testing, as determined in accordance with section 2.1. or section 2.2. of appendix B to subpart C of part 431, as applicable. DOE requests comment on the proposed definitions for ‘‘cold-wall evaporator,’’ ‘‘forced-air evaporator,’’ ‘‘pass-through doors,’’ ‘‘roll-in door,’’ ‘‘roll-through doors,’’ ‘‘sliding door,’’ and ‘‘rating temperature.’’ VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 c. Equipment Class Modifications In the June 2022 Preliminary TSD, DOE had initially determined that additional equipment classes may be appropriate to address certain CRE available on the market. Specifically, DOE initially determined to split several commercial refrigerator equipment classes and establish separate classes for high-temperature refrigerators. Also, DOE initially determined to establish standards for chef bases or griddle stands with operating temperatures of ≥32 °F or <32 °F (10 CFR 431.66(f) currently excludes chef bases or griddle stands from energy conservation standards). See chapter 3 of the June 2022 Preliminary TSD for additional details. In the September 2023 Test Procedure Final Rule, DOE established and amended definitions and test procedures for high-temperature refrigerators, medium-temperature refrigerators, and chef bases or griddle stands. 88 FR 66152, 66154–66155. Specifically, DOE established definitions for ‘‘high-temperature refrigerators’’ and ‘‘medium-temperature refrigerators,’’ amended the definition for ‘‘chef bases or griddle stands,’’ and incorporated by reference AHRI Standard 1200–2023 (I–P), which provides a IAT of 55 °F ±2.0 °F for which high-temperature refrigerators may be tested. Id. DOE also established a definition for ‘‘low-temperature freezers’’ and amended the definition for ‘‘ice-cream freezers.’’ Id. The newly established and amended definitions in the test procedure final rule are as follows. Chef base or griddle stand means commercial refrigeration equipment that has a maximum height of 32 inches, including any legs or casters, and that is designed and marketed for the express purpose of having a griddle or other cooking appliance placed on top of it that is capable of reaching temperatures hot enough to cook food. High-temperature refrigerator means a commercial refrigerator that is not capable of an operating temperature at or below 40.0 °F. Medium-temperature refrigerator means a commercial refrigerator that is capable of an operating temperature at or below 40.0 °F. Ice-cream freezer means: (1) Prior to the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below ¥5.0 °F and that the manufacturer designs, markets, PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 70213 or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts; or (2) Upon the compliance date(s) of any amended energy conservation standard(s) issued after January 1, 2023 for ice-cream freezers, a commercial freezer that is capable of an operating temperature at or below ¥13.0 °F and that the manufacturer designs, markets, or intends specifically for the storing, displaying, or dispensing of ice cream or other frozen desserts. Low-temperature freezer means a commercial freezer that is not an icecream freezer. 88 FR 66152, 66223–66224. Based on CRE models certified to DOE’s Compliance Certification Management System (‘‘CCMS’’) under the LAPT designation for commercial refrigerators, DOE has tentatively determined that high-temperature refrigerators can be categorized under the self-contained and remote condensing unit configurations and under the vertical closed transparent (‘‘VCT’’), vertical closed solid (‘‘VCS’’), service over counter (‘‘SOC’’), vertical open (‘‘VOP’’), semi-vertical open (‘‘SVO’’), and horizontal open (‘‘HZO’’) equipment families. For these equipment families with hightemperature equipment, DOE proposes to sub-categorize them as hightemperature refrigerators (operating temperature greater than 40.0 °F) and medium-temperature refrigerators (operating temperature greater than or equal to 32.0 °F and less than or equal to 40.0 °F). DOE proposes to maintain the categorization of commercial refrigerator (operating temperature greater than or equal to 32.0 °F) for the remaining equipment families (i.e., any horizontal closed transparent (‘‘HCT’’), horizontal closed solid (‘‘HCS’’), chef bases (‘‘CB’’), or pull-down (‘‘PD’’) equipment that operates above 40 °F, if commercialized, would be considered a ‘‘commercial refrigerator’’ and required to comply with the ‘‘mediumtemperature refrigerator’’ standard when tested at the LAPT). For this NOPR, DOE has directly analyzed high temperature refrigerators in the selfcontained condensing unit configuration for the VCT and VCS equipment families. DOE has also tentatively determined that chef bases or griddle stands can be categorized under the self-contained condensing unit configuration and the ≥32 °F or <32 °F operating temperatures (i.e., commercial refrigerator or lowtemperature freezer, respectively). E:\FR\FM\10OCP2.SGM 10OCP2 70214 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules Accordingly, DOE is considering potential equipment classes for high- temperature refrigerators and chef bases or griddle stands and is proposing potential equipment class structure modifications as presented in table IV.2. TABLE IV.2—PROPOSED EQUIPMENT CLASSES AND EQUIPMENT CLASS MODIFICATIONS Condensing unit configuration Equipment family Rating temperature ** Operating temperature (°F) Self-Contained (SC) ......... Vertical Open (VOP) ..................................... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... CR (38 °F) ................. LF (0 °F) .................... IF (¥15 °F) ............... CR (38 °F) ................. LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... CR (38 °F) ................. CR (38 °F) ................. LF (0 °F) .................... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... CR (38 °F) ................. LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... CR (38 °F) ................. LF (0 °F) .................... IF (¥15 °F) ............... HR (55 °F) ................. MR (38 °F) ................ LF (0 °F) .................... IF (¥15 °F) ............... CR (38 °F) ................. LF (0 °F) .................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x ≥32 ......................... x <32 ......................... x ≤¥13 ...................... x ≥32 ......................... x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x ≥32 ......................... x ≥32 ......................... x <32 ......................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x ≥32 ......................... x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x ≥32 ......................... x <32 ......................... x ≤¥13 ...................... x >40 ......................... 40 ≥ x ≥32 ................. x <32 ......................... x ≤¥13 ...................... x ≥32 ......................... x <32 ......................... Semivertical Open (SVO) ............................. Horizontal Open (HZO) ................................. Vertical Closed Transparent (VCT) .............. Vertical Closed Solid (VCS) ......................... Horizontal Closed Transparent (HCT) .......... Horizontal Closed Solid (HCS) ..................... Service Over Counter (SOC) ........................ Pull-Down (PD) ............................................. Chef Base (CB) ............................................ Remote Condensing (RC) Vertical Open (VOP) ..................................... Semivertical Open (SVO) ............................. Horizontal Open (HZO) ................................. Vertical Closed Transparent (VCT) .............. Horizontal Closed Transparent (HCT) .......... ddrumheller on DSK120RN23PROD with PROPOSALS2 Vertical Closed Solid (VCS) ......................... Horizontal Closed Solid (HCS) ..................... Service Over Counter (SOC) ........................ Chef Base (CB) ............................................ * Proposed new equipment class. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 Equipment class designation VOP.SC.H * VOP.SC.M VOP.SC.L VOP.SC.I SVO.SC.H * SVO.SC.M SVO.SC.L SVO.SC.I HZO.SC.H * HZO.SC.M HZO.SC.L HZO.SC.I VCT.SC.H * VCT.SC.M VCT.SC.L VCT.SC.I VCS.SC.H * VCS.SC.M VCS.SC.L VCS.SC.I HCT.SC.M HCT.SC.L HCT.SC.I HCS.SC.M HCS.SC.L HCS.SC.I SOC.SC.H * SOC.SC.M SOC.SC.L SOC.SC.I PD.SC.M CB.SC.M * CB.SC.L* VOP.RC.H * VOP.RC.M VOP.RC.L VOP.RC.I SVO.RC.H * SVO.RC.M SVO.RC.L SVO.RC.I HZO.RC.H * HZO.RC.M HZO.RC.L HZO.RC.I VCT.RC.H * VCT.RC.M VCT.RC.L VCT.RC.I HCT.RC.M HCT.RC.L HCT.RC.I VCS.RC.H * VCS.RC.M VCS.RC.L VCS.RC.I HCS.RC.M HCS.RC.L HCS.RC.I SOC.RC.H * SOC.RC.M SOC.RC.L SOC.RC.I CB.RC.M * CB.RC.L * Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70215 ** HR—High-Temperature Refrigerator. LF—Low Temperature Freezer. MR—Medium-Temperature Refrigerator. IF—Ice-Cream Freezer. CR—Commercial Refrigerator. ddrumheller on DSK120RN23PROD with PROPOSALS2 DOE received several comments in response to the June 2022 Preliminary Analysis regarding the amendments to the equipment classes for CRE. Equipment Classes With Newly Proposed Standards NEEA supported DOE’s proposed definitions in the June 2022 CRE Test Procedure NOPR for blast chillers and blast freezers, buffet tables and preparation tables, and hightemperature CRE, noting that these definitions allowed consideration of potential standards, categorization of equipment classes, and testing of the equipment separate from other CRE. (NEEA, No. 47 at p. 2) The Joint Commenters supported DOE’s consideration of potential standards for additional equipment categories. (Joint Commenters, No. 39 at p. 1) The Joint Commenters stated that DOE found cost-effective potential energy savings for chef bases/griddle stands and high-temperature refrigerators in the June 2022 Preliminary TSD and commented that they support DOE setting standards for these equipment classes. (Id.) The CA IOUs commended DOE for proposing to expand the scope of the energy conservation standards for CRE to include chef bases or griddle stands and high-temperature refrigeration. (CA IOUs, No. 43 at p. 1) The CA IOUs stated that these added product classes constitute a significant inventory of equipment with a substantial cumulative energy load that were previously outside the scope of DOE’s regulation. (Id. at pp. 1–2) AHRI commented that it has no objection to the added equipment classes detailed in the June 2022 Preliminary TSD. (AHRI, No. 46 at p. 2) However, Continental recommended that DOE delay inclusion of any new categories until applicable industry standard test procedures are published and have been thoroughly evaluated. (Continental, No. 38 at p. 2) DOE has proposed standards for new equipment classes (e.g., chef bases, and high-temperature refrigerators) in this NOPR, as supported by commenters. And as described in the September 2023 Test Procedure Final Rule, DOE has incorporated by reference the latest versions of ASHRAE 72 and AHRI 1200, which were evaluated by each respective committee and subject to public reviews, in the CRE test VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 procedure. 88 FR 66152. In addition, based on the September 2023 Test Procedure Final Rule, chef bases or griddle stands must be tested at a drybulb temperature of 86.0 °F and wetbulb temperature of 73.7 °F. 88 FR 66152, 66203. Therefore, DOE has considered higher ambient temperature conditions in the analysis of chef bases or griddle stands compared to other CRE, which are tested at a dry-bulb temperature of 75.2 °F and wet-bulb temperature of 64.4 °F. See chapter 5 of the NOPR TSD for additional information. Equipment Classes Without Proposed Standards NEEA recommended that DOE analyze the new equipment classes and consider adopting efficiency standards that would better reflect the specific energy consumption of equipment subclasses, resulting in more significant energy savings. (NEEA, No. 47 at p. 4) NEEA commented that DOE had analyzed two of the four new product classes and, as was shown in the CRE June 2022 Preliminary TSD analysis, energy conservation standards were viable for high-temperature CRE and chef bases and griddle stands. (Id.) NEEA commented that for vertical closed transparent self-contained high temperature (‘‘VCT.SC.H’’), vertical closed solid self-contained high temperature (‘‘VCS.SC.H’’), and chef bases self-contained low temperature (‘‘CB.SC.L’’), the average life-cost savings ranged from $300–$500 at EL 3, presenting justification of the energy and cost savings for these equipment classes. (Id.) NEEA added that DOE should conduct similar analyses on blast chillers and buffet tables, citing DOE’s test procedures for these classes as key to allowing data collection. (Id. at p. 4) NEEA commented that DOE’s analysis of high-temperature refrigerators and chef bases indicated that additional significant savings would likely be available from these products. (Id.) Similarly, the Joint Commenters commented that DOE stated DOE lacked sufficient information to fully analyze buffet/preparation tables and blast chillers/freezers in the June 2022 Preliminary TSD, but the Joint Commenters noted that the California Energy Commission (‘‘CEC’’) Modernized Appliance Efficiency Database System (‘‘MAEDbS’’) includes PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 over 100 buffet/preparation tables with a broad range of energy usage. (Joint Commenters, No. 39 at p. 1) The Joint Commenters requested that DOE further investigate the energy usage and savings potential for these products. (Id.) However, Continental agreed with DOE that a preliminary analysis of energy consumption for buffet tables and preparation tables is not appropriate until a standard test procedure is established for these equipment types. (Continental. No. 38 at p. 2). Consistent with comments from NEEA and based on the new rating temperature in the September 2023 Test Procedure Final Rule for hightemperature refrigerators, DOE is proposing to amend the energy conservation standards for hightemperature refrigerators and to establish energy conservation standards for chef bases or griddle stands in this NOPR. See table IV.2. With respect to the comments from NEEA and the Joint Commenters regarding blast chillers and blast freezers, DOE notes that it lacks sufficient data and information regarding blast chillers and blast freezer performance, and related design options, for units tested via the DOE test procedure. As stated in the September 2023 Test Procedure Final Rule, blast chillers and blast freezers are designed for ‘‘rapid temperature pull-down’’ capable of reducing the internal temperature from 135 °F to 40 °F within a period of 4 hours. 88 FR 66152, 66189. Therefore, in this NOPR, DOE is not currently able to model expected performance of this equipment because the established test procedure is significantly different from the test procedure applicable to other CRE categories, which are intended for ‘‘holding temperature application’’. Due to a lack of data and information regarding performance of blast chillers and blast freezers, DOE has not conducted an analysis of potential energy conservation standards for these equipment categories. DOE requests comment on blast chiller or freezer design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix D of 10 CFR 431.64. With respect to the comments from NEEA and the Joint Commenters regarding buffet tables and preparation tables, while DOE acknowledges that E:\FR\FM\10OCP2.SGM 10OCP2 70216 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 CEC’s MAEDbS database contains data for buffet/preparation tables, DOE notes that title 20 of the California Code of Regulations requires refrigerated buffet/ preparation tables to follow the ANSI/ ASTM F2143–01 test method.29 This test method has been revised several times, with ASTM F2143–16 being the most recent version. In the September 2023 Test Procedure Final Rule, DOE stated that ASTM F2143–16 cannot be referenced as a standalone test method but determined the approach based on ASTM F2143–16 with additional requirements is representative for buffet/preparation tables. 88 FR 66152, 66175. Therefore, in this NOPR, DOE is not able to model expected performance of this equipment at this time because the established test procedure is significantly different from the test procedure applicable to other CRE categories, and from the test procedure used to measure energy consumption for the CEC’s MAEDbS. Due to a lack of data and information regarding performance and related design options of refrigerated buffet/preparation tables, DOE has not conducted an analysis of potential energy conservation standards for these equipment categories. DOE requests comment on refrigerated buffet/preparation table design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix C of 10 CFR 431.64. Customer Order Storage Cabinets The CA IOUs supported creating a separate equipment class for customerorder refrigerated storage lockers. (CA IOUs, No. 43 at p. 10) The CA IOUs commented that they expect the refrigerated storage locker market to increase as grocery delivery and pick up continues to be a growing segment of grocery sales. (Id.) The CA IOUs stated that they support aggregating the maximum daily energy consumption values for all compartments in a refrigerated storage locker according to 10 CFR 431.66(e)(2). (Id.) The CA IOUs also pointed out that ‘‘temperature controlled pick up lockers’’ can be refrigerated lockers; however, some of these models can be either refrigerated or heated or neither. (Id.) The CA IOUs recommended that DOE analyze the individual refrigerator, freezer, and refrigerator/freezer compartments in customer-order 29 See table A–1 in 20 CCR section 1604.a.2 located at https://govt.westlaw.com/calregs/ Document/ID5812C41DABD11ED852 BC9A091C0DD8F? viewType=FullText&originationContext= documenttoc&transitionType=CategoryPageItem& contextData=(sc.Default). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 refrigerated storage lockers as a separate equipment family as noted in the CA IOUs comments on DOE’s July 2021 CRE Test Procedure RFI. (Id.) The CA IOUs highlighted the Traulsen waiver 30 to show that these compartments will have distinct door-opening conditions compared to the CRE equipment families. (Id.) In response to the CA IOUs comments, DOE has not conducted an analysis specifically for customer order storage cabinets in this NOPR.31 DOE has analyzed a representative volume for the VCS equipment families of which customer order storage cabinets are typically included. In the September 2023 Test Procedure Final Rule, DOE provides a discussion of customer order storage cabinets and determination to adopt a test procedure based on existing test procedure waivers. 88 FR 66152, 66211–66213. Comments on Specific Equipment Classes The Joint Commenters recommended that DOE analyze additional equipment classes and stated that DOE did not directly analyze the vertical closed solid remote condensing medium temperature (‘‘VCS.RC.M’’), vertical closed solid remote condensing low temperature (‘‘VCS.RC.L’’), horizontal closed transparent remote condensing medium temperature (‘‘HCT.RC.M’’), or horizontal closed transparent remote condensing low temperature (‘‘HCT.RC.L’’) equipment classes in the June 2022 Preliminary TSD. (Joint Commenters, No. 39 at p. 2) The Joint Commenters commented that the number of models for each of these classes in the CCD suggests their market share could be larger than the estimated volume of shipments for these classes in the analysis for the March 2014 Final Rule. (Id.) The Joint Commenters stated that there are nearly 500 VCS.RC.M models certified in the CCD, and there are more HCT.RC.M models in the CCD than horizontal closed transparent selfcontained medium temperature (‘‘HCT.SC.M’’), an equipment class that was analyzed by DOE in the June 2022 Preliminary TSD. (Id.) The Joint Commenters commented that, based on these data, the market share of these equipment classes may be larger than estimated, and the Joint Commenters 30 CA IOUs provided the footnote reference 83 FR 46148 for the granted waiver. 31 DOE defines customer order storage cabinet at § 431.62 to mean a commercial refrigerator, freezer, or refrigerator-freezer that stores customer orders and includes individual, secured compartments with doors that are accessible to customers for order retrieval. PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 encouraged DOE to analyze these additional equipment classes. (Id.) AHRI asked that DOE clarify whether DOE removed the vertical self-contained class from the June 2022 Preliminary TSD. (AHRI, No. 46 at p. 2) And Zero Zone commented that it did not see any evaluation of solid-door remote commercial refrigerators and inquired whether DOE is dropping that equipment class or has no plans to change the energy requirements. (Zero Zone, No. 44 at p. 5) With respect to the comments from the Joint Commenters, AHRI, and Zero Zone, DOE notes that the equipment classes mentioned by the Joint Commenters were not directly analyzed as primary equipment classes in the June 2022 Preliminary Analysis, but are analyzed as secondary equipment classes in this NOPR using DOE’s primary to secondary equipment class multipliers. See chapter 5 of the NOPR TSD for additional details on secondary equipment classes. Additionally, DOE notes that in the June 2022 Preliminary Analysis, DOE analyzed vertical closed solid, self contained equipment, as well as other vertical self-contained equipment (e.g., vertical open selfcontained medium temperature (‘‘VOP.SC.M’’) and vertical closed transparent self-contained medium temperature (‘‘VCT.SC.M’’)). See table 5.8.1 of the June 2022 Preliminary TSD for a full list of primary equipment classes DOE analyzed in the June 2022 Preliminary Analysis. AHRI commented that breaking equipment classes into smaller (under 30 cubic feet) and larger units (over 30 cubic feet) could be beneficial. (AHRI, No. 46 at p. 7) Additionally, NAMA commented that DOE appeared to have overlooked or not fully recognized the existence of smaller refrigerated singleand double-door beverage (and food) coolers. (NAMA, No. 37 at p. 5) NAMA stated that energy efficiency analyses of larger (e.g., 60 cubic feet) units may not be applicable to smaller (e.g., 24 cubic feet) units. (Id.) NAMA recommended that, for purposes of DOE analysis, units under 30 cubic feet should be considered differently from those over 30 cubic feet in refrigerated volume. (Id.) In response to the June 2021 Test Procedure RFI, True Manufacturing Company, Inc. (‘‘True’’) commented that there are examples where the ice-cream freezer maximum allowable energy consumption is less than for an equivalent commercial freezer.32 (Docket No. EERE–2017–BT–TP–0008, 32 See www.regulations.gov/comment/EERE-2017BT-TP-0008-0004. E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules True, No. 4 at p. 3) True provided three examples of common VCT.SC.L CREs found in the marketplace where the maximum DOE energy allowance for the ice-cream freezer is less than that of the equivalent commercial freezer. (Id.) True also commented that when comparing the VCS.SC.I and VCS.SC.L formulas, for cabinets with a volume of 4 cubic feet or less, the energy use allowance for the ice-cream freezer is less than for the equivalent commercial freezer. (Id.) Additionally, in response to the July 2021 RFI, Glastender, Inc. (‘‘Glastender’’) provided a chart and commented that the energy allowance for VCT.SC.M CRE is less than the energy allowance for VCS.SC.M CRE when the refrigerated volume is less than 10 cubic feet. (Glastender, No. 4 at p. 1). Glastender commented that it believed the requirement curves were generated from primarily larger volume models and smaller volume refrigerators need to be considered when generating new curves. (Id.) In response to comments from AHRI and NAMA, DOE is maintaining the current equipment class structure in this NOPR, except for the new equipment classes which are proposed and discussed in section IV.A.1.c of this document. DOE considers all volumes and TDAs when developing the proposed standards in this NOPR in addition to the representative volume or TDA for each directly analyzed equipment class. Based on market research and feedback received during manufacturer interviews, DOE expects the use of sliding and pass-through doors represent equipment utilities that have unique energy use characteristics that differentiate CRE in the VCT.SC.M equipment class and that beverage coolers are a common type of equipment in the VCT.SC.M equipment class that use sliding and pass-through doors. Therefore, based on market research and feedback received during manufacturer interviews, DOE has proposed separate energy use equations based on an energy consumption multiplier for CRE with sliding and pass-through doors. In response to comments from AHRI, NAMA, True, and Glastender, DOE considered all volumes and TDAs when developing the proposed standards in this NOPR in addition to the representative volume or TDA for each directly analyzed equipment class. When developing the proposed standards in this NOPR, DOE generally applied the energy use reduction percentage selected in section V.C of this document to the baseline energy use equation’s slope and intercept. However, in three directly analyzed VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 equipment classes, VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE has tentatively determined that, based on the efficiency distribution of the market across the equipment classes, additional consideration is necessary. For these three classes, DOE maintained the current standard equation intercept and calculated a slope based on the current intercept and the proposed energy use level at the representative volume or TDA. This approach addresses the standard line crossover that True and Glastender mentioned in their comments and better represents the energy use characteristics of CRE at volumes and TDAs that are smaller than the representative volume or TDA for these three classes. Additionally, DOE reviewed the proposed standard for VCT.SC.I and VCT.SC.L and observed that the standard lines do not have the crossover that True mentioned in its comment. See section IV.C.1 of this document and chapter 5 of the NOPR TSD for additional details. The Joint Commenters recommended that DOE eliminate the equipment class for pull-down CREs. (Joint Commenters, No. 39 at p. 2) The Joint Commenters stated that while there are currently no pull-down models certified in DOE’s CCD, the Joint Commenters are concerned that models could be certified as pull-down CRE in the future in order to be subject to a less-stringent standard. (Id.) In response to the Joint Commenters, DOE notes that the ‘‘pull-down temperature application’’ is defined in 42 U.S.C. 6311(9)(d) and the equipment class was established by the Energy Policy Act of 2005 (Pub. L. 109–58).33 In the September 2023 Test Procedure Final Rule, DOE established verification provisions for pull-down temperature applications based on the EPCA definition, which are intended to ensure CRE are certified correctly as pull-down temperature applications. 88 FR 66152, 66187–66189. Therefore, DOE is not proposing to eliminate the equipment class for pull-down CREs in this NOPR. Equipment Rating The CA IOUs recommended changing the key metric for service over the counter (‘‘SOC’’) refrigeration from total display area (‘‘TDA’’) to either refrigerated volume or refrigerated floor area. (CA IOUs, No. 43 at pp. 9–10). The CA IOUs commented that the current energy conservation standard for SOC is based on TDA, which incentivizes the 70217 use of more glass to increase the TDA and the corresponding maximum daily energy consumption. (Id. at p. 9) The CA IOUs stated that basing the energy conservation standard for SOC equipment on refrigerated volume would ensure that any increases in an SOC unit’s maximum allowable energy consumption is directly linked to an increase in the equipment’s useful holding capacity. (Id.) The CA IOUs commented that this change would ensure that manufacturers wanting to increase TDA would be incentivized to use glass with better thermal insulation properties. (Id.) The CA IOUs commented also that switching to a refrigerated volume metric would also be more consistent with other closed refrigeration categories with display functionality, such as refrigerators with glass doors. (Id.) The CA IOUs stated that the burden of shifting to refrigerated volume as a metric could be minimized by allowing either physical measurement or measurement based on a diagram or computer-aided design (‘‘CAD’’) drawing. (Id. at p. 10) The CA IOUs added that an alternative metric for deli cases without shelving could also be refrigerated floor area, which would be the available surface area for product, although the CA IOUs noted that most SOC refrigerators are sold with shelving that can be added or removed depending on food product being displayed. (Id.) However, in response to the July 2021 RFI, other commenters indicated that TDA is the appropriate metric for the respective equipment classes, and the industry has adapted to the use of TDA or volume and that no change is necessary (see chapter 2 of the June 2022 Preliminary TSD for additional information). Therefore, in this NOPR, DOE has not evaluated revising the capacity metrics for any equipment classes. The CA IOUs commented that they support the proposal to rate equipment capable of operating at temperatures of multiple equipment classes at all relevant temperature conditions. (CA IOUs, No. 43 at p. 8–9) Consistent with the CA IOUs comment, in the September 2023 Test Procedure Final Rule, DOE specified in 10 CFR 429.42 that basic models of CRE that operate in multiple equipment classes must be certified and comply with the energy conservation standards for each applicable equipment class. 88 FR 66152, 66162. 2. CRE Market 33 See 119 STAT. 639 at https://www.govinfo.gov/ content/pkg/PLAW-109publ58/pdf/PLAW109publ58.pdf. PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 In response to the June 2022 Preliminary Analysis, DOE received E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70218 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules several comments regarding the CRE market. NAMA commented that it was not listed in the proposed regulation or list of manufacturers. (NAMA, No. 37 at p. 4) NAMA added that the names of CRE manufacturers represented by NAMA, which were filed in the DOE’s CCMS, were not mentioned. (Id.) In response to this comment from NAMA, for this NOPR, DOE updated its assessment of manufacturer trade groups to include NAMA and reviewed the list of CRE manufacturers based on the list of supporters on NAMA’s website.34 See chapter 3 of the NOPR TSD for additional information regarding CRE original equipment manufacturers (‘‘OEMs’’) and manufacturer trade groups. Continental commented that relying on manufacturer model counts in the CCD is not an accurate way of approximating company market share and stated that model counts in DOE’s CCD reflect the variety of models offered, but do not represent the sales or market share of a company. (Continental, No. 38, p. 2) In the June 2022 Preliminary TSD, DOE used manufacturer model counts to identify key CRE OEMs operating in the United States. DOE presented an abridged list of OEMs with more than 1percent share of basic model listings in chapter 3 of the June 2022 Preliminary TSD. DOE understands that model counts do not reflect company market shares. For this NOPR, DOE conducted confidential manufacturer interviews. During these interviews, DOE asked manufacturers about their estimated CRE market share, annual shipments by equipment class, and the estimated market shares of other CRE manufacturers. DOE used the information from confidential interviews, data from the shipments analysis, and model listings from CCD to estimate manufacturer market shares, which were then used to weight certain inputs used in the MIA (e.g., industry financial parameters, manufacturer markups). DOE does not present these company-specific market share estimates in the NOPR TSD chapter 3 as the information is protected under nondisclosure agreements (‘‘NDAs’’). See chapter 3 of the NOPR TSD for additional details on the CRE market and manufacturers. DOE requests comment on publicly available market data on CRE manufacturers or identification of any 34 DOE reviewed the ‘‘2022 Annual Dues Donors’’ accessible at namanow.org/foundation/supporters/ to identify members of NAMA (last accessed March 31, 2023). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 CRE manufacturers with large market shares not identified in Chapter 3 of the NOPR TSD. DOE received several comments in response to the June 2022 Preliminary Analysis regarding the technology options. compressor technologies like scroll compressors and variable-speed compressors. (NEEA No. 47 at pp. 4–5) NEEA commented that DOE had expressed agreement with NEEA in the June 2022 Preliminary TSD that variable-speed compressors represented an energy-saving technology and estimated that implementing variablespeed compressors could save 3–38 percent of energy consumption, depending on equipment class. (Id. at p. 4) NEEA pointed out that DOE had not tested a model with a variable-speed compressor and encouraged DOE to further research the energy-savings potential of variable-speed compressors in CRE. (Id.) NEEA commented that, in the June 2022 Preliminary TSD Table 5.5.1,35 DOE noted propane variablespeed compressors as a design option for a majority of CRE equipment classes. (Id.) NEEA encouraged DOE to collect data and consider other equipment classes that could utilize variable-speed compressors to improve the energysavings potential and common use of this technology option. (Id. at pp. 4–5) Consistent with the preliminary analysis, DOE has included R–290 variable-speed compressors as a technology option in this NOPR. Due to the refrigerant transition in response to the December 2022 EPA NOPR, DOE has analyzed R–290 compressors (single and variable speed) for all self-contained equipment classes. See section IV.C.1 of this document and chapter 5 of the NOPR TSD for additional details on the refrigerant transition and analyzed compressors. Additionally, scroll compressors have not been included as a design option in this NOPR. While DOE has not observed scroll compressors in any directly analyzed models, DOE is aware that scroll compressors may be used on very large, self-contained CRE. Based on market research, DOE observed that fixed-speed scroll compressors have similar efficiencies to hermetic, reciprocating compressors; therefore, DOE has not considered scroll compressors in this analysis. Continental commented that variablespeed compressors hold promise for reducing energy consumption of selfcontained CRE, but the increased technical complexity and related increases in material and service costs have thus far limited use of this technology. (Continental, No. 38 at p. 2) Similarly, AHRI commented that variable-speed compressors do not a. Compressors NEEA referred to its previous comment to the July 2021 RFI that DOE consider the energy-use impact of 35 Technical Support Document: Commercial Refrigeration Equipment: Table 5.5.1 Design Options by Equipment. Class. PreTSD CRE 2022. June 2022. https://www.regulations.gov/document/ EERE-2017-BT-STD-0007-0013. 3. Technology Options In the preliminary market analysis and technology assessment, DOE identified technology options that would be expected to improve the efficiency of CRE, as measured by the DOE test procedure and shown in table IV.3. TABLE IV.3—TECHNOLOGY OPTIONS FOR CRE Insulation: Improved resistivity of insulation (insulation type). Increased insulation thickness. Vacuum-insulated panels. Lighting: Higher-efficiency lighting. Occupancy Sensors. Improved transparent doors: * Low-emissivity coatings.* Inert gas fill.* Vacuum-insulated glass.* Additional panes.* Anti-sweat heater controls.* Anti-fog films.* Frame design.* Compressor.** Improved compressor efficiency.** Alternative refrigerants.** Variable-speed compressors.** Linear compressors.** Evaporator: Increased surface area. Improved evaporator coil design. Low-pressure differential evaporator. Condenser: ** Increased surface area.** Tube-and-fin enhancements.** Microchannel heat exchanger.** Fans and fan motors: Evaporator fan motors. Evaporator fan blades. Evaporator fan controls. Condenser fan motors.** Condenser fan blades.** Condenser fan controls.** Other technologies: Defrost systems. Expansion valve improvements. Air curtain design.*** Night curtains.*** Liquid suction heat exchanger.** * Only applies to equipment classes with doors. ** Only applies to self-contained equipment classes. *** Only applies to equipment classes without doors (open equipment classes). PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 contribute significantly to energy savings in specific products and present additional technical challenges for servicers. (AHRI, No. 46 at p. 5) Further, AHRI commented that DOE should not assume that equipment employing variable-speed compressors will automatically have an energy-efficiency increase of 15–20 percent and that this design option is more complex and requires more careful analysis. (Id.) To estimate the performance impacts of transitioning to a variable-speed compressor, DOE incorporated the performance data for variable-speed R– 290 compressors currently available on the market into DOE’s engineering spreadsheet. DOE assumed that variable-speed compressors would operate at the minimum speed under steady-state operation. DOE also assumed that the fan motors would operate during the compressor run time (i.e., the fan motor operating duration would likely increase compared to a single-speed compressor). Overall, DOE estimated a 0.5–25 percent energy consumption reduction when implementing variable-speed compressors, with savings varying depending on equipment class. See chapters 3 and 5 of the NOPR TSD for additional details on variable speed compressors. b. R–290 NAMA stated that it began evaluating the changes necessary for CRE to utilize lower GWP refrigerants, such as R–290, in 2018, and NAMA pointed out that the ASHRAE 15 standard was changed in the summer of 2020 to allow CRE using up to 114 grams of A–3 refrigerants to be placed in public places and that CRE with A–3 refrigerants began to appear in the U.S. market in the first quarter of 2021. (NAMA, No. 37 at p. 6) NAMA stated that manufacturers had to redesign heat exchangers, use new compressors and expansion valves, and make all switches, electrical components, motors, wiring, connectors, and larger electrical components (e.g., compressors) compliant with ‘‘spark-proof connections’’ to manufacture machines using A–3 refrigerant. (Id. at pp. 6–7) NAMA commented that the June 2022 Preliminary TSD did not adequately address this level of re-design using expensive components, nor the redesign of factories to comply with health and safety regulations through greater ventilation, safety sensors, and other measures. (Id. at p.7) NAMA noted that every model, product line, quality assurance facility, factory, warehouse, and service center must be updated to install, warehouse, and service units VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 with R–290 refrigerant, and only a handful of State and local building codes have been updated to accommodate these changes. (Id.) NAMA stated that significant work remains to be done in finalizing these codes, and they are unlikely to be complete before 2026. (Id.) NAMA commented that DOE did not address this transition in the June 2022 Preliminary TSD. (Id.) Similarly, AHRI commented that the June 2022 Preliminary TSD cited an example of a transition from an R–134a (ASHRAE Class A1) to an R–290 (propane or an ASHRAE Class A3) compressor as the only required change, but AHRI added that compressors, switches, and other components in the system must also be upgraded to comply with UL60335–2–89 requirements to reduce the risk of ignition. (AHRI, No. 46 at p. 13) The CA IOUs noted that their comments to the July 2021 RFI stated that since energy conservation standards were last analyzed, the market has developed higher-efficiency compressors, and self-contained CRE has increasingly shifted to R–290. (CA IOUs, No. 43 at pp. 4–6) While the CA IOUs thanked DOE for analyzing these technology advances, they noted that the June 2022 Preliminary TSD analyzes the refrigerant propane as a technology option for nearly all self-contained refrigeration categories except for vertical open self-contained medium temperature (‘‘VOP.SC.M’’), semivertical self-contained medium temperature (‘‘SVO.SC.M’’), and horizontal glass self-contained ice cream (‘‘HCT.SC.I’’) categories. (Id. at pp. 4–5) The CA IOUs stated that propane had already become an industry standard for self-contained refrigeration equipment, and the CA IOUs recommended considering it as a baseline refrigerant for all self-contained refrigeration categories. (Id. at p. 5) The CA IOUs further commented that the June 2022 Preliminary TSD excludes variablespeed compressors as a technology option for almost all categories where it does not consider propane as an option. (Id.) The CA IOUs commented that variable-speed compressors can use any refrigerant and are not limited to propane. (Id.) The CA IOUs stated that the current market availability of variable-speed compressors that use refrigerants other than propane is limited to compressors above 1 horsepower, and the CA IOUs recommended that DOE work with manufacturer stakeholders to determine future market availability of variablespeed compressors for all refrigerants. (Id. at pp. 5–6) PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 70219 NEEA stated support for DOE’s consideration of propane refrigerants as an energy-saving technology option in the technology assessment and engineering analysis for CRE, but NEEA noted that table 5.5.18 in the June 2022 Preliminary TSD showed that DOE had not considered propane as an option for all CRE equipment classes. (NEEA, No. 47 at p. 4) NEEA commented that CRE refrigerants are transitioning from hydrofluorocarbons (‘‘HFC’’) refrigerants to alternative options like propane (R– 290) and NEEA anticipated an increase in the use of propane in other equipment classes. (Id.) NEEA recommended that DOE ensure its analysis take into consideration the current availability of propane products in the product classes not currently considered by DOE as a design option (e.g., VOP.SC.M and SVO.SC.M). (Id.) NEEA further recommended DOE anticipate that more products would likely become available with propane refrigerants if the charge limit (currently 150 grams under the EPA’s Significant New Alternatives Policy (‘‘SNAP’’)) for propane were to increase, as allowed in ASHRAE 15–2022. (Id.) Similarly, the Joint Commenters commented that DOE excluded propane compressors as a design option for some equipment classes due to propane charge limits, but the Joint Commenters further commented that ASHRAE 15 is proposing to increase the charge limits for higher-flammability refrigerants. (Joint Commenters, No. 39 at p. 2) Additionally, the Joint Commenters stated that models are available on the market in some of the equipment classes for which DOE excluded propane technology options, including the VOP.SC.M, SVO.SC.M, and HCT.SC.I categories. (Id. at pp. 2–3) The Joint Commenters recommended that DOE consider propane refrigerant for these additional equipment classes. (Id. at p. 3) In the June 2022 Preliminary Analysis, DOE considered only CRE that could meet the 150-gram charge limit for R–290, per the EPA’s SNAP regulations.36 Based on the December 2022 EPA NOPR’s proposed GWP limits, DOE anticipates EPA will harmonize with UL 60335–2–89 and allow R–290 charge limits of 304g for closed CRE and 494g for open CRE. Therefore, DOE has updated its engineering analysis in the NOPR to analyze R–290 compressors as a technology option for all self-contained CRE. See section IV.C.1 of this 36 See https://www.govinfo.gov/content/pkg/FR2015-04-10/pdf/2015-07895.pdf. E:\FR\FM\10OCP2.SGM 10OCP2 70220 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules document and chapter 5 of the NOPR TSD for additional information. Additionally, based on information gathered from interviews, component data, and teardowns, DOE has reevaluated the cost associated with the switch to R–290 on self-contained units. Because DOE has analyzed R–290 as the baseline for all self-contained classes in response to the December 2022 EPA NOPR, the costs associated with additional components necessary to comply with safety standards for R–290 are incorporated into the core case cost.37 See the engineering analysis in section IV.C.1 of this document for more detail on the refrigerant transition. ddrumheller on DSK120RN23PROD with PROPOSALS2 c. Insulation AHT commented that the combination of an additional half inch of insulation and vacuum-insulated panels (‘‘VIPs’’) does not make sense and should not be included as two cumulative potential savings. (AHT, No. 48 at p. 6) Based on feedback from manufacturers, DOE has not analyzed increased insulation thickness or VIPs as a design option in this NOPR. See section IV.B.1 of this document and chapters 3 and 4 of the NOPR TSD for additional information. ITW commented that, in terms of improved resistivity of insulation, some manufacturers have introduced new hydrofluorolefin (‘‘HFO’’) low-GWP blowing agents with claims of improved efficiencies and thermal resistivities from 2 to 11 percent compared to the previous typical HFC–245fa blowing agents and that DOE expected that manufacturers had already incorporated these new agents into models currently available on the market. (ITW, No. 41 at p. 25) ITW commented that, in fact, such claims for HFOs were ‘‘marketing hype’’ and without much promised improvement in thermal performance. (Id.) Regarding ITW’s comment on foam blowing agents, DOE calibrated its engineering analysis based on directly analyzed units, and, therefore, DOE expects that the analysis represents the foam blowing agents currently in use for units available on the market. 37 The ‘‘core case’’ consists of components, such as structural members, shelving, wiring, air curtain grilles, and trim, that do not change at higher design option levels. To develop the core case cost, DOE dismantled units available on the market component-by component to develop a bill of materials and cost model for the core of the refrigerated case. The core case cost is just one component of the overall baseline cost, which takes into account all manufacturer production costs associated with baseline equipment. Therefore, changes in CRE case design due to the transition to R–290are accounted for in the core case and design option manufacturer production costs. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 d. Doors AHT commented that the best design option to save energy for open CRE is to add transparent doors. (AHT, No. 48 at p. 1) AHT noted that the existing equipment class definitions and corresponding energy conservation standards permit manufacturers that cannot reach the energy limits for closed transparent units to remove the transparent doors, which would then require compliance with the increased energy limits of open units. (Id.) AHRI commented that efficient doors are generally used today, but there remain instances where charge sizes are insufficient and may only be allowed to be increased sufficiently if doors are not present on equipment. (AHRI, No. 46 at p. 13) Zero Zone commented that a commenter referenced Zero Zone marketing literature for customer preference on certain types of cases with doors in section 2.3.2.5 of the June 2022 Preliminary TSD. (Zero Zone, No 44 at p. 5). Zero Zone stated that an interview with two grocers is not an exhaustive industry study and also noted that, since that marketing literature was published, Zero Zone has developed an open-case product line. (Id.) With respect to the comment from AHT, AHRI, and Zero Zone, DOE notes that open cases provide distinct utility with respect to features such as unobstructed view and access to product, as well as simplified stocking, cleaning, and maintenance. While DOE understands there are different charge size limitations for refrigerant safety for open and closed CRE, DOE has tentatively determined to not analyze the addition of doors to open cases or the removal of doors on closed cases due to the distinct utility differences between open and closed CRE. e. Evaporators and Condensers Continental commented that larger evaporator coils take up more internal space, reducing product storage and utility of the equipment. (Continental, No. 38 at p. 2) Zero Zone disagreed with DOE’s evaluation of the high-performance coil. (Zero Zone, No. 44 at p. 4) Zero Zone commented that using wavy fins without changing the fin pitch in an application with high-glide refrigerants can lead to a build up of frost and ice across the evaporator coil. (Id.) Zero Zone commented additionally that adding another tube row transverse to airflow without a change to the physical dimensions of the coil will compact the tubes, impeding airflow and causing the accumulation of frost and snow. (Id.) PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 Zero Zone stated that it does not believe the addition of either of these design changes to an evaporator coil would create a ‘‘high-performance’’ coil. (Id.) Zero Zone commented that if coil design allowed for an increased evaporator temperature, a superheat setting at a value that avoids liquid carryover and compressor damage would be very difficult. (Id.) Zero Zone provided a white paper called ‘‘High-glide Refrigerants: What’s the Point?’’ to describe the challenges with superheat settings in door cases. (Id.) Based on feedback from manufacturer interviews and commenters, DOE has not considered increased evaporator or condenser sizes in this NOPR. DOE has tentatively determined that manufacturers have maximized the heat exchanger size without reducing internal storage or increasing the external dimensions of the unit, both of which would impact product utility. In addition, due to refrigerant transition in response to the December 2022 EPA NOPR, DOE has analyzed refrigerants with charge size limitations in this NOPR. Because manufacturers have only partially converted to refrigerants that would be allowed per the December 2022 EPA NOPR, there is still uncertainty in refrigerant charge size, and therefore the evaporator and condenser design, required for all sizes of CRE. In the June 2022 Preliminary Analysis, DOE analyzed ‘‘baseline’’ and ‘‘high efficiency’’ evaporator and condenser design options. While DOE understands the exact characteristics of the evaporator or condenser may change depending on equipment class, the evaporator and condenser design options normalize the overall conductance-area (‘‘UA’’) based on the design load. Based on stakeholder comments, interviews with manufacturers, and CoilDesigner 38 simulation, DOE tentatively determined that the ‘‘high efficiency’’ evaporator and condenser design options are representative of current manufacturer designs. Therefore, DOE tentatively determined to analyze the ‘‘high efficiency’’ evaporator and condenser coil as ‘‘baseline’’ in this NOPR and remove the ‘‘high efficiency’’ evaporator and condenser design options in the NOPR. See chapters 3 and 5 of the TSD for additional details. Zero Zone commented that it believes one CRE manufacturer holds a patent on split-circuit evaporators. (Zero Zone, No. 44 at p. 5) Zero Zone stated that 38 See https://ots-rd.com/software-development/ for further information on the CoilDesigner software. E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules DOE suggested manufacturers use this product with propane even though DOE does not include patented design options in rulemakings. (Id.) Zero Zone commented that DOE should plan energy levels around the use of A2L refrigerants in large, self-contained appliances instead of focusing on propane. (Id.) Based on a limited review of patents listed for split-circuit evaporators, DOE was able to find several patents for dual circuit evaporators, which are all either expired or abandoned.39 Zero Zone did not specify what is meant by ‘‘splitcircuit evaporators,’’ and DOE was unable to locate any patent that would impact CRE manufacturer’s ability to use evaporators with multiple circuits. Additionally, Zero Zone did not specify the manufacturer that it believes holds a patent on split-circuit evaporators. As such, DOE has tentatively determined that each manufacturer’s design is unique and would not infringe on active patents and notes that even if there is an intellectual property claim on a specific split-circuit design, manufacturers could use a multiple circuit design with multiple evaporators without necessarily using split-circuit evaporators. ddrumheller on DSK120RN23PROD with PROPOSALS2 f. Fan Motors Zero Zone commented that it already uses electronically commutated motors (‘‘ECM’’) fan motors to meet the current energy standard and stated that it believes most of industry is also using this style of motor. (Zero Zone, No. 44 at p. 5) Zero Zone requested that DOE include the ECM motor in the base model. (Id.) Zero Zone stated that the opening height for this type of product has a disproportional impact on energy consumption because larger opening heights disproportionally increase energy use. (Id.) Zero Zone commented that DOE’s models account for this characteristic. (Id.) DOE has maintained fan motor improvements as a technology option in this NOPR. As indicated by Zero Zone, DOE has observed that ECM fan motors are incorporated to a large extent in CRE. While DOE has observed ECMs incorporated in baseline equipment for multiple analyzed equipment classes, DOE has tentatively determined that certain baseline equipment still incorporates other less-efficient motor types. For these classes, DOE has maintained a transition to ECMs as a design option change. DOE has also 39 See https://patents.google.com/patent/ US3537274; https://patents.google.com/patent/ US3866439A/en; https://patents.google.com/ patent/US20120137724A1/en. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 updated its motor costs relative to the June 2022 Preliminary Analysis in this analysis to reflect current pricing. See chapter 3 and 5 of the NOPR TSD for additional details. Zero Zone commented that DOE suggested using permanent magnet synchronous motors for CRE. (Zero Zone, No. 44 at p. 6) Zero Zone noted that the study DOE references was completed in 2019, and the motors have not permeated the market since that time. (Id.) Zero Zone stated that the motors of such fans operate at 1800 RPM, creating unacceptable fan noise, and although its fan suppliers are aware of this technology, they do not recommend this style of motor for use in CRE. (Id.) Zero Zone recommended screening permanent magnet synchronous motors from use in CRE. (Id.) In response to Zero Zone, DOE has observed that permanent magnet synchronous motors are available on the market for CRE. However, DOE has not identified specific commercialized designs of permanent magnet synchronous motors with the appropriate size and rated airflow for the equipment analyzed in this NOPR. Based on these observations along with further discussions with manufacturers, DOE has not considered permanent magnet synchronous motors as a design option in this NOPR, as discussed further in section IV.C.1 of this document and chapter 5 of the NOPR TSD. g. Defrost Continental commented that, to its knowledge, variable defrost controls have not proven to reduce energy consumption in CRE. (Continental, No. 38 at p. 2) Zero Zone commented that variable defrost is an unreliable option that results in lost food product and therefore a monetary impact when it does not operate as intended. (Zero Zone, No. 44 at p. 4) Zero Zone commented that the potential energy savings of variable defrost are outweighed by the potential loss of product. (Id.) While DOE considered variable defrost as a design option in the preliminary analysis, DOE has tentatively determined to not consider this design option in the NOPR. For further discussion, see section IV.C.1.b of this document and chapter 5 of the NOPR TSD. B. Screening Analysis DOE uses the following five screening criteria to determine which technology options are suitable for further PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 70221 consideration in an energy conservation standards rulemaking: (1) Technological feasibility. Technologies that are not incorporated in commercial products or in commercially viable, existing prototypes will not be considered further. (2) Practicability to manufacture, install, and service. If it is determined that mass production of a technology in commercial products and reliable installation and servicing of the technology could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further. (3) Impacts on product utility. If a technology is determined to have a significant adverse impact on the utility of the product to subgroups of consumers, or result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not be considered further. (4) Safety of technologies. If it is determined that a technology would have significant adverse impacts on health or safety, it will not be considered further. (5) Unique-pathway proprietary technologies. If a technology has proprietary protection and represents a unique pathway to achieving a given efficiency level, it will not be considered further, due to the potential for monopolistic concerns. (See 10 CFR 431.4; sections 6(b)(3) and 7(b) of the Process Rule). In summary, if DOE determines that a technology, or a combination of technologies, fails to meet one or more of the listed five criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology are discussed in the following sections. The subsequent sections include comments from interested parties pertinent to the screening criteria, DOE’s evaluation of each technology option against the screening analysis criteria, and whether DOE determined that a technology option should be excluded (‘‘screened out’’) based on the screening criteria. DOE received the following comments in response to the June 2022 Preliminary Analysis regarding the screening analysis. ITW listed six design options that ITW stated sounded good but proved problematic: variable-speed E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70222 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules compressors that force other components to run; synchronousreluctance fan motors with performance that does not match CRE applications; enhanced-UA condenser or evaporator coils that increase energy consumption; microchannel condenser coils that cannot be cleaned; additional one-halfinch insulation that adds cost but not value; and vacuum-insulated panels that prove too fragile for CRE. (ITW, No. 41 at pp. 34–35) AHRI provided feedback on Table 4.3.1 ‘‘Retained Design Options,’’ stating that improved transparent doors; higher efficiency lighting; ECM motors; evaporator and condenser fans, motors, blades and controls (closed selfcontained cases); compressors; and variable-speed compressor horizontal closed transparent self-contained ice cream freezer (‘‘HCT.SCI’’) (specific to some specific smaller self-contained equipment) were already in use to meet the current standard. (AHRI, No. 46 at p. 15) AHRI stated vacuum-insulated glass (‘‘VIG’’) was not economically viable. (Id.) AHRI stated thicker insulation, synchronous-speed motors, and larger evaporators (due to space constraints) had reduced utility. (Id.) AHRI stated vacuum-insulated panels (prone to puncture, cannot be repaired), microchannel condensers (leak and plug during operation), evaporator and condenser fans, motors, blades, and controls (open cases), high-tech defrost fans (do not necessarily save energy and are unreliable), variable-defrost systems (do not reduce energy consumption), expansion valves, and larger evaporators (limitations due to flammable refrigerants) are not technically viable. (Id.) AHRI noted that in previous comments to DOE these options were considered to be max-tech, but, after further consultation with members, AHRI found them to be not technically viable design options. (Id.) AHRI stated that antisweat controls and night curtains, and occupancy sensors had a limited market. (Id.) And AHRI concluded that variable speed compressors (specific to some smaller, self-contained equipment—already used in some equipment) were a viable design option. (Id.) Zero Zone commented that vacuuminsulated glass is not a viable design option. (Zero Zone, No. 44 at p. 6) Zero Zone stated that its door supplier reported that the one vacuum-insulated glass supplier in the United States no longer offers the product because its high cost prevented customers from using it. (Id.) NAMA commented that several of the design options shown in the June 2022 Preliminary TSD could reduce the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 overall machine capacity, such as larger condensers or evaporators, more insulation, and changes to the type of glass that require new structural components. (NAMA, No. 37 at p. 15) NAMA commented that the external dimensions of a CRE appliance are limited by the height of breakrooms and built-in areas, and the width and length are limited by the machine’s integration with other machines with which CRE are paired. (Id.) NAMA commented that the June 2022 Preliminary TSD did not address the resultant change in utility or performance caused by a reduction in overall capacity. (Id.) NAMA stated that smaller capacity resulted in customers opening the door for longer periods of time and necessitated more frequent restocking, making the appliance more difficult for business owners to operate. (Id.) NAMA also commented that several of the design options suggested by DOE (e.g., lower-wattage refrigeration systems, vacuum-panel insulation, different evaporators or condensers, and lower-wattage fan motors) could affect the overall performance of the machine. (Id.) NAMA stated that overall performance of CRE is critical and can be significantly affected by a difference of 1 degree Celsius. (Id.) NAMA requested that DOE review the design options for energy efficiency and also their ability to maintain critical design features and performance. (Id.) Based on these comments, DOE has tentatively determined to screen out two technology options mentioned by commenters, increased insulation thickness and vacuum-insulated panels, which are discussed in more detail in section IV.B.1 of this document. However, DOE disagrees with commenters that permanent magnet synchronous motors meet the criteria of ‘‘impacts on product utility’’ because, although the permanent magnet synchronous motors currently available on the market are not optimized for size and rated airflow of CRE,40 there is not a significant adverse impact on the utility of the product. DOE also disagrees with commenters that increased evaporator or condenser surface areas meet the criteria of ‘‘impacts on product utility’’ because there is not a significant adverse impact on the utility of the product unless the increased evaporator or condenser requires a reduction in the overall CRE capacity. DOE notes that it did not consider any technology options that reduce the overall CRE capacity, 40 See www.qmpower.com/wp-content/uploads/ 2022/06/Product_Info-QSync_12W_60Hz-6.2.22WEB.pdf. PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 consistent with the criteria ‘‘impacts on product utility.’’ DOE also disagrees with commenters that microchannel condensers, evaporator fan controls, variable defrost systems, expansion valve improvements, and increased evaporator surface area meet the criteria of ‘‘technological feasibility.’’ Microchannel heat exchangers are often used in the automobile industry, and the stationary air conditioning and refrigeration markets have seen recent increases in implementation of microchannel heat exchangers. As noted by commenters and based on feedback during manufacturer interviews, DOE only considered evaporator fan controls as a design option on closed selfcontained CRE equipment classes. DOE notes that the amount of energy saved for each design option is not a criterion for the screening analysis and is discussed in the engineering analysis. For increased evaporator surface area, DOE considered the limitations due to flammable refrigerants (e.g., R–290) consistent with industry safety standards as discussed in section IV.C.1.a of this document. Additionally, DOE disagrees with commenters that vacuum-insulated glass is not a viable design option. DOE is aware of vacuum-insulated glass door suppliers outside of the United States and notes that that ‘‘not economically viable’’ is not one of the screening criteria specified in the Process Rule. DOE considered the cost of each design option in the engineering analysis. Finally, in response to commenters, DOE notes that ‘‘high-tech defrost fans,’’ ‘‘lower-wattage refrigeration systems,’’ and ‘‘lower-wattage fan motors’’ are not technology options DOE has analyzed in the preliminary or NOPR analysis. DOE discusses the screened-out technologies in section IV.B.1 of this document, lists the remaining technology options in section IV.B.2 of this document, and discusses the design options in section IV.C of this document and chapter 5 of the NOPR TSD. 1. Screened-Out Technologies For CRE, the screening criteria were applied to the technology options to either retain or eliminate technology for consideration in the engineering analysis. The screened-out technology options and the rationale for screening out each technology option considered in this analysis is detailed below. a. Increased Insulation Thickness In response to the June 2022 Preliminary Analysis, Continental commented that increasing insulation thickness, even by half an inch as E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 proposed by DOE, would expand equipment sizes and/or reduce internal capacity, both of which would have significant negative impact on utility for the end user. (Continental, No. 38 at p. 2) Zero Zone commented that DOE’s expectation that manufacturers will increase the thickness of insulation does not take into account the importance of physical dimensions in CRE equipment. (Zero Zone, No. 44 at p. 4) Zero Zone added that customers need replacement equipment that will fit in the existing available space and fit through 80-inch doorways. (Id.) Zero Zone stated that increasing the thickness of the internal insulation reduces the refrigerated volume, and equipment classes that use refrigerated volume in their allowable energy calculation would therefore see a ‘‘double hit.’’ (Id.) Zero Zone asserted that the resources in engineering design hours and retooling costs for the sheet metal necessary to accommodate such adjustments to insulation would be overly burdensome to manufacturers. (Id. at pp. 4–5) Zero Zone stated that increasing the thickness of internal insulation would result in stranded inventory for manufacturers and would affect end users’ ability to replace their aging equipment due to size limitations. (Id. at p. 5) As discussed in chapter 3 of the NOPR TSD, increasing insulation thickness increases the thermal resistivity of the exterior of the unit, which in turn reduces the heat load that must be removed by the CRE’s refrigeration system. However, to increase insulation thickness, either an increase to the size of the unit or a decrease to the refrigerated volume of the unit must occur. Because CRE is typically required to meet standard dimensions to fit into a fixed amount of space, the refrigerated volume of the unit may need to be decreased to accommodate increased insulation thickness, thus limiting the capacity of the unit. As a result, DOE has tentatively determined that increased insulation thickness meets the screening criterion of ‘‘impacts on product utility.’’ In this NOPR, DOE has screened out increased insulation thickness as a design option for improving the energy efficiency of CRE. b. Vacuum-Insulated Panels In response to the June 2022 Preliminary Analysis, Continental commented that vacuum-insulated panels are relatively expensive, introduce significant complexity to manufacturing, reduce equipment structural stability, are subject to damage, and are not easily replaceable, VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 requiring replacement of the entire unit. (Continental, No. 38 at p. 2) AHRI commented that cost estimates in the June 2022 Preliminary TSD were significantly underestimated related to pandemic-related scarcity pricing. (AHRI, No. 46 at pp. 14–15) AHRI stated it planned to complete a survey to clarify the cost of vacuum panels (estimated by DOE to be considerably less expensive than is accurate) among other components, but could not do so within the 30-day deadline, especially given that the comment period for the test procedure and the walk-in cooler and walk-in freezer Preliminary TSD overlapped. (Id. at p. 15) AHRI stated that components are difficult to obtain because of longer shipping times and this impacts research and development and testing timelines and time for listing through nationally recognized testing laboratories. (Id.) AHRI commented that these factors should be considered in future timing and rulemaking processes. (Id.) Zero Zone commented that vacuuminsulation panels are insufficiently robust and can lose their vacuum through bending or flexing. (Zero Zone, No 44 at p. 6) Zero Zone commented also that it can be difficult to determine the vacuum has been lost until the final product operation reveals condensation. (Id.) Zero Zone stated that large commercial refrigerators flex during shipping and customers fasten items to commercial refrigerators with screws, which can increase the risk of failure when using vacuum panels. (Id.) Zero Zone noted that a vacuum panel failure in a continuous line-up of remote commercial refrigerators results in the entire line up being moved to access the panel, which can result in replacement of the refrigerator. (Id.) Zero Zone recommended that DOE should not include vacuum-insulated panels as a design option. (Id.) As discussed in chapter 3 of the NOPR TSD, VIPs allow reduction in insulation thickness while maintaining or increasing thermal resistivity, due to the reduced conductivity that occurs in a low vacuum. Because VIPs consist of an outer airtight membrane surrounding a core material to form a cavity, any puncture to a panel renders the VIP ineffective. This may prevent customers from being able to install any screws or fasteners into the panel. VIPs cannot be repaired once a leak is detected in the field and would require replacement upon puncture or failure. In the June 2022 Preliminary Analysis TSD, DOE stated that it had not observed VIPs incorporated in CRE but had observed VIPs used in other refrigeration products (e.g., consumer refrigerators) PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 70223 (see section 2.5.1.6 of the June 2022 Preliminary TSD). Based on comments received and feedback during manufacturer interviews, DOE has tentatively determined that because of the significant difference in shelf loads between commercial and consumer refrigeration units, CRE may require brackets or other supporting structures to accommodate the heavier shelf loads, installed with screws or fasteners that could puncture the VIP. As a result, DOE has tentatively determined that vacuum-insulated panels meet the screening criterion of ‘‘impacts on product utility.’’ In this NOPR, DOE has screened out vacuum-insulated panels as a design option for improving the energy efficiency of CRE. c. Linear compressors As discussed in chapter 3 of the June 2022 Preliminary TSD and chapter 3 of the NOPR TSD, linear compressors use a linear rather than rotary motion to reduce the need for a crankshaft and linkage, resulting in reduced friction and side forces. Most linear compressors use a free-piston arrangement and can be controlled for a range of capacities. Compressor manufacturers had begun development on linear compressors for residential refrigerators. However, a lack of availability on the market of linear compressors with a large enough cooling capacity for commercial refrigeration sizes has prevented further development of this technology for commercial refrigeration applications and, therefore, DOE has tentatively determined that linear compressors meet the screening criterion of ‘‘practicability to manufacture, install, and service.’’ DOE did not receive any comments on its tentative determination to screen out linear compressors in response to the June 2022 Preliminary Analysis, and, in this NOPR, DOE has screened out linear compressors as a design option for improving the energy efficiency of CRE. d. Air curtain design As discussed in chapter 3 of the June 2022 Preliminary TSD and chapter 3 of the NOPR TSD, an air curtain is a fanpowered device that creates a moving wall (curtain) of air, which separates two spaces of different temperatures. Air curtains are used in CRE to minimize the infiltration of warmer external air into the refrigerated space. DOE’s research had presented the possibility of advanced air-curtain designs with levels of performance beyond the traditional air curtains generally employed in open display cases being used in the CRE industry. E:\FR\FM\10OCP2.SGM 10OCP2 70224 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules However, DOE has tentatively determined that advanced air-curtain designs are currently only in the research stage and, therefore, DOE has initially determined that advanced aircurtain designs meet the screening criterion of ‘‘practicability to manufacture, install, and service.’’ DOE did not receive any comments on its tentative determination to screen out air curtains in response to the June 2022 Preliminary Analysis, and, in this NOPR, DOE has screened out improved air curtains as a design option for improving the energy efficiency of CRE. 2. Remaining Technologies Through a review of each technology, DOE tentatively concludes that all of the other identified technologies listed in section IV.A.2 of this document met all five screening criteria to be examined further as design options in DOE’s NOPR analysis. In summary, DOE did not screen out the following technology options presented in table IV.4. TABLE IV.4—REMAINING TECHNOLOGY OPTIONS FOR CRE Insulation .................................................................................................. Improved resistivity of insulation (insulation type) ................................... Lighting ..................................................................................................... Higher-efficiency lighting .......................................................................... Occupancy Sensors ................................................................................. Improved transparent doors * ................................................................... Low-emissivity coatings * .......................................................................... Inert gas fill * ............................................................................................. Vacuum-insulated glass * ......................................................................... Additional panes * ..................................................................................... Anti-sweat heater controls * ...................................................................... Anti-fog films * ........................................................................................... Frame design * .......................................................................................... Fans and fan motors ................................................................................ Evaporator fan motors .............................................................................. Evaporator fan blades .............................................................................. Evaporator fan controls ............................................................................ Condenser fan motors ** .......................................................................... Condenser fan blades ** ........................................................................... Condenser fan controls ** ......................................................................... Evaporator Increased surface area Improved evaporator coil design Low-pressure differential evaporator Condenser ** Increased surface area ** Tube-and-fin enhancements ** Microchannel heat exchanger ** Compressor ** Improved compressor efficiency ** Alternative refrigerants ** Variable-speed compressors ** Other technologies Defrost systems Expansion valve improvements Night curtains *** Liquid suction heat exchanger ** * Only applies to equipment classes with doors. ** Only applies to self-contained equipment classes. *** Only applies to equipment classes without doors (open equipment classes). ddrumheller on DSK120RN23PROD with PROPOSALS2 DOE has initially determined that these technology options are technologically feasible because they are being used or have previously been used in commercially available equipment or working prototypes. DOE also finds that all of the remaining technology options meet the other screening criteria (i.e., practicable to manufacture, install, and service and do not result in adverse impacts on consumer utility, product availability, health, or safety, uniquepathway proprietary technologies). For additional details, see chapter 4 of the NOPR TSD. DOE requests comment on the decision to screen out increased insulation thickness, vacuum-insulated panels, linear compressors, and air curtain design as design options for improving the energy efficiency of CRE. C. Engineering Analysis The purpose of the engineering analysis is to establish the relationship between the efficiency and cost of CRE. There are two elements to consider in the engineering analysis: the selection of efficiency levels to analyze (i.e., the ‘‘efficiency analysis’’) and the determination of equipment cost at each efficiency level (i.e., the ‘‘cost analysis’’). In determining the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 performance of higher-efficiency equipment, DOE considers technologies and design option combinations not eliminated by the screening analysis. For each equipment class, DOE estimates the baseline cost, as well as the incremental cost for the equipment at efficiency levels above the baseline. The output of the engineering analysis is a set of cost-efficiency ‘‘curves’’ that are used in downstream analyses (i.e., the LCC and PBP analyses and the NIA). 1. Efficiency Analysis DOE typically uses one of two approaches to develop energy efficiency levels for the engineering analysis: (1) relying on observed efficiency levels in the market (i.e., the efficiency-level approach), or (2) determining the incremental efficiency improvements associated with incorporating specific design options to a baseline model (i.e., the design-option approach). Using the efficiency-level approach, the efficiency levels established for the analysis are determined based on the market distribution of existing equipment (in other words, based on the range of efficiencies and efficiency level ‘‘clusters’’ that already exist on the market). Using the design-option approach, the efficiency levels PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 established for the analysis are determined through detailed engineering calculations and/or computer simulations of the efficiency improvements from implementing specific design options that have been identified in the technology assessment. DOE may also rely on a combination of these two approaches. For example, the efficiency-level approach (based on actual equipment on the market) may be extended using the design-option approach to ‘‘gap fill’’ levels (to bridge large gaps between other identified efficiency levels) and/or to extrapolate to the max-tech level (particularly in cases where the max-tech level exceeds the maximum efficiency level currently available on the market). In this rulemaking, DOE relies on a design-option approach, supported with the testing and reverse engineering of directly analyzed CRE. The design options were incrementally added to the baseline configuration and continued through the ‘‘max-tech’’ configuration (i.e., implementing the ‘‘best available’’ combination of available design options). Consistent with the March 2014 Final Rule analysis (see chapter 5 of the E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 March 2014 Final Rule TSD 41), DOE estimated the performance of design option combinations using an engineering analysis spreadsheet model. This model estimates the daily energy consumption of CRE in kWh/day at various performance levels using a design-option approach. DOE generally relied on test data, CCD information, feedback from manufacturer interviews, publicly available component information, and reverse engineering to support and calibrate the engineering analysis spreadsheet model. The model calculates energy consumption at each performance level separately for each analysis configuration. In the March 2014 Final Rule analysis, DOE selected 25 high shipment volume equipment classes, referred to as ‘‘primary’’ classes, to analyze directly in the engineering analysis (see chapter 5 of the March 2014 Final Rule TSD 42). In this NOPR, DOE has followed a similar approach of directly analyzing 28 primary equipment classes. DOE directly analyzed the same primary equipment classes as the March 2014 Final Rule, except that the PD.SC.M equipment class was not included, and DOE directly analyzed four new equipment classes: VCT.SC.H, VCS.SC.H, chef base self-contained medium temperature (‘‘CB.SC.M’’), chef base self-contained low temperature (‘‘CB.SC.L’’). Additional details of the engineering analysis are available in chapter 5 of the NOPR TSD. a. Baseline Energy Use For each equipment class, DOE generally selects a baseline model as a reference point for each class, and measures changes resulting from potential energy conservation standards against the baseline. The baseline model in each equipment class represents the characteristics of equipment typical of that class (e.g., capacity, physical size). Generally, a baseline model is one that just meets current energy conservation standards, or, if no standards are in place, the baseline is typically the most common or least efficient unit on the market. In the June 2022 Preliminary TSD, DOE utilized the current standards for CRE for classes with current standards and the energy consumption based on the assumed baseline specifications modeled in the engineering analysis spreadsheet for classes without current standards as the baseline energy use for 41 See www.regulations.gov/document/EERE2010-BT-STD-0003-0102. 42 See www.regulations.gov/document/EERE2010-BT-STD-0003-0102. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 each analyzed equipment class. For higher efficiency levels, DOE assessed CRE efficiencies as a percent improvement relative to the baseline model. This provided a consistent efficiency comparison across each equipment class. DOE considered the efficiency improvements associated with implementing available design options beyond the baseline to the maxtech efficiency level. See chapter 5 of the June 2022 Preliminary TSD for additional details. In response to the June 2022 Preliminary Analysis, Zero Zone commented that, while it believes DOE is developing models and setting energy levels based on average energy values, no data were provided to confirm or deny that suspicion. (Zero Zone, No. 44 at p. 2) Zero Zone stated that setting energy values at an average expected level and requiring manufacturers to have all products meet the average energy level is incorrect, and such approach necessitates that manufacturers develop equipment with low enough average energy levels that the worst measured performance of any product is less than DOE’s average value. (Id.) Zero Zone provided figures illustrating that if DOE’s regulated average energy requirement is 30 kWh/ day, then industry must shift to a new average that is less than the uncertainty level in order to be sure that products do not exceed the energy level requirement. (Id.) Zero Zone requested that DOE account for this lower energy level penalty and provide which options are included in each energy level so that Zero Zone can fully evaluate the proposals. (Id. at p. 3) Zero Zone additionally commented that DOE’s proposed CRE test procedure requires manufacturers to calculate the uncertainty level and apply it to their rating, but DOE does not appear to apply the test requirements for uncertainty to its own work. (Id. at p. 2) Zero Zone stated that DOE proposed a 5-percent tolerance on total display area, but that one variation caused a 4.62-percent variation in allowable energy swinging on Zero Zone’s fivedoor case. (Id.) Zero Zone requested that DOE take into account all uncertainty when estimating energy consumption of CRE. (Id.) In response to the comment from Zero Zone, DOE notes that the engineering spreadsheet model that is used to develop the baseline and efficiency levels is calibrated using publicly available CCD data, which are subject to the requirements of the determination of represented value at 10 CFR 429.42(a), as well as ENERGY STAR data and manufacturer-submitted data. The DOE PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 70225 requirements specify that manufacturers must determine the represented value, which includes the certified rating, for each basic model of commercial refrigerator, freezer, or refrigeratorfreezer either by testing, in conjunction with the applicable sampling provisions, or by applying an alternative efficiency determination method (‘‘AEDM’’). In the case where the reported value is derived from testing, at least two or more units should be tested pursuant to 10 CFR 429.42 and the appropriate sampling statistics must be applied in order to develop the represented value. 79 FR 22277, 22296. Any represented value of energy consumption or other measure of energy use of a basic model for which consumers would favor lower values shall be greater than or equal to the higher of: (1) the mean of the sample or, (2) the upper 95 percent confidence limit (UCL) of the true mean divided by 1.10. 10 CFR 429.42(a)(1)(ii)(A). These requirements provide a statistical assessment of test results used to determine the represented value for a basic model which indicates a high level of confidence that the model population average energy use is less than or equal to the standard. DOE did not consider additional uncertainty in the proposed maximum daily energy consumption standard equation in this NOPR analysis. DOE expects that Zero Zone is referring to section J., Enforcement Provisions, of the June 2022 Test Procedure NOPR and the respective proposed regulatory text at 10 CFR 429.134. As stated in the June 2022 Test Procedure NOPR, product-specific enforcement provisions specify which ratings or measurements DOE will use to determine compliance with applicable energy or water conservation standards. 87 FR 39164, 39211. Generally, DOE provides that the certified metric is used for enforcement purposes (e.g., calculation of the applicable energy conservation standard) if the average value measured during assessment and enforcement testing is within a specified percent of the rated value. Id. Otherwise, the average measured value would be used. Id. DOE proposed to add a new productspecific enforcement provision section stating that the certified volume for CRE will be considered valid only if the measurement(s) (either the measured volume for a single unit sample or the average of the measured volumes for a multiple unit sample) is within five percent of the certified volume; otherwise, the measured volume would be used as the basis for determining the E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70226 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules applicable energy conservation standard. Id. at 87 FR 39212. Similarly, DOE proposed that the certified TDA for CRE will be considered valid only if the measurement(s) (either the measured TDA for a single unit sample or the average of the measured TDAs for a multiple unit sample) is within five percent of the certified TDA. Id. If the certified TDA is found to not be valid, the measured TDA would be used to determine the applicable energy conservation standard. Id. These proposals in the June 2022 Test Procedure NOPR are specific to how DOE conducts enforcement testing and a tolerance on the certified volume or TDA of a given CRE model is used to decide whether the certified volume or TDA will be used to determine compliance with the applicable standard, or, if the average measured volume or TDA is outside of the tolerance, the average measured volume or TDA of the assessment and enforcement units will be used to determine compliance with the applicable standard. Refrigerants. In response to the June 2022 Preliminary Analysis, DOE received several comments from stakeholders regarding how refrigerants were considered in the preliminary engineering analysis. AHRI commented that many states that adopted the SNAP Rules do not allow the use of the refrigerant R404A. (AHRI, No. 46 at p. 3) AHRI requested clarification regarding whether this addresses self-contained cases. (Id.) NAFEM expressed concern about DOE’s position not to account for future refrigerant regulatory changes by the EPA. (NAFEM, No. 40 at p. 3). NAFEM stated its concern that DOE had not analyzed refrigerant transitions of remote condensing systems in the June 2022 Preliminary TSD and had declined to evaluate alternative refrigerants as a design option for remote CRE due to the lack of a test procedure. (Id.) NAFEM recommended that DOE and EPA better coordinate their actions to achieve their mutual goals, and NAFEM volunteered to educate DOE technical staff so that any proposed rule accurately reflects industry knowledge. (Id.) The Joint Commenters requested that DOE analyze propane refrigerant for additional equipment classes. (Joint Commenters, No. 39 at p. 1) AHRI commented that a preliminary transition was in process from R–404A to refrigerants with a global warming potential of approximately 1500 and refrigerants used in colder temperature applications have a GWP of 2200. (AHRI, No. 46 at p. 12) AHRI noted that most lower-GWP refrigerants were VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 limited by building codes because the necessary standard, UL 60335–2–89, was just published recently in October 2021. (Id.) AHRI commented that the second, more complex and costly refrigerant transition in January 2026 was unaccounted for in the June 2022 Preliminary TSD, and that the two transitions will have a significant reduction in radiative-forcing, shortlived climate-polluting HFCs and should be taken into consideration in the social cost of carbon and environmental impact assessments. (Id.) AHRI commented that EPA does not yet allow for R–290 or an ASHRAE Class A3 refrigerant to be used and few of the thousands of State and local building codes have been updated to charge refrigeration equipment and store necessary quantities to supply end-user needs. (Id. at p. 13) AHRI stated that significant work must be done to finalize codes prior to the anticipated 2026 transition and AHRI noted that AZ, CO, IN, ME, MO, NY, TN, TX, VT, WA, and WV would allow for the use these new refrigerants once the EPA listed them. (Id. at pp. 13–14) AHRI pointed out that manufacturers are still testing refrigerants for the 2026 transition, and that because refrigerant and component manufacturers have largely been focused on larger markets than many of the equipment types sold in the CRE space, not all of the details are known about the impact of specific refrigerants to energy efficiency. (Id. at p. 13) AHRI stated, however, that some proposed blends are known to have higher glide and lower efficiencies (some significantly lower) than those in use, especially for colder-temperature applications. (Id.) AHRI commented that, in addition, the energy efficiency impact of an important mitigation strategy related to refrigerants has not been addressed—the need to continuously operate fans to reduce the risk of reaching a flammable concentration. (Id.) AHRI noted that, in some cases, glide is high enough that evaporator re-design is needed, making costs even higher to conform with energy conservation standards. (Id.) AHRI commented that most lowerGWP refrigerants have a different flammability classification than those currently used today and cost estimates must also include new electrical components required to be ‘‘sparkproof’’ to eliminate the risk of ignition in case of a leak. (Id. at p. 12) AHRI noted that motors, wiring, compressors, and other components must all comply with this flammability classification, making them more costly than estimated in the June 2022 Preliminary TSD. (Id.) PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 NAMA stated that several of the design options mentioned in the June 2022 Preliminary TSD are either not available or not realistic in NAMA equipment, such as the change to an A– 3 refrigerant that would require nearly a dozen other components to also be changed. (NAMA, No. 37 at p. 7). NAMA commented that DOE failed to mention the CRADA between the NAMA Foundation, DOE, and Oak Ridge National Laboratory (‘‘ORNL’’) in the June 2022 Preliminary TSD. (Id. at p. 12) NAMA stated that most of the activities during the 2019–2021 CRADA were focused on reducing the risk during a potential leak situation. (Id.) NAMA stated that in nearly all scenarios tested by ORNL, additional fans were necessary to reduce the mixture of air and refrigerant below the lower flammability limit (‘‘LFL’’), but the energy used by these fans was not accounted for in the June 2022 Preliminary TSD. (Id.) NAMA commented that the proposed DOE test procedure would actually penalize selfcontained bottle cooler manufacturers for using additional ventilation. (Id.) NAMA further stated that the COVID–19 pandemic had delayed progress in the CRADA and that NAMA had requested an extension so that the remaining items (over half) could be studied. (Id.) NAMA commented that these remaining items look at possible energy efficiency gains, and the lack of results had put its industry behind schedule to meet any new energy efficiency requirements from DOE. (Id.) NAMA requested that DOE delay new minimum energy efficiency standards until manufacturers have the research from ORNL to pursue the research and development of new technologies. (Id.) Zero Zone commented that DOE asserted multi-circuit evaporators are a design option that would allow larger pieces of equipment to use propane in multiple small systems. (Zero Zone, No. 44 at p. 5) Zero Zone commented that using propane in systems over 150 grams requires additional leakmitigation equipment. (Id.) Zero Zone stated that until the release of UL 60335–2–89, CRE could only use 150gram charges of propane and were not required to have mitigation strategies, which explains why DOE has not observed mitigation on CRE on the market. (Id.) Zero Zone requested that DOE include the mitigation cost in its evaluation. (Id.) As recommended by stakeholders, DOE is considering the impact of the December 2022 EPA NOPR on CRE in this NOPR. As described in section I of this document, DOE understands that it would be beneficial to CRE equipment E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules manufacturers to align the compliance date of any DOE amended or established standards as closely as possible with the refrigerant prohibition dates proposed by the December 2022 EPA NOPR. Therefore, DOE is proposing that the proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is 3 years after the date on which the final established and amended standards are published. The December 2022 EPA NOPR proposed to prohibit manufacture or import of such CRE starting January 1, 2025, which is at least 3 years earlier than the expected compliance date for any amended CRE standards associated with the proposals in this document. Hence, the proposed refrigerant 70227 prohibitions listed in the December 2022 EPA NOPR are assumed to be enacted for the purpose of DOE’s analysis in support of this NOPR. Refrigerants not prohibited from use in CRE in the December 2022 EPA NOPR are presumed to be permitted for use in CRE. Table IV.5 summarizes the relevant provisions from the December 2022 EPA NOPR. TABLE IV.5—DECEMBER 2022 EPA NOPR SUMMARY FOR CRE Proposed GWP limit ddrumheller on DSK120RN23PROD with PROPOSALS2 Sectors and subsectors Retail food refrigeration—stand-alone units ............................................................................................................ 150 Retail food refrigeration—refrigerated food processing and dispensing equipment ............................................... 150 Retail food refrigeration—supermarket systems with refrigerant charge capacities of 200 pounds or greater ..... 150 Retail food refrigeration—supermarket systems with refrigeration charge capacities less than 200 pounds charge. Retail food refrigeration—supermarket systems, high temperature side of cascade system ................................ 300 Retail food refrigeration—remote condensing units with refrigerant charge capacities of 200 pounds or greater 150 Retail food refrigeration—remote condensing units with refrigerant charge capacities less than 200 pounds ..... 300 Retail food refrigeration—remote condensing units, high temperature side of cascade systems ......................... 300 In the December 2022 EPA NOPR, self-contained CRE (EPA refers to selfcontained CRE as ‘‘stand-alone equipment’’) are limited to a GWP of 150 for all DOE self-contained equipment classes. Commercial refrigeration equipment has typically used R–404A or R–134a refrigerant, which have a GWP above 150. Because of the high GWP of R–404A and R–134a, significant research has been conducted to find alternative refrigerants with less or no GWP. Naturally occurring substances such as carbon dioxide, ammonia, and hydrocarbons (specifically propane (i.e., R–290) for commercial refrigeration equipment) all have very low GWP. DOE notes that several manufacturers currently rate CRE models to both ENERGY STAR 43 and DOE 44 with CRE equipment using R–290 (GWP of 3) and manufacturers indicated in manufacturer interviews that the industry is planning to transition to R–290 for self-contained CRE. EPA currently lists R–290 as acceptable with use conditions for selfcontained CRE,45 however, EPA has not yet updated the use conditions for R– 43 See www.energystar.gov/productfinder/ product/certified-commercial-refrigerators-andfreezers/results. 44 See www.regulations.doe.gov/certificationdata/#q=Product_Group_s%3A*. 45 See www.epa.gov/snap/substitutes-stand-aloneequipment. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 290 consistent with the latest industry safety standards for CRE. EPA currently lists R–290 as acceptable with use conditions for a refrigerant charge of up to 150 grams in self-contained CRE, but in a recent proposed rule, EPA proposed to increase the allowable charge to 304 grams for closed equipment and 494 grams for open equipment to harmonize with the maximum charge quantity allowed by industry safety standards 46 and to be consistent with the December 2022 EPA NOPR (i.e., prohibitions for retail food refrigeration—standalone units, when using or intended to use a regulated substance, or a blend containing a regulated substance with a global warming potential of 150 or greater). Therefore, DOE has tentatively determined that once EPA finalizes the proposed increases to the allowable charge limits, all self-contained CRE equipment can use R–290. DOE expects that the use of R–290 generally will improve efficiency as compared with the refrigerants currently in use (e.g., R–404A), which are proposed to be prohibited by the December 2022 EPA NOPR, because R– 290 has higher refrigeration-cycle efficiency than the current refrigerants. Thus, DOE expects the December 2022 EPA NOPR to require redesign that will 46 SNAP Proposed Rule 26 (88 FR 33722) harmonizes with UL Standard 60335–2–89, Edition 2, published on October 27, 2021. PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 300 Compliance date January 2025. January 2025. January 2025. January 2025. January 2025. January 2025. January 2025. January 2025. 1, 1, 1, 1, 1, 1, 1, 1, improve the efficiency of self-contained CRE equipment. Hence, the baseline levels for self-contained CRE in this NOPR reflect the design changes made by manufacturers in response to the December 2022 EPA NOPR, which incorporates refrigerant conversion to R–290. The expected efficiency improvement associated with this refrigerant change varies by class and is presented in table IV.6. DOE considered the requirement for components to be ‘‘spark-proof’’ for use with the R–290 refrigerant (i.e., propane) and the associated costs were included in the cost of baseline models. In chapter 2 of the June 2022 Preliminary TSD, DOE stated that DOE has not observed any additional leak monitoring or ventilation components for leak mitigation in any analyzed selfcontained equipment that currently incorporates R–290 refrigerant.47 (See June 2022 Preliminary TSD, Chapter 2). As a result, for the representative equipment sizes considered in the preliminary engineering analysis, DOE initially determined that leak mitigation controls are not needed and therefore did not account for any additional energy consuming components with the transition to R–290 refrigerant. (Id.) Based on the CRE that DOE tested and tore down in support of this NOPR, DOE 47 See www.regulations.gov/document/EERE– 2017–BT–STD–0007–0013. E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70228 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules has not observed any refrigerant leak mitigation controls that consume additional energy use for self-contained CRE that use 150 grams of R–290 or less. DOE expects that any refrigerant leak mitigation controls that manufacturers implement on self-contained CRE would not use any additional energy use as measured according to the DOE test procedure (e.g., any ventilation fans used to disperse refrigerant in the event of a refrigerant leak would not be on and using energy unless a refrigerant leak was detected). In response to the comment from NAMA, DOE acknowledges the ongoing research at ORNL under the CRADA. DOE recognizes that leak mitigation technologies are still under development and requests comment and data on the use of such technologies, how they may impact CRE energy use as measured according to the DOE test procedure, and the associated cost of such technologies. DOE welcomes any additional comments and supporting data, including any additional results of the CRADA, in response to this NOPR. DOE is also aware of small CRE equipment using R–600a, which is a similar refrigerant to R–290. DOE has tentatively determined that R–600a has similar refrigeration-cycle efficiency as R–290 and that the performance of CRE using R–290 is representative of CRE using R–600a. As discussed in section IV.C.1.a, remote condensing CRE have proposed GWP limits of either 150 or 300, depending on the refrigerant system charge size or refrigerant system type. In chapter 2 of the June 2022 Preliminary TSD, DOE noted that the current and proposed DOE test procedures account for the refrigeration load of remote cases plus any energy consumed by components within the equipment.48 (See June 2022 TSD, Chapter 2) By reference to table 1 in AHRI 1200, the test procedure calculates an expected compressor energy consumption associated with the case refrigeration load, independent of compressor details including refrigerant type. (Id.) Hence, DOE initially determined that alternative refrigerants in remote CRE cases do not result in changes in measured energy consumption. (Id.) Therefore, DOE did not consider alternative refrigerants in remote CRE cases in the preliminary engineering analysis. (Id.) In this NOPR, DOE has tentatively determined that the current standard is representative of the baseline energy use for remotecondensing CRE using refrigerants that 48 See www.regulations.gov/document/EERE– 2017–BT–STD–0007–0013. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 comply with the December 2022 EPA NOPR when tested according to the DOE test procedure. DOE’s analysis considers that these efficiency improvements, equipment costs, and manufacturer investments required to comply with the December 2022 EPA NOPR will be in effect prior to the time of compliance for the proposed amended DOE CRE standards for all CRE equipment classes and sizes. DOE has updated its baseline equipment costs to reflect current costs based on feedback received during manufacturer interviews, information collected during CRE teardowns, and market research. TABLE IV.6—EFFECT OF USE OF R– 290 ON ENERGY USE IN BASELINE MODELS Energy use reduction below DOE standard (%) Equipment class VOP.SC.M ............................ SVO.SC.M ............................ HZO.SC.M ............................ HZO.SC.L ............................. VCT.SC.M ............................. VCT.SC.L .............................. VCS.SC.M ............................ VCS.SC.L ............................. HCT.SC.M ............................ HCT.SC.L ............................. HCS.SC.M ............................ HCS.SC.L ............................. SOC.SC.M ............................ VCT.SC.I ............................... HCT.SC.I .............................. VCS.SC.I .............................. 4.4 9.2 19.5 4.8 18.8 2.8 20.5 8.5 0.0 0.0 20.1 22.1 2.7 0.0 0.0 3.3 The expected energy efficiency improvement associated with the change to R–290 is based on R–290 single-speed compressors currently available on the market suitable for CRE equipment. In this NOPR, DOE did not consider additional single-speed compressor efficiency improvements beyond the baseline because DOE expects that the single-speed compressors currently available on the market for refrigerants that comply with the December 2022 EPA NOPR represent the maximum single-speed compressor efficiency achievable for each respective equipment class. DOE requests comment on its proposal to use baseline levels for CRE equipment based upon the anticipated design changes that will be made by manufacturers in response to the December 2022 EPA NOPR. DOE further requests comment on its estimates of energy-use reduction associated with the design changes made by manufacturers in response to the December 2022 EPA NOPR. PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 Baseline Components. NAMA commented that the June 2022 Preliminary TSD contained errors and appeared to have been prepared prior to significant changes that occurred from 2019–2022. (NAMA, No. 37, p. 4–5) NAMA commented also that features DOE seemed to believe represented future improvements to design had already been implemented, leading to inaccurate baseline model assumptions by DOE about energy efficiency levels and incremental costs. (Id. at p. 5) NAMA stated that DOE’s design changes, project energy efficiency improvements, and cost data on the 12 design options under consideration appeared outdated by 10 years and applicable only to very large machines greater than 50 cubic feet in volume. (Id. at p. 7) NAMA further commented that the design options were not representative of the possible changes, availability, and costs associated with refrigerated bottle coolers and small self-contained display cabinets. (Id.) NAMA recommended that DOE change its categories and make allowances for the differences in energy efficiency between small and large equipment, as well as differences in cost and costbenefit analysis. (Id. at p. 9) NAMA commented that DOE could use data on shipments to modify DOE percentages according to sales-weighted numbers. (Id.) NAMA proposed that DOE restructure its categories in the June 2022 Preliminary TSD to include two ranges: Range 1, which would be less than 30 cubic feet, and Range 2, which would be 30 cubic feet and over in volume. (Id.) NAMA commented that it believes using these categories would enable a more accurate assessment of the energy savings and cost burden. (Id.) NAFEM and NAMA commented that the design options in the 2014 TSD were so stringent that industry had to go beyond DOE’s standards and incorporate features such as LED lighting, brushless DC evaporator fan motors, high-performance doors, and brushless DC condenser fan motors. (NAFEM, No. 40 at pp. 5–6; NAMA, No. 37 at p. 5) Zero Zone similarly stated that it disagrees with the design options that fall above the 2017 equipment class maximum daily energy consumption standard level and that LED lighting, high-efficiency fan motors (like ECM), and high-performance doors are already employed to meet current maximum energy consumption levels. (Zero Zone, No. 44 at p. 3) Zero Zone commented that this information is available on company specification sheets and that an analysis using this available information would show that the slope E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules of the manufacturer production costs versus daily energy use in DOE’s engineering spreadsheet should be reevaluated. (Id.) ITW recommended adding technologies to the baseline as they were applied by industry, citing examples including ECM fans, highefficiency compressors, and evaporator fan controls. (ITW, No. 41 at p. 34) NAFEM and NAMA stated that because these and other technologies were already necessary to meet the 2014 standard, DOE should not be able to claim any new energy efficiency benefits when incorporating such technologies into the June 2022 Preliminary TSD. (NAFEM, No. 40 at p. 6; NAMA, No. 37 at p. 5) Zero Zone similarly commented that DOE’s graph in the June 2022 Preliminary TSD indicates that using high-performance doors would reduce the calculated daily energy use from 35.14 kWh/day to 26.60 kWh/day, but Zero Zone stated that this design option is already employed by manufacturers, and that DOE is therefore double counting the impact of high-performance doors. (Zero Zone, No. 44 at p. 3). AHRI commented that design options included in the June 2022 Preliminary TSD—such as high efficiency doors, fans, motors, and ECM in self-contained cases—are largely already incorporated by manufacturers to meet current standards and that counting them a second time will not cause the equipment to meet the proposed energy efficiency levels. (AHRI, No. 46 at p. 3) AHRI noted that vacuum-packed doors and insulation are a few of the recommended design options that are not already in use by manufacturers. (Id.) AHRI commented that lowtemperature vertical closed transparent (‘‘VCT’’) classes already use highefficiency doors and that DOE’s model is incorrect regarding low-temperature VCT equipment classes as DOE assumes no-sweat anti-heat. (Id. at p. 6) AHRI noted that DOE’s baseline does not meet current energy-efficiency standards, as the current standard for VCT remote low temperature allowable is 34.46 kWh/day compared to 35.14 kWh/day in DOE’s baseline design without design options. (Id.) AHRI noted also that there is no room for anti-sweat controls under the ASHRAE test conditions and therefore this technology is not logical. (Id.) AHRI commented that many potential energy saving scenarios in the June 2022 Preliminary TSD contain elements that are already in use or are technically impractical for refrigeration equipment. (Id. at p. 14) AHRI stated that the teardown analysis must have used equipment built before 2019, which VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 would have excluded design features needed to meet current energy conservation standards, such as efficient doors and LED lights. (Id.) AHRI commented that variable-speed compressors are impactful with significant changing loads, but not for most refrigeration systems. (Id.) AHRI also stated that the analysis failed to recognize concerns with proposed product features; for example, retailers generally do not want occupancy lighting because a light that is off indicates to consumers that equipment is not working properly and that food may be spoiled. (Id.) AHRI commented that energy-saving opportunities are lower after the elimination of design features that are technically infeasible, already in use, or cost prohibitive. (Id.) AHRI stated that design options are also limited by the equipment footprint: larger compressors or additional insulation requirements increase case sizes and reduce storage capacity, creating less utility and requiring remodeling to fit in current spaces. (Id.) AHRI commented that the June 2022 Preliminary TSD failed to address the impact of design options on performance or other design features, such as temperature, and offered the example of the VCT.RC.M equipment class in which some OEMs have begun incorporating high-efficiency, triplepane doors and increased insulation. (Id.) AHRI stated the baseline components in the tear-down analysis included evaporator fans that are shaded pole motors and have not been used in years. (Id.) Continental stated that some selections in the June 2022 Preliminary TSD technology options have not been sufficiently evaluated for their current usage, anticipated contribution to energy reduction, technological viability, cost impact, and/or bearing on the utility of the equipment. (Continental, No. 38 at p. 2) Continental noted that many manufacturers already use improved transparent doors, highefficiency LED lighting, and highefficiency ECM fans to meet current standards for DOE and/or ENERGY STAR. (Id.) Zero Zone commented that DOE did not conduct manufacturer interviews. (Zero Zone, No. 44 at p. 5) Zero Zone stated that each of its models in the compliance database uses a unique code to identify the components provided. (Id.) Zero Zone questioned how DOE determined what is included in this base line. (Id.) With respect to comments from NAMA, NAFEM, ITW, AHRI, Continental, and Zero Zone, DOE followed a similar approach to the PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 70229 March 2014 Final Rule analysis in the June 2022 Preliminary Analysis but incorporated additional design options and updated the design option assumptions based on publicly available manufacturer specifications and preliminary test data. In support of this NOPR, manufacturer interviews were conducted and interviews yielded feedback on several aspects of the June 2022 Preliminary Analysis, including typical CRE baseline components. Further, DOE has reviewed the current CRE market, incorporated feedback from the June 2022 Preliminary Analysis, and incorporated information gathered during manufacturer interviews to update the baseline components in this NOPR to reflect current designs and ensure that design options have not already been implemented in a representative baseline CRE for each equipment class. For the June 2022 Preliminary Analysis, DOE directly analyzed multiple equipment classes intended to represent the majority of industry shipments for CRE. Within each analyzed equipment class, DOE also selected a volume or TDA for the analysis to best represent the range of equipment available in that equipment class. For currently covered equipment classes, the representative volumes and TDAs selected were consistent with those analyzed for the March 2014 Final Rule. DOE has retained the June 2022 Preliminary Analysis approach in this NOPR. Although the NOPR analysis is conducted at one representative volume or TDA for each directly analyzed class, DOE considers the components, design options, costs, and energy use characteristics of CRE across the entire equipment class. See chapter 5 of the NOPR TSD for additional details on the baseline components in each equipment class. AHT commented that internal LED lighting is a common characteristic in all closed transparent equipment classes, yet in the June 2022 Preliminary Analysis, DOE does not indicate lights for the baseline design options for horizontal closed transparent selfcontained equipment classes (HCT.SC.M, HCT.SC.L, HCT.SC.I). (AHT, No. 48 at p. 1) AHT stated that good internal illumination is of high importance for these units because their purpose is to display refrigerated or frozen food to the end consumer, whereas open units may be sufficiently illuminated with external ceiling lights. (Id. at pp. 1–2) AHT commented that DOE’s energy rating regulation does not consider the energy consumption of such external lights or the additional headload, further disadvantaging closed E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70230 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules units compared to open units. (Id. at p. 2) AHT commented that the energy consumption of open units relying on external lights is substantially higher than the test result suggests because the additional lighting is often higher than the 800 lux stated in the test procedure. (Id.) AHT commented that manufacturers have already incorporated many of the proposed design options to meet current limits for HCT.SC.M/L/I and provided the example of a unit from the HCT.SC.M equipment class with around 25 ft2 of TDA, which already uses highefficiency reciprocating compressors, brushless DC condenser fan motors, variable-speed compressors, and an additional half inch of insulation to achieve the measured consumption of 1.9 kWh/24h in the test. (Id. at pp. 2– 3) Based on a review of these comments, manufacturer feedback, and the available equipment on the market, DOE has included lighting and additional components at the baseline for horizontal closed transparent CRE equipment in this NOPR. See chapter 5 of the NOPR TSD for additional details. Regarding fan motors, the CA IOUs referred DOE to their comments on the July 2021 RFI in which they stated that there has been continued improvement in fan motors since energy conservation standards were last analyzed. (CA IOUs, No. 43 at p. 2) The CA IOUs expressed gratitude that DOE included electronically commutated permanent magnet motors, also known as brushless permanent magnet motors or brushless DC motors and synchronous motors; however, the CA IOUs also commented that the list of fan motor technology options analyzed for the closed-door refrigeration categories is incomplete, as shown in the CA IOUs Table 1, which lists all analyzed fan types alongside all self-contained equipment families. (Id. at pp. 2–3) The CA IOUs recommended that the evaporator fan technology options analyzed in the vertical closed refrigeration category also be analyzed for the horizontal closed refrigeration category. (Id. at p. 2) The CA IOUs stated that several horizontal glass case manufacturers offer medium- to lowtemperature convertible units, suggesting that analyzing the same technology options for these two equipment classes makes sense. (Id.) The Joint Commenters recommended that DOE analyze evaporator technologies for horizontal, closed CREs as DOE had done for the majority of CRE equipment classes. (Joint Commenters, No. 39 at p. 2) The Joint Commenters stated that DOE’s analysis found that these evaporator-related technology VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 options result in significant energy savings for other equipment classes analyzed. (Id.) The Joint Commenters stated that they are unsure why DOE excluded evaporator technology options for horizontal closed CREs. (Id.) In response to the comments from the CA IOUs and the Joint Commenters, DOE notes that the horizontal closed category (horizontal closed transparent or solid equipment classes) consists of CRE that utilize either cold-wall or forced-air evaporators depending on the equipment class. DOE observed that each primary equipment class that utilizes forced air evaporators has an evaporator fan and motor and each primary equipment class that utilizes cold-wall evaporators does not have an evaporator fan and motor. Therefore, classes with a cold-wall evaporator did not have an evaporator fan motor design option. See chapter 5 of the NOPR TSD for additional details. The CA IOUs commented that the June 2022 Preliminary TSD analysis for several equipment categories (e.g., chef bases/griddle stands, semi-vertical open, and horizontal closed transparent) assumes shaded-pole motors as the baseline; however, the CA IOUs stated that shaded-pole motors are rarely used in new equipment in the industry and recommended that DOE analyze permanent split capacitor (‘‘PSC’’) motors as the baseline. (CA IOUs, No. 43 at p. 3) Similarly, AHRI commented that there are inconsistencies with the assumptions made regarding efficiency levels in the June 2022 Preliminary TSD: (1) the VOP.RC.M (open dairy cases) class in the baseline already have ECMs, which should have been the baseline motor, and (2) LED lighting contributing to increased efficiency. (AHRI, No. 46 at p. 2) With respect to the comment from the CA IOUs, for chef bases or griddle stands, DOE has tentatively determined that, based on teardowns conducted in support of this NOPR, shaded-pole motors (‘‘SPMs’’) are used for fan motors in baseline equipment. See chapter 5 of the NOPR TSD for additional details. Regarding the equipment noted by commenters, DOE has also updated baseline components in this NOPR for all equipment classes (including those components and classes mentioned by commenters) to better reflect baseline CRE. See chapter 5 of the NOPR TSD for additional detail. Equipment Classes with Unique Energy Use Characteristics. ITW commented that, in terms of designoptions compliance with the MDEC value, DOE failed to recognize that manufacturers might use other options farther down the list of compliant PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 design options to produce cabinets with increased heat loads due to their physical features (other than those required by a simple reach-in refrigerator), citing the following applications as examples: (1) passthrough refrigerators—cabinets with doors on both sides, providing access to stored items from either side; (2) roll-in refrigerators—cabinets with ramps and door sweeps that allow for loading of bakery carts; and (3) roll-through refrigerators—cabinets with ramps and door sweeps on both sides that allow for bakery carts to move in and out from one side to the other. (ITW, No. 41 at p. 33) ITW commented that in the 2014 TSD, DOE proposed many of the same design options to achieve compliance and manufacturers adopted many of the options, such as ECM fans and highefficiency compressors, with the industry trending toward R–290 refrigeration systems. (Id.) ITW commented that DOE does not prescribe technologies; it recommends them and industry selects the technology used for compliance. (Id.) NAFEM stated that it and other commenters recommended separating forced-air and cold-wall refrigeration systems into different categories, yet DOE deferred making a decision until a future proposed rule. (NAFEM, No. 40 at p. 3) NAFEM commented that the preliminary TSD stage is the appropriate stage to adopt a position on these categories and that DOE’s deferral missed an opportunity for DOE to work with NAFEM members to fully understand the issues. (Id.) NAFEM also commented that DOE’s decision to defer accounting for different door configurations (roll-in, roll-through, and pass-through doors) presented a similar missed opportunity for DOE to work with NAFEM members. (Id.) With respect to the comments from ITW and NAFEM, DOE recognizes that certain CRE equipment classes may contain equipment that utilize either forced-air evaporators or cold-wall evaporators and that certain CRE equipment classes may contain equipment that have different door configurations (e.g., roll-in, roll-through, and pass-through). Based on CCD data, information from commenters and manufacturer interviews, and DOE’s directly analyzed units showing an energy use difference between certain types of CRE, DOE has tentatively determined to include separate energy use equations based on an energy use multiplier for certain equipment classes that contain CRE with unique utility. This energy use multiplier will require models with certain characteristics (e.g., E:\FR\FM\10OCP2.SGM 10OCP2 70231 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules roll-in doors, roll-thru doors, pass-thru doors, forced-air evaporators) to comply with an energy conservation standard that has a higher maximum daily energy consumption than the proposed energy conservation standard for a specific equipment class. DOE has initially determined that the energy use multipliers do not result in maximum daily energy consumptions that are higher than the current energy conservation standard for a given equipment class (i.e., complying with EPCA’s ‘‘anti-backsliding’’ provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(1))). In section IV.A.1.b of this NOPR, DOE proposes definitions for pass-through, roll-in, roll-through, and sliding doors. Based on CCD data, information from commenters and manufacturer interviews, and DOE’s directly analyzed units showing an energy use difference between certain types of CRE, DOE has tentatively developed an energy use multiplier for equipment classes that DOE observed CRE with pass-through, roll-in, roll-through, or sliding doors on the market. DOE has tentatively developed multipliers for pass-through, sliding, and roll-in doors (roll-through is a combination of pass-through and rollin), which in combination account for all the different door designs currently observed on the market. See table IV.7 for additional details. TABLE IV.7—DESCRIPTION OF EQUIPMENT CLASS MULTIPLIERS FOR UNIQUE DOOR CHARACTERISTICS Door type Applicable equipment classes Pass-through .................................. Sliding ............................................. Pass-through and Sliding ............... Roll-in .............................................. Roll-through .................................... VCT.RC.M; VCT.RC.M; VCT.RC.M; VCT.RC.M; VCT.RC.M; In section IV.A.1.b of this NOPR, DOE additionally proposes definitions for cold-wall and forced-air evaporators. Based on CCD data, information from commenters and manufacturer interviews, and DOE’s directly analyzed units showing an energy use difference VCT.SC.M; VCT.SC.L; VCS.SC.M; VCS.SC.L ................... VCT.SC.M ............................................................................ VCT.SC.M ............................................................................ VCT.SC.M; VCS.SC.M; VCS.SC.L ...................................... VCT.SC.M; VCS.SC.M; VCS.SC.L ...................................... between certain types of CRE, DOE has tentatively developed an energy use multiplier for equipment classes that were directly analyzed in this NOPR as CRE with a cold-wall evaporator and which DOE observed CRE with forcedair evaporators in those equipment Equipment type coefficient Equipment class multiplier PT ..................... SD ..................... SDPT ................ RI ...................... RT ..................... 1.04 1.07 1.11 1.05 1.09 classes on the market. DOE has tentatively developed this multiplier to account for the additional energy use associated with a forced-air evaporator as compared to a cold-wall evaporator. See table IV.8 for additional details. TABLE IV.8—DESCRIPTION OF EQUIPMENT CLASS MULTIPLIERS FOR UNIQUE REFRIGERATION SYSTEMS Refrigeration system Applicable equipment classes Equipment type coefficient Equipment class multiplier Forced Air ....................................... HCS.SC.L ................................................................................................ FA ..................... 1.2 ddrumheller on DSK120RN23PROD with PROPOSALS2 DOE requests comment on its proposal to apply an energy use multiplier to certain equipment classes that contain CRE with unique utility and energy use characteristics. DOE additionally requests comment on the proposed multiplier values and equipment classes for which these multipliers would be applied. b. Higher Efficiency Levels As part of DOE’s analysis, the maximum available efficiency level is the highest efficiency unit currently available on the market. DOE also defines a ‘‘max-tech’’ efficiency level to represent the maximum possible efficiency for a given equipment. After conducting the screening analysis described in section IV.B of this document and chapter 4 of the NOPR TSD, DOE considered the remaining design options in the engineering analysis to achieve higher efficiency levels. See chapter 5 of the NOPR TSD for additional detail on the design options. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 Design Options beyond Baseline. In response to the June 2022 Preliminary Analysis, the CA IOUs recommended analyzing variable-speed fan control as a technology option for vertical, medium-temperature refrigerators. (CA IOUs, No. 43 at p. 2) With respect to the recommendation from the CA IOUs, DOE has not considered variable-speed fan technology as a design option for this NOPR. For open cases, the evaporator fan must run continuously to maintain the air curtain so any variable-speed function could disrupt the air curtain. For closed cases, DOE did not receive any data to show energy use savings associated with variable-speed fan control and has tentatively determined that variable-speed fan control would not reduce energy use according to the DOE test procedure. DOE notes that it did consider evaporator fan control (i.e., cycling the evaporator fan on and off as opposed to running constantly) as a PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 design option. See chapter 5 of the NOPR TSD for additional information. NAFEM commented that DOE should make it easier for the public to understand how it calculates possible improvements that reduce energy consumption, providing the example of the efficiency of permanent-magnet synchronous motors (also known as synchronous-reluctance motors). (NAFEM, No. 40 at p. 6) NAFEM commented that these motors, for which NAFEM stated DOE claimed a theoretical efficiency of 75 percent, are not available in the rated wattages found in the 2022 spreadsheet, despite being the basis for two design-level options. (Id.) Based on feedback during manufacturer interviews, feedback from commenters, and a review of the current market, DOE has tentatively determined to remove permanent-magnet synchronous motors (previously referred to as synchronous-reluctance motors) from the NOPR analysis because motors currently available on the market E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70232 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules do not span the range of CRE fan wattages and revolutions per minute needed for proper operation. For more information, see chapter 5 of the NOPR TSD. The CA IOUs commented that the June 2022 Preliminary TSD inconsistently considered variable defrost for certain low- and mediumtemperature categories. (CA IOUs, No. 43 at p. 6) As an example, the CA IOUs stated that the June 2022 Preliminary TSD analyzed variable defrost for horizontal open self-contained cases— medium temperature (‘‘HZO.SC.M’’) but not horizontal open self-contained cases—low temperature (‘‘HZO.SC.L’’). (Id.) The CA IOUs recommended that DOE review technology options analyzed across equipment categories for consistency and that DOE analyze variable defrost as a technology option for vertical glass door self-contained freezers (‘‘VCT.SC.L’’) and vertical solid door self-contained ice cream freezers (‘‘VCS.SC.I’’) because there are aftermarket controllers available to enable variable defrost in any freezer category. (Id.) While DOE considered variable defrost as a design option in the June 2022 Preliminary Analysis, DOE has tentatively determined to remove this design option in the NOPR. Based on manufacturer feedback and test data, DOE has tentatively determined that there is variation across equipment classes and defrost types that would not allow for a variable-defrost control design option that is representative of each class. And based on discussions with manufacturers, all manufacturers are already controlling the defrost period on a time- or temperature-based defrost specific to each individual model to minimize the defrost time and energy consumption. For further discussion, see chapter 5 of the NOPR TSD. AHT commented that it is unable to comprehend the listed energy-saving potentials for the different temperature classes and the values seem incorrect. (AHT, No. 48 at p. 6) AHT asked why the potential savings for variable-speed compressors, for example, are rated at 20 percent in the ice cream class, 35 percent in the low-temperature class, and zero percent in the mediumtemperature class. (Id.) DOE reviewed its engineering spreadsheet model and compressors analyzed and tentatively determined the discrepancy noted by AHT occurs because of the energy efficiency ratios (‘‘EERs’’) for single-speed and variablespeed compressors available on the market. Based on compressors analyzed from several manufacturers of CRE VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 compressors, single-speed compressors available on the market, operating at medium back pressure (‘‘MBP’’) (medium-temperature refrigerators), typically have EERs more similar to those of variable-speed compressors available on the market, operating at MBP, when compared to compressors operating at low back pressure (‘‘LBP’’) (low-temperature freezers and ice-cream freezers). This means that there is less potential energy savings for mediumtemperature refrigerators that use variable-speed compressors. The difference in EERs is based on the operation of a single-speed vs variablespeed compressor, which has a significant decrease in cooling capacity as the operating temperature decreases. See chapter 5 of the NOPR TSD for additional details on the compressor analysis. Efficiency Levels and Max-Tech. AHRI commented that DOE has not defined efficiency levels in adequate detail and recommended that DOE verify its analysis for accuracy and consistency. (AHRI, No. 46 at p. 3) NAMA commented that DOE should reduce the demands to make additional changes and acknowledge that manufacturers have already made changes that would contribute significantly to the Administration’s climate change initiatives. (NAMA, No. 37 at p. 8) NAMA stated that the actual energy savings that can be attributed to DOE’s design options in the June 2022 Preliminary TSD engineering analysis are closer to a 5–10-percent reduction from baseline energy usage after removing design options that are not technically feasible or that were accomplished years ago. (Id.) NAMA noted that its estimate of a 5–10-percent reduction is significantly lower than DOE’s estimate of a 41-percent reduction in energy use. (Id.) DOE has considered commenters’ feedback, information gathered through manufacturer interviews, and additional testing of analysis units to update the analysis, including the efficiency levels and max tech. See chapters 3 and 5 of the NOPR TSD for a description of each design option and how each is incorporated into the NOPR analysis. AHT commented that the limits from the March 2014 Final Rule have almost eliminated the equipment classes HCT.SC.M, HCT.SC.L, and HCT.SC.I. (AHT, No. 48 at p. 2) AHT stated that the closed units within these classes are among the most efficient food display equipment in retail stores and corresponding open units consume far more energy while being regulated less strictly. (Id.) AHT commented that the 72.6-percent reduction of energy PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 consumption for the HCT.SC.M, the 60.4-percent reduction of energy consumption for the HCT.SC.L, and the 61.6-percent reduction of energy consumption for the HCT.SC.I are impossible, and AHT recommended repeating the engineering analysis for these equipment classes. (Id. at p. 3–6) DOE has considered commenters’ feedback, information gathered through manufacturer interviews, and additional testing of analysis units to update the analysis for horizontal closed transparent equipment. See chapter 5 of the NOPR TSD for additional details on the baseline specifications and design options analyzed for these equipment classes. The Joint Commenters stated that, for several of the equipment classes analyzed, multiple models at comparable sizes in DOE’s CCD exceed the max-tech efficiency level in the engineering analysis. (Joint Commenters, No. 39 at p. 3) The Joint Commenters provided an example that DOE’s max-tech level for the representative service over counter remote condensing medium temperature (‘‘SOC.RC.M’’) unit is 14.7 kWh/day, yet there are multiple models in the CCD at a comparable size with energy consumption as low as about 10 kWh/ day. (Id.) The Joint Commenters added that multiple models of vertical open self-contained medium temperature (‘‘VOP.SC.M’’) units significantly exceed DOE’s max-tech level of 23.5 kWh/day at similar total display areas. (Id.) The Joint Commenters stated that models are available beyond DOE’s max-tech levels for additional equipment classes as well and recommended that DOE set max-tech levels that are at least as high as efficiencies currently available on the market. (Id.) While DOE considers the maximum efficiency level for CRE available on the market, there are certain components or technologies for equipment classes that manufacturers may choose to implement that are not directly analyzed as a design option. For example, some manufacturers may have different airflow designs for open cases that affect energy use, which are calibrated specific to a CRE model, referred to as an ‘‘air curtain’’. Air curtains are only applicable on open units (such as the VOP.SC.M equipment class mentioned by the Joint Commenters) and are intended to mitigate heat infiltration into the CRE. See section IV.B.1.d of this NOPR or chapters 3 and 4 of the NOPR TSD for additional details on air curtains. DOE analyzes design options that pass the E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 screening criteria and have a measurable impact on CRE efficiency. c. Engineering Spreadsheet Model In performing the engineering analysis in the March 2014 Final Rule, DOE selected representative units for each primary equipment class to serve as analysis points in the development of cost-efficiency curves. 79 FR 17726, 17746. In selecting these units, DOE researched the offerings of major manufacturers to select models that were generally representative of the typical offerings produced within the given equipment class. Id. Unit sizes, configurations, and features were based on high-shipment-volume designs prevalent in the market. Id. Using these data, a set of specifications was developed defining a representative unit for each primary equipment class. Id. These specifications include geometric dimensions, quantities of components (such as fans), operating temperatures, and other case features that are necessary to calculate energy consumption. Id. Modifications to the units modeled were made as needed to ensure that those units were representative of typical models from industry, rather than a specific unit offered by one manufacturer. Id. This process created a representative unit for each equipment class with typical characteristics for physical parameters (e.g., volume, TDA), and minimum performance of energy-consuming components (e.g., fans, lighting). Id. As noted in the Executive Summary of the June 2022 Preliminary Analysis, DOE analyzed the same representative volumes and TDAs developed in the March 2014 Final Rule. See 79 FR 17726, 17746. In the June 2022 Preliminary Analysis, DOE kept the same design specifications in most cases, but updated some design specifications to better match the directly analyzed units available on the market. DOE received several comments on the updates made to the engineering spreadsheet model, summarized below. NAFEM stated that, as demonstrated in its 2015 brief,49 errors and omissions in the engineering spreadsheet have significant effects on DOE’s CRE analyses and final standards-setting process. (NAFEM, No. 40 at p. 2) NAFEM commented that its members could provide important information to DOE to improve and correct its engineering spreadsheets to make any future proposed CRE rules less controversial and more representative of 49 NAFEM included its 2015 brief in addition to their comment responses. NAFEM specifically referenced pp. 35–51 for this comment. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 real-world applications. (Id. at p. 4) NAFEM stated that any concerns identified by NAFEM are only limited examples of issues it believes exist throughout the document. (Id.) NAFEM stated that ITW compared the March 2014 Final Rule engineering spreadsheet to the 2022 engineering spreadsheet related to the preliminary analysis for CRE. (NAFEM, No. 40 at p. 4) NAFEM commented that the equipment classes subject to review were VCT.SC.M, VCT.SC.L, VCS.SC.M, and VCS.SC.L, which included selfcontained refrigerators and freezers at medium and low temperatures with both solid and transparent vertical closed doors. (Id.) NAFEM commented that many of the observations provided by ITW applied to other equipment classes as well. (Id. at p. 5) ITW commented that the CRE engineering spreadsheet made generalized assumptions that could be considered opinion versus facts and all product types in an equipment class are not reflected. (ITW, No. 41 at p. 2) ITW commented that the spreadsheet requires validation, that costs are inaccurate to the point of being useless, that more collaboration with manufacturers is needed, and that DOE should build confidence in the spreadsheet by making it more visible. (Id.) Zero Zone commented that some of DOE’s models have errors and asked that DOE share the raw data for these models, including, at minimum, the type and number of models that were reverse engineered and/or lab tested. (Zero Zone, No. 44 at p. 1) With respect to the comments from NAFEM, ITW, and Zero Zone, DOE developed and calibrated the engineering spreadsheet model based on test data from directly analyzed units, feedback from manufacturer interviews, and market data from the CCD. DOE has also published the engineering spreadsheet model for the June 2022 Preliminary Analysis and for this NOPR. In support of this NOPR, DOE tested 70 CRE models and reverse engineered 47 CRE models. These models consisted of all equipment families within the scope of this NOPR except pull-down temperature applications, and all temperature classes. The volume range of these models is 3 ft3–69 ft3 and the TDA range is 5 ft2–32 ft2. NAFEM requested an explanation regarding the 75-percent reduction in ‘‘Infiltrated Air Mass Flow (lb/hr)’’ on the 2022 engineering spreadsheet under ‘‘Design Specifications’’ when compared with the 2014 spreadsheet. (NAFEM, No. 40 at p. 6) PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 70233 ITW similarly commented that DOE failed to provide any supporting documentation, calculations, or impact analysis for updates from the 2013 and 2014 CRE engineering spreadsheets to the 2022 revision used to estimate performance in terms of Infiltrated Air Mass Flow [lb/hr] and Polyurethane Foam K-Factor [Btu*in/ft2h°F]. (ITW, No. 41 at p. 18) ITW commented that some design specifications listed in table 5A.2.5 through table 5A.2.8 were updated in the June 2022 Preliminary TSD while other changes received only brief commentary, such as ‘‘Improved Resistivity of Insulation’’ found in section 3.3.1.1 concerning polyurethane foam. (Id.) ITW further commented that this issue was discovered at the end of the comment period and that said comment period required extension because the changes do not represent a thermal efficiency improvement for polyurethane foam insulation. (Id.) ITW questioned why two differing methods were used to calculate the ‘‘Conduction Through Walls and Solid Doors [Btu/ hr]’’ and requested justification for the change, stating that one formula in the spreadsheet or the other could be correct, but not both. (Id.) ITW added that DOE spent considerable time in 2013 and 2014 developing the energy consumption model and calculating the right values for Infiltrated Air Mass Flow [lb/hr], working with manufacturers’ detailed specifications, calculating sensible and latent heat loads due to infiltration, and reviewing and revising the infiltrated air mass flow values for certain equipment classes, including VCT and VCS based on stakeholder feedback. (Id. at pp. 18– 23) ITW commented that, by contrast, in the 2022 CRE engineering spreadsheet, DOE made significant changes to the Infiltrated Air Mass Flow value for 17 different equipment classes, including VCT and VCS models, without an explanation other than DOE did update design specifications. (Id. at p. 23) ITW stated that the formulas used to calculate the ‘‘Load Due to Infiltration [Btu/hr]’’ on the engineering spreadsheet tab ‘‘Calculations’’ and the CRE cabinet specification have not changed from 2014. (Id.) ITW summarized its comment by stating DOE needed to explain this discrepancy or recalculate the 17 classes with revised or reverted values for Infiltrated Air Mass Flow [lb/hr]. (Id.) ITW concluded that its calculations resulted in the following assumptions: (1) DOE underestimated by 28 percent the theoretical quantity of heat (BTU/hr) infiltrating the representative 49 (cu ft) VCS.SC.M model during the 2014 CRE E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70234 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules do not affect the underlying data and formulas. rulemaking; (2) DOE would overstate a decline in thermal performance for the foam insulation by 25 percent for the same model in the June 2022 Preliminary TSD; (3) if 1 and 2 were correct, DOE would need to correct its energy use model for all equipment classes; and (4) discrepancies in DOE’s own parameter Conduction Through Walls and Solid Doors [Btu/hr] between the 2014 TSD and the June 2022 Preliminary TSD should have been flagged for further explanation and discussion in the June 2022 Preliminary TSD. (Id. at pp. 25–26) ITW commented that DOE discarded specific data when faced with energy consumption values above the MDEC for the baseline unit in the 2022 engineering spreadsheet, instead calculating new values for the baseline unit and not DOE’s own energy model. (Id. at p. 34) ITW questioned whether DOE trusted its engineering spreadsheet. (Id.) Based on comments received from NAFEM and ITW, DOE has re-evaluated the infiltrated air-mass flow and insulation design specifications in this NOPR. Based on feedback provided from manufacturers during manufacturer interviews, DOE updated the infiltrated air-mass flow and insulation design specifications in this NOPR to be more consistent with the March 2014 Final Rule. See chapter 5 of the NOPR TSD for additional details. Zero Zone commented that the fraction of power into case for evaporator motors is missing. (Zero Zone, No. 44 at p. 3) Zero Zone stated that this heat load is illustrated in the component load in the model diagram tab but not included in the daily energy consumption calculations. (Id.) DOE reviewed the engineering spreadsheet model published to the docket 50 and found that this calculation was included (see the ‘‘Calculations’’ tab, row 176). ITW commented that to review data in the CRE engineering spreadsheets, the Excel macros needed to function, but the 2013 and 2014 CRE engineering spreadsheet macros were not found to be executable in Excel using a 64-bit Windows 10 computer and instead required Excel running on a 32-bit WindowsNT machine. (ITW, No. 41 at p. 6) In response to the comment from ITW, DOE notes that the data and formulas are reviewable regardless of the version of the Windows operating system being used because the macros d. Industry Trade Association Survey In response to the June 2022 Preliminary Analysis, three industry trade associations surveyed their members to provide feedback to DOE on the June 2022 Preliminary Analysis. The survey is located on the docket,51 and DOE has provided a summary of the engineering-related results of the survey. AHRI, NAMA, and NAFEM stated that more than 50 percent of the data in the survey was shared by small businesses (<1250 employees). (Trade Associations Survey, No. 50 at p. 8) The manufacturers surveyed manufacture all equipment types (to varying degrees) directly analyzed in the June 2022 Preliminary Analysis, besides VCT.SC.I equipment. (Id. at pp. 9–10) The survey provided a heat map of design options currently used across different equipment classes. (Id. at p. 11) AHRI, NAMA, and NAFEM noted that all members reported using LED lighting and are unaware of any higherefficiency lighting that could be incorporated into their equipment. (Id.) DOE notes that, based on the survey, all design options besides vacuuminsulated panels are currently used by at least a small percentage of the market, but many technologies are used by less than 50 percent of manufacturers surveyed. (See Id.) AHRI, NAMA, and NAFEM provided a chart asking manufacturers why certain design options were not used. (Id. at p. 12) The responses included: ‘‘not economically justified,’’ ‘‘reduced utility,’’ ‘‘not technologically feasible, ’’ ‘‘limited market (not as desireable),’’ ‘‘already in use to meet current ECS,’’ and ‘‘option not available for this equipment.’’ (Id.) AHRI, NAMA, and NAFEM added that the most common response was that the design options were already in use by manufacturers, and the second most common response was that those design options not already in use were not economically justified. (Id.) AHRI, NAMA, and NAFEM stated that some manufacturers identified ways to use design options to meet EL 1–3 proposed in the June 2022 Preliminary Analysis; however, no manufacturers thought EL 4–6 was feasible for any equipment class. (Id. at p. 14) As a follow up to what ELs manufacturers thought were appropriate, AHRI, NAMA, and NAFEM stated that manufacturers responded 50 See www.regulations.gov/document/EERE2017-BT-STD-0007-0032. 51 See www.regulations.gov/document/EERE2017-BT-STD-0007-0050. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 that a 1-percent increase in energy efficiency over today’s levels would be acceptable, and numerous responses stated that max tech has already been achieved. (Id. at p. 15) AHRI, NAMA, and NAFEM commented that manufacturers reported using the most energy-efficient foam insulation available, with an average K factor of 0.15. (Id. at p. 19) AHRI, NAMA, and NAFEM stated that manufacturers primarily use highpressure, two-component foam systems, with the remainder using an application technique, such as foam boards and spray polyurethane foam insulation. (Id.) AHRI, NAMA, and NAFEM noted that refurbished equipment is not reinsulated to meet the current standard. (Id.) AHRI, NAMA, and NAFEM also commented that increased thickness either increases the cabinet footprint or decreases internal dimensions in cases, making them more costly for consumers, especially for equipment replacement, which would require a redesign of the architecture of the store. (Id.) AHRI, NAMA, and NAFEM commented that survey respondents stated that increased insulation thickness would require a new foam mixture, as well as tooling and design changes, and decrease the display/storage area or increase the footprint of the equipment. (Id. at p. 20) AHRI, NAMA, and NAFEM noted that survey respondents indicated that VIPs could not be incorporated into the foam matrix without early failures, raising concerns that VIPs are not a viable design option. (Id. at p. 19) DOE has considered the results of this survey as part of its NOPR engineering analysis. 2. Cost Analysis The cost analysis portion of the engineering analysis is conducted using one or a combination of cost approaches. The selection of cost approach depends on a suite of factors, including the availability and reliability of public information, characteristics of the regulated equipment, and the availability and timeliness of purchasing the equipment on the market. The cost approaches are summarized as follows: • Physical teardowns: Under this approach, DOE physically dismantles a commercially available equipment, component by component, to develop a detailed bill of materials for the equipment. • Catalog teardowns: In lieu of physically deconstructing equipment, DOE identifies each component using parts diagrams (available from manufacturer websites or appliance E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules repair websites, for example) to develop the bill of materials for the equipment. • Price surveys: If neither a physical nor catalog teardown is feasible (e.g., for tightly integrated products such as fluorescent lamps, which are infeasible to disassemble and for which parts diagrams are unavailable) or costprohibitive and otherwise impractical (e.g., large commercial boilers), DOE conducts price surveys using publicly available pricing data published on major online retailer websites and/or by soliciting prices from distributors and other commercial channels. In the present case, DOE conducted the analysis using physical and catalog teardowns. See chapter 5 of the NOPR TSD for additional details. DOE received several comments in response to the June 2022 Preliminary Analysis related to the manufacturer production costs (‘‘MPCs’’). NAFEM commented that it compared inflation index and cost model values in DOE’s engineering spreadsheets with ITW’s own calculations for the same values. (NAFEM, No. 40 at p. 5) NAFEM stated that significant discrepancies existed between DOE’s and ITW’s calculations of the inflation index for evaporator and condenser fan motors, evaporator coil, condenser coil, insulation, and core case cost. (Id.) NAFEM commented also that it found inaccuracies in DOE’s calculations used for a cost analysis of design-level technology options. (Id. p. 5) For example, according to NAFEM, the simulated condenser and evaporator coil costs for self-contained models were off or low by 250 percent and the costs for evaporator and condenser fan blades were off by more than 300 percent, having not been updated since before DOE published the March 2014 Final Rule. (Id.) NAFEM commented that it reviewed the calculations and assumptions for DOE’s energy analysis at the 16 design option levels, and NAFEM noted that ITW would supply DOE with a current inflation rate for review as a cost structure update for 2022. (Id. at pp. 5– 6) NAMA commented that it conducted an analysis of the effect of present inflation levels on the cost of components, summarizing the results of its analysis in a table showing the major components in efficiency compared with cost increases from October 2020 to April 2021 and from October 2021 to April 2022. (NAMA, No. 37 at pp. 13– 14) NAMA recommended that DOE factor in the unprecedented inflation of basic constituents in CRE machines into the costs shown for design options and into the economic analysis. (Id. at p. 14) VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 ITW presented several examples of spreadsheet data comparing the 2014 TSD and June 2022 Preliminary TSD engineering spreadsheets. (ITW, No. 41 at pp. 36–47) ITW noted that, for all evaluations, MPC appeared to be down in 2022 relative to the 2014 reference, but the 2022 engineering spreadsheet did not reflect actual market changes, and when specifications and ordering were held to the 2014 reference, energy was up. (Id. at p. 37) ITW summarized that, as a result, the 2014 and 2022 engineering spreadsheets did not appear to have a strong correlation. (Id.) AHRI commented that the baseline case should be modified to reflect current market prices, including the use of LEDs and energy-efficient doors, enhanced frames, and ECM fan motors. (AHRI, No. 46 at p. 6) AHRI commented that components were incorporated and upgraded to meet DOE’s previous CRE energy-efficiency requirements and that the no-standards-case efficiency distribution will need to be amended based on those corrections. (Id.) AHRI stated that prices of various design options need to be upgraded for the nostandards-case efficiency distribution. (Id.) ITW commented that, in DOE’s engineering analysis in the June 2022 Preliminary TSD, DOE failed to establish an accurate baseline cost and, as a result, justification for any change to the MDEC was suspect to bias and/ or error. (ITW, No. 41 at pp. 27–28) ITW commented that costs have not fallen by 12.4 percent or even remained flat as stated in the June 2022 Preliminary TSD, section 5.6 Core Case Costs, and that, in fact, costs have risen by up to 24.9 percent. (Id. at p. 28) ITW commented that it cannot make determinations or move forward without correcting the cost issue found in the June 2022 Preliminary TSD, considering that costs have not gone down since 2013 or 2014. (Id.) In response to these comments, DOE has updated the NOPR analysis to reflect current inflation rates (i.e., 2022 dollars) and component and design option costs based on feedback from commenters, feedback from manufacturer interviews, a review of market data, and teardowns of directly analyzed units. See chapter 5 of the NOPR TSD for additional details. NAFEM commented that DOE should make it easier for the public to understand how it calculates possible improvements that reduce energy consumption. (NAFEM, No. 40 at p. 6) NAFEM identified the costs of microchannel condenser coils as an example where it believes improved clarity would be beneficial. (Id.) PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 70235 With respect to the comment from NAFEM, DOE has further described the cost and efficiency assumptions for each design option, including microchannel condensers, in chapter 5 of the NOPR TSD. NAMA commented that it found errors in the June 2022 Preliminary TSD for design options as follows: (a) highefficiency reciprocating compressor for VCS.SC.M is shown at a cost of $9.23 but for VCT.SC.M it is shown as $4.01; (b) UA evaporator coil is shown for VCT.SC.H at $16.01 but for VCT.RC.M is $65.84, for VCS.SC.M is $14.33 and for VCT.SC.M is $22.90; (c) variablespeed compressor for VCS.SC.M is $72.54, for VCT.SC.M is $79.27 but for VCT.SC.L is $168.34; and (d) VIG door for VCT.SC.M is $837.38 but for VCT.RC.M is projected at $2,095.84. (NAMA, No. 37 at pp. 10–11) NAMA requested DOE’s justification for variations in the cost of the same component and further stated that this rulemaking should be withdrawn and replaced with accurate estimates, particularly for machines under 30 cubic feet in capacity. (Id. at p. 12) With respect to the comment from NAMA, DOE assigns design specifications and costs for each equipment class based on a representative volume or TDA. Therefore, components may be a different size or capacity than other equipment classes, which likely yields a different cost. DOE expects that the different representative volumes or TDAs account for the differences described by NAMA. For example, the VCT.SC.M primary equipment class analyzed has 2 doors, whereas the VCT.RC.M primary equipment class analyzed has 5 doors. For more information on the design option costs, see chapter 5 of the NOPR TSD. To account for manufacturers’ nonproduction costs and profit margin, DOE applies a multiplier (the manufacturer markup) to the MPC. The resulting manufacturer selling price (‘‘MSP’’) is the price at which the manufacturer distributes a unit into commerce. DOE developed an industry average manufacturer markup by examining the prior CRE rulemaking and annual Securities and Exchange Commission (‘‘SEC’’) 10–K reports 52 filed by publicly traded manufacturers primarily engaged in commercial refrigeration manufacturing and whose combined equipment range includes CRE. 79 FR 17725, 17758. See section IV.J.2.d of this 52 U.S. Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval system is available at www.sec.gov/edgar/ searchedgar/companysearch (last accessed March 30, 2023). E:\FR\FM\10OCP2.SGM 10OCP2 70236 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules document and chapter 12 of the NOPR TSD for additional information on the manufacturer markup. DOE seeks comment on the method for estimating manufacturing production costs. ddrumheller on DSK120RN23PROD with PROPOSALS2 3. Cost-Efficiency Results The results of the engineering analysis are reported as cost-efficiency data (or ‘‘curves’’) in the form of daily energy consumption (in kWh) versus MPC (in dollars). DOE developed curves representing the primary equipment classes. The methodology for developing the curves started with determining the energy consumption for baseline equipment and MPCs for this equipment. Above the baseline, design options were implemented until all available technologies were employed (i.e., at a max-tech level). See chapter 5 of the NOPR TSD for additional detail on the engineering analysis and appendix 5B of the NOPR TSD for complete cost-efficiency results. In response to the June 2022 Preliminary Analysis, the Joint Commenters recommended that DOE evaluate additional, intermediateefficiency levels for certain equipment classes that fall between the downstream efficiency levels currently analyzed. (Joint Commenters, No. 39 at p. 4) The Joint Commenters commented that EL 5 for the VCS.SC.M equipment class is cost effective but EL 6 is not; however, an intermediate level between EL 5 and EL 6 (a so-called ‘‘EL 5.5’’) could be cost effective. (Id.) The Joint Commenters stated that they provided a table (table 1) showing examples of classes in which an intermediate efficiency level may be cost effective. (Id.) NAMA stated that DOE had requested comments on the design options for each equipment class, but provided very little information on which commenters can base comments. (NAMA, No. 37 at p. 10) NAMA provided a detailed review of each of the design options considered by DOE in annex A to its comment and commented that DOE estimated that options AD4, 8, 9, 11, 12, and 13 in table 5.8.8 (results for VCT.SC.M) each have energy savings of less than 3 percent. (Id. at pp. 10, 21– 40) NAMA further stated that the change suggested by AD4 is not possible. (Id. at p. 10) NAMA commented that for other options, the savings potential is very small despite being extremely expensive, even using DOE’s estimates, which NAMA stated are erroneous. (Id.) NAMA stated that it provided significantly different energy savings and cost estimates that it VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 believes to be more accurate than those provided by DOE. (Id.) In response to the comments from the Joint Commenters and NAMA, DOE updated the EL structure in its NOPR analysis to better reflect the costeffective design path that manufacturers can take to achieve the ELs. DOE notes that design options are typically ordered by cost effectiveness, which may result in design options with low energy savings and high costs at the end of the design option order. DOE has updated the NOPR analysis based on comments received and manufacturer interview feedback. DOE provides additional details on design options in chapters 3– 5 of the NOPR TSD. D. Markups Analysis The markups analysis develops appropriate markups (e.g., wholesaler markups, distributor markups, contractor markups) in the distribution chain and sales taxes to convert the MSP estimates derived in the engineering analysis to consumer prices, which are then used in the LCC and PBP analysis. At each step in the distribution channel, companies mark up the price of the equipment to cover business costs and profit margin. In the June 2022 Preliminary Analysis, DOE considered the following distribution channels: 1a. Contractor channel with replacement (Manufacturer → Wholesaler → Mechanical Contractor → Consumer) 1b. Contractor channel with new construction (Manufacturer → Wholesaler → Mechanical Contractor → General Contractor → Consumer) 2. Wholesale channel (Manufacturer → Wholesaler → Consumer) 3. National account channel (Manufacturer → Consumer). Following the June 2022 Preliminary Analysis, AHRI suggested that DOE should revise several channels, create a fourth channel for reused or refurbished equipment, and refer to consumers as ‘‘end-users’’ because the term consumer may imply individuals or families. (AHRI, No. 46 at pp. 3–4) AHRI also recommended DOE to include other CRE purchaser categories, such as buyer’s clubs, restaurant consortiums, food service consultants, and governmental bids. (Id.). Further, in the Trade Associations Survey, some manufacturers proposed including an additional channel under channel 2 for OEM to OEM that ‘‘moves through a supply chain similarly to a wholesaler.’’ (Trade Associations Survey, No. 50 at p. 24) In consideration of the AHRI feedback, DOE included an additional PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 national account channel in which manufacturers sell the equipment to contractors, who in turn sell the equipment to end users. With regard to the suggested addition of distribution channels for reused or refurbished equipment, DOE notes that the markup analysis only pertains to new equipment purchases; therefore, DOE did not consider such distribution channels in the markups analysis. However, refurbishments were considered in the LCC analysis (see section IV.F of this document for details). In the Trade Associations Survey, no market share inputs were provided for the OEM-toOEM channel. As a result, DOE did not consider this in the final distribution channels. DOE re-estimated the market shares of distribution channels based on manufacturer inputs from the Trade Associations Survey. DOE clarifies that it considers all purchasers of CRE in its analyses and is using the term CRE ‘‘purchaser’’ and ‘‘consumer’’ interchangeably in this document. The CA IOUs commented that DOE should separate distribution channels by condensing unit configuration. (CA IOUs, No. 43 at p. 6) The CA IOUs stated that there are differences in the sales structure for remote-condensing and self-contained equipment that necessitate a separate pricing analysis. (Id.) DOE acknowledges that equipment with different condensing unit configurations would have different applications and thus different sales structures. In the markups analysis, DOE contends that each equipment type (e.g., display cases and solid-door equipment) consists of equipment with different condensing unit configurations, and their relative pricing structures are already reflected through the channels market shares. For example, the display-case equipment type is represented by a higher fraction of remote-condensing units used in large grocery store chains; hence, a greater share of shipments go through the national account channel, which provides better price advantages. DOE developed baseline and incremental markups for each actor in the distribution chain. Baseline markups are applied to the price of equipment with baseline efficiency, while incremental markups are applied to the difference in price between baseline and higher-efficiency models (the incremental cost increase). The incremental markup is typically less than the baseline markup and is designed to maintain similar per-unit E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules operating profit before and after new and amended standards.53 DOE developed baseline and incremental markups for wholesalers and contractors using U.S. Census Bureau data from the 2017 Annual Wholesale Trade Report and the 2017 U.S. Economic Census, respectively. DOE requests comment on the CRE distribution channels and overall on the markups analysis. Chapter 6 of the NOPR TSD provides details on DOE’s development of the markups analysis for CRE. E. Energy Use Analysis ddrumheller on DSK120RN23PROD with PROPOSALS2 The purpose of the energy use analysis is to determine the annual energy consumption of CRE at different efficiencies in representative U.S. commercial buildings, and to assess the energy savings potential of increased CRE efficiency. The energy use analysis estimates the range of energy use of CRE in the field (i.e., as they are actually used by consumers). The energy use analysis provides the basis for other analyses DOE performed, particularly assessments of the energy savings and the savings in consumer operating costs that could result from adoption of amended or new standards. For CRE, DOE calculated the energy consumption of the equipment as part of the engineering analysis (see chapter 5 of the NOPR TSD). DOE requests comment on its approach for the energy use analysis. Chapter 7 of the NOPR TSD addresses DOE’s energy use analysis for CRE. F. Life-Cycle Cost and Payback Period Analysis DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers of potential energy conservation standards for CRE. The effect of new and amended energy conservation standards on individual purchasers usually involves a reduction in operating cost and an increase in purchase cost. DOE used the following two metrics to measure consumer impacts: • The LCC is the total consumer expense of an equipment over the life of that equipment, consisting of total installed cost (manufacturer selling price, distribution chain markups, sales tax, and installation costs) plus operating costs (expenses for energy use, maintenance, and repair). To compute the operating costs, DOE discounts 53 Because the projected price of standardscompliant products is typically higher than the price of baseline products, using the same markup for the incremental cost and the baseline cost would result in higher per-unit operating profit. While such an outcome is possible, DOE maintains that in VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 70237 future operating costs to the time of purchase and sums them over the lifetime of the equipment. • The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of more-efficient equipment through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost at higher efficiency levels by the change in annual operating cost for the year that amended or new standards are assumed to take effect. For any given efficiency level, DOE measures the change in LCC relative to the LCC in the no-new-standards case, which reflects the estimated efficiency distribution of CRE in the absence of new and amended energy conservation standards. In contrast, the PBP for a given efficiency level is measured relative to the baseline equipment. For each considered efficiency level in each equipment class, DOE calculated the LCC and PBP for a nationally representative set of commercial buildings that use CRE. DOE developed commercial buildings samples from the DOE EIA’s 2018 Commercial Buildings Energy Consumption Survey (‘‘2018 CBECS’’).54 DOE divided the 2018 CBECS sample into building types characterized by their principal building activity (CBECS variable ‘‘PBA’’) using a subset of the data that excluded vacant buildings. DOE then grouped building types into six categories: (1) large food sales, (2) small food sales, (3) large food service, (4) small food service, (5) large other, and (6) small other. DOE defined small buildings as those less than or equal to 5,000 ft2, while large buildings are defined as those greater than 5,000 ft2. For each sample commercial building, DOE determined the energy consumption and the appropriate energy price of CRE. By developing a representative sample of CRE purchasers, the analysis captures the variability in energy prices associated with the use of CRE. Inputs to the calculation of total installed cost include the cost of the equipment—which includes MPCs, manufacturer markups, retailer and distributor markups, and sales taxes— and installation costs. Inputs to the calculation of operating expenses include annual energy consumption, energy prices and price projections, repair and maintenance costs, equipment lifetimes, and discount rates. DOE created distributions of values for equipment lifetime, discount rates, and sales taxes, with probabilities attached to each value, to account for their uncertainty and variability. The computer model DOE uses to calculate the LCC relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations randomly sample input values from the probability distributions and CRE user samples. For this rulemaking, DOE conducted probability analyses by randomly sampling from probability distributions using Python. To calculate the LCC and PBP for CRE, DOE performed 10,000 Monte Carlo simulations for each variable. During a single trial, random values are selected from the defined probability distributions for each variable, which enables the estimation of LCC and PBP with uncertainty evaluation. The analytical results include a distribution of 10,000 data points showing the range of LCC savings for a given efficiency level relative to the no-new-standards case efficiency distribution. In performing an iteration of the Monte Carlo simulation for a given purchaser, equipment efficiency is chosen based on its probability. If the chosen equipment efficiency is greater than or equal to the efficiency of the standard level under consideration, the LCC calculation reveals that a consumer is not impacted by the standard level. By accounting for consumers who already purchase moreefficient equipment, DOE avoids overstating the potential benefits from increasing equipment efficiency. DOE calculated the LCC and PBP for consumers of CRE as if each were to purchase new equipment in the expected year of required compliance with new and amended standards. New and amended standards would apply to CRE manufactured 3 years after the date on which any new and amended standards are published. (42 U.S.C. 6313(c)(6)(C)(i). At this time, DOE estimates publication of a final rule in the second half of 2024. Therefore, for purposes of its analysis, DOE used 2028 as the first full year of compliance with any amended standards for CRE. Table IV.9 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion. Details of the Python model, markets that are reasonably competitive, it is unlikely that standards would lead to a sustainable increase in profitability in the long run. 54 U.S. Department of Energy—Energy Information Administration. 2018 Commercial Buildings Energy Consumption Survey (CBECS). 2018. Available at www.eia.gov/consumption/ commercial/data/2018/ (last accessed February 1, 2023). PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 70238 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules and of all the inputs to the LCC and PBP analyses, are contained in chapter 8 of the NOPR TSD and its appendices. TABLE IV.9—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS * Inputs Source/method Equipment Cost ........................... Derived by multiplying MPCs by manufacturer and retailer markups and sales tax, as appropriate. Apply price learning between present (2022) and compliance year (2028) for LED lighting and variable-speed compressor electronics, using historical data to derive a price scaling index to project equipment costs for those components. Assumed not to change with efficiency level and, therefore, not considered in the LCC and PBP analyses. Obtained from the test procedure for each equipment class at each considered efficiency level. Electricity: Edison Electric Institute Typical Bills and Average Rates reports. Variability: Regional energy prices across nine census divisions. Based on AEO2023 55 price projections. Material costs derived from the engineering analysis and labor costs derived from RS Means 2023. Assumed additional labor time for maintaining equipment with microchannel heat exchangers; considered replacement of LED lighting, evaporators, condensers, and compressors; assumed LED lighting repair frequency decreases due to the presence of occupancy sensor. Average: 10 years for large businesses and 20 years for small buildings. Approach involves identifying all possible debt or asset classes that might be used to purchase the considered equipment or might be affected indirectly. Primary data source was the Federal Reserve Board’s Survey of Consumer Finances. 2028. Installation Costs ......................... Annual Energy Use ..................... Energy Prices .............................. Energy Price Trends ................... Repair and Maintenance Costs ... Equipment Lifetime ...................... Discount Rates ............................ Compliance Date ......................... * Not used for PBP calculation. References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the NOPR TSD. ddrumheller on DSK120RN23PROD with PROPOSALS2 1. Equipment Cost To calculate consumer equipment costs, DOE multiplied the MPCs developed in the engineering analysis by the markups described previously (along with sales taxes). DOE used different markups for baseline equipment and higher-efficiency equipment because DOE applies an incremental markup to the increase in MSP associated with higher-efficiency equipment. DOE used a price learning analysis to account for changes in LED lamp prices that are expected to occur between the time for which DOE has data for lamp prices (2022) and the assumed compliance date of the rulemaking (2028). See chapter 8 of the NOPR TSD for more details on how price learning for LED lighting was applied. In response to the June 2022 Preliminary Analysis, the Joint Commenters noted that while DOE included price trends for lighting design options, other design options, such as variable-speed compressors and highefficiency fans were not included, and the Joint Commenters encouraged DOE to incorporate price trends for additional CRE design options. (Joint Commenters, No. 39 at p. 5) As discussed in section IV.C of this document, DOE included variable-speed compressors as a technology option for 55 For further information, see the Assumptions to AEO2023 report that sets forth the major assumptions used to generate the projections in the Annual Energy Outlook. Available at www.eia.gov/ outlooks/aeo/assumptions/ (last accessed March 30, 2023). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 higher efficiency levels in certain equipment classes. To develop future prices specific for that technology, DOE applied a different price trend to the electronic control board of the variablespeed compressor. DOE estimated that the cost of that control board was 50 percent of the cost of the variable frequency drive (‘‘VFD’’) included in the variable speed compressor. DOE used Producer Price Index (‘‘PPI’’) data on ‘‘semiconductors and related device manufacturing’’ between 1967 and 2021 to estimate the historic price trend of electronic components in the control.56 The regression, performed as an exponential trend line fit, results in an R-square of 0.99, with an annual price decline rate of 6.5 percent. See chapter 8 of the TSD for further details on this topic. DOE requests comment on its price learning assumptions and methodology. 2. Installation Cost Installation cost includes labor, overhead, and any miscellaneous materials and parts needed to install the equipment. In response to the June 2022 Preliminary Analysis, the CA IOUs commented that DOE overestimated installation costs for self-contained equipment compared to remote condensing equipment. (CA IOUs, No. 43 at p. 7) DOE notes that, in the LCC and PBP, such costs were assumed not to vary by EL within the same 56 Semiconductors and related device manufacturing PPI series ID: PCU334413334413; www.bls.gov/ppi/. PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 equipment class, and, therefore, were not considered in the June 2022 Preliminary Analysis. AHRI commented that more efficient equipment can be more expensive to install and may require more time to set up due to additional programming, equipment size changes with type of insulation used, and technician training. (AHRI, No. 46 at p. 5) Thus, AHRI concluded that installation cost may change with efficiency level. (Id.) Similarly, AHRI, NAMA, and NAFEM commented that adding components to CRE and increasing their energy efficiency would lead to increased installation costs due to additional programing time and floor space rearrangement needs. (Trade Associations Survey, No. 50 at p. 25) AHRI, NAMA, and NAFEM also stated that technicians require additional technical training to install such equipment. (Id.) In response to these comments, DOE found no evidence that any of the analyzed design options considered in this NOPR require additional installation time. DOE estimates that installation workers may already have the required skills to install the analyzed design options or would adjust their labor rates equally across all efficiency levels if necessary skills are lacking. Therefore, as in the June 2022 Preliminary Analysis, DOE assumed that installation costs do not vary by efficiency level (within the same equipment class) and did not account for installation costs in the LCC and PBP analyses. E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules DOE requests comment and data to inform how any of the analyzed design options would require additional installation time, training, or other related skills compared to the baseline equipment. ddrumheller on DSK120RN23PROD with PROPOSALS2 3. Annual Energy Consumption For each equipment class, DOE determined the annual energy consumption for each sample equipment user of CRE at different efficiency levels using the approach described in section IV.E of this document. 4. Energy Prices Because marginal electricity price more accurately captures the incremental savings associated with a change in energy use from higher efficiency, it provides a better representation of incremental change in consumer costs than average electricity prices. Therefore, DOE applied average electricity prices for the energy use of the equipment purchased in the nonew-standards case, and marginal electricity prices for the incremental change in energy use associated with the other efficiency levels considered. DOE derived electricity prices in 2022 for each census division using data from Edison Electric Institute (‘‘EEI’’) Typical Bills and Average Rates reports. Based upon comprehensive, industry-wide surveys, this semi-annual report presents typical monthly electric bills and average kilowatt-hour costs to the customer as charged by investor-owned utilities. For the commercial sector, DOE calculated electricity prices using the methodology described in Coughlin and Beraki (2019).57 DOE’s methodology allows electricity prices to vary by sector, region, and season. In the analysis, variability in electricity prices is chosen to be consistent with the way the consumer economic and energy use characteristics are defined in the LCC analysis. For CRE, DOE calculated weighted-average values for average and marginal price for the nine census divisions for the commercial sector for both large-size (greater than 5,000 ft2) and small-size (less than 5,000 ft2) buildings. As the EEI data are published separately for summer and winter, DOE calculated seasonal prices for each division and sector. Each EEI utility in a given region was assigned a weight based on the 57 Coughlin, K. and B. Beraki. 2019. Nonresidential Electricity Prices: A Review of Data Sources and Estimation Methods. Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL–2001203. Available at ees.lbl.gov/ publications/non-residential-electricity-prices (last accessed March 9, 2023). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 number of consumers it serves. DOE adjusted these regional weightedaverage prices to account for systematic differences between investor-owned utilities (‘‘IOUs’’) and publicly owned utilities (‘‘POUs’’), as the latter are not included in the EEI data set. See chapter 8 of the NOPR TSD for details. To estimate energy prices in future years, DOE multiplied the 2022 energy prices by the projection of annual average price changes for each of the nine census divisions from the Reference case in AEO2023, which has an end year of 2050.58 To estimate price trends after 2050, a simple average of the 2046–2050 values was used for 2051 and all subsequent years. 5. Repair and Maintenance Costs Repair costs are associated with repairing or replacing equipment components that have failed in an appliance or equipment; maintenance costs are associated with maintaining the operation of the equipment. Typically, small incremental increases in equipment efficiency entail no, or only minor, changes in repair and maintenance costs compared to baseline efficiency equipment. DOE does not account for lost time when CRE fails or breaks, as DOE does not have data indicating how that would affect outcomes considered in the LCC, such as operating cost. In the June 2022 Preliminary Analysis, DOE calculated repair costs by considering the typical failure rate of refrigeration system components (compressor, lighting, and evaporator and condenser fan motors), component MPCs and associated markups, and the labor cost of repairs, which is assumed to be performed by private vendors. As discussed in sections 8.3.3 and 8.3.4 of the June 2022 Preliminary Analysis TSD, DOE considered the following specific CRE components and associated failure probabilities during typical CRE lifetime in its repair cost approach: compressor (25 percent), evaporator fan motor (50 percent), condenser fan motor (25 percent), and LED lighting (100 percent), with the presence of occupancy sensors decreasing LED lighting repair frequency by half. In response to the June 2022 Preliminary Analysis, Continental commented that microchannel condenser coils require more frequent cleaning due to the accumulation of debris and are more susceptible to corrosion and leaks, which often requires replacement. (Continental No. 58 EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed March 28, 2023). PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 70239 38 at p. 2) And AHRI stated that microchannel condenser coils require more frequent cleaning. (AHRI, No. 46 at pp. 5–6) In response to these comments regarding the impact of microchannel condenser coils on repair and maintenance costs and based on feedback from manufacturer interviews, DOE agrees with commenters that microchannel condenser coils are subject to more accumulation of debris, which may result in extended cleaning time. However, DOE found no evidence that microchannel condenser coils may be more susceptible to corrosion and leaks, or that these problems are not repairable with similar labor and material inputs as baseline units. Accordingly, DOE has updated its maintenance costs of equipment with microchannel condenser coils to account for an additional 10 minutes of annual cleaning. Continental commented that controls for defrost, lighting, and anti-sweat heaters can be challenging for technicians to diagnose and fix, leading to additional labor time and material replacement costs. (Continental No. 38 at p. 2) AHRI, NAMA, and NAFEM commented that adding higherefficiency CRE components leads to increased repair and maintenance costs due to the component purchase price and labor time. (Trade Associations Survey, No. 50 at p. 26) With respect to the comments from Continental and AHRI, NAMA, and NAFEM, DOE clarifies that neither vacuum-insulated panels nor controls for defrost and anti-sweat heaters are considered design options. DOE did not consider preventative maintenance for other design options, such as lighting occupancy sensors and night curtains, because DOE assumed they have similar average lifetimes to the equipment in which they are installed. AHRI commented that additional labor costs should be considered for flammable refrigerants. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM commented that equipment using alternative refrigerants (R–290) should have higher repair costs because leaks are harder to detect. (Trade Associations Survey, No. 50 at p. 26) DOE reiterates in response that equipment classes are analyzed individually and all analyzed self-contained equipment classes use R– 290, so there are no refrigerant changes by efficiency level. AHRI commented that labor shortages have caused an increase in servicing costs. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM commented that there is a shortage of qualified service technicians for CRE in the United States E:\FR\FM\10OCP2.SGM 10OCP2 70240 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 and higher standards would exacerbate the issue and lead to longer equipment downtimes for food retailers. (Trade Associations Survey, No. 50 at p. 30) In response to these comments, DOE clarifies that short-term labor supply variations are not included in its analysis because economic theory maintains that labor markets are expected to adjust in the long-term period considered in the LCC analysis. DOE requests comment and data on its assumptions and approach regarding consideration of repair and maintenance costs in the LCC and PBP analyses. Specifically, DOE requests data on the expected lifetimes and repair and maintenance frequencies of the considered design options in this NOPR. 6. Equipment Lifetime DOE used a lifetime distribution to characterize the probability that CRE will be retired from service at a given age. For the June 2022 Preliminary Analysis, consistent with the approach followed in the March 2014 Final Rule, which was based on discussions with industry experts, DOE had assumed that lifetime of CRE is correlated to the frequency of store renovations. DOE had also estimated an average lifetime of 10 years for all large-size and small foodservice buildings and 15 years for small food-sales buildings, and other businesses with CRE (per the CBECS sample) correlating such buildings with businesses that may have longer renovation cycles, such as independent grocery stores.59 DOE also assumed that the probability function for the annual survival of CRE would take the form of a Weibull distribution. A Weibull distribution is a probability distribution commonly used to measure failure rates.60 Further, in the June 2022 Preliminary Analysis, due to lack of data to suggest otherwise, DOE had assumed that retired but functional CRE had low salvage value and that the refurbished/used market for CRE was negligible. Therefore, DOE had not considered such CRE in the LCC analysis. In response to the June 2022 Preliminary Analysis, AHRI commented that smaller businesses use their equipment for 15–25 years due to the cost of upgrading. (AHRI, No. 46 at p. 6) AHRI added that, in some cases, compressor racks may be used for 30– 40 years, while display cases are switched out once during this time. (Id.) AHRI commented that businesses 59 See section 8.3.5 of the June 2022 Preliminary Analysis TSD and section 8.2.3.5 of the March 2014 Final Rule TSD for details. 60 Weibull distributions are commonly used to model appliance lifetimes. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 replacing CRE may also buy used equipment or ‘‘reskin’’ equipment by changing out sheet metal panels and bumpers. (Id.) NAMA recommended that DOE estimate the number of refurbished machines with an increased energy usage versus refurbished energycompliant ones. (NAMA, No. 37 at p. 16) Based on these comments, DOE has adjusted the mean lifetime distribution assumption for CRE to 10 years for large-size buildings and 20 years for small-size buildings, with a maximum lifetime of 40 years for each. DOE clarifies that it does not analyze the energy use of refurbished CRE because such equipment is not subject to new standards. However, DOE accounted for purchasers who sell their CRE to a refurbisher before the end of the equipment lifetime, by assigning a credit equivalent to the residual value of the used equipment at the selling year. See the following section (IV.F.7) for details on the residual value approach. DOE requests comment and data regarding the CRE lifetime assumptions and methodology. See chapter 8 of the NOPR TSD for more information. 7. Residual Value To model the phenomenon of CRE sold for refurbishment, DOE utilized a residual value for such equipment in the LCC. The residual value represents the remaining dollar value of surviving CRE at the average age of refurbishment, estimated to be 5 years for small-size food service buildings (e.g., restaurants) and 10 years for small-size food sales and other commercial buildings. To account for the value of CRE with remaining life to the consumer, the LCC model applies this residual value as a ‘‘credit’’ at the end of the CRE lifetime and discounts it back to the start of the analysis period. Per manufacturer feedback, this was only applied to a fraction of self-contained CRE in small buildings, totaling about 10 percent of all CRE in the LCC sample. DOE requests comment and data on the assumed business types and the corresponding CRE lifetimes at which refurbishment may occur. 8. Discount Rates In the calculation of LCC, DOE applies discount rates appropriate to commercial consumers to estimate the present value of future operating cost savings. For purchasers of CRE in the commercial sector, DOE used the cost of capital to estimate the present value of cash flows to be derived from a typical company project or investment. Most PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 companies use both debt and equity capital to fund investments, so the cost of capital is the weighted-average cost to the firm of equity and debt financing. This corporate finance approach is referred to as the weighted-average cost of capital. DOE used currently available economic data in developing commercial discount rates, with Damodaran Online being the primary data source.61 The weighted-average discount rates for the commercial sector for CRE is 6.4 percent. See chapter 8 of the NOPR TSD for further details on the development of discount rates. 9. Energy Efficiency Distribution in the No-New-Standards Case To accurately estimate the share of consumers that would be affected by a potential energy conservation standard at a particular efficiency level, DOE’s LCC analysis considered the projected distribution (market shares) of equipment efficiencies under the nonew-standards case (i.e., the case without amended or new energy conservation standards). To estimate the energy efficiency distribution of CRE for 2028, DOE used test data, feedback from manufacturer interviews, surveys (see Trade Associations Survey, No. 50), and the Single Compartment Commercial Refrigeration Equipment data from DOE’s CCMS, accessed in March 2023.62 As discussed in the engineering analysis, DOE assumed that all manufacturers will switch to R–290 in response to the December 2022 EPA NOPR, a proposed rule to restrict use of certain HFC refrigerants in specific equipment, including CRE. The EPA compliance date is 2025, which is earlier than the expected DOE CRE ECS compliance date of 2028. This approach reduces the potential maximum energy savings below the baseline compared to the June 2022 Preliminary Analysis. To create a robust sample for the energy efficiency distribution used in the LCC analysis, DOE grouped the 28 CRE equipment classes into 21 separate groups. For the equipment classes that DOE relied on CCMS model count data 61 Damodaran, A. Data: Cost of Capital by Industry Sector, United States. 2023. (Last accessed March 1, 2023.) https://pages.stern.nyu.edu/ ∼adamodar/. 62 U.S. Department of Energy. Compliance Certification Management System (CCMS) for Refrigeration Equipment—Commercial, Single Compartment. Available at www.regulations.doe.gov/certification-data/CCMS4-Refrigeration_Equipment_-_Commercial__Single_ Compartment.html#q=Product_Group_ s%3A%22Refrigeration%20Equipment%20%20Commercial%2C%20Single%20Compartment %22 (last accessed April 4, 2023). E:\FR\FM\10OCP2.SGM 10OCP2 70241 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules to formulate the efficiency distributions, this approach was used to allow equipment classes with a limited sample to share the efficiency distribution of a group of similar classes with a larger sample in the CCMS. DOE compared energy use data from the CCMS with energy use equations from the engineering analysis to derive model counts at each efficiency level. Equipment classes whose efficiency distributions were derived from aggregated data from manufacturer interviews, surveys, and test data were assigned their own groups. The estimated market shares for the no-newstandards case for CRE and the corresponding groupings are shown in table IV.10. See chapter 8 of the NOPR TSD for further information on the derivation of the efficiency distributions. In response to the June 2022 Preliminary Analysis, Continental commented that DOE’s approach to derive the no-standards-case efficiency distribution by relying on manufacturer model counts in the CCMS database is erroneous. (Continental, No. 38 at p. 2) Continental stated that model counts in DOE’s CCMS do not reflect sales or market share, but rather the variety of different models that manufacturers offer. (Id.) For this NOPR, as discussed in previous sections, DOE was able to conduct manufacturer interviews and collect shipments data for several equipment classes. The equipment classes for which data was collected account for 85 percent of total shipments and are marked with an asterisk in table IV.10. For the remainder of the equipment classes for which DOE was not able to collect representative shipments data from manufacturers, DOE utilized the CCMS database to estimate the no-newstandards-case efficiency distribution. TABLE IV.10—NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTIONS IN 2028 Market share by efficiency level Equipment class Group VOP.RC.M ................................... VOP.RC.L .................................... VOP.SC.M * .................................. VCT.RC.M .................................... VCT.RC.L ..................................... VCT.SC.H * .................................. VCT.SC.M * .................................. VCT.SC.L* .................................... VCT.SC.I ...................................... VCS.SC.H * .................................. 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 ..................................... CB.SC.M * .................................... CB.SC.L * ..................................... EL 0 (%) 1 1 2 3 3 4 5 6 7 8 9 10 11 12 13 14 15 16 16 17 17 18 18 18 19 19 20 21 73 73 86 93 93 60 48 35 44 70 71 77 100 76 66 98 36 100 100 81 81 72 72 72 88 88 50 70 EL 1 (%) 27 27 5 1 1 15 17 5 19 30 8 8 0 24 2 1 7 0 0 4 4 6 6 6 12 12 40 30 EL 2 (%) EL 3 (%) EL 4 (%) EL 5 (%) EL 6 (%) EL 7 (%) 0 0 4 6 6 17 17 0 27 0 2 0 0 0 2 1 9 ................ ................ 15 15 0 0 0 0 0 10 0 ................ ................ 0 0 0 5 1 50 10 0 11 1 0 ................ 8 0 6 ................ ................ 0 0 9 9 9 0 0 0 0 ................ ................ 0 0 ................ 0 0 0 0 0 3 14 0 ................ 8 0 15 ................ ................ 0 0 2 2 2 ................ ................ 0 0 ................ ................ 5 ................ ................ 0 0 0 ................ 0 5 0 0 ................ 2 ................ 0 ................ ................ 0 0 0 0 0 ................ ................ 0 0 ................ ................ ................ ................ ................ 0 17 10 ................ 0 ................ 0 0 ................ 1 ................ 2 ................ ................ ................ ................ 2 2 2 ................ ................ 0 0 ................ ................ ................ ................ ................ 3 0 0 ................ 0 ................ ................ ................ ................ 10 ................ 25 ................ ................ ................ ................ 9 9 9 ................ ................ ................ ................ ddrumheller on DSK120RN23PROD with PROPOSALS2 * The distributions for these equipment classes were derived from aggregated data from the Trade Associations Survey, test data, and manufacturer interview data. The LCC Monte Carlo simulations draw from the efficiency distributions and randomly assign an efficiency to the CRE purchased by each sample CRE purchaser in the no-new-standards case. The resulting percent shares within the sample match the market shares in the efficiency distributions. While DOE acknowledges that economic factors may play a role when consumers purchase CRE, assignment of CRE efficiency for a given installation, based solely on economic measures such as life-cycle cost or simple payback period, most likely would not fully and VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 accurately reflect actual real-world installations. There are a number of market failures discussed in the economics literature that illustrate how purchasing decisions in the commercial sector with respect to energy efficiency are unlikely to be perfectly correlated with energy use. One study in particular showed evidence of substantial gains in energy efficiency that could have been achieved without negative repercussions on profitability, but the investments had not been undertaken by PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 firms.63 The study found that multiple organizational and institutional factors caused firms to require shorter payback periods and higher returns than the cost of capital for alternative investments of similar risk. A number of other case studies similarly demonstrate the existence of market failures preventing the adoption of energy-efficient technologies in a variety of commercial sectors around the world, including 63 DeCanio, S.J. (1998). ‘‘The Efficiency Paradox: Bureaucratic and Organizational Barriers to Profitable Energy-Saving Investments,’’ Energy Policy, 26(5), 441–454. E:\FR\FM\10OCP2.SGM 10OCP2 70242 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules office buildings,64 supermarkets,65 and the electric motor market.66 DOE requests comment on its methodology and data to better inform the no-standards-case efficiency distribution for CRE. 10. Payback Period Analysis ddrumheller on DSK120RN23PROD with PROPOSALS2 The payback period is the amount of time (expressed in years) it takes the consumer to recover the additional installed cost of more efficient equipment, compared to baseline equipment, through energy cost savings. Payback periods that exceed the life of the equipment mean that the increased total installed cost is not recovered in reduced operating expenses. The inputs to the PBP calculation for each efficiency level are the change in total installed cost of the equipment and the change in the first-year annual operating expenditures relative to the baseline. DOE refers to this as a ‘‘simple PBP’’ because it does not consider changes over time in operating cost savings. The PBP calculation uses the same inputs as the LCC analysis when deriving first-year operating costs. As noted previously, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing equipment complying with an energy conservation standard level will be less than three times the value of the first year’s energy savings resulting from the standard, as calculated under the applicable test procedure. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)). For each considered efficiency level, DOE determined the value of the first year’s energy savings by calculating the energy savings in accordance with the applicable DOE test procedure and multiplying those savings by the average energy price projection for the year in which compliance with the new and amended standards would be required. 64 Prindle 2007, op. cit. Howarth, R.B., Haddad, B.M., and Paton, B. (2000). ‘‘The economics of energy efficiency: insights from voluntary participation programs,’’ Energy Policy, 28, 477– 486. 65 Klemick, H., Kopits, E., Wolverton, A. (2017). ‘‘Potential Barriers to Improving Energy Efficiency in Commercial Buildings: The Case of Supermarket Refrigeration,’’ Journal of Benefit-Cost Analysis, 8(1), 115–145. 66 de Almeida, E.L.F. (1998), ‘‘Energy efficiency and the limits of market forces: The example of the electric motor market in France’’, Energy Policy, 26(8), 643–653. Xenergy, Inc. (1998), United States Industrial Electric Motor Systems Market Opportunity Assessment (Available at: www.energy.gov/sites/default/files/2014/04/f15/ mtrmkt.pdf) (Last accessed Jan. 3, 2023). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 G. Shipments Analysis DOE uses projections of annual equipment shipments to calculate the national impacts of potential amended or new energy conservation standards on energy use, NPV, and future manufacturer cash flows.67 The shipments model takes an accounting approach, tracking market shares of each equipment class and the vintage of units in the stock. Stock accounting uses equipment shipments as inputs to estimate the age distribution of inservice equipment stocks for all years. The age distribution of in-service equipment stocks is a key input to calculations of both the NES and NPV, because operating costs for any year depend on the age distribution of the stock. The shipments analysis projects units of open and closed refrigeration cases sold in future years in each of food sales, food service, and all other applications combined. These equipment classifications and applications are defined in EIA’s 2018 CBECS. DOE estimates demand for these equipment categories in these applications by calculating demand coming from new construction as well as the replacement of retiring units, for each year. To calculate new demand for these equipment classes in each application, DOE combined new and existing floorspace projections from AEO2023 with saturation estimates based on 2018 CBECS and AEO2023. Shipments to meet this demand for these CRE equipment categories in each application are then disaggregated across the analyzed CRE classes, using fixed market shares derived from data collected during manufacturer interviews. To compute demand for replacements, DOE used the lifetime distributions determined in the LCC analysis, which estimates an average lifetime of 10 years for large grocery/ multi-line stores (food-sales buildings) and restaurants (food-service buildings), and an average lifetime of 20 years for small food-sales and food-service buildings, with a maximum lifetime of 40 years for all equipment. In each analysis year of the model, DOE calculated retirements across the distribution to compute all demand arising from the retirements. In response to the June 2022 Preliminary Analysis, AHRI stated that significantly higher-cost equipment 67 DOE uses data on manufacturer shipments as a proxy for national sales, as aggregate data on sales are lacking. In general, one would expect a close correspondence between shipments and sales. PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 would drive growth of the refurbished equipment market and lead to continued use of older equipment with lower efficiencies and higher GWP refrigerants. (AHRI, No. 46 at p. 15) As discussed in section IV.F.6 of this NOPR, DOE revised its assumptions of lifetime of equipment for small buildings from 15 years at the stage of the preliminary analysis to 20 years in this NOPR. To account for the use of refurbished equipment, DOE assumed an elasticity effect for a fraction of the CRE shipments, which is limited to small-size buildings. DOE applied an elasticity constant of ¥0.5 to shipments for small-size buildings and scaled this constant down to ¥0.15 over a period of 20 years (then constant thereafter) from the current year of calculations. DOE requests comment on the price elasticity assumptions for the CRE shipments analysis as they relate to the overall CRE market and the market for refurbished CRE. AHRI stated that DOE incorrectly estimated the number of existing units in use, as well as their average lifespan and noted that there are significantly more units in current use than DOE estimated. (Id. at p. 7). In response, DOE notes that it collected shipments data during manufacturer interviews and reestimated the market shares for each equipment class based on the collected data. DOE then used the shipment and stock estimates from the floorspace and saturations calculations and scaled them to the data obtained from the manufacturers for the year 2022. DOE notes that, due to lack of shipments data for some equipment classes with a small market share, DOE estimated their shipments based on other equipment classes with similar characteristics for those equipment classes. For example, in this NOPR, DOE assumed that shipments of VCT.SC.H are one percent of VCT.SC.I and that shipments for HZO.SC.M are equivalent to HZO.SC.L. More information on these assumptions can be found in chapter 9 of the NOPR TSD. DOE also compared its shipments data with the numbers provided by ENERGY STAR in its unit shipment and market penetration report for the calendar year 2021.68 DOE’s shipment results are generally consistent with the figures provided by ENERGY STAR, 68 ENERGY STAR®. ENERGY STAR® Unit Shipment and Market Penetration Report Calendar Year 2021 Summary. 2021. U.S. Environmental Protection Agency and U.S. Department of Energy. (Last accessed April 11, 2022.) https:// energystar.gov/sites/default/files/asset/document/ 2021%20Unit%20Shipment% 20Data%20Summary%20Report_0.pdf. E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules which reported 50-percent market penetration for the reported year. Historically, the annual amount of CRE capacity shipped has been depicted in linear feet, which is also an alternative way to express shipments data. DOE determined the linear feet shipped for any given year by multiplying each unit shipped by its associated average length and then summing all the linear footage values. Chapter 9 of the NOPR TSD presents the representative equipment-class lengths used for the conversion of per-unit shipments to linear footage within each equipment class. AHRI commented that changes to market shares would result in corresponding changes to shipping methodologies and added that some of the imposed requirements would cause retailers to favor open cases, or to take doors off completely. (AHRI, No. 46 at pp. 7–8) AHRI added that the impact of pending refrigerant regulations is unknown. (Id. at p. 8) AHRI also stated that because door cases have a greater maximum allowable charge compared to cases with doors, customers wishing to use A2L refrigerants may choose to use larger commercial refrigerators without doors. (Id. at p. 8) In response to these comments, DOE did not find any significant shift from closed cases to open cases or vice versa. The ratio between closed cases and open cases is approximately 93 percent and 7 percent respectively, as derived from manufacturer provided data for the year 2022. Based on these data, DOE concluded that any shift in the market may already have occurred and currently DOE does not anticipate any new market trends in this direction. AHRI shared, in response to DOE’s inquiring about market trends in the June 2022 Preliminary Analysis, that architecture in facilities is anticipated to change due to the refrigerant transition. (AHRI, No. 46 at p. 7) AHRI added that these changes are due in part to the lack of available refrigerants and the likely consequent growth in market share in self-contained and smaller units. (Id.) AHRI commented that a great deal of uncertainty exists about this direction. (Id.) DOE appreciates AHRI’s comments and continues to request information on market trends and shipments data to better inform the shipments analysis. Chapter 9 of the NOPR TSD provides additional details regarding the shipments analysis. H. National Impact Analysis The NIA assesses the NES and the NPV from a national perspective of total consumer costs and savings that would be expected to result from new and amended standards at specific efficiency levels.69 (‘‘Consumer’’ in this context refers to consumers of the equipment being regulated.) DOE calculates the NES and NPV for the potential standard levels considered based on projections of annual equipment shipments, along with the annual energy consumption and total installed cost data from the energy use and LCC analyses. For the present analysis, DOE projected the energy savings, operating cost savings, equipment costs, and NPV of consumer benefits over the lifetime of CRE sold from 2028 through 2057. 70243 DOE evaluates the impacts of new and amended standards by comparing a case without such standards with standardscase projections. The no-new-standards case characterizes energy use and consumer costs for each equipment class in the absence of new and amended energy conservation standards. For this projection, DOE considers historical trends in efficiency and various forces that are likely to affect the mix of efficiencies over time. DOE compares the no-new-standards case with projections characterizing the market for each equipment class if DOE adopted new and amended standards at specific energy efficiency levels (i.e., the TSLs or standards cases) for that class. For the standards cases, DOE considers how a given standard would likely affect the market shares of equipment with efficiencies greater than the standard. DOE utilized the Python programming language for its shipments’ analysis. The final results of the shipments analysis are available in the NIA spreadsheet developed for this analysis, accessible at www.regulations.gov/docket/EERE2017-BT-STD-0007. Interested parties can review DOE’s analyses by changing various input quantities within the spreadsheet. The NIA spreadsheet model uses typical values (as opposed to probability distributions) as inputs. Table IV.11 summarizes the inputs and methods DOE used for the NIA analysis for the NOPR. Discussion of these inputs and methods follows the table. See chapter 10 of the NOPR TSD for further details. TABLE IV.11—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS Inputs Method Shipments .............................................................. Compliance Date of Standard ............................... Efficiency Trends ................................................... Annual Energy Consumption per Unit .................. Total Installed Cost per Unit ................................. Annual Energy Cost per Unit ................................ ddrumheller on DSK120RN23PROD with PROPOSALS2 Repair and Maintenance Cost per Unit ................ Energy Price Trends ............................................. Energy Site-to-Primary and FFC Conversion ....... Discount Rate ........................................................ Present Year ......................................................... 1. Equipment Efficiency Trends A key component of the NIA is the trend in energy efficiency projected for the no-new-standards case and each of Annual shipments from shipments model. 2028. N/A (No efficiency trends were applied). Expressed as a function of energy use at each TSL. Expressed as a function of cost at each TSL. Incorporates projection of future equipment prices. Annual weighted-average values as a function of the annual energy consumption per unit and energy prices. Annual, weighted-average values from the LCC model. AEO2023 projections (to 2050) and extrapolation thereafter. A time-series conversion factor based on AEO2023. 3 percent and 7 percent. 2023. the standards cases. Section IV.F.9 of this document describes how DOE developed an energy efficiency distribution for the no-new-standards case (which yields a shipment-weighted average efficiency) for each of the considered equipment classes for the first full year of anticipated compliance (2028) with an amended or new standard. 69 The NIA accounts for impacts in the 50 States and U.S. territories. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 70244 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 For the standards cases, DOE used a ‘‘roll-up’’ scenario to establish the shipment-weighted efficiency for the year that standards are assumed to become effective (2028). In this scenario, the market shares of equipment in the no-new-standards case that do not meet the standard under consideration would ‘‘roll up’’ to meet the new standard level, and the market share of equipment above the standard would remain unchanged. In the absence of data on trends in efficiency, DOE assumed no efficiency trend over the analysis period for both the no-new-standards and standards cases. For a given equipment class, market shares by efficiency level were held fixed to their estimated distribution in 2028.70 DOE requests comment on its assumption of no efficiency trend for CRE and seeks historical CRE efficiency data, ideally by equipment class or alternatively by equipment family, or overall for the CRE market as a whole. 2. National Energy Savings The national energy savings analysis involves a comparison of national energy consumption of the considered equipment between each potential standards case and the case with no new and amended energy conservation standards. DOE calculated the national energy consumption by multiplying the number of units (stock) of each equipment (by vintage or age) by the unit energy consumption (also by vintage). DOE calculated annual NES based on the difference in national energy consumption for the no-newstandards case and for each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savings to primary energy (i.e., the energy consumed by power plants to generate site electricity) using annual conversion factors derived from AEO2023. Cumulative energy savings are the sum of the NES for each year over the timeframe of the analysis. In 2011, in response to the recommendations of a committee on ‘‘Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards’’ appointed by the National Academy of Sciences, DOE announced its intention to use FFC measures of energy use and greenhouse gas and other emissions in the national impact analyses and emissions analyses 70 DOE notes that, as discussed in section IV.C.1.a.i of this document, DOE has accounted for CRE efficiency trends by assuming that all selfcontained units will have transitioned to R–290 (propane) by 2028. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 included in future energy conservation standards rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the approaches discussed in the August 18, 2011 document, DOE published a statement of amended policy in which DOE explained its determination that EIA’s National Energy Modeling System (‘‘NEMS’’) is the most appropriate tool for its FFC analysis and its intention to use NEMS for that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, multi-sector, partial equilibrium model of the U.S. energy sector 71 that EIA uses to prepare its AEO. The FFC factors incorporate losses in production and delivery in the case of natural gas (including fugitive emissions) and additional energy used to produce and deliver the various fuels used by power plants. The approach used for deriving FFC measures of energy use and emissions is described in appendix 10B of the NOPR TSD. 3. Net Present Value Analysis The inputs for determining the NPV of the total costs and benefits experienced by consumers are (1) total annual installed cost, (2) total annual operating costs (energy costs and repair and maintenance costs), and (3) a discount factor to calculate the present value of costs and savings. DOE calculates net savings each year as the difference between the no-newstandards case and each standards case in terms of total savings in operating costs versus total increases in installed costs. DOE calculates operating cost savings over the lifetime of each equipment shipped during the projection period. As discussed in section IV.F.1 of this document, DOE developed price trends for CRE with variable speed compressors and CRE with LED lighting. DOE applied the same trends to project component prices for each representative unit of each equipment class containing variable speed compressors and/or LED lighting. By 2057, which is the end date of the projection period, the average CRE LED lighting price is expected to drop by approximately 25 percent, while the average price of variable speed compressors is expected to drop by approximately 42 percent, relative to projected 2028 prices. Because these component prices do not typically contribute substantively to the overall price of equipment, overall equipment prices are projected to decrease by at 71 For more information on NEMS, refer to The National Energy Modeling System: An Overview 2009, DOE/EIA–0581(2009), October 2009. Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed March 9, 2023). PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 most 7 percent by 2057 relative to 2028. The price of equipment at the current baseline efficiency level is expected to drop by at most 3 percent in the same period. For details on the price learning methodology and assumptions, see chapter 8 of the NOPR TSD. The energy cost savings are calculated using the estimated energy savings in each year and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the projection of annual national-average commercial energy price changes in the Reference case from AEO2023, which has an end year of 2050. To estimate price trends after 2050, the 2046–2050 average was used for all years. To estimate repair and maintenance costs, DOE considered the typical failure rate of refrigeration system components, component MPCs and associated markups, and the labor cost of repairs. As part of the NIA, DOE also analyzed scenarios that used inputs from variants of the AEO2023 Reference case that have lower and higher economic growth. Those cases have lower and higher energy price trends and stock compared to the Reference case. NIA results based on these cases are presented in appendix 10C of the NOPR TSD. Use of higher-efficiency equipment is occasionally associated with a direct rebound effect, which refers to an increase in utilization of the equipment due to the increase in efficiency. DOE did not find any data on the rebound effect specific to CRE that would indicate that end-users or CRE purchasers would alter the utilization of their equipment as a result of an increase in efficiency. CRE are typically plugged in and operate continuously; therefore, DOE assumed a rebound rate of 0. In calculating the NPV, DOE multiplies the net savings in future years by a discount factor to determine their present value. For this NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent and a 7-percent real discount rate. DOE uses these discount rates in accordance with guidance provided by the Office of Management and Budget (‘‘OMB’’) to Federal agencies on the development of regulatory analysis.72 The discount rates for the determination of NPV are in contrast to the discount rates used in the LCC analysis, which are designed to 72 United States Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. Section E. Available at georgewbush-whitehouse.archives.gov/omb/ memoranda/m03-21.html (last accessed February 17, 2023). E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules reflect a consumer’s perspective. The 7percent real value is an estimate of the average before-tax rate of return to private capital in the U.S. economy. The 3-percent real value represents the ‘‘social rate of time preference,’’ which is the rate at which society discounts future consumption flows to their present value. I. Consumer Subgroup Analysis In analyzing the potential impact of new and amended energy conservation standards on consumers, DOE evaluates the impact on identifiable subgroups of consumers that may be disproportionately affected by a new or amended national standard. The purpose of a subgroup analysis is to determine the extent of any such disproportional impacts. DOE evaluates impacts on particular subgroups of consumers by analyzing the LCC impacts and PBP for those particular consumers from alternative standard levels. In response to the June 2022 Preliminary Analysis, AHRI commented that the cost per energy efficiency improvement will be very high and especially challenging for small business owners, and in particular for restaurants and small retailers located in rural and urban food deserts, in which profit margins are low. (AHRI, No. 46 at p. 8) For this NOPR, DOE analyzed the impacts of the considered standard levels on small businesses. For this subgroup, DOE applied discount rates specific to small businesses to the same consumer sample that was used in the standard LCC analysis. DOE used the LCC and PBP model to estimate the impacts of the considered efficiency levels on this subgroup. For details on the subgroup analysis, see chapter 11 of the NOPR TSD. J. Manufacturer Impact Analysis ddrumheller on DSK120RN23PROD with PROPOSALS2 1. Overview DOE performed an MIA to estimate the financial impacts of new and amended energy conservation standards on manufacturers of CRE and to estimate the potential impacts of such standards on employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects and includes analyses of projected industry cash flows, the INPV, investments in research and development (‘‘R&D’’) and manufacturing capital, and domestic manufacturing employment. Additionally, the MIA seeks to determine how new and amended energy conservation standards might VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 affect manufacturing employment, capacity, and competition, as well as how standards contribute to overall regulatory burden. Finally, the MIA serves to identify any disproportionate impacts on manufacturer subgroups, including small business manufacturers. The quantitative part of the MIA primarily relies on the GRIM, an industry cash flow model with inputs specific to this rulemaking. The key GRIM inputs include data on the industry cost structure, unit production costs, equipment shipments, manufacturer markups, and investments in R&D and manufacturing capital required to produce compliant equipment. The key GRIM outputs are the INPV, which is the sum of industry annual cash flows over the analysis period, discounted using the industryweighted average cost of capital, and the impact to domestic manufacturing employment. The model uses standard accounting principles to estimate the impacts of more stringent energy conservation standards on a given industry by comparing changes in INPV and domestic manufacturing employment between a no-newstandards case and the various standards cases (i.e., TSLs). To capture the uncertainty relating to manufacturer pricing strategies following amended standards, the GRIM estimates a range of possible impacts under different scenarios. The qualitative part of the MIA addresses manufacturer characteristics and market trends. Specifically, the MIA considers such factors as a potential standard’s impact on manufacturing capacity, competition within the industry, the cumulative impact of other DOE and non-DOE regulations, and impacts on manufacturer subgroups. The complete MIA is outlined in chapter 12 of the NOPR TSD. DOE conducted the MIA for this rulemaking in three phases. In Phase 1 of the MIA, DOE prepared a profile of the CRE manufacturing industry based on the market and technology assessment and publicly available information. This included a top-down analysis of CRE manufacturers that DOE used to derive preliminary financial inputs for the GRIM (e.g., revenues; materials, labor, overhead, and depreciation expenses; selling, general, and administrative expenses (‘‘SG&A’’); and R&D expenses). DOE also used public sources of information to further calibrate its initial characterization of the CRE manufacturing industry, including company filings of form 10– PO 00000 Frm 00051 Fmt 4701 Sfmt 4702 70245 K from the SEC,73 corporate annual reports, the U.S. Census Bureau’s ASM,74 the U.S. Census Bureau’s Economic Census,75 the U.S. Census Bureau’s Quarterly Survey of Plant Capacity Utilization,76 and reports from Dun & Bradstreet.77 In Phase 2 of the MIA, DOE prepared a framework industry cash-flow analysis to quantify the potential impacts of new and amended energy conservation standards. The GRIM uses several factors to determine a series of annual cash flows starting with the announcement of the standard and extending over a 30-year period following the compliance date of the standard. These factors include annual expected revenues, costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. In general, energy conservation standards can affect manufacturer cash flow in three distinct ways: (1) creating a need for increased investment, (2) raising production costs per unit, and (3) altering revenue due to higher per-unit prices and changes in sales volumes. In addition, during Phase 2, DOE developed interview guides to distribute to manufacturers of CRE in order to develop other key GRIM inputs, including equipment and capital conversion costs, and to gather additional information on the anticipated effects of energy conservation standards on revenues, direct employment, capital assets, industry competitiveness, and subgroup impacts. In Phase 3 of the MIA, DOE conducted structured, detailed interviews with representative manufacturers. During these interviews, DOE discussed engineering, manufacturing, procurement, and financial topics to validate assumptions used in the GRIM and to identify key issues or concerns. See section IV.J.3 of this document for a description of the key issues raised by manufacturers 73 U.S. Securities and Exchange Commission. Electronic Data Gathering, Analysis, and Retrieval system. Available at www.sec.gov/edgar/ searchedgar/companysearch (last accessed April 20, 2022). 74 U.S. Census Bureau. Annual Survey of Manufactures. (2013–2022). Available at www.census.gov/programs-surveys/asm.html (last accessed February 1, 2023). 75 U.S. Census Bureau. Economic Census. (2012 and 2017). Available at www.census.gov/programssurveys/economic-census.html (last accessed February 1, 2023). 76 U.S. Census Bureau. Quarterly Survey of Plant Capacity Utilization. (2010–2022). Available at www.census.gov/programs-surveys/qpc/data/ tables.html (Last accessed December 14, 2022). 77 Dun & Bradstreet Hoovers. Subscription login accessible at app.dnbhoovers.com/ (last accessed March 27, 2023). E:\FR\FM\10OCP2.SGM 10OCP2 70246 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 during the interviews. As part of Phase 3, DOE also evaluated subgroups of manufacturers that may be disproportionately impacted by new and amended standards or that may not be accurately represented by the average cost assumptions used to develop the industry cash flow analysis. Such manufacturer subgroups may include small business manufacturers, lowvolume manufacturers, niche players, and/or manufacturers exhibiting a cost structure that largely differs from the industry average. DOE identified one subgroup for a separate impact analysis: small business manufacturers. The small business subgroup is discussed in section VI.B of this document, ‘‘Review under the Regulatory Flexibility Act,’’ and in chapter 12 of the NOPR TSD. 2. Government Regulatory Impact Model and Key Inputs DOE uses the GRIM to quantify the changes in cash flow due to new or amended standards that result in a higher or lower industry value. The GRIM uses a standard, annual discounted cash-flow analysis that incorporates manufacturer costs, markups, shipments, and industry financial information as inputs. The GRIM models changes in costs, distribution of shipments, investments, and manufacturer margins that could result from an amended energy conservation standard. The GRIM spreadsheet uses the inputs to arrive at a series of annual cash flows, beginning in 2023 (the base year of the analysis) and continuing to 2057. DOE calculated INPVs by summing the stream of annual discounted cash flows during this period. For manufacturers of CRE, DOE used a real discount rate of 10.0 percent, which was derived from industry financials and then modified according to feedback received during manufacturer interviews. The GRIM calculates cash flows using standard accounting principles and compares changes in INPV between the no-new-standards case and each standards case. The difference in INPV between the no-new-standards case and a standards case represents the financial impact of the new or amended energy conservation standard on manufacturers. As discussed previously, DOE developed critical GRIM inputs using a number of sources, including publicly available data, results of the engineering analysis, results of the shipments analysis, and information gathered from industry stakeholders during the course of manufacturer interviews. The GRIM results are presented in section V.B.2 of this document. Additional details about the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 GRIM, the discount rate, and other financial parameters can be found in chapter 12 of the NOPR TSD. a. Manufacturer Production Costs Manufacturing more efficient equipment is typically more expensive than manufacturing baseline equipment due to the use of more complex components, which are typically more costly than baseline components. The changes in the MPCs of covered equipment can affect the revenues, gross margins, and cash flow of the industry. For this NOPR, DOE relied on a designoption approach, supported with the testing and reverse engineering of directly analyzed CRE. The design options were incrementally added to the baseline configuration and continued through the ‘‘max-tech’’ configuration (i.e., implementing the ‘‘best available’’ combination of available design options). For a complete description of the MPCs, see section IV.C of this document and chapter 5 of the NOPR TSD. b. Shipments Projections The GRIM estimates manufacturer revenues based on total unit shipment projections and the distribution of those shipments by efficiency level. Changes in sales volumes and efficiency mix over time can significantly affect manufacturer finances. For this analysis, the GRIM uses the NIA’s annual shipment projections derived from the shipments analysis from 2023 (the base year) to 2057 (the end year of the analysis period). See section IV.J.2.b of this document and chapter 9 of the NOPR TSD for additional details. c. Product and Capital Conversion Costs New or amended energy conservation standards could cause manufacturers to incur conversion costs to bring their production facilities and equipment designs into compliance. DOE evaluated the level of conversion-related expenditures that would be needed to comply with each considered efficiency level in each equipment class. For the MIA, DOE classified these conversion costs into two major groups: (1) product conversion costs; and (2) capital conversion costs. Product conversion costs are investments in research, development, testing, marketing, and other non-capitalized costs necessary to make equipment designs comply with new or amended energy conservation standards. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new compliant equipment designs can be fabricated and assembled. PO 00000 Frm 00052 Fmt 4701 Sfmt 4702 DOE based its estimates of the product conversion costs that would be required to meet each efficiency level on information obtained from manufacturer interviews; the design pathways analyzed in the engineering analysis; the equipment teardown analysis; the shipments analysis; and model count information. DOE estimated product development effort, including engineer, laboratory technician, and marketing resources, associated with design options and scaled the costs based on the number of basic models (or product platforms, depending on the nature of the design option). Product development effort varied by design option. DOE modeled door design changes (i.e., moving from a doublepane to triple-pane door, incorporating vacuum-insulated glass) would require more complex system redesigns and more cost, as compared to implementing more efficient components (e.g., incorporating a PSC motor or an ECM). DOE also assumed additional engineering effort would be required to optimize variable-speed compressors to ensure energy efficiency benefits, based on interview feedback. To estimate industry product conversion costs, DOE multiplied the product development cost estimate at each efficiency level for each equipment class by the number of industry basic models or product platforms that would require redesign. DOE used its CCD 78 and California Energy Commission’s MAEDbS 79 to identify CRE models covered by this proposed rulemaking. To identify chef bases and hightemperature CRE models, DOE further relied on publicly available data aggregated from web scraping retail websites. DOE used the no-newstandards case efficiency distribution from the shipments analysis to estimate the model efficiency distribution. DOE also included the estimated cost of testing to the DOE test procedure for chef bases and high-temperature units using the estimated per-unit testing cost of $5,000 detailed in the September 2023 Test Procedure Final Rule. 88 FR 66152, 66215. In addition to the sources used to derive product conversion costs, DOE relied on additional sources of information such as the Trade 78 U.S. Department of Energy’s Compliance Certification Database is available at www.regulations.doe.gov/certification-data/ #q=Product_Group_s%3A* (last accessed February 21, 2023). 79 California Energy Commission’s Modernized Appliance Efficiency Database System is available at cacertappliances.energy.ca.gov/Pages/Search/ AdvancedSearch.aspx (last accessed February 21, 2023). E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules Associations Survey 80 to estimate the capital conversion costs manufacturers would incur to comply with potential new and amended energy conservation standards. During interviews, manufacturers provided estimates and descriptions of the required tooling changes required by the considered design options. (See Trade Associations Survey. No. 50 at pp. 16–18) Based on these inputs, DOE assumed that most component swaps, while requiring moderate product conversion costs, would not require changes to existing production lines or equipment, and, therefore, would not require notable capital expenditures because one-forone component swaps would not require changes to existing production equipment (i.e., manufacturers will continue to be able to use their existing production equipment and production lines to manufacture CREs that achieve higher efficiency levels through component swaps, which are typically associated with lower ELs). However, based on manufacturer feedback, DOE modeled some tooling and capital expenditures when manufacturers implement improved door designs and variable-speed compressors. For improved door designs, some manufacturers noted that they would need new fixtures. Incorporating additional panes of glass for highvolume equipment classes could also necessitate heavier duty lifting equipment to transport and assemble heavier glass packs. For variable-speed compressors, which could be larger than existing single-speed compressors, manufacturers may need new tools for the baseplate. To estimate industry capital conversion costs, DOE scaled the estimated capital expenditures at each efficiency level for each equipment class by the number of applicable OEMs. As previously stated, the Trade Associations Survey included information about the anticipated capital investments associated with a range of design options. (Id. at pp. 16– 18) The survey results showed high capital investments associated with increasing insulation thickness and incorporating vacuum-insulated panels. (Id. at p. 18) As discussed in section IV.B.1 of this document, DOE excluded these technologies from further consideration in the engineering analysis. Other design options potentially requiring notable capital investment included microchannel heat exchangers, additional panes of glass, and variable-speed compressors. DOE compared the feedback from the Trade 80 www.regulations.gov/document/EERE-2017-BTSTD-0007-0050. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 Associations Survey with information from the equipment teardown analysis and manufacturer interviews and incorporated the feedback where applicable. DOE requests detailed comment and information on the capital investments associated with each analyzed design option. In particular, DOE requests detailed comment and feedback on the specific changes in equipment and tooling required to incorporate microchannel heat exchangers, as DOE currently models microchannel heat exchangers as a purchased part that can be substituted for tube and fin heat exchangers with minor production line changes. In general, DOE assumes all conversion-related investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the new standard. The conversion cost figures used in the GRIM can be found in section IV.J.2.c of this document. For additional information on the estimated capital and product conversion costs, see chapter 12 of the NOPR TSD. Regarding the potential investments associated with redesigning CRE to use flammable refrigerants in response to refrigerant regulations such as the December 2022 EPA NOPR, DOE did not consider these investments as conversion costs as they are independent of DOE actions related to any new or amended energy conservation standards. Instead, the refrigerant transition expenses are modeled as an impact to industry cashflow and are incorporated into both the no-new-standards case and standards cases. The refrigerant transition expenses includes redesigning CRE to use flammable refrigerants and retrofitting production facilities to accommodate flammable refrigerants. DOE relied on manufacturer feedback in confidential interviews, a report prepared for EPA,81 results of the engineering analysis, and investment estimates submitted by NAMA and AHRI in response to the June 2022 Preliminary Analysis to estimate the industry refrigerant transition costs. Based on feedback, DOE assumed that the transition to lowGWP refrigerants would require industry to invest approximately $21.3 million in R&D and $33.3 million in capital expenditures (e.g., investments in new charging equipment, leak 81 See pp. 5–113 of the ‘‘Global Non-CO 2 Greenhouse Gas Emission Projections & Marginal Abatement Cost Analysis: Methodology Documentation’’ (2019). Available at www.epa.gov/ sites/default/files/2019-09/documents/nonco2_ methodology_report.pdf. PO 00000 Frm 00053 Fmt 4701 Sfmt 4702 70247 detection systems, etc.). These costs are included in the no-new-standards case as well as the standards cases. See section V.B.2.e of this document or chapter 12 of the NOPR TSD for additional information. d. Manufacturer Markup Scenarios MSPs include direct manufacturing production costs (i.e., labor, materials, and overhead estimated in DOE’s MPCs) and all non-production costs (i.e., SG&A, R&D, and interest), along with profit. To calculate the MSPs in the GRIM, DOE applied non-production cost markups to the MPCs estimated in the engineering analysis for each equipment class and efficiency level. Modifying these manufacturer markups in the standards case yields different sets of impacts on manufacturers. For the MIA, DOE modeled two standardscase scenarios to represent uncertainty regarding the potential impacts on prices and profitability for manufacturers following the implementation of new and amended energy conservation standards: (1) a preservation of gross-margin-percentage scenario; and (2) a preservation-ofoperating-profit scenario. These scenarios lead to different manufacturer markup values that, when applied to the MPCs, result in varying revenue and cash flow impacts. Under the preservation-of-grossmargin-percentage scenario, DOE applied a single uniform ‘‘gross-marginpercentage’’ markup across all efficiency levels, which assumes that manufacturers would be able to maintain the same amount of profit as a percentage of revenues at all efficiency levels within an equipment class. As manufacturer production costs increase with efficiency, this scenario implies that the per-unit dollar profit will increase. DOE assumed a gross-margin percentage of 29 percent for all equipment classes.82 Manufacturers tend to believe it is optimistic to assume that they would be able to maintain the same gross-margin percentage as their production costs increase, particularly for minimally efficient equipment. Therefore, this scenario represents an upper bound of industry profitability under a new and amended energy conservation standard. In the preservation-of-operating-profit scenario, as the cost of production goes up under a standards case, manufacturers are generally required to reduce their manufacturer markups to a level that maintains no-new-standardscase operating profit. DOE implemented 82 The gross margin percentage of 29 percent is based on a manufacturer markup of 1.40. E:\FR\FM\10OCP2.SGM 10OCP2 70248 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules this scenario in the GRIM by lowering the manufacturer markups at each TSL to yield approximately the same earnings before interest and taxes in the standards case as in the no-newstandards case in the year after the expected compliance date of the new and amended standards. The implicit assumption behind this scenario is that the industry can only maintain its operating profit in absolute dollars after the standard takes effect. DOE seeks comment on the use of a 1.40 manufacturer markup for all CRE equipment classes analyzed in this proposed rule. DOE also seeks comment on the estimated manufacturer markups and incremental MSPs that result from the analyzed energy conservation standards. A comparison of industry financial impacts under the two manufacturer markup scenarios is presented in section V.B.2.a of this document. ddrumheller on DSK120RN23PROD with PROPOSALS2 3. Manufacturer Interviews DOE interviewed manufacturers representing approximately 60 percent of the domestic CRE shipments. Participants included domestic-based and foreign-based OEMs. Participants included manufacturers with a wide range of market shares and variety of equipment offerings, including four manufacturers who offered equipment under the expanded scope. In interviews, DOE asked manufacturers to describe their major concerns regarding the potential for more stringent energy conservation standards for CRE. The following section highlights manufacturer concerns that helped inform the projected potential impacts of an amended standard on the industry. Manufacturer interviews are conducted under NDAs, so DOE does not document these discussions in the same way that it does public comments in the comment summaries and DOE’s responses throughout the rest of this document. a. Changes to the Cabinet Structure In interviews, manufacturers expressed numerous concerns about efficiency levels that would necessitate significant changes to the cabinet structure (i.e., increasing insulation thickness or implementing VIPs). Regarding thicker insulation, manufacturers noted that changing the exterior dimensions of equipment would be extremely undesirable for the replacement market because customers expect equipment to fit within the same footprint as the equipment being replaced. A change in exterior dimensions could cause misalignment VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 between existing cases and new cases. As manufacturers typically treat exterior dimensions as fixed, increasing insulation thickness would necessitate reducing interior volume, which could reduce useable, refrigerated volume. Furthermore, manufacturers stated that increasing insulation thickness would require significant capital and product conversion costs. Manufacturers would need to invest in new foam fixtures and tooling. Manufacturers would likely need to update all designs and tooling associated with the interior of the equipment. Regarding VIPs, manufacturers noted there is very limited industry experience with incorporating VIPs into CRE. Manufacturers emphasized that commercial environments may not be suitable for VIPs as they could be easily punctured, which would erode any efficiency improvements. Manufacturers noted that it would be nearly impossible to do in-field replacements of ineffectual VIPs, meaning that a puncture could require an entirely new CRE unit. Manufacturers also noted that implementing VIPs would require significant investment and redesign to the foaming station, manufacturing facility, and equipment design. Typically, CRE designs require numerous fasteners to secure internal components to the cabinet, which would not be feasible with VIPs. Manufacturers also noted the need to allocate special warehouse space to ensure the VIPs are not jostled or roughly handled in the manufacturing environment. b. Supply Chain Concerns Multiple manufacturers expressed concerns about the ongoing supply chain constraints related to sourcing a range of components, such as highefficiency motors, compressors, and control boards and electronics. Manufacturers noted that limited component availability, increases in raw material prices, and escalating shipping and transportation costs all affect manufacturer production costs. In addition to higher production costs, these manufacturers stated that the evolving nature of these component shortages requires dedicating personnel resources to identify and qualify new suppliers, build prototypes, conduct testing, and update equipment literature. Some manufacturers expressed concern about standard levels that would necessitate numerous component changes, as the manufacturers are already experiencing delays sourcing parts for prototypes. If these supply constraints continue through the end of the conversion PO 00000 Frm 00054 Fmt 4701 Sfmt 4702 period, industry could face capacity constraints. DOE discusses potential supply constraints in section V.B.2.c of this document. 4. Discussion of MIA Comments In response to the June 2022 Preliminary Analysis, NAMA asserted that the convenience services industry had suffered greatly over the past 3 years due to new DOE energy efficiency regulations, new ENERGY STAR levels, regulations on refrigerants (e.g., California Air Resources Board), the global pandemic, record inflation, and staffing troubles. (NAMA, No. 37 at pp. 2–3) NAMA commented that DOE assumed during the previous rulemaking that the industry would be using natural refrigerants, but industry had not completed these transitions due in part to pandemic shutdowns and the cost of redesigning and manufacturing. (Id. at p. 3) Furthermore, NAMA commented that the costs associated with setting up the production of R–290 machines can easily cost between $0.5 million and $1.0 million per production line depending on the scale and stated that the June 2022 Preliminary TSD does not capture these costs. (Id. at pp. 7–8) NAMA commented further that the cost of redesigning equipment for lower GWP chemicals and the associated costs for safety compliance, improvements to factories, changes to service, and training of factory employees and service providers proved a huge burden to smaller manufacturers. (Id. at p. 3) NAMA stated that several of its member manufacturing companies qualified as small- and medium-enterprise businesses and requested that DOE pay close attention to the economic impacts of a new set of energy regulations on an industry already under extreme pressure. (Id.) NAMA recommended that the environmental impact analysis include the fact that the CRE industry has spent many millions of dollars converting to lower-GWP refrigerant blends and hydrocarbon refrigerants such as R–290, which have a direct and immediate impact on climate change. (Id. at p. 8) AHRI commented similarly on the costs and burdens to transition to alternative refrigerants. (AHRI, No. 46 at pp. 12–13, 17–18) AHRI commented that the AIM Act requires refrigerant manufacturers to phase down the supply of high-GWP HFCs, encouraging CRE manufacturers to switch to lowGWP refrigerants, which often have some degree of flammability. (Id. at p. 18) AHRI commented that new lowGWP refrigerants would significantly impact CRE and that new safety E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules standards must address the application of these new flammable refrigerants and subsequent leak mitigation. (Id.) AHRI commented that flammable refrigerant sensors would likely be employed, with significant redesign of equipment needed to achieve required mitigation capability, and all equipment would require certification to these new standards, which included a number of additional requirements due to the combination of multiple standards. (Id.) AHRI added that all equipment would also need to eliminate potential ignition sources. (Id.) AHRI stated that manufacturers estimate the capital investment needed to safely handle and store flammable refrigerants at manufacturing facilities at $0.5 to $1.0 million for small facilities that only manufacture self-contained equipment and $2.0 to $4.0 million for medium and larger facilities. (Id. at pp. 12–13) AHRI noted that some companies have made this investment and transitioned products with smaller charges (114 grams in areas of egress, such as hallways) and 150 grams limit in occupied spaces for A3 products (such as propane). (Id. at p. 13) Regarding the comments about new DOE energy efficiency regulations, DOE’s cumulative regulatory burden analysis is based on rulemakings that go into effect within a 3-year time frame before or after the expected compliance date of amended CRE energy conservation standards (2028). Section V.B.2.e of this document includes a list of DOE energy conservation standards rulemakings that contribute to cumulative regulatory burden within the 3-year period before or after the expected compliance date of new and amended CRE energy conservation standards, should they be finalized. Regarding the comments about EPA’s new ENERGY STAR levels, DOE notes that participating in ENERGY STAR is voluntary and not considered in DOE’s analysis of cumulative regulatory burden. Regarding the comments about the costs associated with redesigning equipment to make use of lower-GWP refrigerants, DOE understands that manufacturers of CRE using high-GWP refrigerants (e.g., R–404a) will likely need to transition to alternative, lowerGWP refrigerants to comply with anticipated refrigeration regulations, such as the December 2022 EPA NOPR, prior to the expected 2028 compliance date of potential energy conservation standards. See 87 FR 76738. DOE did incorporate the estimated expenses associated with redesigning CRE to make use of flammable refrigerants and upgrading production facilities to VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 accommodate flammable refrigerants in the GRIM. DOE relied on a range of sources to estimate the investment required to transition CRE using highGWP refrigerants to low-GWP refrigerants that satisfy the restrictions outlined in the December 2022 EPA NOPR. These sources included feedback from confidential manufacturer interviews, a report prepared for EPA,83 results of the engineering analysis, and investment estimates submitted by NAMA and AHRI in response to the June 2022 Preliminary Analysis. DOE also reviewed other public sources, such as retail websites, EPA’s ENERGY STAR Product Finder dataset, and equipment literature to estimate the portion of the CRE market that still needs to transition to low-GWP refrigerants (e.g., R–290). The expenses associated with a change in refrigerant are independent on DOE’s proposal to amend energy conservation standards and are separate from DOE’s estimates of conversion costs to meet amended standards. See section V.B.2.e of this document and chapter 12 of the NOPR TSD for additional discussion on cumulative regulatory burden. NAMA commented that DOE should not discount the time and resources needed to evaluate and respond to simultaneous proposed test procedures and energy conservation standards for multiple equipment over a short period of time. (NAMA, No. 37 at p. 17) NAMA stated that when rulemakings occur simultaneously, the cumulative burden increases dramatically. (Id.) NAMA noted that manufacturers of CRE are in the middle of transitioning from HFC refrigerants to lower-GWP refrigerants and commented that additional requirements from DOE would increase the time necessary for transition. (Id.) NAMA commented that the transition to lower-GWP refrigerants is more impactful to the environment than the new energy efficiency requirements shown in the June 2022 Preliminary Analysis. (Id.) NAMA requested that DOE incorporate the financial results of the current cumulative regulatory burden analysis directly into the MIA by adding the combined costs of complying with multiple regulations into the product conversion costs in the GRIM. (Id. at p. 18) NAMA requested that DOE complete a consolidated analysis for multiple regulations starting from the time of the first regulation. (Id.) NAMA stated that DOE has asserted such an analysis would require counting the 83 See pp. 5–113 of the ‘‘Global Non-CO 2 Greenhouse Gas Emission Projections & Marginal Abatement Cost Analysis: Methodology Documentation’’ (2019). Available at www.epa.gov/ sites/default/files/2019-09/documents/nonco2_ methodology_report.pdf. PO 00000 Frm 00055 Fmt 4701 Sfmt 4702 70249 costs/investments and the revenues/ profits for both equipment, which is correct and represents a feature, not a deficiency. (Id.) NAMA further commented that if this is not possible, DOE should incorporate a value reduction factor in the first postregulation year of the analysis that subtracts the value lost from the remaining years of the previous regulation. (Id.) Regarding NAMA’s suggestion to account for the financial results of the cumulative regulatory burden analysis into the GRIM, DOE incorporated the estimated refrigerant transition costs that occur in the timeframe of the analysis directly into the GRIM in both the no-new-standards case and the standards-case to reflect the impact of refrigerant regulation on CRE industry cash flow. See section V.B.2.e of this document for additional information. NAMA requested also that DOE stage its energy efficiency regulations at least 3, and preferably 5, years away from other significant and overlapping governmental regulations. (Id.) NAMA commented that changes to State and local building codes are another regulatory burden that should have been factored in the June 2022 Preliminary Analysis. Regarding NAMA’s suggestion to promulgate energy efficiency regulations at least 3, and preferably 5, years away from other significant and overlapping governmental regulations, DOE has statutory requirements under EPCA on the timing of rulemakings. For CRE, EPCA requires that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE evaluate the energy conservation standards for each type of covered equipment and publish either a notification of determination that the standards do not need to be amended, or a NOPR that includes new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1)); 42 U.S.C. 6295(m)(1)) The current CRE energy conservation standards were implemented by the March 2014 Final Rule. 79 FR 17725. Under EPCA, any potential new and amended standards would go into effect (1) 3 years after the date on which the final amended standard is published or (2) if the Secretary determines, by rule, that 3 years is inadequate, not later than 5 years after the date on which the final rule is published. (42 U.S.C. 6313(c)(6)(C)). For this NOPR, DOE has proposed a 3-year compliance period after the date on which final amended standard is published. DOE welcomes stakeholder feedback on choice of 3 E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70250 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules years or 5 years between the final rule publication and the compliance date. NAMA commented that large inaccuracies exist in the tables of design options in the June 2022 TSD and that the June 2022 Preliminary TSD failed to take into account the substantial capital costs caused by these design options, not including recent cost increases due to inflation. (NAMA, No. 37 at pp. 9–10) NAMA stated that it sees no sign DOE has factored into its estimates the cost of capital-intensive design options, such as increased insulation, vacuum panels, heavier doors, and microchannel coils, and that these costs, which would be accrued on top of the millions of dollars being invested to move from high-GWP refrigerants to low-GWP refrigerants, comprise an issue of cumulative burden. (Id.) With respect to NAMA’s comment on design options and capital costs, DOE did not estimate capital conversion costs for the June 2022 Preliminary Analysis as DOE does not conduct a full MIA for rulemaking stages prior to the NOPR analysis stage. For this NOPR, DOE accounts for the capital investments required to implement the considered design options in the MIA. See section IV.J.2.c of this document for additional details on conversion costs. AHRI commented that its members face significant regulatory burdens requiring redesign, retooling, testing, and listing of equipment; new regulations related to the inclusion of special/definite-purpose motors as regulated; state-mandated refrigerant emissions limits, which coincide with a change in the safety standard for CRE; and new regulations requiring elimination of the use of phenyl isopropylated phosphate (PIP 3:1) in components. (AHRI, No. 46 at p. 16) AHRI commented that recent changes to the scope of test procedures for electric motors will increase the burden on manufacturers significantly if all equipment using special and definitepurpose motors were suddenly forced to certify compliance with standards for component parts, including the testing, paperwork, and recordkeeping requirements that accompany certification. (Id. at pp. 16–17) AHRI stated that efficient electric motors incorporated into finished equipment are already a major part of the energy equation when OEMs consider what design options to apply to meet new standards, as is evidenced by the June 2022 Preliminary TSD, and urged DOE to account for these costs. (Id. at p. 17) AHRI recommended that DOE should consider the impact of new motor designs on CRE and stated that, for equipment yet to be produced, the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 impact could range from retesting/ recertification aligning with safety standards to a full equipment redesign accommodating a new, larger motor. (Id.) AHRI commented that the impact could be devastating for equipment already installed in businesses as motors could no longer be available as replacement parts, thereby forcing consumers to prematurely discard equipment that could have otherwise been repaired, imposing significant additional costs on consumers, and generating environmental impacts that would likely entirely offset any marginal gains from the increased scope. (Id.) AHRI recommended that DOE should account for the decrease in useful life from this component regulation in the product’s LCC calculations. (Id.) AHRI stated that the 180-day timeline for motor manufacturers to comply with the electric motor test procedure puts the need to consider the impact of motor test procedures into this analysis. (Id.) AHRI calculated and submitted a detailed cost analysis of changing an embedded motor totaling $304,000 for one model of commercial HVAC equipment in response to the electric motor rulemaking. (Id.) AHRI stated that CRE will likely face similar costs and that the expanded definition of ‘‘manufacturer’’ would redefine OEMs as electric motor manufacturers and they would need to comply with these certification requirements, which is a burden that DOE has not accounted for this burden in its analysis. (Id.) DOE analyzes cumulative regulatory burden pursuant to section 13(g) of the Process Rule. Regarding comments related to the electric motors test procedure final rule published on October 19, 2022 (‘‘October 2022 Final Rule’’), DOE tentatively expects that the motors used in the CRE covered by this rulemaking would not be directly impacted by the electric motors rulemaking because the motors used in CRE are typically below 0.25 horsepower, and, thus, are outside the scope of the October 2022 Final Rule. See 87 FR 63588, 63601. Regarding comments related to a change in safety standards for CRE, DOE understands that existing safety standards will be replaced by UL 60335–2–89 in 2024 after which all new equipment and certain modifications to existing CRE will require evaluation to the latest edition of UL 60335–2–89. Some manufacturers noted that the latest edition of UL 60335–2–89 is more onerous than existing safety standards for CRE. DOE understood that the product conversion cost feedback from PO 00000 Frm 00056 Fmt 4701 Sfmt 4702 manufacturer interviews reflects the additional time investment associated with testing to UL 60335–2–89. Regarding comments related to regulations requiring elimination of the use of PIP 3:1 in components, DOE did not consider chemical regulations in its NOPR cumulative regulatory burden analysis as EPA’s final rule is not a CREspecific Federal regulatory action and the required compliance date does not occur within the specified 3-year cumulative regulatory burden timeframe analyzed in this NOPR. See 87 FR 12875. AHRI commented that manufacturers of chef bases, griddle stands, and other equipment for which there is no test procedure would have to spend additional time and funds to determine test efficacy and whether it is possible to meet DOE-designated energy conservation standards. (AHRI, No. 46 at p. 8) DOE is proposing new and amended conservation standards for chef bases and high-temperature units (e.g., VCT.SC.H, VCS.SC.H, CB.SC.M, CB.SC.L). In its modeling, DOE incorporated the upfront per-unit costs associated with testing to the September 2023 Test Procedure Final Rule for the classes of equipment for which there was no test procedure. DOE incorporated the testing costs into its product conversion cost estimates. See section IV.J.2.c of this document and chapter 12 of the NOPR TSD for additional details. NAMA commented that the CRE industry has suffered shortages in the supply chain of critical parts during recent years. (NAMA, No. 37 at p. 14) Specifically, NAMA commented regarding difficulties in acquiring fabricated computer chips and other components in the electronics, displays, and electrical area. (Id.) NAMA stated that the economic analysis in support of the June 2022 Preliminary Analysis did not account for these disruptions. (Id.) NAMA recommended that DOE consider the impact of supply chain issues as part of the new energy efficiency standards levels. (Id.) NAMA commented that unavailable components had increased the complexity of equipment design, and further changes based on perceived energy efficiency added additional complexity without benefiting the customer. (Id.) As detailed in section IV.J.3 of this document, DOE received similar comments about the challenges sourcing certain CRE components in recent years during confidential manufacturer interviews. DOE notes that increased costs associated with recent supply E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules chain issues have been implemented in the cost analysis and are presented in the MPCs in this NOPR analysis, specifically by way of 5-year moving averages for materials and the most upto-date information on purchased part prices for this NOPR analysis. DOE requests comment on the availability of computer chips and other electronic components used in CREs in the timeframe of 2028, and specifically how availability would affect industry’s ability to achieve higher efficiency levels. NAFEM commented that DOE was evasive in DOE’s response to comments regarding negative impacts on a substantial number of small businesses in the July 2021 RFI. (NAFEM, No. 40 at p. 4) NAFEM commented that it continues to work with the Small Business Administration (‘‘SBA’’) Office of Advocacy to ensure that small businesses have a direct avenue for input and that DOE properly assesses cumulative regulatory burden and conducts a fair regulatory flexibility analysis. (Id.) DOE notes that there is no regulatory flexibility analysis or manufacturer impact analysis in the preliminary analysis stage of rulemakings. At this NOPR stage, DOE identified 25 small domestic OEMs selling covered CRE in the United States. In support of this NOPR analysis, DOE contractors conducted confidential manufacturer interviews, which included discussions with small, domestic OEMs. DOE incorporated their feedback into the MIA. Additionally, DOE analyzed the impact of the proposed amended standards on small business manufacturers in section VI.B of this document and in chapter 12 of the NOPR TSD. NAMA commented that no contact between DOE consultants and its manufacturing members was apparent and stated its belief that the information in the June 2022 Preliminary TSD would have been more accurate and reflective of today’s market if NAMA’s members had been interviewed. (NAMA, No. 37 at p. 6) DOE did not conduct preliminary manufacturer interviews in support of the June 2022 Preliminary Analysis. However, DOE conducted interviews with a range of manufacturers in support of this NOPR analysis. DOE conducted manufacturer interviews with eight CRE OEMs, representing approximately 60 percent of domestic industry shipments. For additional information on manufacturer interviews, see section IV.J.3 of this document and chapter 12 of the NOPR TSD. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 K. Emissions Analysis The emissions analysis consists of two components. The first component estimates the effect of potential energy conservation standards on power sector and site (where applicable) combustion emissions of CO2, NOX, SO2, and Hg. The second component estimates the impacts of potential standards on emissions of two additional greenhouse gases, CH4 and N2O, as well as the reductions to emissions of other gases due to ‘‘upstream’’ activities in the fuel production chain. These upstream activities comprise extraction, processing, and transporting fuels to the site of combustion. The analysis of electric power sector emissions of CO2, NOX, SO2, and Hg uses emissions factors intended to represent the marginal impacts of the change in electricity consumption associated with amended or new standards. The methodology is based on results published for the AEO, including a set of side cases that implement a variety of efficiency-related policies. The methodology is described in appendix 13A in the NOPR TSD. The analysis presented in this document uses projections from AEO2023. Power sector emissions of CH4 and N2O from fuel combustion are estimated using Emission Factors for Greenhouse Gas Inventories published by the EPA.84 FFC upstream emissions, which include emissions from fuel combustion during extraction, processing, and transportation of fuels, and ‘‘fugitive’’ emissions (direct leakage to the atmosphere) of CH4 and CO2, are estimated based on the methodology described in chapter 15 of the NOPR TSD. The emissions intensity factors are expressed in terms of physical units per MWh or MMBtu of site energy savings. For power sector emissions, specific emissions intensity factors are calculated by sector and end use. Total emissions reductions are estimated using the energy savings calculated in the national impact analysis. 1. Air Quality Regulations Incorporated in DOE’s Analysis DOE’s no-new-standards case for the electric power sector reflects the AEO, which incorporates the projected impacts of existing air quality regulations on emissions. AEO2023 reflects, to the extent possible, laws and regulations adopted through midNovember 2022, including the emissions control programs discussed in 84 Available at www.epa.gov/sites/production/ files/2021-04/documents/emission-factors_ apr2021.pdf (last accessed March 9, 2023). PO 00000 Frm 00057 Fmt 4701 Sfmt 4702 70251 the following paragraphs the emissions control programs discussed in the following paragraphs, and the Inflation Reduction Act.85 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 and the District of Columbia (D.C.). (42 U.S.C. 7651 et seq.) SO2 emissions from numerous States in the eastern half of the United States are also limited under the Cross-State Air Pollution Rule (‘‘CSAPR’’). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these States to reduce certain emissions, including annual SO2 emissions, and went into effect as of January 1, 2015.86 The AEO incorporates implementation of CSAPR, including the update to the CSAPR ozone season program emission budgets and target dates issued in 2016. 81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among EGUs and is enforced through the use of tradable emissions allowances. Under existing EPA regulations, any excess SO2 emissions allowances resulting from the lower electricity demand caused by the adoption of an efficiency standard could be used to permit offsetting increases in SO2 emissions by another regulated EGU. However, beginning in 2016, SO2 emissions began to fall as a result of the Mercury and Air Toxics Standards (‘‘MATS’’) for power plants.87 77 FR 9304 (Feb. 16, 2012). In the MATS final rule, EPA established a standard for hydrogen chloride as a surrogate for acid gas hazardous air pollutants (‘‘HAP’’), and also established a standard for SO2 (a non-HAP acid gas) 85 For further information, see the Assumptions to AEO2023 report that sets forth the major assumptions used to generate the projections in the Annual Energy Outlook. Available at www.eia.gov/ outlooks/aeo/assumptions/ (last accessed March 30, 2023). 86 CSAPR requires States to address annual emissions of SO2 and NOX, precursors to the formation of fine particulate matter (PM2.5) pollution, in order to address the interstate transport of pollution with respect to the 1997 and 2006 PM2.5 National Ambient Air Quality Standards (‘‘NAAQS’’). CSAPR also requires certain States to address the ozone season (May–September) emissions of NOX, a precursor to the formation of ozone pollution, in order to address the interstate transport of ozone pollution with respect to the 1997 ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a supplemental rule that included an additional five States in the CSAPR ozone season program; 76 FR 80760 (December 27, 2011) (Supplemental Rule). 87 In order to continue operating, coal power plants must have either flue gas desulfurization or dry sorbent injection systems installed. Both technologies, which are used to reduce acid gas emissions, also reduce SO2 emissions. E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70252 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules as an alternative equivalent surrogate standard for acid gas HAP. The same controls are used to reduce HAP and non-HAP acid gas; thus, SO2 emissions are being reduced as a result of the control technologies installed on coalfired power plants to comply with the MATS requirements for acid gas. In order to continue operating, coal power plants must have either flue gas desulfurization or dry sorbent injection systems installed. Both technologies, which are used to reduce acid gas emissions, also reduce SO2 emissions. Because of the emissions reductions under the MATS, it is unlikely that excess SO2 emissions allowances resulting from the lower electricity demand would be needed or used to permit offsetting increases in SO2 emissions by another regulated EGU. Therefore, energy conservation standards that decrease electricity generation would generally reduce SO2 emissions. DOE estimated SO2 emissions reduction using emissions factors based on AEO2023. CSAPR also established limits on NOX emissions for numerous States in the eastern half of the United States. Energy conservation standards would have little effect on NOX emissions in those States covered by CSAPR emissions limits if excess NOX emissions allowances resulting from the lower electricity demand could be used to permit offsetting increases in NOX emissions from other EGUs. In such cases, NOX emissions would remain near the limit even if electricity generation goes down. A different case could possibly result, depending on the configuration of the power sector in the different regions and the need for allowances, such that NOX emissions might not remain at the limit in the case of lower electricity demand. In this case, energy conservation standards might reduce NOX emissions in covered States. Despite this possibility, DOE has chosen to be conservative in its analysis and has maintained the assumption that standards will not reduce NOX emissions in States covered by CSAPR. Energy conservation standards would be expected to reduce NOX emissions in the States not covered by CSAPR. DOE used AEO2023 data to derive NOX emissions factors for the group of States not covered by CSAPR. The MATS limit mercury emissions from power plants, but they do not include emissions caps and, as such, DOE’s energy conservation standards would be expected to slightly reduce Hg emissions. DOE estimated mercury emissions reduction using emissions factors based on AEO2023, which incorporates the MATS. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 L. Monetizing Emissions Impacts As part of the development of this proposed rule, for the purpose of complying with the requirements of Executive Order 12866, DOE considered the estimated monetary benefits from the reduced emissions of CO2, CH4, N2O, NOX, and SO2 that are expected to result from each of the TSLs considered. To make this calculation analogous to the calculation of the NPV of consumer benefit, DOE considered the reduced emissions expected to result over the lifetime of equipment shipped in the projection period for each TSL. This section summarizes the basis for the values used for monetizing the emissions benefits and presents the values considered in this NOPR. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG (‘‘February 2021 SC–GHG TSD’’). In response to the June 2022 Preliminary Analysis, AHRI expressed concern that DOE’s social cost of carbon (‘‘SCC’’) analysis used to generate the original 2007 and updated 2020 new interim value for the social cost of carbon dioxide extends beyond the statutory authority and the scope contemplated by Congress. (AHRI, No. 46 at p. 9) AHRI stated its belief that DOE should withdraw the SCC values and refrain from using the SCC in any other rulemaking or policymaking until the SCC undergoes a more rigorous notice, review and comment process. (Id.) AHRI added that while AHRI agrees that the SCC should be estimated, presented, and made publicly available for every DOE rule, the SCC has not been adequately reviewed before being used as a factor in calculating net benefits. (Id.) As stated in section III.F.1.f of this document, DOE accounts for the environmental and public health benefits associated with the more efficient use of energy, including those connected to global climate change, and considers them important to take into account when considering the need for national energy conservation. (See 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) In addition, Executive Order 13563 states that each agency must, among other things: ‘‘select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other PO 00000 Frm 00058 Fmt 4701 Sfmt 4702 advantages; distributive impacts; and equity).’’ 76 FR 3821 (Jan. 21, 2011) For these reasons, DOE includes monetized emissions reductions in its evaluation of potential standard levels and reporting of net benefits. As previously stated, however, DOE would reach the same conclusion presented in this proposed rulemaking in the absence of the social cost of greenhouse gases. AHRI stated that the SCC’s timeperiod for analysis renders its applicability suspect. (AHRI, No. 46 at p. 9) AHRI noted that, in contrast to the timeframe considered for carbon emissions, DOE calculates the present value of the costs to consumers and manufacturers over a 30-year period. (Id.) AHRI contends that DOE’s comparison of 30 years of cost to hundreds of years of presumed future benefits is inconsistent and improper. (Id.) In response, DOE notes that its analysis considers the costs and benefits associated with 30 years of shipments of a covered product. Because such products continue to operate beyond 30 years, DOE accounts for energy cost savings and reductions in emissions until all products shipped within the 30-year period are retired. In the case of CO2 emissions, which remain in the atmosphere and contribute to climate change for many decades, the benefits of reductions in emissions likewise occur over a lengthy period. To not include such benefits would be inappropriate. However, because benefits associated with a ton of CO2 emissions are discounted to derive the SCC value for a given emissions year, and then the benefits from potential standards are discounted to the present, the contribution of climate change benefits in the far future to the total benefits from CO2 reduction is very small. AHRI stated that EPCA’s focus is exclusively on benefits accruing within this nation, and thus SCC figures reported by DOE at the global level are beyond the scope and authority of DOE. (Id. at p. 10) As previously discussed in this section, many climate impacts that affect the welfare of U.S. citizens and residents are better reflected by global measures of the SC–GHG. In addition, assessing the benefits of U.S. GHG mitigation activities requires consideration of how those actions may affect mitigation activities by other countries, as those international mitigation actions will provide a benefit to U.S. citizens and residents by mitigating climate impacts that affect U.S. citizens and residents. AHRI stated that DOE wrongly assumes that SCC values will increase over time. (Id.) AHRI contended that the E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules more economic development that occurs, the more adaptation and mitigation efforts are both undertaken by humanity and that a population living in a growing economy can afford to undertake. (Id.) In response, DOE notes that there are many reasons why the analysis of the IWG, along with other rigorous assessments, shows SCC values rising over time. Briefly, as concentrations of GHGs increase, so do the impacts on climate and sea level. Growing population in many parts of the world mean more people who would suffer the effects of heat waves and rising sea levels, and continued economic growth means that the overall magnitude of economic damage from climate change is likely to rise. In its February 2021 TSD, the IWG notes that various limitations in the analysis suggest that the range of SC–GHG estimates presented in the TSD likely underestimate societal damages from GHG emissions.88 AHRI commented that if DOE still chooses to include the SCC, DOE should consider the benefits of foam blowing and the refrigerant transition in its analysis. (Id. at p. 9) In response, DOE notes that the benefits of foam blowing agents and the refrigerant transition is independent of DOE actions related to any new and amended energy conservation standards, therefore such benefits are not accounted for in its monetizing emissions analysis. ddrumheller on DSK120RN23PROD with PROPOSALS2 1. Monetization of Greenhouse Gas Emissions DOE estimates the monetized benefits of the reductions in emissions of CO2, CH4, and N2O by using a measure of the SC of each pollutant (e.g., ‘‘SC–CO2’’). These estimates represent the monetary value of the net harm to society associated with a marginal increase in emissions of these pollutants in a given year, or the benefit of avoiding that increase. These estimates are intended to include (but are not limited to) climate-change-related changes in net agricultural productivity, human health, property damages from increased flood risk, disruption of energy systems, risk of conflict, environmental migration, and the value of ecosystem services. DOE exercises its own judgment in presenting monetized climate benefits as recommended by applicable Executive orders, and DOE would reach the same conclusion presented in this proposed rulemaking in the absence of the social cost of greenhouse gases. That 88 See the February 2021 SC–GHG TSD at p. 4. Available at www.whitehouse.gov/wp-content/ uploads/2021/02/TechnicalSupportDocument_ SocialCostofCarbonMethaneNitrousOxide.pdf. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 is, the social costs of greenhouse gases, whether measured using the February 2021 interim estimates presented by the IWG or by another means, did not affect the rule ultimately proposed by DOE. DOE estimated the global social benefits of CO2, CH4, and N2O emission reductions using SC–GHG values that were based on the interim values presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990, published in February 2021 by the IWG (‘‘February 2021 SC–GHG TSD’’). The SC–GHG is the monetary value of the net harm to society associated with a marginal increase in emissions in a given year, or the benefit of avoiding that increase. In principle, the SC–GHG includes the value of all climate change impacts, including (but not limited to) changes in net agricultural productivity, human health effects, property damage from increased flood risk and natural disasters, disruption of energy systems, risk of conflict, environmental migration, and the value of ecosystem services. Therefore, the SC–GHG reflects the societal value of reducing emissions of the gas in question by one metric ton. The SC–GHG is the theoretically appropriate value to use in conducting benefit-cost analyses of policies that affect CO2, N2O, and CH4 emissions. As a member of the IWG involved in the development of the February 2021 SC– GHG TSD, DOE agrees that the interim SC–GHG estimates represent the most appropriate estimate of the SC–GHG until revised estimates have been developed reflecting the latest peerreviewed science. The SC–GHG estimates presented here were developed over many years, using a transparent process, peerreviewed methodologies, the best science available at the time of that process, and with input from the public. Specifically, in 2009, the IWG, which included DOE and other executive branch agencies and offices, was established to ensure that agencies were using the best available science and to promote consistency in the SC–CO2 values used across agencies. The IWG published SC–CO2 estimates in 2010 that were developed from an ensemble of three widely cited integrated assessment models (‘‘IAMs’’) that estimate global climate damages using highly aggregated representations of climate processes and the global economy combined into a single modeling framework. The three IAMs were run using a common set of input assumptions in each model for future population, economic, and CO2 emissions growth, as well as PO 00000 Frm 00059 Fmt 4701 Sfmt 4702 70253 equilibrium climate sensitivity—a measure of the globally averaged temperature response to increased atmospheric CO2 concentrations. These estimates were updated in 2013 based on new versions of each IAM. In August 2016 the IWG published estimates of the social cost of methane (‘‘SC–CH4’’) and nitrous oxide (‘‘SC–N2O’’) using methodologies consistent with the methodology underlying the SC–CO2 estimates. The modeling approach that extends the IWG SC–CO2 methodology to non-CO2 GHGs has undergone multiple stages of peer review. The SC– CH4 and SC–N2O estimates were developed by Marten et al.89 and underwent a standard double-blind peer-review process prior to journal publication. In 2015, as part of the response to public comments received to a 2013 solicitation for comments on the SC–CO2 estimates, the IWG announced a National Academies of Sciences, Engineering, and Medicine review of the SC–CO2 estimates to offer advice on how to approach future updates to ensure that the estimates continue to reflect the best available science and methodologies. In January 2017, the National Academies released their final report, Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide,’’ and recommended specific criteria for future updates to the SC–CO2 estimates, a modeling framework to satisfy the specified criteria, and both near-term updates and longer-term research needs pertaining to various components of the estimation process.90 Shortly thereafter, in March 2017, President Trump issued Executive Order 13783, which disbanded the IWG, withdrew the previous TSDs, and directed agencies to ensure SC–CO2 estimates used in regulatory analyses are consistent with the guidance contained in OMB’s Circular A–4, ‘‘including with respect to the consideration of domestic versus international impacts and the consideration of appropriate discount rates’’ (E.O. 13783, Section 5(c)). Benefit-cost analyses following E.O. 13783 used SC–GHG estimates that attempted to focus on the U.S.-specific share of climate change damages as estimated by the models and were 89 Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, and A. Wolverton. Incremental CH4 and N2O mitigation benefits consistent with the U.S. Government’s SC–CO2 estimates. Climate Policy. 2015. 15(2): pp. 272–298. 90 National Academies of Sciences, Engineering, and Medicine. Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide. 2017. The National Academies Press: Washington, DC. nap.nationalacademies.org/catalog/24651/ valuing-climate-damages-updating-estimation-ofthe-social-cost-of. E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70254 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules calculated using two discount rates recommended by Circular A–4, 3 percent and 7 percent. All other methodological decisions and model versions used in SC–GHG calculations remained the same as those used by the IWG in 2010 and 2013, respectively. On January 20, 2021, President Biden issued Executive Order 13990, which reestablished the IWG and directed it to ensure that the U.S. Government’s estimates of the social cost of carbon and other greenhouse gases reflect the best available science and the recommendations in the National Academies 2017 report. The IWG was tasked with first reviewing the SC–GHG estimates currently used in Federal analyses and publishing interim estimates within 30 days of the E.O. that reflect the full impact of GHG emissions, including by taking global damages into account. The interim SC– GHG estimates published in February 2021 are used here to estimate the climate benefits for this proposed rulemaking. The E.O. instructs the IWG to undertake a fuller update of the SC– GHG estimates that takes into consideration the advice in the National Academies 2017 report and other recent scientific literature. The February 2021 SC–GHG TSD provides a complete discussion of the IWG’s initial review conducted under E.O. 13990. In particular, the IWG found that the SC– GHG estimates used under E.O. 13783 fail to reflect the full impact of GHG emissions in multiple ways. First, the IWG found that the SC–GHG estimates used under E.O. 13783 fail to fully capture many climate impacts that affect the welfare of U.S. citizens and residents, and those impacts are better reflected by global measures of the SC– GHG. Examples of omitted effects from the E.O. 13783 estimates include direct effects on U.S. citizens, assets, and investments located abroad, supply chains, U.S. military assets and interests abroad, tourism, and spillover pathways, such as economic and political destabilization and global migration that can lead to adverse impacts on U.S. national security, public health, and humanitarian concerns. In addition, assessing the benefits of U.S. GHG mitigation activities requires consideration of how those actions may affect mitigation activities by other countries, as those international mitigation actions will provide a benefit to U.S. citizens and residents by mitigating climate impacts that affect U.S. citizens and residents. A wide range of scientific and economic experts have emphasized the issue of reciprocity as support for considering global damages of GHG emissions. If the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 United States does not consider impacts on other countries, it is difficult to convince other countries to consider the impacts of their emissions on the United States. The only way to achieve an efficient allocation of resources for emissions reduction on a global basis— and so benefit the United States and its citizens—is for all countries to base their policies on global estimates of damages. As a member of the IWG involved in the development of the February 2021 SC–GHG TSD, DOE agrees with this assessment and, therefore, in this proposed rule, DOE centers attention on a global measure of SC–GHG. This approach is the same as that taken in DOE regulatory analyses from 2012 through 2016. A robust estimate of climate damages that accrue only to U.S. citizens and residents does not currently exist in the literature. As explained in the February 2021 SC– GHG TSD, existing estimates are both incomplete and an underestimate of total damages that accrue to the citizens and residents of the United States because they do not fully capture the regional interactions and spillovers discussed above; nor do they include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature. As noted in the February 2021 SC–GHG TSD, the IWG will continue to review developments in the literature, including more robust methodologies for estimating a U.S.specific SC–GHG value, and explore ways to better inform the public of the full range of carbon impacts. As a member of the IWG, DOE will continue to follow developments in the literature pertaining to this issue. Second, the IWG found that the use of the social rate of return on capital (7 percent under current OMB Circular A– 4 guidance) to discount the future benefits of reducing GHG emissions inappropriately underestimates the impacts of climate change for the purposes of estimating the SC–GHG. Consistent with the findings of the National Academies and the economic literature, the IWG continued to conclude that the consumption rate of interest is the theoretically appropriate discount rate in an intergenerational context,91 and recommended that 91 Interagency Working Group on Social Cost of Carbon. Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866. 2010. United States Government, available at www.epa.gov/sites/default/files/2016-12/ documents/scc_tsd_2010.pdf (last accessed March 9, 2023); Interagency Working Group on Social Cost of Carbon. Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. 2013, available at www.federalregister.gov/documents/2013/11/26/ PO 00000 Frm 00060 Fmt 4701 Sfmt 4702 discount rate uncertainty and relevant aspects of intergenerational ethical considerations be accounted for in selecting future discount rates. Furthermore, the damage estimates developed for use in the SC–GHG are estimated in consumption-equivalent terms, and so an application of OMB Circular A–4’s guidance for regulatory analysis would then use the consumption discount rate to calculate the SC–GHG. DOE agrees with this assessment and will continue to follow developments in the literature pertaining to this issue. DOE also notes that while OMB Circular A–4, as published in 2003, recommends using 3-percent and 7-percent discount rates as ‘‘default’’ values, Circular A–4 also reminds agencies that ‘‘different regulations may call for different emphases in the analysis, depending on the nature and complexity of the regulatory issues and the sensitivity of the benefit and cost estimates to the key assumptions.’’ On discounting, Circular A–4 recognizes that ‘‘special ethical considerations arise when comparing benefits and costs across generations,’’ and Circular A–4 acknowledges that analyses may appropriately ‘‘discount future costs and consumption benefits . . . at a lower rate than for intragenerational analysis.’’ In the 2015 Response to Comments on the Social Cost of Carbon for Regulatory Impact Analysis, OMB, DOE, and the other IWG members recognized that ‘‘Circular A–4 is a living document’’ and ‘‘the use of 7 percent is not considered appropriate for intergenerational discounting. There is wide support for this view in the academic literature, and it is recognized in Circular A–4 itself.’’ Thus, DOE concludes that a 7-percent discount rate is not appropriate to apply to value the social cost of greenhouse gases in the analysis presented in this NOPR. To calculate the present and annualized values of climate benefits, DOE uses the same discount rate as the 2013-28242/technical-support-document-technicalupdate-of-the-social-cost-of-carbon-for-regulatoryimpact (last accessed March 9, 2023); Interagency Working Group on Social Cost of Greenhouse Gases, United States Government. Technical Support Document: Technical Update on the Social Cost of Carbon for Regulatory Impact Analysis-Under Executive Order 12866. August 2016, available at www.epa.gov/sites/default/files/201612/documents/ sc_co2_tsd_august_2016.pdf (last accessed March 9, 2023); Interagency Working Group on Social Cost of Greenhouse Gases, United States Government. Addendum to Technical Support Document on Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide. August 2016, available at www.epa.gov/sites/ default/files/2016-12/documents/addendum_to_scghg_tsd_august_2016.pdf (last accessed January 18, 2022). E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules rate used to discount the value of damages from future GHG emissions, for internal consistency. That approach to discounting follows the same approach that the February 2021 SC–GHG TSD recommends ‘‘to ensure internal consistency—i.e., future damages from climate change using the SC–GHG at 2.5 percent should be discounted to the base year of the analysis using the same 2.5-percent rate.’’ DOE has also consulted the National Academies’ 2017 recommendations on how SC–GHG estimates can ‘‘be combined in RIAs with other cost and benefits estimates that may use different discount rates.’’ The National Academies reviewed several options, including ‘‘presenting all discount rate combinations of other costs and benefits with [SC–GHG] estimates.’’ As a member of the IWG involved in the development of the February 2021 SC–GHG TSD, DOE agrees with the above assessment and will continue to follow developments in the literature pertaining to this issue. While the IWG works to assess how best to incorporate the latest peer-reviewed science to develop an updated set of SC–GHG estimates, it set the interim estimates to be the most recent estimates developed by the IWG prior to the group being disbanded in 2017. The estimates rely on the same models and harmonized inputs and are calculated using a range of discount rates. As explained in the February 2021 SC–GHG TSD, the IWG has recommended that agencies revert to the same set of four values drawn from the SC–GHG distributions based on three discount rates as were used in regulatory analyses between 2010 and 2016 and were subject to public comment. For each discount rate, the IWG combined the distributions across models and socioeconomic emissions scenarios (applying equal weight to each) and then selected a set of four values recommended for use in benefitcost analyses: an average value resulting from the model runs for each of three discount rates (2.5 percent, 3 percent, and 5 percent), plus a fourth value, selected as the 95th percentile of estimates based on a 3-percent discount rate. The fourth value was included to provide information on potentially higher-than-expected economic impacts from climate change. As explained in the February 2021 SC–GHG TSD, this update reflects the immediate need to have an operational SC–GHG for use in regulatory benefit-cost analyses and other applications that was developed using a transparent process, peerreviewed methodologies, and the science available at the time of that process, and DOE agrees with this determination. Those estimates were subject to public comment in the context of dozens of proposed rulemakings as well as in a dedicated public comment period in 2013. There are a number of limitations and uncertainties associated with the SC– GHG estimates. First, the current scientific and economic understanding of discounting approaches suggests discount rates appropriate for intergenerational analysis in the context of climate change are likely to be less than 3 percent, near 2 percent or lower.92 Second, the IAMs used to produce these interim estimates do not include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature and the science underlying their ‘‘damage functions’’—(i.e., the core parts of the IAMs that map global mean temperature changes and other physical impacts of climate change into economic (both market and nonmarket) damages)—lags behind the most recent research. For example, limitations include the incomplete treatment of catastrophic and non-catastrophic impacts in the model IAMs, their incomplete treatment of adaptation and technological change, the incomplete way in which interregional and intersectoral linkages are modeled, uncertainty in the extrapolation of damages to high temperatures, and inadequate 70255 representation of the relationship between the discount rate and uncertainty in economic growth over long time horizons. Likewise, the socioeconomic and emissions scenarios used as inputs to the models do not reflect new information from the last decade of scenario generation or the full range of projections. The modeling limitations do not all work in the same direction in terms of their influence on the SC–CO2 estimates. However, as discussed in the February 2021 SC–GHG TSD, the IWG has recommended that, taken together, the limitations suggest that the interim SC–GHG estimates used in this proposed rule likely underestimate the damages from GHG emissions. DOE concurs with this assessment. DOE’s derivations of the SC–CO2, SC– N2O, and SC–CH4 values used for this NOPR are discussed in the following sections, and the results of DOE’s analyses estimating the benefits of the reductions in emissions of these GHGs are presented in section V.B.6 of this document. a. Social Cost of Carbon The SC–CO2 values used for this NOPR were based on the values presented for the IWG’s February 2021 TSD, which are shown in table IV.12 in five-year increments from 2020 to 2050. shows the updated sets of SC–CO2 estimates from the IWG’s TSD in 5-year increments from 2020 to 2050. The set of annual values that DOE used, which was adapted from estimates published by EPA,93 is presented in appendix 14– A of the final rule TSD. These estimates are based on methods, assumptions, and parameters identical to the estimates published by the IWG (which were based on EPA modeling), and include values for 2051 to 2070. DOE expects additional climate benefits to accrue for products still operating after 2070, but a lack of available SC–CO2 estimates for emissions years beyond 2070 prevents DOE from monetizing these potential benefits in this analysis. TABLE IV.10—ANNUAL SC–CO2 VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050 [2020$ per metric ton CO2] ddrumheller on DSK120RN23PROD with PROPOSALS2 Discount rate and statistic Year 5% Average 2020 ................................................................................................. 92 Interagency Working Group on Social Cost of Greenhouse Gases (IWG). 2021. Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990. February. United States Government. Available at www.whitehouse.gov/wp-content/ VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 3% Average 14 uploads/2021/02/TechnicalSupportDocument_ SocialCostofCarbonMethaneNitrousOxide.pdf (last accessed March 9, 2023). 93 See EPA, Revised 2023 and Later Model Year Light-Duty Vehicle GHG Emissions Standards: PO 00000 Frm 00061 Fmt 4701 Sfmt 4702 2.5% Average 51 3% 95th percentile 76 152 Regulatory Impact Analysis, Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023). E:\FR\FM\10OCP2.SGM 10OCP2 70256 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE IV.10—ANNUAL SC–CO2 VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050—Continued [2020$ per metric ton CO2] Discount rate and statistic Year 2025 2030 2035 2040 2045 2050 5% Average ................................................................................................. ................................................................................................. ................................................................................................. ................................................................................................. ................................................................................................. ................................................................................................. For 2051 to 2070, DOE used SC–CO2 estimates published by EPA, adjusted to 2020$.94 These estimates are based on methods, assumptions, and parameters identical to the 2020–2050 estimates published by the IWG. DOE expects additional climate benefits to accrue for any longer-life CRE after 2070, but a lack of available SC–CO2 estimates for emissions years beyond 2070 prevents DOE from monetizing these potential benefits in this analysis. DOE multiplied the CO2 emissions reduction estimated for each year by the SC–CO2 value for that year in each of 3% Average 17 19 22 25 28 32 2.5% Average 56 62 67 73 79 85 the four cases. DOE adjusted the values to 2020$ using the implicit price deflator for gross domestic product (‘‘GDP’’) from the Bureau of Economic Analysis. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the four cases using the specific discount rate that had been used to obtain the SC–CO2 values in each case. b. Social Cost of Methane and Nitrous Oxide The SC–CH4 and SC–N2O values used for this NOPR were based on the values 3% 95th percentile 83 89 96 103 110 116 169 187 206 225 242 260 developed for the February 2021 SC– GHG TSD. Table IV.13 shows the updated sets of SC–CH4 and SC–N2O estimates from the latest interagency update in 5-year increments from 2020 to 2050. The full set of annual values used is presented in appendix 14–A of the NOPR TSD. To capture the uncertainties involved in regulatory impact analysis, DOE has determined it is appropriate to include all four sets of SC–CH4 and SC–N2O values, as recommended by the IWG. DOE derived values after 2050 using the approach described above for the SC–CO2. TABLE IV.13—ANNUAL SC–CH4 AND SC–N2O VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050 [2020$ per metric ton] Year 5% Average ddrumheller on DSK120RN23PROD with PROPOSALS2 2020 2025 2030 2035 2040 2045 2050 ............. ............. ............. ............. ............. ............. ............. 670 800 940 1,100 1,300 1,500 1,700 SC–CH4 SC–N2O Discount rate and statistic Discount rate and statistic 3% Average 2.5% Average 1,500 1,700 2,000 2,200 2,500 2,800 3,100 DOE multiplied the CH4 and N2O emissions reduction estimated for each year by the SC–CH4 and SC–N2O estimates for that year in each of the cases. DOE adjusted the values to 2022$ using the implicit price deflator for GDP from the Bureau of Economic Analysis. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the cases using the specific discount rate that had been used to obtain the SC–CH4 and SC–N2O estimates in each case. 94 See EPA, Revised 2023 and Later Model Year Light-Duty Vehicle GHG Emissions Standards: Regulatory Impact Analysis, Washington, DC, December 2021. Available at www.federalregister.gov/documents/2021/10/30/ VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 3% 95th percentile 2,000 2,200 2,500 2,800 3,100 3,500 3,800 3,900 4,500 5,200 6,000 6,700 7,500 8,200 5% Average 5,800 6,800 7,800 9,000 10,000 10,000 13,000 2. Monetization of Other Emissions Impacts For the NOPR, DOE estimated the monetized value of NOX and SO2 emissions reductions from electricity generation using the latest benefit per ton estimates for that sector from the EPA’s Benefits Mapping and Analysis Program.95 DOE used EPA’s values for PM2.5-related benefits associated with NOX and SO2 and for ozone-related benefits associated with NOX for 2025, 2030, and 2040, calculated with discount rates of 3 percent and 7 2021-27854/revised-2023-and-later-model-yearlight-duty-vehicle-greenhouse-gas-emissionsstandards (last accessed March 9, 2023). 95 U.S. Environmental Protection Agency. Estimating the Benefit per Ton of Reducing PO 00000 Frm 00062 Fmt 4701 Sfmt 4702 3% Average 18,000 21,000 23,000 25,000 28,000 30,000 33,000 2.5% Average 27,000 30,000 33,000 36,000 39,000 42,000 45,000 3% 95th percentile 48,000 54,000 60,000 67,000 74,000 81,000 88,000 percent. DOE used linear interpolation to define values for the years not given in the 2025 to 2040 period; for years beyond 2040 the values are held constant. DOE combined the EPA regional benefit-per-ton estimates with regional information on electricity consumption and emissions from AEO2023 to define weighted-average national values for NOX and SO2 (see appendix 14B of the NOPR TSD). DOE also estimated the monetized value of NOX and SO2 emissions reductions from site use of natural gas Directly-Emitted PM2.5, PM2.5 Precursors and Ozone Precursors from 21 Sectors. www.epa.gov/benmap/ estimating-benefit-ton-reducing-directly-emittedpm25-pm25-precursors-and-ozone-precursors. E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules in CRE using benefit-per-ton estimates from the EPA’s Benefits Mapping and Analysis Program. Although none of the sectors covered by EPA refers specifically to residential and commercial buildings, the sector called ‘‘area sources’’ would be a reasonable proxy for residential and commercial buildings.96 The EPA document provides high and low estimates for 2025 and 2030 at 3- and 7-percent discount rates.97 DOE used the same linear interpolation and extrapolation as it did with the values for electricity generation. DOE multiplied the site emissions reduction (in tons) in each year by the associated $/ton values, and then discounted each series using discount rates of 3 percent and 7 percent as appropriate. M. Utility Impact Analysis ddrumheller on DSK120RN23PROD with PROPOSALS2 The utility impact analysis estimates the changes in installed electrical capacity and generation projected to result for each considered TSL. The analysis is based on published output from the NEMS associated with AEO2023. NEMS produces the AEO Reference case, as well as a number of side cases that estimate the economywide impacts of changes to energy supply and demand. For the current analysis, impacts are quantified by comparing the levels of electricity sector generation, installed capacity, fuel consumption, and emissions in the AEO2023 Reference case and various side cases. Details of the methodology are provided in the appendices to chapters 13 and 15 of the NOPR TSD. The output of this analysis is a set of time-dependent coefficients that capture the change in electricity generation, primary fuel consumption, installed capacity, and power sector emissions due to a unit reduction in demand for a given end use. These coefficients are multiplied by the stream of electricity savings calculated in the NIA to provide estimates of selected utility impacts of potential new and amended energy conservation standards. 96 ‘‘Area sources’’ represents all emission sources for which states do not have exact (point) locations in their emissions inventories. Because exact locations would tend to be associated with larger sources, ‘‘area sources’’ would be fairly representative of small dispersed sources like homes and businesses. 97 ‘‘Area sources’’ are a category in the 2018 document from EPA, but are not used in the 2021 document cited above. Available at www.epa.gov/ sites/default/files/2018-02/documents/ sourceapportionmentbpttsd_2018.pdf (last accessed March 9, 2023). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 N. Employment Impact Analysis DOE considers employment impacts in the domestic economy as one factor in selecting a proposed standard. Employment impacts from new and amended energy conservation standards include both direct and indirect impacts. Direct employment impacts are any changes in the number of employees of manufacturers of the equipment subject to standards, their suppliers, and related service firms. The MIA addresses those impacts. Indirect employment impacts are changes in national employment that occur due to the shift in expenditures and capital investment caused by the purchase and operation of more-efficient appliances. Indirect employment impacts from standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, caused by (1) reduced spending by consumers on energy, (2) reduced spending on new energy supply by the utility industry, (3) increased consumer spending on the equipment to which the new standards apply and other goods and services, and (4) the effects of those three factors throughout the economy. One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sector employment statistics developed by the Labor Department’s Bureau of Labor Statistics (‘‘BLS’’). BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than expenditures in other sectors of the economy.98 There are many reasons for these differences, including wage differences and the fact that the utility sector is more capital-intensive and less labor-intensive than other sectors. Energy conservation standards have the effect of reducing consumer utility bills. Because reduced consumer expenditures for energy likely lead to increased expenditures in other sectors of the economy, the general effect of efficiency standards is to shift economic activity from a less labor-intensive sector (i.e., the utility sector) to more labor-intensive sectors (e.g., the retail 98 See U.S. Department of Commerce—Bureau of Economic Analysis. Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (RIMS II). 1997. U.S. Government Printing Office: Washington, DC. Available at apps.bea.gov/ scb/pdf/regional/perinc/meth/rims2.pdf (last accessed March 9, 2023). PO 00000 Frm 00063 Fmt 4701 Sfmt 4702 70257 and service sectors). Thus, the BLS data suggest that net national employment may increase due to shifts in economic activity resulting from energy conservation standards. DOE estimated indirect national employment impacts for the standard levels considered in this NOPR using an input/output model of the U.S. economy called Impact of Sector Energy Technologies version 4 (‘‘ImSET’’).99 ImSET is a special-purpose version of the ‘‘U.S. Benchmark National InputOutput’’ (‘‘I–O’’) model, which was designed to estimate the national employment and income effects of energy-saving technologies. The ImSET software includes a computer-based I–O model having structural coefficients that characterize economic flows among 187 sectors most relevant to industrial, commercial, and residential building energy use. DOE notes that ImSET is not a general equilibrium forecasting model, and that there are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Because ImSET does not incorporate price changes, the employment effects predicted by ImSET may over-estimate actual job impacts over the long run for this rulemaking. Therefore, DOE used ImSET only to generate results for near-term timeframes (2028–2032), where these uncertainties are reduced. For more details on the employment impact analysis, see chapter 16 of the NOPR TSD. V. Analytical Results and Conclusions The following section addresses the results from DOE’s analyses with respect to the considered energy conservation standards for CRE. It addresses the TSLs examined by DOE, the projected impacts of each of these levels if adopted as energy conservation standards for CRE, and the standards levels that DOE is proposing to adopt in this NOPR. Additional details regarding DOE’s analyses are contained in the NOPR TSD supporting this document. A. Trial Standard Levels In general, DOE typically evaluates potential new or amended standards for equipment by grouping individual efficiency levels for each class into TSLs. Use of TSLs allows DOE to identify and consider manufacturer cost interactions between the equipment classes, to the extent that there are such 99 Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model Description and User Guide. 2015. Pacific Northwest National Laboratory: Richland, WA. PNNL–24563. E:\FR\FM\10OCP2.SGM 10OCP2 70258 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules interactions, and price elasticity of consumer purchasing decisions that may change when different standard levels are set. In the analysis conducted for this NOPR, DOE analyzed the benefits and burdens of six TSLs for CRE. DOE developed TSLs that combine efficiency levels for each analyzed equipment class. DOE presents the results for the TSLs in this document, while the results for all efficiency levels that DOE analyzed are in the NOPR TSD. Table V.1 presents the TSLs and the corresponding efficiency levels that DOE has identified for potential new and amended energy conservation standards for CRE. TSL 6 represents the maximum technologically feasible (‘‘max-tech’’) energy efficiency for all equipment classes. TSL 5 represents the highest efficiency level with positive LCC savings, including subgroups, for all equipment classes. TSL 4 represents the highest efficiency level with maximum LCC savings for all equipment classes. TSL 3 represents the highest efficiency level with positive LCC savings and single speed compressor for equipment classes in which this design option was considered. TSL 2 represents the highest efficiency level with maximum LCC savings and single speed compressor for equipment classes with compressors, which also corresponds to the minimum efficiency level between TSL 4 and TSL 3. TSL 1 represents the minimum efficiency level with positive LCC savings. TABLE V.1—TRIAL STANDARD LEVELS FOR CRE—EFFICIENCY LEVELS Equipment class TSL 1 VOP.RC.M ............................................................................................... VOP.RC.L ................................................................................................ VOP.SC.M ................................................................................................ VCT.RC.M ................................................................................................ VCT.RC.L ................................................................................................. VCT.SC.M ................................................................................................ VCT.SC.L ................................................................................................. VCT.SC.I .................................................................................................. VCT.SC.H ................................................................................................ VCS.SC.M ................................................................................................ VCS.SC.L ................................................................................................. VCS.SC.I .................................................................................................. VCS.SC.H ................................................................................................ 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 ................................................................................................. CB.SC.M .................................................................................................. CB.SC.L ................................................................................................... Table V.2 presents the TSLs and the corresponding percent reduction in energy use below baseline by equipment TSL 2 1 1 1 1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 1 TSL 3 2 2 2 1 2 1 3 2 0 3 4 4 1 1 4 1 3 1 1 2 2 0 0 0 1 1 2 4 class. The baseline values for the selfcontained equipment classes are TSL 4 2 2 2 3 2 1 3 2 0 3 4 4 5 2 4 3 3 1 1 2 2 0 0 0 2 1 4 4 TSL 5 2 2 4 1 2 3 5 2 0 3 5 5 1 1 6 1 5 1 1 3 3 0 0 1 1 1 2 5 TSL 6 2 2 5 3 2 3 6 2 0 4 6 6 6 2 7 3 7 1 1 5 5 0 0 2 2 1 5 6 2 2 5 4 3 7 7 4 7 5 6 6 7 2 7 4 7 1 1 5 5 7 7 7 4 3 6 6 presented in table IV.6 in section IV.C.1.a of this document. TABLE V.2—TRIAL STANDARD LEVELS FOR CRE—% ENERGY REDUCTION BELOW ANALYZED BASELINE TSL 1 (%) ddrumheller on DSK120RN23PROD with PROPOSALS2 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 .................................................................................................. VCT.SC.H ................................................................................................ VCS.SC.M ................................................................................................ VCS.SC.L ................................................................................................. VCS.SC.I .................................................................................................. VCS.SC.H ................................................................................................ SVO.RC.M ............................................................................................... SVO.SC.M ................................................................................................ VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00064 Fmt 4701 4.5 1.6 2.6 9.5 3.4 3.0 2.9 0.6 0.0 26.7 6.6 4.8 53.9 5.0 3.4 Sfmt 4702 TSL 2 (%) 12.2 7.1 11.0 9.5 3.8 3.0 4.6 2.6 0.0 40.4 13.8 10.0 53.9 5.0 14.9 TSL 3 (%) TSL 4 (%) 12.2 7.1 11.0 10.8 3.8 3.0 4.6 2.6 0.0 40.4 13.8 10.0 69.3 12.2 14.9 E:\FR\FM\10OCP2.SGM 10OCP2 12.2 7.1 21.9 9.5 3.8 24.8 16.7 2.6 0.0 40.4 22.6 22.0 53.9 5.0 22.6 TSL 5 (%) 12.2 7.1 22.6 10.8 3.8 24.8 17.0 2.6 0.0 50.1 23.2 22.1 77.6 12.2 23.7 TSL 6 (%) 12.2 7.1 22.6 11.6 6.8 27.7 20.1 8.8 41.3 51.0 23.2 22.1 78.1 12.2 23.7 70259 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.2—TRIAL STANDARD LEVELS FOR CRE—% ENERGY REDUCTION BELOW ANALYZED BASELINE—Continued TSL 1 (%) Equipment class 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 ................................................................................................. CB.SC.M .................................................................................................. CB.SC.L ................................................................................................... TSL 2 (%) 10.9 13.7 2.3 1.1 3.8 2.4 0.0 0.0 30.0 36.7 7.7 22.4 15.6 10.9 22.9 2.3 1.1 5.2 3.1 0.0 0.0 0.0 36.7 7.7 50.3 38.4 (2) annual operating costs decrease. Inputs used for calculating the LCC and PBP include total installed costs (i.e., equipment price plus installation costs), and operating costs (i.e., annual energy use, energy prices, energy price trends, repair costs, and maintenance costs). The LCC calculation also uses equipment lifetime and a discount rate. Chapter 8 of the NOPR TSD provides detailed information on the LCC and PBP analyses. Table V.3 through table V.58 show the LCC and PBP results for the TSLs considered for each equipment class. In the first of each pair of tables, the simple payback is measured relative to the baseline equipment. In the second B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers DOE analyzed the economic impacts on CRE consumers by looking at the effects that potential new and amended standards at each TSL would have on the LCC and PBP. DOE also examined the impacts of potential standards on selected consumer subgroups. These analyses are discussed in the following sections. a. Life-Cycle Cost and Payback Period In general, higher-efficiency equipment affect consumers in two ways: (1) purchase price increases and TSL 3 (%) TSL 4 (%) 11.1 22.9 2.3 1.1 5.2 3.1 0.0 0.0 0.0 44.2 7.7 58.2 38.4 TSL 5 (%) 10.9 38.9 2.3 1.1 14.7 17.7 0.0 0.0 30.0 36.7 7.7 50.3 54.1 11.1 39.8 2.3 1.1 16.9 18.4 0.0 0.0 33.4 44.2 7.7 60.9 54.4 TSL 6 (%) 11.2 39.8 2.3 1.1 16.9 18.4 28.4 43.2 42.5 45.4 44.3 61.2 54.4 table, impacts are measured relative to the efficiency distribution in the nonew-standards case in the compliance year (see section IV.F.9 of this document). Because some consumers purchase equipment with higher efficiency in the no-new-standards case, the average savings are less than the difference between the average LCC of the baseline equipment and the average LCC at each TSL. The savings refer only to consumers who are affected by a standard at a given TSL. Those who already purchase an equipment with efficiency at or above a given TSL are not affected. Consumers for whom the LCC increases at a given TSL experience a net cost. TABLE V.3—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR CB.SC.L Average costs (2022F$) TSL Simple PBP (years) Efficiency level Installed cost 1 ................................... 2,3 ................................ 4 ................................... 5,6 ................................ Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... First year’s operating cost Lifetime operating cost 275.08 239.80 195.85 192.38 188.05 155.98 155.68 2,506.40 2,212.22 1,840.56 1,814.45 1,780.62 1,527.83 1,613.81 2,413.64 2,447.35 2,480.02 2,496.88 2,513.22 2,654.88 2,675.72 LCC 4,780.95 4,518.53 4,177.65 4,167.42 4,148.99 4,029.69 4,135.31 ........................ 1.0 0.8 1.0 1.1 2.0 2.2 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.4—AVERAGE LCC SAVINGS FOR CB.SC.L ddrumheller on DSK120RN23PROD with PROPOSALS2 Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... 5,6 ............................................................................................................................................ 1 2 3 4 5 6 263.09 524.57 534.80 553.24 672.54 566.92 % of consumers that experience net cost 0.0 0.0 0.0 0.0 0.2 1.3 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00065 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 70260 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.5—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR CB.SC.M Average costs (2022$) Efficiency level TSL 1 ................................... 2,4 ................................ 3 ................................... 5 ................................... 6 ................................... Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... First year’s operating cost 1,750.66 1,767.51 1,783.85 1,800.70 1,817.04 1,958.70 1,992.58 Lifetime operating cost 86.90 71.40 52.08 49.43 46.12 45.03 44.94 797.20 669.43 507.74 488.95 464.25 484.78 571.95 Simple PBP (years) LCC 2,452.05 2,340.22 2,193.97 2,191.11 2,181.85 2,336.27 2,455.47 ........................ 1.1 1.0 1.3 1.6 5.0 5.8 Average lifetime (years) 13.9 13.9 13.9 13.9 13.9 13.9 13.9 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.6—AVERAGE LCC SAVINGS FOR CB.SC.M Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 2,4 ............................................................................................................................................ 1 2 3 4 5 6 3 ............................................................................................................................................... 5 ............................................................................................................................................... 6 ............................................................................................................................................... 111.31 208.70 190.07 199.32 44.90 (74.29) % of consumers that experience net cost 0.0 0.0 4.1 3.3 45.9 73.7 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.7—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HCS.SC.L Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 1–5 ............................... 6 ................................... Baseline ......... 1 ..................... 2 ..................... 3 ..................... First year’s operating cost Lifetime operating cost 44.53 41.62 28.51 27.85 428.89 407.13 321.35 404.44 1,646.86 1,661.72 1,803.38 1,827.70 LCC 1,984.18 1,976.45 2,024.44 2,130.49 ........................ 5.1 9.8 10.8 Average lifetime (years) 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.8—AVERAGE LCC SAVINGS FOR HCS.SC.L Average LCC savings * (2022$) Efficiency level TSL 1–5 ........................................................................................................................................... 1 2 3 6 ............................................................................................................................................... 7.77 (41.22) (147.27) % of consumers that experience net cost 22.2 72.9 96.1 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. ddrumheller on DSK120RN23PROD with PROPOSALS2 TABLE V.9—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HCS.SC.M Average costs 2022$ TSL Installed cost 1,2,4 ............................. 3,5 ................................ VerDate Sep<11>2014 Simple PBP (years) Efficiency level Baseline ......... 1 ..................... 2 ..................... 3 ..................... 21:45 Oct 06, 2023 Jkt 262001 First year’s operating cost Lifetime operating cost 37.22 25.66 23.32 23.02 382.20 279.21 262.46 348.86 1,658.31 1,667.94 1,682.80 1,707.13 PO 00000 Frm 00066 Fmt 4701 Sfmt 4702 LCC 1,953.10 1,859.23 1,856.56 1,965.99 E:\FR\FM\10OCP2.SGM 10OCP2 ........................ 0.8 1.8 3.4 Average lifetime (years) 14.0 14.0 14.0 14.0 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70261 TABLE V.9—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HCS.SC.M—Continued Average costs 2022$ TSL Simple PBP (years) Efficiency level Installed cost 6 ................................... 4 ..................... First year’s operating cost Lifetime operating cost 22.94 379.24 1,848.81 LCC 2,130.58 13.3 Average lifetime (years) 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.10—AVERAGE LCC SAVINGS FOR HCS.SC.M Average LCC savings * (2022$) Efficiency level TSL 1,2,4 ......................................................................................................................................... 3,5 ............................................................................................................................................ 1 2 3 4 6 ............................................................................................................................................... 94.14 84.89 (24.55) (189.13) % of consumers that experience net cost 0.0 4.9 73.5 99.1 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.11—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HCT.SC.I Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 2,3 ................................ 1,4 ................................ 5 ................................... 6 ................................... Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 115.03 85.83 82.51 81.94 75.95 74.88 74.52 73.68 1,152.21 923.71 870.76 954.60 901.32 891.73 888.53 881.07 1,532.98 1,674.44 1,764.26 1,795.72 1,869.93 1,882.40 1,885.31 2,146.62 LCC 2,599.07 2,504.07 2,535.89 2,649.42 2,666.17 2,668.35 2,667.90 2,907.06 ........................ 4.8 7.1 7.9 8.6 8.7 8.7 14.8 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.12—AVERAGE LCC SAVINGS FOR HCT.SC.I Average LCC savings * (2022$) Efficiency level TSL 1,4 ............................................................................................................................................ 5 ............................................................................................................................................... 1 2 3 4 5 6 7 6 ............................................................................................................................................... 93.84 55.03 (58.42) (68.58) (69.11) (68.66) (306.51) % of consumers that experience net cost 15.0 32.5 56.4 63.7 65.2 65.0 85.8 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. ddrumheller on DSK120RN23PROD with PROPOSALS2 TABLE V.13—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HCT.SC.L Average costs (2022$) TSL Installed cost 1–5 ............................... VerDate Sep<11>2014 Simple PBP (years) Efficiency level Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 21:45 Oct 06, 2023 Jkt 262001 First year’s operating cost Lifetime operating cost 71.52 53.78 50.47 49.85 46.64 46.06 740.91 614.92 562.23 645.27 616.76 611.63 1,426.49 1,567.94 1,657.75 1,689.21 1,763.42 1,775.89 PO 00000 Frm 00067 Fmt 4701 Sfmt 4702 LCC 2,089.70 2,097.45 2,129.67 2,242.46 2,284.11 2,290.76 E:\FR\FM\10OCP2.SGM 10OCP2 ........................ 8.0 11.0 12.1 13.5 13.7 Average lifetime (years) 13.9 13.9 13.9 13.9 13.9 13.9 70262 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.13—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HCT.SC.L—Continued Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 6 ................................... 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 45.87 45.42 609.92 605.93 1,778.80 2,040.10 LCC 2,291.80 2,534.87 13.7 23.5 Average lifetime (years) 13.9 13.9 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.14—AVERAGE LCC SAVINGS FOR HCT.SC.L Average LCC savings * (2022$) Efficiency level TSL 1 2 3 4 5 6 7 6 ............................................................................................................................................... (8.05) (39.67) (152.24) (178.19) (180.80) (181.84) (421.60) % of consumers that experience net cost 42.8 57.0 71.5 81.8 83.9 83.8 90.5 *The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.15—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HCT.SC.M Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 1–5 ............................... 6 ................................... Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 33.30 30.61 27.30 27.05 25.79 25.56 25.48 25.31 378.46 386.32 333.51 420.09 408.84 406.81 406.14 404.56 1,310.11 1,451.54 1,541.34 1,572.79 1,646.98 1,659.45 1,662.35 1,923.61 LCC 1,617.43 1,759.03 1,791.13 1,907.45 1,966.35 1,976.12 1,978.19 2,223.67 ........................ 52.6 38.5 42.1 44.9 45.1 45.1 76.8 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.16—AVERAGE LCC SAVINGS FOR HCT.SC.M 1 2 3 4 5 6 7 6 ............................................................................................................................................... ddrumheller on DSK120RN23PROD with PROPOSALS2 Average LCC savings * (2022$) Efficiency level TSL (141.71) (164.18) (279.83) (307.69) (309.50) (311.58) (551.40) % of consumers that experience net cost 72.3 76.8 77.8 87.5 89.8 89.8 91.4 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.17—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HZO.RC.L TSL Efficiency level Baseline ......... VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 Average costs (2022$) Installed cost 6,037.15 PO 00000 First year’s operating cost I Frm 00068 1,214.59 Fmt 4701 Simple PBP (years) Lifetime operating cost I Sfmt 4702 11,439.53 LCC I 17,476.68 E:\FR\FM\10OCP2.SGM 10OCP2 ........................ Average lifetime (years) 13.0 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70263 TABLE V.17—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HZO.RC.L—Continued Average costs (2022$) Efficiency level TSL 1–6 ............................... Installed cost 1 ..................... First year’s operating cost Lifetime operating cost 1,203.55 11,249.48 6,180.64 Simple PBP (years) LCC 17,430.12 Average lifetime (years) 13.0 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.18—AVERAGE LCC SAVINGS FOR HZO.RC.L TSL Efficiency level Average LCC savings * (2022$) % of consumers that experience net cost 1–6 ........................................................................................................................................... 1 46.57 7.8 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.19—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HZO.RC.M Average costs (2022$) Efficiency level TSL 1–6 ............................... Installed cost Baseline ......... 1 ..................... First year’s operating cost Lifetime operating cost 543.01 532.57 5,247.93 5,064.11 6,023.23 6,166.77 Simple PBP (years) LCC 11,271.17 11,230.88 Average lifetime (years) ........................ 13.8 13.0 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.20—AVERAGE LCC SAVINGS FOR HZO.RC.M TSL Efficiency level Average LCC savings * (2022$) % of consumers that experience net cost 1–6 ........................................................................................................................................... 1 40.29 10.8 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.21—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HZO.SC.L Average costs (2022$) Efficiency level TSL 1 ................................... 2,3 ................................ 4 ................................... 5,6 ................................ Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... First year’s operating cost Lifetime operating cost 1,070.30 1,048.99 1,042.34 911.71 908.91 905.58 9,605.52 9,428.65 9,374.71 8,295.65 8,358.49 8,287.58 3,086.17 3,102.46 3,117.28 3,399.80 3,425.87 3,542.47 Simple PBP (years) LCC 12,578.04 12,416.86 12,377.19 11,570.22 11,658.16 11,699.54 ........................ 0.8 1.1 2.0 2.1 2.8 Average lifetime (years) 13.1 13.1 13.1 13.1 13.1 13.1 ddrumheller on DSK120RN23PROD with PROPOSALS2 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.22—AVERAGE LCC SAVINGS FOR HZO.SC.L 1 ............................................................................................................................................... 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Average LCC savings * (2022$) Efficiency level TSL Frm 00069 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 1 2 3 4 10OCP2 160.85 193.59 971.22 883.28 % of consumers that experience net cost 0.0 0.0 0.2 0.5 70264 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.22—AVERAGE LCC SAVINGS FOR HZO.SC.L—Continued Average LCC savings * (2022$) Efficiency level TSL 5,6 ............................................................................................................................................ 5 % of consumers that experience net cost 841.89 0.9 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.23—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR HZO.SC.M Average costs (2022$) Efficiency level TSL 1 ................................... 2,3 ................................ 4 ................................... 5,6 ................................ Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... First year’s operating cost Lifetime operating cost 429.17 415.60 410.44 376.54 371.96 368.63 3,921.92 3,812.49 3,771.80 3,509.56 3,556.41 3,398.99 2,397.43 2,412.25 2,427.07 2,568.36 2,594.43 2,711.05 Simple PBP (years) LCC 6,226.78 6,131.59 6,105.15 5,978.72 6,050.63 6,005.32 ........................ 1.1 1.6 3.3 3.4 5.2 Average lifetime (years) 13.1 13.1 13.1 13.1 13.1 13.1 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.24—AVERAGE LCC SAVINGS FOR HZO.SC.M Average LCC savings* (2022$) Efficiency level TSL 1 ............................................................................................................................................... 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... 1 2 3 4 5 5,6 ............................................................................................................................................ 95.03 117.44 226.50 154.59 199.91 % of consumers that experience net cost 0.0 0.2 6.8 19.6 14.8 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.25—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR SOC.RC.M Average costs (2022$) Efficiency level TSL 1,2,4 ............................. 3,5 ................................ 6 ................................... Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... First year’s operating cost Lifetime operating cost 847.97 770.99 769.68 769.26 768.26 8,984.53 7,801.16 7,789.05 7,785.15 7,775.94 13,455.98 13,653.31 13,701.42 13,712.64 14,720.84 Simple PBP (years) LCC 22,440.51 21,454.47 21,490.47 21,497.79 22,496.78 ........................ 2.6 3.1 3.3 15.9 Average lifetime (years) 12.9 12.9 12.9 12.9 12.9 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. ddrumheller on DSK120RN23PROD with PROPOSALS2 TABLE V.26—AVERAGE LCC SAVINGS FOR SOC.RC.M Average LCC savings * (2022$) Efficiency level TSL 1,2,4 ......................................................................................................................................... 3,5 ............................................................................................................................................ 6 ............................................................................................................................................... 1 2 3 4 986.27 944.21 929.51 (70.50) % of consumers that experience net cost 0.0 0.6 1.4 70.9 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00070 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70265 TABLE V.27—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR SOC.SC.M Average costs (2022$) Efficiency level TSL 1 ................................... 2,3 ................................ 4 ................................... 5,6 ................................ Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 1,010.13 894.71 841.08 816.47 761.20 681.78 676.67 673.64 10,218.96 9,215.75 8,823.37 8,630.16 8,212.91 7,036.90 6,992.45 7,052.97 15,074.90 15,084.50 15,216.87 15,292.93 15,575.42 15,772.73 15,820.79 16,888.21 Simple PBP (years) LCC 24,736.27 23,742.30 23,477.38 23,357.41 23,212.16 22,226.13 22,227.96 23,316.27 ........................ 0.1 0.8 1.1 2.0 2.1 2.2 5.4 Average lifetime (years) 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.28—AVERAGE LCC SAVINGS FOR SOC.SC.M Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 1 2 3 4 5 6 7 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... 5,6 ............................................................................................................................................ 994.55 1,085.17 1,015.54 1,063.82 1,834.72 1,832.85 698.37 % of consumers that experience net cost 0.0 0.4 0.9 3.7 0.0 0.0 25.6 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.29—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR SVO.RC.M Average costs (2022$) Efficiency level TSL 1,2,4 ............................. 3,5,6 ............................. Installed cost Baseline ......... 1 ..................... 2 ..................... First year’s operating cost Lifetime operating cost 1,115.54 1,068.46 1,001.65 11,064.57 10,317.17 9,696.11 6,998.28 7,222.52 7,833.88 Simple PBP (years) LCC 18,062.84 17,539.69 17,529.99 ........................ 4.8 7.3 Average lifetime (years) 13.0 13.0 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.30—AVERAGE LCC SAVINGS FOR SVO.RC.M Average LCC savings * (2022$) Efficiency level TSL 1,2,4 ......................................................................................................................................... 3,5,6 ......................................................................................................................................... 1 2 522.85 406.59 % of consumers that experience net cost 0.0 18.4 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. ddrumheller on DSK120RN23PROD with PROPOSALS2 TABLE V.31—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR SVO.SC.M Efficiency level TSL 1 ................................... 2,3 ................................ VerDate Sep<11>2014 Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 21:45 Oct 06, 2023 Jkt 262001 Average costs (2022$) Installed cost First year’s operating cost Lifetime operating cost 902.18 876.57 864.11 848.60 789.90 746.66 8,199.62 7,995.58 7,897.08 7,771.84 7,264.50 6,953.23 4,779.96 4,810.58 4,844.20 4,876.77 5,080.56 5,363.08 PO 00000 Frm 00071 Fmt 4701 Sfmt 4702 Simple PBP (years) LCC 12,793.46 12,618.85 12,552.66 12,458.72 12,147.21 12,107.44 E:\FR\FM\10OCP2.SGM 10OCP2 ........................ 1.2 1.7 1.8 2.7 3.8 Average lifetime (years) 13.0 13.0 13.0 13.0 13.0 13.0 70266 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.31—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR SVO.SC.M—Continued Average costs (2022$) Efficiency level TSL 4 ................................... 5,6 ................................ Installed cost 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 731.65 723.43 6,718.66 6,733.74 5,479.68 5,550.97 Simple PBP (years) LCC 11,984.91 12,068.50 4.1 4.3 Average lifetime (years) 13.0 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.32—AVERAGE LCC SAVINGS FOR SVO.SC.M Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 1 2 3 4 5 6 7 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... 5,6 ............................................................................................................................................ 175.56 237.26 324.02 600.52 586.37 692.32 602.17 % of consumers that experience net cost 0.0 0.2 0.1 0.1 8.2 4.6 11.0 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.33—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCS.SC.H Average costs (2022$) Efficiency level TSL 1,2,4 ............................. 3 ................................... 5 ................................... 6 ................................... Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 101.23 55.10 50.58 44.95 43.59 41.89 34.74 34.34 969.24 558.87 535.86 501.90 494.32 483.62 451.10 536.33 3,949.97 3,959.60 3,991.29 4,021.01 4,037.86 4,054.20 4,195.84 4,242.12 Simple PBP (years) LCC 4,701.69 4,300.41 4,307.35 4,301.47 4,309.82 4,314.55 4,415.86 4,544.82 ........................ 0.2 0.8 1.3 1.5 1.8 3.7 4.4 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.34—AVERAGE LCC SAVINGS FOR VCS.SC.H Average LCC savings * (2022$) Efficiency level TSL 1,2,4 ......................................................................................................................................... 1 2 3 4 5 6 7 3 ............................................................................................................................................... 5 ............................................................................................................................................... 6 ............................................................................................................................................... 399.54 270.97 276.86 268.51 263.78 162.47 33.51 % of consumers that experience net cost 0.0 17.8 15.0 17.4 18.4 31.6 52.8 ddrumheller on DSK120RN23PROD with PROPOSALS2 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.35—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCS.SC.I Efficiency level TSL 1 ................................... VerDate Sep<11>2014 Baseline ......... 1 ..................... 21:45 Oct 06, 2023 Jkt 262001 Average costs (2022$) Installed cost First year’s operating cost Lifetime operating cost 627.67 602.08 5,752.96 5,524.85 4,529.28 4,538.91 PO 00000 Frm 00072 Fmt 4701 Sfmt 4702 Simple PBP (years) LCC 10,031.71 9,812.69 E:\FR\FM\10OCP2.SGM 10OCP2 ........................ 0.4 Average lifetime (years) 14.1 14.1 70267 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.35—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCS.SC.I—Continued Average costs (2022$) Efficiency level TSL 2,3 ................................ 4 ................................... 5,6 ................................ 2 3 4 5 6 Installed cost ..................... ..................... ..................... ..................... ..................... First year’s operating cost Lifetime operating cost 584.86 580.39 574.81 511.08 510.61 5,387.74 5,352.37 5,307.05 4,801.64 4,886.41 4,568.63 4,585.48 4,601.82 4,885.14 4,931.42 Simple PBP (years) LCC 9,703.65 9,684.20 9,654.31 9,416.52 9,545.00 0.9 1.2 1.4 3.1 3.4 Average lifetime (years) 14.1 14.1 14.1 14.1 14.1 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.36—AVERAGE LCC SAVINGS FOR VCS.SC.I Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 1 2 3 4 5 6 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... 5,6 ............................................................................................................................................ % of consumers that experience net cost 219.02 328.05 347.51 377.40 615.19 486.70 0.0 0.0 0.0 0.0 3.6 8.9 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.37—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCS.SC.L Average costs (2022$) Efficiency level TSL 1 ................................... 2,3 ................................ 4 ................................... 5,6 ................................ Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... First year’s operating cost Lifetime operating cost 411.78 388.98 373.64 369.23 363.74 332.97 331.05 3,767.90 3,565.71 3,446.25 3,411.70 3,367.39 3,125.76 3,197.27 4,195.10 4,204.73 4,234.45 4,251.30 4,267.64 4,409.29 4,455.57 Simple PBP (years) LCC 7,721.94 7,528.82 7,437.36 7,418.70 7,389.78 7,281.65 7,396.77 ........................ 0.4 1.0 1.3 1.5 2.7 3.2 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.38—AVERAGE LCC SAVINGS FOR VCS.SC.L Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 1 2 3 4 5 6 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... 5,6 ............................................................................................................................................ 193.07 265.56 284.18 309.04 375.85 260.73 % of consumers that experience net cost 0.0 0.1 0.2 0.2 4.3 17.1 ddrumheller on DSK120RN23PROD with PROPOSALS2 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.39—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCS.SC.M Efficiency level TSL 1 ................................... VerDate Sep<11>2014 Baseline ......... 1 ..................... 21:45 Oct 06, 2023 Jkt 262001 Average costs (2022$) Installed cost First year’s operating cost Lifetime operating cost 112.72 87.24 1,080.77 854.78 3,956.46 3,966.08 PO 00000 Frm 00073 Fmt 4701 Sfmt 4702 Simple PBP (years) LCC 4,809.78 4,592.87 E:\FR\FM\10OCP2.SGM 10OCP2 ........................ 0.4 Average lifetime (years) 14.1 14.1 70268 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.39—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCS.SC.M—Continued Average costs (2022$) Efficiency level TSL 2–4 ............................... 5 ................................... 6 ................................... 2 3 4 5 Installed cost ..................... ..................... ..................... ..................... First year’s operating cost Lifetime operating cost 77.73 74.16 64.87 64.02 786.61 759.47 709.37 790.45 3,995.80 4,012.13 4,153.76 4,200.04 Simple PBP (years) LCC 4,552.70 4,540.95 4,624.33 4,749.02 1.1 1.4 4.1 5.0 Average lifetime (years) 14.1 14.1 14.1 14.1 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.40—AVERAGE LCC SAVINGS FOR VCS.SC.M Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 1 2 3 4 5 2–4 ........................................................................................................................................... 5 ............................................................................................................................................... 6 ............................................................................................................................................... 217.33 235.40 240.66 128.81 0.17 % of consumers that experience net cost 0.0 1.3 1.6 27.0 56.2 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.41—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCT.RC.L Average costs (2022$) Efficiency level TSL 1 ................................... 2–5 ............................... 6 ................................... Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... First year’s operating cost Lifetime operating cost 1,277.59 1,241.24 1,236.13 1,204.29 12,897.96 12,349.78 12,299.80 11,988.81 9,261.69 9,486.23 9,525.84 13,084.28 Simple PBP (years) LCC 22,159.65 21,836.00 21,825.64 25,073.10 ........................ 6.2 6.4 52.2 Average lifetime (years) 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.42—AVERAGE LCC SAVINGS FOR VCT.RC.L Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 2–5 ........................................................................................................................................... 6 ............................................................................................................................................... 1 2 3 323.67 331.04 (2,934.72) % of consumers that experience net cost 0.0 0.4 99.7 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.43—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCT.RC.M Efficiency level ddrumheller on DSK120RN23PROD with PROPOSALS2 TSL 1,2,4 ............................. 3,5 ................................ 6 ................................... Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... Average costs (2022$) Installed cost First year’s operating cost Lifetime operating cost 433.39 398.58 394.88 393.69 390.88 4,761.74 4,228.77 4,192.70 4,181.07 4,153.62 9,052.59 9,277.06 9,446.82 9,486.42 13,043.92 Simple PBP (years) LCC 13,814.33 13,505.84 13,639.51 13,667.49 17,197.54 ........................ 6.5 10.2 10.9 93.9 Average lifetime (years) 13.9 13.9 13.9 13.9 13.9 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00074 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70269 TABLE V.44—AVERAGE LCC SAVINGS FOR VCT.RC.M Average LCC savings * (2022$) Efficiency level TSL 1,2,4 ......................................................................................................................................... 1 2 3 4 3,5 ............................................................................................................................................ 6 ............................................................................................................................................... 308.65 171.49 133.62 (3,397.02) % of Consumers that experience net cost 0.0 8.1 24.0 100.0 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.45—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCT.SC.H Average costs (2022$) Efficiency level TSL Installed cost 1–5 ............................... 6 ................................... Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... 7 ..................... Simple PBP (years) First year’s operating cost Lifetime operating cost 126.82 116.79 112.31 97.60 85.18 83.82 83.25 82.48 1,370.85 1,315.87 1,285.13 1,186.12 1,008.73 996.65 1,080.12 1,073.29 4,470.66 4,531.98 4,565.12 4,706.57 4,823.32 4,907.08 4,953.92 6,377.25 LCC 5,586.32 5,589.16 5,589.67 5,624.01 5,556.70 5,623.60 5,751.23 7,086.37 ........................ 6.1 6.5 8.1 8.5 10.2 11.1 43.0 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.46—AVERAGE LCC SAVINGS FOR VCT.SC.H TSL Efficiency level Average LCC savings * (2022$) 1 2 3 4 5 6 7 6 ............................................................................................................................................... (2.49) (2.54) (36.07) 33.12 (33.78) (161.50) (1,496.81) % of Consumers that experience net cost 30.6 42.4 62.7 46.7 63.8 79.4 96.9 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.47—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCT.SC.I Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 1 ................................... 2–5 ............................... 6 ................................... Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... First year’s operating cost Lifetime operating cost 717.90 714.41 701.99 690.86 664.72 6,723.31 6,692.45 6,515.27 6,505.12 6,273.60 6,606.39 6,622.23 6,738.97 7,046.29 8,469.43 LCC 12,967.00 12,951.12 12,884.25 13,164.53 14,277.88 ........................ 4.6 8.3 16.3 35.0 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 ddrumheller on DSK120RN23PROD with PROPOSALS2 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.48—AVERAGE LCC SAVINGS FOR VCT.SC.I TSL Efficiency level 1 ............................................................................................................................................... 2–5 ........................................................................................................................................... VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00075 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM Average LCC savings * (2022$) 1 2 3 10OCP2 15.76 77.46 (226.28) % of Consumers that experience net cost 1.5 1.1 85.6 70270 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.48—AVERAGE LCC SAVINGS FOR VCT.SC.I—Continued TSL Efficiency level 6 ............................................................................................................................................... Average LCC savings * (2022$) 4 (1,318.52) % of Consumers that experience net cost 100.0 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.49—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCT.SC.L Average costs (2022$) Efficiency level TSL 1 ................................... 2,3 ................................ 4 ................................... 5 ................................... 6 ................................... Installed cost Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 616.41 601.18 595.37 592.42 541.91 529.48 527.53 511.74 5,793.30 5,674.48 5,627.26 5,601.15 5,215.01 5,037.56 5,108.98 4,968.73 6,441.77 6,471.45 6,487.76 6,503.61 6,786.54 6,903.32 6,956.92 8,380.48 Simple PBP (years) LCC 11,866.44 11,775.59 11,743.75 11,732.58 11,613.15 11,545.79 11,667.74 12,869.46 ........................ 2.0 2.2 2.6 4.6 5.3 5.8 18.5 Average lifetime (years) 14.0 14.0 14.0 14.0 14.0 14.0 14.0 14.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.50—AVERAGE LCC SAVINGS FOR VCT.SC.L TSL Efficiency level 1 ............................................................................................................................................... Average LCC savings * (2022$) 1 2 3 4 5 6 7 2,3 ............................................................................................................................................ 4 ............................................................................................................................................... 5 ............................................................................................................................................... 6 ............................................................................................................................................... 91.06 111.65 122.78 174.92 242.33 120.34 (1,093.50) % of Consumers that experience net cost 0.3% 0.6% 0.7% 22.6% 18.8% 37.5% 98.2% * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.51—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VCT.SC.M Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 1–3 ............................... 4,5 ................................ 6 ................................... Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 5 ..................... 6 ..................... 7 ..................... First year’s operating cost Lifetime operating cost 173.05 168.71 149.19 136.78 135.23 134.73 133.74 132.58 1,797.38 1,763.44 1,623.12 1,446.54 1,432.85 1,428.43 1,507.74 1,497.52 4,523.51 4,539.82 4,681.25 4,798.00 4,865.91 4,881.76 4,928.59 6,351.83 LCC 6,066.11 6,047.55 6,040.70 5,974.28 6,024.67 6,035.20 6,158.71 7,491.48 ........................ 3.8 6.6 7.6 9.1 9.4 10.3 45.2 Average lifetime (years) 13.9 13.9 13.9 13.9 13.9 13.9 13.9 13.9 ddrumheller on DSK120RN23PROD with PROPOSALS2 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.52—AVERAGE LCC SAVINGS FOR VCT.SC.M 1–3 ........................................................................................................................................... 4,5 ............................................................................................................................................ VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Average LCC savings * (2022$) Efficiency level TSL Frm 00076 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 1 2 3 4 5 10OCP2 18.80 20.52 82.53 30.92 20.36 % of Consumers that experience net cost 5.7% 29.8 20.1 42.4 45.9 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70271 TABLE V.52—AVERAGE LCC SAVINGS FOR VCT.SC.M—Continued Average LCC savings * (2022$) Efficiency level TSL 6 7 6 ............................................................................................................................................... (103.42) (1,417.22) % of Consumers that experience net cost 64.6 100.0 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.53—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VOP.RC.L Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 1 ................................... 2–6 ............................... Baseline ......... 1 ..................... 2 ..................... First year’s operating cost Lifetime operating cost 3,953.75 3,901.88 3,719.92 37,429.46 36,591.13 34,905.64 9,804.18 10,028.41 10,639.77 LCC 47,233.63 46,619.55 45,545.41 ........................ 4.3 3.6 Average lifetime (years) 13.0 13.0 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.54—AVERAGE LCC SAVINGS FOR VOP.RC.L Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 2–6 ........................................................................................................................................... 1 2 % of Consumers that experience net cost 615.37 1,524.52 0.0 0.0 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. TABLE V.55—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VOP.RC.M Average costs (2022$) TSL Simple PBP (years) Efficiency level Installed cost 1 ................................... 2–6 ............................... Baseline ......... 1 ..................... 2 ..................... First year’s operating cost Lifetime operating cost 1,436.26 1,381.81 1,290.04 14,170.99 13,308.67 12,457.83 8,943.72 9,167.99 9,779.42 LCC 23,114.71 22,476.66 22,237.25 ........................ 4.1 5.7 Average lifetime (years) 13.0 13.0 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.56—AVERAGE LCC SAVINGS FOR VOP.RC.M Average LCC savings * (2022$) Efficiency level TSL 1 ............................................................................................................................................... 2–6 ........................................................................................................................................... 1 2 % of Consumers that experience net cost 638.01 707.13 0.0 8.2 * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. ddrumheller on DSK120RN23PROD with PROPOSALS2 TABLE V.57—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VOP.SC.M Efficiency level TSL 1 ................................... 2,3 ................................ 4 ................................... VerDate Sep<11>2014 Baseline ......... 1 ..................... 2 ..................... 3 ..................... 4 ..................... 21:45 Oct 06, 2023 Jkt 262001 Average costs (2022$) Installed cost First year’s operating cost Lifetime operating cost 1,076.62 1,053.03 977.96 897.61 879.28 9,936.29 9,745.17 9,092.80 8,457.71 8,164.31 6,563.78 6,612.64 6,816.42 7,098.92 7,242.43 PO 00000 Frm 00077 Fmt 4701 Sfmt 4702 Simple PBP (years) LCC 16,264.24 16,120.22 15,664.28 15,301.52 15,146.45 E:\FR\FM\10OCP2.SGM 10OCP2 ........................ 2.1 2.6 3.0 3.4 Average lifetime (years) 13.0 13.0 13.0 13.0 13.0 70272 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.57—LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR VOP.SC.M—Continued Average costs (2022$) Efficiency level TSL 5,6 ................................ Installed cost 5 ..................... First year’s operating cost Lifetime operating cost 872.97 8,196.09 7,303.09 Average lifetime (years) Simple PBP (years) LCC 15,236.71 3.6 13.0 Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured relative to the baseline equipment. TABLE V.58—AVERAGE LCC SAVINGS FOR VOP.SC.M Efficiency level TSL 1 ............................................................................................................................................... 2,3 ............................................................................................................................................ Average LCC savings * (2022$) % of consumers that experience net cost 143.30 590.02 927.32 1,082.34 992.17 0.6 0.0 1.0 0.4 1.0 1 2 3 4 5 4 ............................................................................................................................................... 5,6 ............................................................................................................................................ * The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not change under a standard set at the corresponding EL, i.e., those with zero LCC savings. b. Consumer Subgroup Analysis In the consumer subgroup analysis, DOE estimated the impact of the considered TSLs on small businesses. Table V.59 compares the average LCC savings and PBP at each efficiency level for small businesses with the entire consumer sample for CRE. In most cases, the average LCC savings and PBP for small businesses at the considered efficiency levels are not substantially different from the average for all businesses. Chapter 11 of the NOPR TSD presents the complete LCC and PBP results for the subgroup. TABLE V.59—AVERAGE LCC AND PBP RESULTS COMPARISON FOR SMALL BUSINESSES FOR CRE Average LCC savings (2022$) Equipment class EL Small business CB.SC.L ............................... CB.SC.M .............................. HCS.SC.L ............................. HCS.SC.M ............................ ddrumheller on DSK120RN23PROD with PROPOSALS2 HCT.SC.I .............................. HCT.SC.L ............................. VerDate Sep<11>2014 21:45 Oct 06, 2023 Simple payback period (years) 1 2 3 4 5 6 1 2 3 4 5 6 1 2 3 1 2 3 4 1 2 3 4 5 6 7 1 2 3 4 5 6 7 Jkt 262001 227.9 455.5 462.59 476.95 565.61 473.70 96.14 180.72 162.71 168.99 16.80 (88.63) 5.13 (54.10) (146.77) 81.56 71.87 (23.76) (184.84) 66.18 21.88 (78.05) (93.01) (94.20) (94.15) (334.29) (23.30) (61.20) (160.47) (189.47) (192.51) (193.78) (435.54) PO 00000 Frm 00078 All purchasers Small business 263.09 524.57 534.80 553.24 672.54 566.92 111.31 208.70 190.07 199.32 44.90 (74.29) 7.77 (41.22) (147.27) 94.14 84.89 (24.55) (189.13) 93.84 55.03 (58.42) (68.58) (69.11) (68.66) (306.51) (8.05) (39.67) (152.24) (178.19) (180.80) (181.84) (421.60) Fmt 4701 Sfmt 4702 Net cost (%) All purchasers 1.0 0.8 1.0 1.1 2.0 2.2 1.1 1.0 1.3 1.6 5.0 5.8 5.11 9.77 10.84 0.83 1.76 3.44 13.34 4.84 7.11 7.94 8.62 8.70 8.70 14.84 7.97 10.99 12.13 13.54 13.72 13.73 23.51 E:\FR\FM\10OCP2.SGM 1.0 0.8 1.0 1.1 2.0 2.2 1.1 1.0 1.3 1.6 5.0 5.8 5.1 9.8 10.8 0.8 1.8 3.4 13.3 4.8 7.1 7.9 8.6 8.7 8.7 14.8 8.0 11.0 12.1 13.5 13.7 13.7 23.5 10OCP2 Small business All purchasers 0 0 0 0 0 2 0 0 5 4 53 79 28 77 98 0 6 76 99 19 40 60 69 70 70 89 49 61 75 85 87 87 91 0 0 0 0 0 1 0 0 4 3 46 74 22 73 96 0 5 74 99 15 33 56 64 65 65 86 43 57 72 82 84 84 90 70273 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.59—AVERAGE LCC AND PBP RESULTS COMPARISON FOR SMALL BUSINESSES FOR CRE—Continued Average LCC savings (2022$) Equipment class EL Small business HCT.SC.M ............................ HZO.RC.L ............................ HZO.RC.M ........................... HZO.SC.L ............................. HZO.SC.M ............................ SOC.RC.M ........................... SOC.SC.M ........................... SVO.RC.M ........................... SVO.SC.M ............................ VCS.SC.H ............................ VCS.SC.I .............................. ddrumheller on DSK120RN23PROD with PROPOSALS2 VCS.SC.L ............................. VCS.SC.M ............................ VCT.RC.L ............................. VCT.RC.M ............................ VerDate Sep<11>2014 21:45 Oct 06, 2023 Simple payback period (years) 1 2 3 4 5 6 7 1 1 1 2 3 4 5 1 2 3 4 5 1 2 3 4 1 2 3 4 5 6 7 1 2 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 1 2 3 4 5 6 1 2 3 4 5 1 2 3 1 2 Jkt 262001 (140.89) (170.95) (272.85) (303.34) (305.59) (307.77) (549.59) 20.91 15.27 140.87 168.35 826.60 749.21 698.01 82.72 101.05 182.80 119.58 141.74 828.50 785.91 771.98 (229.00) 880.09 947.58 880.22 894.49 1551.11 1543.96 422.14 422.15 253.11 152.71 203.94 277.65 500.97 461.06 540.59 456.68 349.72 233.72 235.66 226.40 220.36 114.89 (0.49) 191.10 283.57 298.70 323.05 498.66 383.73 168.73 229.45 243.92 264.03 307.51 204.16 189.78 202.56 205.44 91.46 (23.05) 245.49 246.83 (3056.29) 233.10 91.96 PO 00000 Frm 00079 All purchasers Small business (141.71) (164.18) (279.83) (307.69) (309.50) (311.58) (551.40) 46.57 40.29 160.85 193.59 971.22 883.28 841.89 95.03 117.44 226.50 154.59 199.91 986.27 944.21 929.51 (70.50) 994.55 1085.17 1015.54 1063.82 1834.72 1832.85 698.37 522.85 406.59 175.56 237.26 324.02 600.52 586.37 692.32 602.17 399.54 270.97 276.86 268.51 263.78 162.47 33.51 219.02 328.05 347.51 377.40 615.19 486.70 193.07 265.56 284.18 309.04 375.85 260.73 217.33 235.40 240.66 128.81 0.17 323.67 331.04 (2934.72) 308.65 171.49 Fmt 4701 Sfmt 4702 Net cost (%) All purchasers 52.63 38.53 42.07 44.85 45.14 45.07 76.76 12.99 13.75 0.76 1.11 1.98 2.10 2.77 1.09 1.58 3.25 3.44 5.18 2.56 3.13 3.26 15.87 0.08 0.84 1.13 2.01 2.13 2.24 5.39 4.76 7.34 1.20 1.69 1.81 2.68 3.75 4.10 4.31 0.21 0.82 1.26 1.52 1.76 3.70 4.37 0.38 0.92 1.19 1.37 3.05 3.44 0.42 1.03 1.32 1.51 2.72 3.23 0.38 1.12 1.44 4.12 5.00 6.18 6.37 52.15 6.45 10.24 E:\FR\FM\10OCP2.SGM 52.6 38.5 42.1 44.9 45.1 45.1 76.8 13.0 13.8 0.8 1.1 2.0 2.1 2.8 1.1 1.6 3.3 3.4 5.2 2.6 3.1 3.3 15.9 0.1 0.8 1.1 2.0 2.1 2.2 5.4 4.8 7.3 1.2 1.7 1.8 2.7 3.8 4.1 4.3 0.2 0.8 1.3 1.5 1.8 3.7 4.4 0.4 0.9 1.2 1.4 3.1 3.4 0.4 1.0 1.3 1.5 2.7 3.2 0.4 1.1 1.4 4.1 5.0 6.2 6.4 52.2 6.5 10.2 10OCP2 Small business 72 77 78 87 90 90 91 32 38 0 0 0 1 1 0 0 8 24 22 0 1 1 82 0 0 1 5 0 0 32 0 26 0 0 0 0 11 7 16 0 20 17 19 20 36 57 0 0 0 0 5 11 0 0 0 0 5 20 0 1 2 31 61 0 0 100 0 26 All purchasers 72 77 78 87 90 90 91 8 11 0 0 0 0 1 0 0 7 20 15 0 1 1 71 0 0 1 4 0 0 26 0 18 0 0 0 0 8 5 11 0 18 15 17 18 32 53 0 0 0 0 4 9 0 0 0 0 4 17 0 1 2 27 56 0 0 100 0 8 70274 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.59—AVERAGE LCC AND PBP RESULTS COMPARISON FOR SMALL BUSINESSES FOR CRE—Continued Average LCC savings (2022$) Equipment class Simple payback period (years) EL Small business 3 4 1 2 3 4 5 6 7 1 2 3 4 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 1 2 1 2 3 4 5 VCT.SC.H ............................ VCT.SC.I .............................. VCT.SC.L ............................. VCT.SC.M ............................ VOP.RC.L ............................ VOP.RC.M ........................... VOP.SC.M ............................ All purchasers 57.11 (3476.87) (8.77) (11.19) (55.34) (8.95) (77.88) (192.35) (1538.28) 11.97 51.25 (244.33) (1372.20) 76.90 93.55 101.44 118.16 161.77 51.55 (1182.18) 14.68 0.46 43.04 (10.13) (21.33) (132.37) (1451.68) 502.94 1234.55 522.36 516.94 121.91 495.13 764.98 882.37 798.96 Small business 133.62 (3397.02) (2.49) (2.54) (36.07) 33.12 (33.78) (161.50) (1496.81) 15.76 77.46 (226.28) (1318.52) 91.06 111.65 122.78 174.92 242.33 120.34 (1093.50) 18.80 20.52 82.53 30.92 20.36 (103.42) (1417.22) 615.37 1524.52 638.01 707.13 143.30 590.02 927.32 1082.34 992.17 Net cost (%) Small business All purchasers 10.93 93.89 6.12 6.51 8.07 8.47 10.15 11.09 43.00 4.55 8.34 16.27 35.04 1.95 2.19 2.58 4.63 5.31 5.80 18.52 3.75 6.61 7.57 9.05 9.35 10.31 45.18 4.32 3.57 4.12 5.72 2.07 2.56 2.99 3.44 3.63 10.9 93.9 6.1 6.5 8.1 8.5 10.2 11.1 43.0 4.6 8.3 16.3 35.0 2.0 2.2 2.6 4.6 5.3 5.8 18.5 3.8 6.6 7.6 9.1 9.4 10.3 45.2 4.3 3.6 4.1 5.7 2.1 2.6 3.0 3.4 3.6 All purchasers 45 100 34 47 67 57 71 86 97 3 6 89 100 0 1 1 29 26 46 99 6 36 29 52 55 69 100 0 0 0 13 1 0 1 1 2 24 100 31 42 63 47 64 79 97 2 1 86 100 0 1 1 23 19 38 98 6 30 20 42 46 65 100 0 0 0 8 1 0 1 0 1 Notes: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. The savings represent the average LCC savings for affected consumers. c. Rebuttable Presumption Payback ddrumheller on DSK120RN23PROD with PROPOSALS2 As discussed in section IV.F.10 of this document, EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the increased purchase cost for an equipment that meets the standard is less than three times the value of the first-year energy savings resulting from the standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)) In calculating a rebuttable presumption payback period for each of the considered TSLs, DOE used discrete values, and, as required by EPCA, based the energy use calculation on the DOE test procedure for CRE. In contrast, the PBPs presented in section V.B.1.a of this document were calculated using distributions that reflect the range of energy use in the field. Table V.60 presents the rebuttablepresumption payback periods for the considered TSLs for CRE. While DOE examined the rebuttable-presumption criterion, it considered whether the standard levels considered for the NOPR are economically justified through a more detailed analysis of the economic impacts of those levels, pursuant to 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to the consumer, manufacturer, Nation, and environment. The results of that analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level, thereby supporting or rebutting the results of any preliminary determination of economic justification. TABLE V.60—REBUTTABLE-PRESUMPTION PAYBACK PERIODS Rebuttable payback period (years) Equipment class CB.SC.L ....................... CB.SC.M ...................... HCS.SC.L ..................... VerDate Sep<11>2014 EL 1 I 21:45 Oct 06, 2023 EL 2 0.9 1.0 4.5 Jkt 262001 I PO 00000 EL 3 0.7 0.8 8.7 0.9 1.2 9.6 I Frm 00080 Fmt 4701 I EL 4 EL 5 EL 6 EL 7 1.0 1.4 ........................ 1.8 4.4 ........................ 2.0 5.1 ........................ ........................ ........................ ........................ Sfmt 4702 I E:\FR\FM\10OCP2.SGM I 10OCP2 I Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70275 TABLE V.60—REBUTTABLE-PRESUMPTION PAYBACK PERIODS—Continued Rebuttable payback period (years) Equipment class HCS.SC.M .................... HCT.SC.I ...................... HCT.SC.L ..................... HCT.SC.M .................... HZO.RC.L .................... HZO.RC.M ................... HZO.SC.L ..................... HZO.SC.M .................... SOC.RC.M ................... SOC.SC.M ................... SVO.RC.M ................... SVO.SC.M .................... VCS.SC.H .................... VCS.SC.I ...................... VCS.SC.L ..................... VCS.SC.M .................... VCT.RC.L ..................... VCT.RC.M .................... VCT.SC.H .................... VCT.SC.I ...................... VCT.SC.L ..................... VCT.SC.M .................... VOP.RC.L .................... VOP.RC.M ................... VOP.SC.M .................... EL 1 0.7 4.3 7.1 46.7 11.6 12.3 0.7 1.0 2.3 0.1 4.3 1.1 0.2 0.3 0.4 0.3 5.5 5.7 5.4 4.0 1.7 3.3 3.9 3.7 1.8 EL 2 EL 3 EL 4 EL 5 EL 6 EL 7 1.6 6.3 9.7 34.2 ........................ ........................ 1.0 1.4 2.8 0.8 6.6 1.5 0.7 0.8 0.9 1.0 5.7 9.1 5.8 7.4 1.9 5.9 3.2 5.1 2.3 3.0 7.1 10.7 37.3 ........................ ........................ 1.8 2.9 2.9 1.0 ........................ 1.6 1.1 1.1 1.2 1.3 46.3 9.7 7.2 14.4 2.3 6.7 ........................ ........................ 2.7 11.8 7.7 12.0 39.8 ........................ ........................ 1.9 3.1 14.1 1.8 ........................ 2.4 1.4 1.2 1.3 3.7 ........................ 83.3 7.5 31.1 4.1 8.0 ........................ ........................ 3.1 ........................ 7.7 12.1 40.0 ........................ ........................ 2.5 4.6 ........................ 1.9 ........................ 3.3 1.6 2.7 2.4 4.5 ........................ ........................ 9.0 ........................ 4.7 8.3 ........................ ........................ 3.2 ........................ 7.7 12.1 40.0 ........................ ........................ ........................ ........................ ........................ 2.0 ........................ 3.7 3.3 3.0 2.9 ........................ ........................ ........................ 9.8 ........................ 5.1 9.1 ........................ ........................ ........................ ........................ 13.2 20.8 68.1 ........................ ........................ ........................ ........................ ........................ 4.8 ........................ 3.9 3.9 ........................ ........................ ........................ ........................ ........................ 38.1 ........................ 16.4 40.0 ........................ ........................ ........................ ddrumheller on DSK120RN23PROD with PROPOSALS2 2. Economic Impacts on Manufacturers DOE performed an MIA to estimate the impact of new and amended energy conservation standards on manufacturers of CRE. The following section describes the expected impacts on manufacturers at each considered TSL. Chapter 12 of the NOPR TSD explains the analysis in further detail. a. Industry Cash Flow Analysis Results In this section, DOE provides GRIM results from the analysis, which examines changes in the industry that would result from new and amended standards. Table V.61 summarizes the estimated financial impacts (represented by changes in INPV) of potential new and amended energy conservation standards on manufacturers of CRE, as well as the conversion costs that DOE estimates manufacturers of CRE would incur at each TSL. The impact of potential new and amended energy conservation standards was analyzed under two scenarios: (1) the preservation of gross margin percentage; and (2) the preservation of operating profit, as discussed in section IV.J.2.d of this document. The preservation of gross margin percentages applies a ‘‘gross margin percentage’’ of 29 percent for all equipment classes across all efficiency levels.100 This scenario assumes that a manufacturer’s per-unit dollar profit would increase as MPCs increase in the standards cases and represents the upper-bound to industry profitability under potential new and amended energy conservation standards. The preservation-of-operating-profit scenario reflects manufacturers’ concerns about their inability to maintain margins as MPCs increase to reach more stringent efficiency levels. In this scenario, while manufacturers make the necessary investments required to convert their facilities to produce compliant equipment, operating profit does not change in absolute dollars and decreases as a percentage of revenue. The preservation-of-operating-profit scenario represents the lower (or more severe) bound to industry profitability under potential new and amended energy conservation standards. Each of the modeled scenarios resulted in a unique set of cash flows and corresponding INPV for each TSL. INPV is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2023–2057). The ‘‘change in INPV’’ results refer to the difference in industry value between the no-new-standards case and standards case at each TSL. To provide perspective on the short-run cash flow impact, DOE includes a comparison of free cash flow between the no-new-standards case and the standards case at each TSL in the year before new and amended standards would take effect. This figure provides an understanding of the magnitude of the required conversion costs relative to the cash flow generated by the industry in the no-new-standards case. Conversion costs are one-time investments for manufacturers to bring their manufacturing facilities and equipment designs into compliance with potential new and amended standards. As described in section IV.J.2.c of this document, conversion cost investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the new standards. The conversion costs can have a significant impact on the short-term cash flow on the industry and generally result in lower free cash flow in the period between the publication of the final rule and the compliance date of potential new and amended standards. Conversion costs are independent of the manufacturer markup scenarios and are not presented as a range in this analysis. 100 The gross margin percentage of 29 percent is based on a manufacturer markup of 1.40. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00081 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 70276 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.61—MANUFACTURER IMPACT ANALYSIS RESULTS No-new-standards case Unit INPV .............................. Change in INPV ............ Free Cash Flow (2027) Change in Free Cash Flow (2027). Product Conversion Costs. Capital Conversion Costs. Total Conversion Costs 2022$ Million. 2022$ Million. % ............... 2022$ Million. % ............... 2022$ Million. 2022$ Million. 2022$ Million. TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 3,286.4 3,274.2 to 3,290.8 ........ ........................ (12.2) to 4.5 .................. 3,241.9 to 3,279.6. (44.4) to (6.7) ........................ 291.2 (0.4) to 0.1 .................... 285.7 ............................. (1.4) to (0.2) .. 268.0 ............. 3,224.4 to 3,271.4. (61.9) to (15.0). (1.9) to (0.5) .. 258.3 ............. 3,182.5 to 3,269.6. (103.8) to (16.7). (3.2) to (0.5) .. 238.7 ............. 3,127.0 to 3,255.5. (159.3) to (30.9). (4.8) to (0.9) .. 210.8 ............. 2,985.9 to 3,529.9. (300.4) to 243.6. (9.1) to 7.4. 170.9. ........................ (1.9) .............................. (8.0) ............... (11.3) ............. (18.0) ............. (27.6) ............. (41.3). - 12.6 ............................... 66.1 ............... 94.0 ............... 121.5 ............. 187.5 ............. 299.9. ........................ 2.7 ................................. 2.2 ................. 3.1 ................. 26.0 ............... 38.9 ............... 43.9. ........................ 15.3 ............................... 68.3 ............... 97.1 ............... 147.5 ............. 226.4 ............. 343.8. * Parentheses denote negative (-) values. The following cash flow discussion refers to the equipment classes as detailed in table IV.1 in section IV.A of this document and the TSLs as detailed in section V.A of this document. Table V.62 through table V.66 show the design options analyzed in the engineering analysis for each directly analyzed equipment class by TSL. See section IV.C of this document and chapter 5 of the NOPR TSD for additional information on the engineering analysis. TABLE V.62—DESIGN OPTIONS ANALYZED AS COMPARED TO BASELINE BY TRIAL STANDARD LEVEL FOR VERTICAL, OPEN EQUIPMENT FAMILIES Equipment class TSL 1 VOP.RC.M ...... Occupancy Sensors ............ Night Curtains; Occupancy Sensors. VOP.RC.L ....... Occupancy Sensors ............ Night Curtains; Occupancy Sensors. VOP.SC.M ...... Electronically Commutated (‘‘EC’’) Cond. Fan Motor. TSL 2 TSL 3 I TSL 4 EC Cond. Fan Motor; Night Curtains TSL 5 EC Cond. Fan Motor; Night Curtains; variable-speed compressors (‘‘VSCs’’); Occupancy Sensors. I TSL 6 EC Cond. Fan Motor; Night Curtains; VSC; Occupancy Sensors; Microchannel Condenser. TABLE V.63—DESIGN OPTIONS ANALYZED AS COMPARED TO BASELINE BY TRIAL STANDARD LEVEL FOR VERTICAL, CLOSED EQUIPMENT FAMILIES Equipment class TSL 1 VCT.RC.M ........ Occupancy Sensors VCT.RC.L ......... I Occupancy Sensors. TSL 2 TSL 3 Occupancy Sensors; Triple Pane Door— Krypton Fill. ddrumheller on DSK120RN23PROD with PROPOSALS2 VerDate Sep<11>2014 21:45 Oct 06, 2023 Occupancy Sensors TSL 5 TSL 6 Occupancy Sensors; Triple Pane Door— Krypton Fill. Occupancy Sensors; VIG Door. Occupancy Sensors; Triple Pane Door—Krypton Fill. I VCT.SC.H ......... VCT.SC.M ........ TSL 4 Baseline. EC Cond. Fan Motor Jkt 262001 PO 00000 Frm 00082 EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Occupancy Sensors; Microchannel Condenser; VIG Door. EC Cond. Fan Motor; VSC; Occupancy Sensors. Fmt 4701 Occupancy Sensors; VIG Door. Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 EC Cond. Fan Motor; VSC; Occupancy Sensors; Microchannel Condenser; VIG Door. Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70277 TABLE V.63—DESIGN OPTIONS ANALYZED AS COMPARED TO BASELINE BY TRIAL STANDARD LEVEL FOR VERTICAL, CLOSED EQUIPMENT FAMILIES—Continued Equipment class TSL 1 TSL 2 VCT.SC.L ......... EC Evap. Fan Motor. VCT.SC.I .......... Triple Pane Door—Krypton Fill. VCS.SC.H ......... EC Evap. Fan Motor; EC Cond. Fan Motor; Triple Pane Door— Krypton Fill. Evap. Fan Control. VCS.SC.L; VCS.SC.I. Evap. Fan Control. TSL 4 TSL 5 TSL 6 EC Evap. Fan Motor; EC Cond. Fan Motor; Triple Pane Door—Krypton Fill; VSC; Occupancy Sensors. EC Evap. Fan Motor; EC Cond. Fan Motor; Triple Pane Door—Krypton Fill; VSC; Occupancy Sensors; Microchannel Condenser. EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Occupancy Sensors; Microchannel Condenser; VIG Door. Triple Pane Door—Krypton Fill; Occupancy Sensors Evap. Fan Control VCS.SC.M ........ TSL 3 Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor. Evap. Fan Control .... Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC. Occupancy Sensors; Microchannel Condenser; VIG Door. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Microchannel Condenser. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Microchannel Condenser. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Microchannel Condenser.. TABLE V.64—DESIGN OPTIONS ANALYZED AS COMPARED TO BASELINE BY TRIAL STANDARD LEVEL FOR SEMI-VERTICAL, OPEN AND SERVICE OVER-COUNTER EQUIPMENT FAMILIES Equipment class SVO.RC.M ........ SVO.SC.M ........ SOC.RC.M ........ ddrumheller on DSK120RN23PROD with PROPOSALS2 SOC.SC.M ........ VerDate Sep<11>2014 TSL 1 TSL 2 Occupancy Sensors. EC Evap. Fan Motor. 21:45 Oct 06, 2023 Jkt 262001 Occupancy Sensors; Night Curtains. EC Evap. Fan Motor; EC Cond. Fan Motor; Night Curtains Occupancy Sensors Evap. Fan Control TSL 3 Occupancy Sensors; Triple Pane Door— Krypton Fill. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor PO 00000 Frm 00083 Fmt 4701 Sfmt 4702 TSL 4 Occupancy Sensors. TSL 5 TSL 6 Occupancy Sensors; Night Curtains. EC Evap. Fan Motor; EC Cond. Fan Motor; Night Curtains; VSC; Occupancy Sensors. EC Evap. Fan Motor; EC Cond. Fan Motor; Night Curtains; SC; Occupancy Sensors; Microchannel Condenser. Occupancy Sensors. Occupancy Sensors; Triple Pane Door— Krypton Fill. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Occupancy Sensors. E:\FR\FM\10OCP2.SGM Occupancy Sensors; VIG Door. Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Occupancy Sensors; Microchannel Condenser; VIG Door. 10OCP2 70278 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.65—DESIGN OPTIONS ANALYZED AS COMPARED TO BASELINE BY TRIAL STANDARD LEVEL FOR HORIZONTAL EQUIPMENT FAMILIES Equipment class TSL 1 TSL 2 TSL 3 HZO.RC.M; HZO.RC.L. TSL 4 TSL 5 TSL 6 Occupancy Sensors. HZO.SC.M; HZO.SC.L. EC Evap. Fan Motor. EC Evap. Fan Motor; EC Cond. Fan Motor EC Evap. Fan Motor; EC Cond. Fan Motor; VSC. EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Microchannel Condenser; Occupancy Sensors.. HCT.SC.M ........ Baseline VSC; Occupancy Sensors; VIG Door. HCT.SC.L ......... Baseline VSC; Occupancy Sensors; Microchannel Condenser; VIG Door. HCT.SC.I .......... VSC ...................... HCS.SC.M ........ Baseline Evap. Fan Control Evap. Fan Control; EC Cond. Fan Motor. HCS.SC.L ......... VSC ...................... VSC; Occupancy Sensors. VSC; Occupancy Sensors; Microchannel Condenser; VIG Door. Evap. Fan Control Evap. Fan Control; EC Cond. Fan Motor. Evap. Fan Control; EC Cond. Fan Motor; Microchannel Condenser; VSC. EC Cond. Fan Motor EC Cond. Fan Motor; VSC; Microchannel Condenser. TABLE V.66—DESIGN OPTIONS ANALYZED AS COMPARED TO BASELINE BY TRIAL STANDARD LEVEL FOR CHEF BASE EQUIPMENT CLASSES ddrumheller on DSK120RN23PROD with PROPOSALS2 Equipment class TSL 1 TSL 2 CB.SC.M ........ PSC Evap. Fan Motor. CB.SC.L ......... PSC Evap. Fan Motor. EC Evap. Fan Motor. 21:45 Oct 06, 2023 Jkt 262001 TSL 4 EC Evap. Fan Motor; EC Cond. Fan Motor. EC Evap. Fan Motor; EC Cond. Fan Motor At TSL 6, the standard represents the max-tech efficiencies for all equipment classes. The change in INPV is expected to range from ¥$300.4 million to $243.6 million, which represents a change in INPV of –9.1 percent to 7.4 percent, respectively. At this level, free cash flow is estimated to decrease by 41.3 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance would be required. In 2027, approximately 2.2 VerDate Sep<11>2014 TSL 3 EC Evap. Fan Motor. EC Evap. Fan Motor; EC Cond. Fan Motor; VSC. percent of covered CRE shipments are expected to meet the efficiencies required at TSL 6. See table V.67 for the percent of equipment class shipments that would meet or exceed the efficiencies required at each TSL in 2027. The design options DOE analyzed at TSL 6 included the max-tech technologies for all equipment classes. For all open (i.e., equipment classes without doors) and transparent door PO 00000 Frm 00084 Fmt 4701 Sfmt 4702 TSL 5 TSL 6 EC Evap. Fan Motor; EC Cond. Fan Motor; VSC. EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Microchannel Condenser. EC Evap. Fan Motor; EC Cond. Fan Motor; VSC; Microchannel Condenser. equipment classes, DOE expects manufacturers would likely need to incorporate occupancy sensors with dimming capability. Open equipment classes would also likely require the use of night curtains. For equipment classes with transparent doors, DOE expects manufacturers would likely need to incorporate vacuum-insulated glass. For self-contained equipment classes, DOE expects manufacturers would need to incorporate EC evaporator and E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules condenser fan motors, variable-speed compressors, and microchannel condensers. For closed, self-contained equipment classes using forced-air refrigeration systems, DOE expects manufacturers would also need to incorporate evaporator fan control. Of the 28 directly analyzed equipment classes, 5 equipment classes (VCT.RC.M, VCT.SC.M, VCT.SC.L, VCS.SC.M, and VCS.SC.L) account for approximately 81.5 percent of industry shipments. For VCT.RC.M, TSL 6 corresponds to EL 4. For VCT.SC.M and VCT.SC.L, TSL 6 corresponds to EL 7. For VCS.SC.M, TSL 6 corresponds to EL 5. For VCS.SC.L, TSL 6 corresponds to EL 6. See section of this V.A of this document for more information on the efficiency levels analyzed at each TSL. At max-tech, DOE expects that nearly all manufacturers would need to dedicate notable engineering resources to update equipment designs and source, qualify, and test high-efficiency components across their CRE portfolio. However, most design options analyzed involve more efficient components (e.g., high-efficiency motors) and would not necessitate significant capital investment. Self-contained CRE equipment classes account for 87.1 percent of industry shipments in 2027 and DOE estimates 2.5 percent of selfcontained CRE shipments would meet TSL 6 in 2027. Incorporating variablespeed compressors into self-contained CRE designs would likely require additional development and testing time to optimize for different CRE applications to realize maximum efficiency benefits. Capital conversion costs may be necessary for new tooling if additional modifications are required to accommodate a larger compressor system. CRE equipment classes with transparent doors (i.e., HCT.SC.I, HCT.SC.L, HCT.SC.M, SOC.RC.M, SOC.SC.M, VCT.RC.L, VCT.RC.M, VCT.SC.H, VCT.SC.I, VCT.SC.L, VCT.SC.M) account for approximately 43.8 percent of industry shipments in 2027. For the 71 OEMs that offer directly analyzed CRE with transparent doors, implementing vacuum-insulated glass would require significant engineering resources and testing time to ensure adequate durability of their doors in all commercial settings. Capital conversion costs may be necessary for new fixtures. In interviews, some manufacturers raised concerns about standards requiring a widespread adoption of vacuum-insulated glass as it is still a relatively untested technology in the commercial refrigeration market. There is very little industry experience with implementing vacuum-insulated VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 glass in CRE applications and DOE estimates that approximately 1.7 percent of CRE equipment classes with transparent doors would meet the maxtech efficiencies in 2027. Manufacturers expressed concerns that the 3-year conversion period between the publication of the final rule and the compliance date of the new and amended energy conservation standards might be insufficient to design and test a full portfolio of CRE with vacuuminsulated glass doors that meet the maxtech efficiencies and maintain their internal performance metrics for durability and safety over the equipment lifetime. DOE estimates capital conversion costs of $43.9 million and product conversion costs of $299.9 million. Conversion costs total $343.8 million. At TSL 6, the shipment-weighted average MPC for all CRE is expected to increase by 25.0 percent relative to the no-new-standards case shipmentweighted average MPC for all CRE in 2028. Given the projected increase in production costs, DOE expects an estimated 2.9 percent drop in shipments in the year the standard takes effect relative to the no-new-standards case. In the preservation of gross margin percentage scenario, the large increase in cashflow from the higher MSP outweighs the $343.8 million in conversion costs, causing an increase in INPV at TSL 6 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $343.8 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 6 under the preservation of operating profit scenario. See section IV.J.2.d of this document for further details on the manufacturer markup scenarios. At TSL 5, the standard represents the highest efficiency level with positive LCC savings for all equipment classes. The change in INPV is expected to range from ¥$159.3 million to ¥$30.9 million, which represents a change in INPV of ¥4.8 percent to ¥0.9 percent, respectively. At this level, free cash flow is estimated to decrease by 27.6 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 10.8 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 5. PO 00000 Frm 00085 Fmt 4701 Sfmt 4702 70279 The design options DOE analyzed at TSL 5 are similar to the design options analyzed at TSL 6 except most equipment classes with transparent doors would not need to incorporate vacuum-insulated glass doors. All VCT equipment classes would likely need to incorporate triple pane glass with krypton fill except for VCT.SC.H and VCT.SC.M (together accounting for 26.4 percent of industry shipments), which would likely not require improved door designs. DOE expects that HCT equipment classes would not need to incorporate additional panes of glass to meet TSL 5 levels. At this level, DOE also expects that fewer self-contained equipment classes would need to incorporate microchannel condensers. Additionally, manufacturers of HCS equipment classes may not need to incorporate variable-speed compressors to meet the efficiencies required. For the five highest-volume equipment classes, TSL 5 corresponds to lower efficiency levels for four equipment classes: VCT.RC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.M. For VCT.RC.M and VCT.SC.M, TSL 5 corresponds to EL 3. For VCT.SC.M, TSL 5 corresponds to EL 5. For VCT.SC.L, TSL 5 corresponds to EL 6. For VCS.SC.M, TSL 5 corresponds to EL 4. For VCS.SC.M and VCS.SC.L, the efficiencies required at TSL 5 are the same as TSL 6. At this level, the VCT.RC.M and VCT.SC.L equipment classes would both need to incorporate triple pane glass with krypton fill. Out of the four highest volume selfcontained classes, only VCT.SC.L and VCS.SC.L would require the use of microchannel condensers. Similar to TSL 6, DOE expects manufacturers would spend development time updating equipment designs to incorporate high-efficiency components. However, at this level, DOE expects that most manufacturers of CRE with transparent doors could meet the TSL 5 efficiencies without implementing vacuum-insulated glass doors. Of the 11 directly analyzed transparent door equipment classes, only SOC.SC.M would likely require the use of vacuum-insulated glass doors to meet the efficiencies required. SOC.SC.M accounts for approximately 0.4 percent of analyzed industry shipments in 2027. DOE estimates capital conversion costs of $38.9 million and product conversion costs of $187.5 million. Conversion costs total $226.4 million. At TSL 5, the shipment-weighted average MPC for all CRE is expected to increase by 6.0 percent relative to the no-new-standards case shipmentweighted average MPC for all CRE in 2028. Given the projected increase in E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70280 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules production costs, DOE expects an estimated 0.7 percent drop in shipments in the year the standard takes effect relative to the no-new-standards case. In the preservation of gross margin percentage scenario, the increase in cashflow from the higher MSP is outweighed by the $226.4 million in conversion costs, causing a slight decrease in INPV at TSL 5 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-newstandards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $226.4 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 5 under the preservation of operating profit scenario. At TSL 4, the standard represents the highest efficiency level with maximum LCC savings for all equipment classes. The change in INPV is expected to range from -$103.8 million to ¥$16.7 million, which represents a change in INPV of ¥3.2 percent to ¥0.5 percent, respectively. At this level, free cash flow is estimated to decrease by 18.0 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 15.7 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 4. At TSL 4, the efficiency levels required for most equipment classes are lower than the efficiency levels required at TSL 5, including for the five highestvolume equipment classes. At this level, no self-contained equipment classes are expected to require the use of microchannel condensers. At TSL 4, none of the highest-volume selfcontained equipment classes (VCT.SC.M, VCT.SC.L, VCS.SC.M, VCS.SC.L) would need to incorporate microchannel condensers. Additionally, DOE does not expect VCS.SC.M would require the use of variable-speed compressors to meet TSL 5 efficiencies. For VCT.RC.M and VCT.SC.M, DOE expects manufacturers would not need to implement additional panes of glass to meet the efficiencies required. For VCT.RC.M, TSL 4 corresponds to EL 1. For VCT.SC.M, TSL 4 corresponds to EL 3. For VCT.SC.L, TSL 4 corresponds to EL 5. For VCS.SC.M, TSL 4 corresponds to EL 3. For VCS.SC.L, TSL 4 corresponds to EL 5. At this level, product conversion costs may be necessary to source, qualify, and test high-efficiency components but to a VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 lesser extent than higher TSLs. Some manufacturers of self-contained equipment classes may need to invest in new tooling if incorporating variablespeed compressors require additional modifications to CRE designs. Some manufacturers of transparent door equipment classes may need to invest in new fixtures to accommodate additional panes of glass into CRE designs. DOE estimates capital conversion costs of $26.0 million and product conversion costs of $121.5 million. Conversion costs total $147.5 million. At TSL 4, the shipment-weighted average MPC for all CRE is expected to increase by 4.1 percent relative to the no-new-standards case shipmentweighted average MPC for all CRE in 2028. Given the projected increase in production costs, DOE expects an estimated 0.4 percent drop in shipments in the year the standard takes effect relative to the no-new-standards case. In the preservation-of-gross-marginpercentage scenario, the increase in cashflow from the higher MSP is slightly outweighed by the $147.5 million in conversion costs, causing a small decrease in INPV at TSL 4 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-newstandards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $147.5 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 4 under the preservation of operating profit scenario. At TSL 3, the standard represents the highest efficiency level with positive LCC savings and the incorporation of single speed compressors for all equipment classes in which this design option was considered. The change in INPV is expected to range from ¥$ 61.9 million to ¥$15.0 million, which represents a change in INPV of ¥1.9 percent to ¥0.5 percent, respectively. At this level, free cash flow is estimated to decrease by 11.3 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 28.8 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 3. At TSL 3, the efficiency levels required for many equipment classes are lower than the efficiency levels required at TSL 4. However, the efficiency levels required for some equipment classes are the same or are higher (i.e., more PO 00000 Frm 00086 Fmt 4701 Sfmt 4702 stringent) than the TSL 4 efficiencies. At this level, DOE expects that none of the self-contained equipment classes would require the use of variable-speed compressor systems. DOE also expects that fewer equipment classes with transparent doors would need to incorporate additional panes of glass to meet TSL 3. For the five highest-volume equipment classes, the efficiency levels required at TSL 3, as compared to TSL 4, are lower for VCT.SC.M, VCT.SC.L, and VCS.SC.L; higher for VCT.RC.M; and the same for VCT.SC.M. For VCT.RC.M, TSL 3 corresponds to EL 3. For VCT.SC.M, TSL 3 corresponds to EL 1. For VCT.SC.L, TSL 3 corresponds to EL 3. For VCS.SC.L, TSL 3 corresponds to EL 4. At this level, DOE expects industry would incur minimal capital conversion costs. Product conversion costs may be necessary to source, qualify, and test high-efficiency components but to a lesser extent than higher TSLs. DOE estimates capital conversion costs of $3.1 million and product conversion costs of $94.0 million. Conversion costs total $97.1 million. At TSL 3, the shipment-weighted average MPC for all CRE is expected to increase by 2.2 percent relative to the no-new-standards case shipmentweighted average MPC for all CRE in 2028. Given the relatively small increase in production costs, DOE does not project a notable drop in shipments in the year the standard takes effect. In the preservation-of-gross-margin-percentage scenario, the minor increase in cashflow from the higher MSP is slightly outweighed by the $97.1 million in conversion costs, causing a small decrease in INPV at TSL 3 under this scenario. Under the preservation-ofoperating-profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-newstandards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $97.1 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 3 under the preservation-of-operatingprofit scenario. At TSL 2, the standard represents the highest efficiency level with maximum LCC savings and the incorporation of single speed compressors for all equipment classes in which this design option was considered. The change in INPV is expected to range from ¥$44.4 million to ¥$6.7 million, which represents a change in INPV of ¥1.4 percent to ¥0.2 percent, respectively. E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules At this level, free cash flow is estimated to decrease by 8.0 percent compared to the no-new-standards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 29.9 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 2. At this level, the efficiency levels required for most equipment classes are the same as TSL 3. For the five highestvolume equipment classes, TSL 2 corresponds to lower efficiency levels for one equipment class: VCT.RC.M. DOE expects manufacturers would likely need to implement occupancy sensors into VCT.RC.M designs. For VCT.SC.M, VCT.SC.L, VCS.SC.M, and VCS.SC.L, the efficiencies at TSL 2 are the same as TSL 3. At this level, DOE expects industry would incur minimal capital conversion costs. The lower efficiency levels required for two equipment classes—VCT.RC.M and SOC.RC.M—drive the drop in product conversion costs at this level. For VCT.RC.M and SOC.RC.M, DOE expects manufacturers could meet TSL 2 efficiencies by incorporating occupancy sensors, which requires minimal development effort. DOE estimates capital conversion costs of $2.2 million and product conversion costs of $66.1 million. Conversion costs total $68.3 million. At TSL 2, the shipment-weighted average MPC for all CRE is expected to increase by 1.7 percent relative to the no-new-standards case shipmentweighted average MPC for all CRE in 2028. Given the relatively small increase in production costs, DOE does not project a notable drop in shipments in the year the standard takes effect. In the preservation of gross margin percentage scenario, the minor increase in cashflow from the higher MSP is slightly outweighed by the $68.3 million in conversion costs, causing a minor decrease in INPV at TSL 2 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-newstandards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $68.3 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 2 under the preservation of operating profit scenario. At TSL 1, the standard represents the minimum efficiency level with positive LCC savings. The change in INPV is expected to range from ¥$12.2 million to $4.5 million, which represents a change in INPV of –0.4 percent to 0.1 percent, respectively. At this level, free cash flow is estimated to decrease by 1.9 percent compared to the no-newstandards case value of $291.2 million in the year 2027, the year before compliance is required. In 2027, approximately 35.6 percent of covered CRE shipments are expected to meet the efficiencies required at TSL 1. At this level, the efficiency levels correspond to EL 1 for nearly all equipment classes (except for VCT.SC.H, HCT.SC.M, and HCT.SC.L, which are set to baseline or EL 0). DOE expects most self-contained equipment classes would need to incorporate higher-efficiency fan motors (i.e., EC evaporator or condenser fan motors or PSC evaporator fan motors for chef bases). Other self-contained equipment classes may need to incorporate evaporator fan controls in lieu of higherefficiency motors. DOE expects that HCT.SC.L and HCT.SC.I may require the use of variable-speed compressors to meet TSL 1 efficiencies. At this level, DOE expects that manufacturers of VCT.SC.I may need to incorporate an additional pane of glass. Remote- 70281 controlled equipment classes would likely need to incorporate occupancy sensors. Capital conversion costs are driven by tooling costs associated with incorporating variable-speed compressors into HCT.SC.L and HCT.SC.I designs. Product conversion costs are driven by incorporating highefficiency components into CRE designs. DOE estimates capital conversion costs of $2.7 million and product conversion costs of $12.6 million. Conversion costs total $15.3 million. At TSL 1, the shipment-weighted average MPC for all CRE is expected to increase by 0.8 percent relative to the no-new-standards case shipmentweighted average MPC for all CRE in 2028. Given the relatively small increase in production costs, DOE does not project a notable drop in shipments in the year the standard takes effect. In the preservation of gross margin percentage scenario, the minor increase in cashflow from the higher MSP slightly outweighs the $15.3 million in conversion costs, causing a minor increase in INPV at TSL 1 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2028, the analyzed compliance year. This reduction in the manufacturer markup and the $15.3 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 1 under the preservation of operating profit scenario. DOE seeks comments, information, and data on the capital conversion costs and product conversion costs estimated for each TSL. TABLE V.67—PERCENTAGES OF 2027 NO-NEW-STANDARDS CASE SHIPMENTS THAT MEET EACH TSL BY EQUIPMENT CLASS ddrumheller on DSK120RN23PROD with PROPOSALS2 Directly analyzed equipment class TSL 1 (%) CB.SC.L ................................................... CB.SC.M .................................................. HCS.SC.L ................................................. HCS.SC.M ................................................ HCT.SC.I .................................................. HCT.SC.L ................................................. HCT.SC.M ................................................ HZO.RC.L ................................................ HZO.RC.M ............................................... HZO.SC.L ................................................. HZO.SC.M ................................................ SOC.RC.M ............................................... SOC.SC.M ............................................... SVO.RC.M ............................................... VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 30.0 50.0 12.4 12.4 28.3 100.0 100.0 0.0 0.0 18.9 18.9 1.6 63.7 23.8 PO 00000 Frm 00087 TSL 2 (%) TSL 3 (%) 0.0 10.0 12.4 12.4 100.0 100.0 100.0 0.0 0.0 15.2 15.2 1.6 47.2 23.8 Fmt 4701 Sfmt 4702 TSL 4 (%) 0.0 0.0 12.4 0.0 100.0 100.0 100.0 0.0 0.0 15.2 15.2 0.2 47.2 0.0 E:\FR\FM\10OCP2.SGM 0.0 10.0 12.4 12.4 28.3 100.0 100.0 0.0 0.0 0.0 0.0 1.6 26.7 23.8 10OCP2 TSL 5 (%) 0.0 0.0 12.4 0.0 22.3 100.0 100.0 0.0 0.0 0.0 0.0 0.2 24.8 0.0 TSL 6 (%) 0.0 0.0 0.0 0.0 8.9 8.9 8.9 0.0 0.0 0.0 0.0 0.0 24.8 0.0 70282 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.67—PERCENTAGES OF 2027 NO-NEW-STANDARDS CASE SHIPMENTS THAT MEET EACH TSL BY EQUIPMENT CLASS—Continued TSL 1 (%) Directly analyzed equipment class SVO.SC.M ................................................ VCS.SC.H ................................................ VCS.SC.I .................................................. VCS.SC.L ................................................. VCS.SC.M ................................................ VCT.RC.L ................................................. VCT.RC.M ................................................ VCT.SC.H ................................................ VCT.SC.I .................................................. VCT.SC.L ................................................. VCT.SC.M ................................................ VOP.RC.L ................................................ VOP.RC.M ............................................... VOP.SC.M ................................................ Overall Industry ........................................ 34.0 30.0 0.0 23.0 29.0 7.0 7.0 100.0 55.8 65.0 52.0 26.9 26.9 14.0 35.6 b. Direct Impacts on Employment To quantitatively assess the potential impacts of new and amended energy conservation standards on direct employment in the CRE industry, DOE used the GRIM to estimate the domestic labor expenditures and number of direct employees in the no-new-standards case and in each of the standards cases during the analysis period. DOE calculated these values using statistical data from the 2021 ASM,101 BLS employee compensation data,102 results of the engineering analysis, and manufacturer interviews. Labor expenditures related to equipment manufacturing depend on the labor intensity of the equipment, the sales volume, and an assumption that wages remain fixed in real terms over time. The total labor expenditures in each year are calculated by multiplying the total MPCs by the labor percentage of MPCs. The total labor expenditures in the GRIM were then converted to total production employment levels by dividing production labor expenditures by the average fully burdened wage multiplied by the average number of hours worked per year per production worker. To do this, DOE relied on the ASM inputs: Production Workers Annual Wages, Production Workers TSL 2 (%) TSL 3 (%) 21.5 30.0 0.0 14.0 19.0 6.0 7.0 100.0 36.5 60.0 52.0 0.0 0.0 9.0 29.9 TSL 4 (%) 21.5 0.0 0.0 14.0 19.0 6.0 0.4 100.0 36.5 60.0 52.0 0.0 0.0 9.0 28.8 Annual Hours, Production Workers for Pay Period, and Number of Employees. DOE also relied on the BLS employee compensation data to determine the fully burdened wage ratio. The fully burdened wage ratio factors in paid leave, supplemental pay, insurance, retirement and savings, and legally required benefits. Total production employees was then multiplied by the U.S. labor percentage to convert total production employment to total domestic production employment. The U.S. labor percentage represents the industry fraction of domestic manufacturing production capacity for the covered equipment. This value is derived from manufacturer interviews, equipment database analysis, DOE’s shipments analysis, and publicly available information. DOE estimates that approximately 77 percent of currently covered CRE are produced domestically. The domestic production employees estimate covers production line workers, including line supervisors, who are directly involved in fabricating and assembling equipment within the OEM facility. Workers performing services that are closely associated with production operations, such as materials handling tasks using forklifts, are also 11.4 30.0 0.0 0.0 19.0 6.0 7.0 100.0 36.5 10.0 18.0 0.0 0.0 5.0 15.7 TSL 5 (%) TSL 6 (%) 10.5 0.0 0.0 0.0 8.0 6.0 0.4 100.0 36.5 10.0 18.0 0.0 0.0 5.0 10.8 10.5 0.0 0.0 0.0 5.0 0.4 0.0 3.0 0.0 0.0 0.0 0.0 0.0 5.0 2.2 included as production labor.103 DOE’s estimates only account for production workers who manufacture the specific equipment covered by this proposed rule. Non-production workers account for the remainder of the direct employment figure. The non-production employees category covers domestic workers who are not directly involved in the production process, such as sales, engineering, human resources, management, etc.104 Using the number of domestic production workers calculated above, non-production domestic employees are extrapolated by multiplying the ratio of non-production workers in the industry compared to production employees. DOE assumes that this employee distribution ratio remains constant between the no-newstandards case and standards cases. Using the GRIM, DOE estimates in the absence of new energy conservation standards there would be 7,472 domestic workers for CRE in 2028. Table V.68 shows the range of the impacts of energy conservation standards on U.S. manufacturing employment in the CRE industry. The discussion below provides a qualitative evaluation of the range of potential impacts presented in the table. ddrumheller on DSK120RN23PROD with PROPOSALS2 TABLE V.68—DIRECT EMPLOYMENT IMPACTS FOR DOMESTIC CRE MANUFACTURERS IN 2028 * Direct Employment in 2028 (Production Workers + Non-Production Workers). No-new-standards case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 7,472 ................ 7,475 ................ 7,467 ................ 7,464 ................ 7,429 ................ 7,393 ................ 101 U.S. Census Bureau, Annual Survey of Manufactures. ‘‘Summary Statistics for Industry Groups and Industries in the U.S (2021).’’ Available at www.census.gov/data/tables/time-series/econ/ asm/2018–2021-asm.html (last accessed January 20, 2023). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 102 U.S. Bureau of Labor Statistics. Employer Costs for Employee Compensation. December 15, 2022. Available at www.bls.gov/news.release/pdf/ ecec.pdf (last accessed January 20, 2023). 103 U.S. Census Bureau, ‘‘Definitions and Instructions for the Annual Survey of Manufactures, PO 00000 Frm 00088 Fmt 4701 Sfmt 4702 TSL 6 7,234. MA–10000.’’ Available at www2.census.gov/ programs-surveys/asm/technical-documentation/ questionnaire/2021/instructions/MA_10000_ Instructions.pdf (last accessed January 25, 2023). 104 Id. E:\FR\FM\10OCP2.SGM 10OCP2 70283 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.68—DIRECT EMPLOYMENT IMPACTS FOR DOMESTIC CRE MANUFACTURERS IN 2028 *—Continued Potential Changes in Direct Employment in 2028*. No-new-standards case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 .......................... (5,484) to 3 ...... (5,484) to (5) .... (5,484) to (8) .... (5,484) to (43) .. (5,484) to (79) .. (5,484) to (238). * DOE presents a range of potential employee impacts. Numbers in parentheses indicate negative numbers. ddrumheller on DSK120RN23PROD with PROPOSALS2 The direct employment impacts in table V.68 represent the potential domestic employment changes that could result following the compliance date for CRE in this proposal. The upper bound estimate corresponds to a potential change in the number of domestic workers that would result from new and amended energy conservation standards if manufacturers continue to produce the same scope of covered equipment within the United States after compliance takes effect. To establish a conservative lower bound, DOE assumes all manufacturers would shift production to foreign countries with lower labor costs. Most of the design options analyzed in the engineering analysis require manufacturers to purchase moreefficient components from suppliers. These components do not require significant additional labor to assemble or significant production line updates. Incorporating vacuum-insulated panels could lead to greater labor requirements, however, as discussed in section IV.B.1 of this document, DOE did not consider vacuum-insulated panels as a design option in its engineering analysis. As a result, DOE believes the likelihood of changes in production location due to new and amended standards are relatively low. Additional detail on the analysis of direct employment can be found in chapter 12 of the NOPR TSD. Additionally, the employment impacts discussed in this section are independent of the employment impacts from the broader U.S. economy, which are documented in chapter 16 of the NOPR TSD. c. Impacts on Manufacturing Capacity In interviews, most manufacturers noted potential manufacturing capacity concerns relating to widespread adoption of increased insulation thickness or VIPs. As discussed in section IV.B.1 of this document, DOE excluded these technologies from further consideration in the engineering analysis and, thus, DOE does not expect manufacturers would need to increase insulation thickness or incorporate VIPs to meet any of the efficiency levels VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 analyzed in this NOPR. Therefore, when considering potential new and amended energy conservation standards in isolation, DOE believes manufacturers would be able to maintain manufacturing capacity levels and continue to meet market demand under the proposed new and amended energy conservation standards. However, multiple manufacturers raised concerns about technical and laboratory resource constraints due to overlapping regulations over a short time period. Specifically, these manufacturers mentioned the testing and redesign required for new safety standards and the various regulations necessitating the transition to low-GWP refrigerants. Some manufacturers stated that there are already experiencing testing laboratory shortages, which would further be exacerbated should EPA finalize its proposals in the December 2022 EPA NOPR and DOE set more stringent standards that necessitate the redesign of the majority of basic models. Manufacturers noted that the ongoing supply chain constraints further strain technical and laboratory resources as manufacturers are forced to identify and qualify new component suppliers due to shortages and long lead times. DOE seeks comment on whether manufacturers expect that manufacturing capacity constraints, engineering resource constraints, or laboratory constraints would limit equipment availability to consumers in the timeframe of the new and amended standards compliance date (2028). d. Impacts on Subgroups of Manufacturers Small business, low volume, and niche equipment manufacturers, and manufacturers exhibiting a cost structure substantially different from the industry average could be affected disproportionately. As discussed in section IV.J of this document, using average cost assumptions to develop an industry cash flow estimate is inadequate to assess differential impacts among manufacturer subgroups. For CRE, DOE identified and evaluated the impact of new and amended conservation standards on one PO 00000 Frm 00089 Fmt 4701 Sfmt 4702 subgroup: small manufacturers. The SBA defines a ‘‘small business’’ as having 1,250 employees or less for NAICS 333415, ‘‘Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing,’’ which includes CRE manufacturing. Based on this definition, DOE identified 25 domestic OEM in the CRE industry that qualify as a ‘‘small business.’’ For a discussion of the impacts on the small manufacturer subgroup, see the regulatory flexibility analysis in section VI.B of this document or chapter 12 of the NOPR TSD. e. Cumulative Regulatory Burden One aspect of assessing manufacturer burden involves looking at the cumulative impact of multiple DOE standards and the equipment/productspecific regulatory actions of other Federal agencies that affect the manufacturers of a covered product or equipment. While any one regulation may not impose a significant burden on manufacturers, the combined effects of several existing or impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. In addition to energy conservation standards, other regulations can significantly affect manufacturers’ financial operations. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing equipment. For these reasons, DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency. DOE evaluates equipment/product-specific regulations that will take effect approximately three years before or after the estimated 2028 compliance date of any new and amended energy conservation standards for CRE. This information is presented in table V.69. E:\FR\FM\10OCP2.SGM 10OCP2 70284 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.69—COMPLIANCE DATES AND EXPECTED CONVERSION EXPENSES OF FEDERAL ENERGY CONSERVATION STANDARDS AFFECTING COMMERCIAL REFRIGERATION EQUIPMENT OEMS Number of OEMs* Federal energy conservation standard Consumer Furnaces† 87 FR 40590 (July 7, 2022) ..... Consumer Clothes Dryers † 87 FR 51734 (August 23, 2022) ........................................................................ Consumer Conventional Cooking Products 88 FR 6818 † (February 1, 2023) ........................................ Refrigerators, Freezers, and Refrigerator-Freezers † 88 FR 12452 ............................................................ (February 27, 2023) ..................................................... Residential Clothes Washers † 88 FR 13520 (March 3, 2023) .................................................................... Room Air Conditioners 88 FR 34298 (May 26, 2023) Miscellaneous Refrigeration Products † 88 FR 19382 (March 31, 2023) ...................................................... Dishwashers† 88 FR 32514 (May 19, 2023) ............... Automatic Commercial Ice Makers † 88 FR 30508 (May 11, 2023) ......................................................... Refrigerated Bottled or Canned Beverage Vending Machines † 88 FR 33968 .......................................... May 25, 2023) .............................................................. Microwave Ovens 88 FR 39912 (June 20, 2023) ....... Walk-in Coolers and Freezers † 88 FR 60746 (September 5, 2023) ........................................................ Number of OEMs affected by this rulemaking ** Approx. standards compliance year Industry conversion costs (Millions $) Industry conversion costs/ equipment revenue*** ( %) 15 2 2029 $150.6 (2020$) 1.4 15 3 2027 149.7 (2020$) 1.8 34 4 2027 183.4 (2021$) 1.2 49 8 2027 1,323.6 (2021$) 3.8 19 8 3 1 2027 2026 690.8 (2021$) 24.8 (2021$) 5.2 0.4 38 22 6 5 2029 2027 126.9 (2021$) 125.6 (2021$) 3.1 2.1 23 7 2027 15.9 (2022$) 0.6 5 18 2 3 2027 2026 1.5 (2022$) 46.1 (2021$) 0.7 0.7 79 5 2027 89.0 (2022$) 0.8 * This column presents the total number of OEMs identified in the energy conservation standard rule that is contributing to cumulative regulatory burden. ** This column presents the number of OEMs producing CRE that are also listed as OEMs in the identified energy conservation standard that is contributing to cumulative regulatory burden. *** This column presents industry conversion costs as a percentage of equipment revenue during the conversion period. Industry conversion costs are the upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the publication year of the final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking. † These rulemakings are at the NOPR stage, and all values are subject to change until finalized through publication of a final rule. DOE requests information regarding the impact of cumulative regulatory burden on manufacturers of CRE associated with multiple DOE standards or equipment/product-specific regulatory actions of other Federal agencies. ddrumheller on DSK120RN23PROD with PROPOSALS2 Refrigerant Regulations The December 2022 EPA NOPR 105 rulemaking proposes to restrict the use of HFCs in specific sectors or subsectors, including use in certain CRE covered by this rulemaking. DOE is considering the impacts of change in refrigerants in its analysis. DOE understands that switching from nonflammable to flammable refrigerants (e.g., R–290) requires time and investment to redesign CRE models and upgrade production facilities to accommodate the additional structural and safety precautions required. As discussed in section IV.C.1 of this document, DOE expects CRE 105 The proposed rule was published on December 15, 2022. 87 FR 76738. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 manufacturers will transition most models to R–290 to comply with anticipated refrigeration regulations, such as the December 2022 EPA NOPR, prior to the expected 2028 compliance date of any potential energy conservation standards. Therefore, the engineering analysis assumes the use of R–290 compressors as a baseline design option for select equipment classes. See section IV.C.1 of this document for additional information on refrigerant assumptions in the engineering analysis. DOE accounted for the costs associated with redesigning CRE to make use of flammable refrigerants and retrofitting production facilities to accommodate flammable refrigerants in the GRIM. DOE considers the expenses associated with the refrigerant transition as independent of DOE actions related to any new and amended energy conservation standards. Therefore, DOE incorporated the refrigerant transition expenses into both the no-newstandards case and standards cases. DOE relied on manufacturer feedback in confidential interviews, a report PO 00000 Frm 00090 Fmt 4701 Sfmt 4702 prepared for EPA,106 results of the engineering analysis, and investment estimates submitted by NAMA and AHRI in response to the June 2022 Preliminary Analysis to estimate the industry refrigerant transition costs. Based on feedback, DOE assumed that the transition to low-GWP refrigerants would require industry to invest approximately $21.3 million in R&D and $33.3 million in capital expenditures (e.g., investments in new charging equipment, leak detection systems, etc.). DOE requests comments on the magnitude of costs associated with transitioning CRE designs and production facilities to accommodate low-GWP refrigerants that would be incurred between the publication of this NOPR and the proposed compliance date of new and amended standards. Quantification and categorization of 106 See pp. 5–113 of the ‘‘Global Non-CO2 Greenhouse Gas Emission Projections & Marginal Abatement Cost Analysis: Methodology Documentation’’ (2019). Available at www.epa.gov/ sites/default/files/2019–09/documents/nonco2_ methodology_report.pdf. E:\FR\FM\10OCP2.SGM 10OCP2 70285 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules these costs, such as engineering efforts, testing lab time, certification costs, and capital investments (e.g., new charging equipment), would enable DOE to refine its analysis. 3. National Impact Analysis This section presents DOE’s estimates of the national energy savings and the NPV of consumer benefits that would result from each of the TSLs considered as potential new and amended standards. measured over the entire lifetime of equipment purchased in the 30-year period that begins in the year of anticipated compliance with new and amended standards (2028–2057). Table V.70 presents DOE’s projections of the national energy savings for each TSL considered for CRE. The savings were calculated using the approach described in section IV.E of this document. a. Significance of Energy Savings To estimate the energy savings attributable to potential new and amended standards for CRE, DOE compared their energy consumption under the no-new-standards case to their anticipated energy consumption under each TSL. The savings are TABLE V.70—CUMULATIVE NATIONAL ENERGY SAVINGS FOR CRE; 30 YEARS OF SHIPMENTS (2028–2057) Trial standard level 1 I 2 I 3 I 4 I 5 I 6 (quads) Primary energy ......................................... FFC energy .............................................. 1.00 1.03 OMB Circular A–4 107 requires agencies to present analytical results, including separate schedules of the monetized benefits and costs that show the type and timing of benefits and costs. Circular A–4 also directs agencies to consider the variability of key elements underlying the estimates of benefits and costs. For this rulemaking, DOE undertook a sensitivity analysis using 9 years, rather than 30 years, of 1.70 1.75 I 1.79 1.83 I 2.70 2.78 I equipment shipments. The choice of a 9-year period is a proxy for the timeline in EPCA for the review of certain energy conservation standards and potential revision of and compliance with such revised standards.108 The review timeframe established in EPCA is generally not synchronized with the equipment lifetime, equipment manufacturing cycles, or other factors specific to CRE. Thus, such results are 3.02 3.11 I 3.29 3.38 I presented for informational purposes only and are not indicative of any change in DOE’s analytical methodology. The NES sensitivity analysis results based on a 9-year analytical period are presented in table V.71. The impacts are counted over the lifetime of CRE purchased in 2028– 2036. TABLE V.71—CUMULATIVE NATIONAL ENERGY SAVINGS FOR CRE; 9 YEARS OF SHIPMENTS (2028–2036) Trial standard level 1 I 2 I 3 I 4 I 5 I 6 (quads) Primary energy ......................................... FFC energy .............................................. 0.28 0.29 ddrumheller on DSK120RN23PROD with PROPOSALS2 b. Net Present Value of Consumer Costs and Benefits I 0.48 0.50 I 0.51 0.52 0.77 0.79 I I 0.86 0.88 I 0.93 0.96 DOE estimated the cumulative NPV of the total costs and savings for consumers that would result from the TSLs considered for CRE. In accordance with OMB’s guidelines on regulatory analysis,109 DOE calculated NPV using both a 7-percent and a 3-percent real discount rate. Table V.72 shows the consumer NPV results with impacts counted over the lifetime of equipment purchased in 2028–2057. 107 U.S. Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. obamawhitehouse.archives.gov/omb/ circulars_a004_a-4 (last accessed February 17, 2023). 108 EPCA requires DOE to review its standards at least once every 6 years, and requires, for certain products, a 3-year period after any new standard is promulgated before compliance is required, except that in no case may any new standards be required within 6 years of the compliance date of the previous standards. (42 U.S.C. 6316(e)(1)); 42 U.S.C. 6295(m)) While adding a 6-year review to the 3-year compliance period adds up to 9 years, DOE notes that it may undertake reviews at any time within the 6-year period and that the 3-year compliance date may yield to the 6-year backstop. A 9-year analysis period may not be appropriate given the variability that occurs in the timing of standards reviews and the fact that for some products, the compliance period is 5 years rather than 3 years. 109 U.S. Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. obamawhitehouse.archives.gov/omb/ circulars_a004_a–4 (last accessed February 17, 2023). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00091 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 70286 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.72—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR CRE; 30 YEARS OF SHIPMENTS (2028– 2057) Trial standard level Discount rate 1 I 2 I 3 I 4 I 5 I 6 (billion [2022$]) 3 percent .................................................. 7 percent .................................................. 4.39 1.80 The NPV results based on the aforementioned 9-year analytical period are presented in 2022$ table V.73. The impacts are counted over the lifetime of 6.01 2.38 I 5.87 2.27 I 8.59 3.24 I equipment purchased in 2028–2036. As mentioned previously, such results are presented for informational purposes only and are not indicative of any 7.10 2.38 I ¥16.5 ¥10.1 I change in DOE’s analytical methodology or decision criteria. TABL—V.73—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR CRE; 9 YEARS OF SHIPMENTS (2028– 2036) Trial standard level Discount rate 1 I 2 I 3 I 4 I 5 I 6 (billion [2022$]) 3 percent .................................................. 7 percent .................................................. 1.68 0.92 The previous results reflect the use of a default trend to estimate the change in price for CRE over the analysis period (see section IV.F.1 of this document). DOE also conducted a sensitivity analysis that considered one scenario with a lower rate of price decline than the reference case and one scenario with a higher rate of price decline than the reference case. The results of these alternative cases are presented in appendix 10C of the NOPR TSD. In the high-price-decline case, the NPV of consumer benefits is higher than in the default case. In the low-price-decline case, the NPV of consumer benefits is lower than in the default case. ddrumheller on DSK120RN23PROD with PROPOSALS2 c. Indirect Impacts on Employment DOE estimates that that new and amended energy conservation standards for CRE would reduce energy expenditures for consumers of those equipment, with the resulting net savings being redirected to other forms of economic activity. These expected shifts in spending and economic activity could affect the demand for labor. As described in section IV.N of this document, DOE used an input/output model of the U.S. economy to estimate indirect employment impacts of the TSLs that DOE considered. There are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Therefore, DOE generated results for near-term timeframes (2028– VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 I 2.30 1.21 I 2.25 1.16 2032), where these uncertainties are reduced. The results suggest that the proposed standards would be likely to have a negligible impact on the net demand for labor in the economy. The net change in jobs is so small that it would be imperceptible in national labor statistics and might be offset by other, unanticipated effects on employment. Chapter 16 of the NOPR TSD presents detailed results regarding anticipated indirect employment impacts. 4. Impact on Utility or Performance of Equipment As discussed in section IV.C.1.b of this document, DOE has tentatively concluded that the standards proposed in this NOPR would not lessen the utility or performance of the CRE under consideration in this rulemaking. Manufacturers of these equipment currently offer units that meet or exceed the proposed standards. 5. Impact of Any Lessening of Competition DOE considered any lessening of competition that would be likely to result from new and amended standards. As discussed in section III.F.1 of this document, the Attorney General determines the impact, if any, of any lessening of competition likely to result from a proposed standard, and transmits such determination in writing to the Secretary, together with an analysis of the nature and extent of such PO 00000 Frm 00092 Fmt 4701 Sfmt 4702 3.16 1.58 I I 2.50 1.09 I ¥6.42 ¥5.21 impact. To assist the Attorney General in making this determination, DOE has provided DOJ with copies of this NOPR and the accompanying TSD for review. DOE will consider DOJ’s comments on the proposed rule in determining whether to proceed to a final rule. DOE will publish and respond to DOJ’s comments in that document. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the ADDRESSES section for information to send comments to DOJ. 6. Need of the Nation to Conserve Energy Enhanced energy efficiency, where economically justified, improves the Nation’s energy security, strengthens the economy, and reduces the environmental impacts (costs) of energy production. Reduced electricity demand due to energy conservation standards is also likely to reduce the cost of maintaining the reliability of the electricity system, particularly during peak-load periods. Chapter 15 in the NOPR TSD presents the estimated impacts on electricity generating capacity, relative to the no-newstandards case, for the TSLs that DOE considered in this proposed rulemaking. Energy conservation resulting from potential energy conservation standards for CRE is expected to yield E:\FR\FM\10OCP2.SGM 10OCP2 70287 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules environmental benefits in the form of reduced emissions of certain air pollutants and greenhouse gases. Tabl— V.74 provides DOE’s estimate of cumulative emissions reductions expected to result from the TSLs considered in this rulemaking. The emissions were calculated using the multipliers discussed in section IV.L.1 of this document. DOE reports annual emissions reductions for each TSL in chapter 13 of the NOPR TSD. TABLE V.74—CUMULATIVE EMISSIONS REDUCTION FOR CRE SHIPPED IN 2028–2057 Trial Standard Level 1 2 3 4 5 6 Power Sector and Site Emissions CO2 (million metric tons) ......................... CH4 (thousand tons) ................................ N2O (thousand tons) ................................ NOX (thousand tons) ................................ SO2 (thousand tons) ................................ Hg (tons) .................................................. 16.7 1.24 0.17 7.89 5.53 0.04 28.5 2.11 0.29 13.4 9.43 0.07 29.9 2.21 0.31 14.1 9.89 0.07 45.3 3.35 0.47 21.3 15.0 0.10 50.7 3.75 0.52 23.9 16.8 0.12 55.1 4.08 0.57 26.0 18.2 0.13 3.04 277 0.01 47.4 0.18 0.00 4.61 419 0.02 71.8 0.28 0.00 5.15 468 0.02 80.3 0.31 0.00 5.61 509 0.03 87.4 0.34 0.00 33.0 279 0.32 61.5 10.1 0.07 49.9 422 0.49 93.1 15.3 0.10 55.8 472 0.54 104 17.1 0.12 60.7 514 0.59 113 18.6 0.13 Upstream Emissions CO2 (million metric tons) ......................... CH4 (thousand tons) ................................ N2O (thousand tons) ................................ NOX (thousand tons) ................................ SO2 (thousand tons) ................................ Hg (tons) .................................................. 1.70 155 0.01 26.5 0.10 0.00 2.90 263 0.01 45.2 0.17 0.00 FFC Emissions CO2 (million metric tons) ......................... CH4 (thousand tons) ................................ N2O (thousand tons) ................................ NOX (thousand tons) ................................ SO2 (thousand tons) ................................ Hg (tons) .................................................. 18.4 156 0.18 34.4 5.64 0.04 As part of the analysis for this rulemaking, DOE estimated monetary benefits likely to result from the reduced emissions of CO2 that DOE estimated for each of the considered 31.4 266 0.31 58.6 9.60 0.07 TSLs for CRE. Section IV.L of this document discusses the SC–CO2 values that DOE used. Table V.75 presents the value of CO2 emissions reduction at each TSL for each of the SC–CO2 cases. The time-series of annual values is presented for the proposed TSL in chapter 14 of the NOPR TSD. TABLE V.75—PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR CRE SHIPPED IN 2028–2057 SC–CO2 Case Discount rate and statistics TSL 5% Average 3% Average 2.5% Average 3% 95th percentile (million 2022$) ddrumheller on DSK120RN23PROD with PROPOSALS2 1 2 3 4 5 6 ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... As discussed in section IV.L.2 of this document, DOE estimated the climate benefits likely to result from the reduced emissions of methane and N2O that DOE estimated for each of the considered TSLs for CRE. Table V.76 VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 183 312 327 495 554 602 presents the value of the CH4 emissions reduction at each TSL, and table V.77 presents the value of the N2O emissions reduction at each TSL. The time-series of annual values is presented for the PO 00000 Frm 00093 Fmt 4701 Sfmt 4702 788 1,342 1,408 2,132 2,384 2,593 1,233 2,101 2,205 3,337 3,733 4,060 2,391 4,074 4,276 6,472 7,239 7,872 proposed TSL in chapter 14 of the NOPR TSD. The time-series of annual values is presented for the proposed TSL in chapter 14 of the NOPR TSD. E:\FR\FM\10OCP2.SGM 10OCP2 70288 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.76—PRESENT VALUE OF METHANE EMISSIONS REDUCTION FOR CRE SHIPPED IN 2028–2057 SC–CH4 Case Discount rate and statistics TSL 5% Average 3% Average 2.5% Average 3% 95th percentile (Million 2022$) 1 2 3 4 5 6 ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... 70.7 120 126 191 214 233 213 362 380 576 644 700 297 506 532 805 900 979 562 958 1005 1522 1702 1852 TABLE V.77—PRESENT VALUE OF NITROUS OXIDE EMISSIONS REDUCTION FOR CRE SHIPPED IN 2028–2057 SC–N2O Case Discount rate and statistics TSL 5% Average 3% Average 2.5% Average 3% 95th percentile (Million 2022$) 1 2 3 4 5 6 ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... ................................................................................................................... DOE is well aware that scientific and economic knowledge about the contribution of CO2 and other GHG emissions to changes in the future global climate and the potential resulting damages to the global and U.S. economy continues to evolve rapidly. DOE, together with other Federal agencies, will continue to review methodologies for estimating the monetary value of reductions in CO2 and other GHG emissions. This ongoing review will consider the comments on 0.69 1.17 1.23 1.85 2.07 2.25 this subject that are part of the public record for this and other rulemakings, as well as other methodological assumptions and issues. DOE notes that the proposed standards would be economically justified even without inclusion of monetized benefits of reduced GHG emissions. DOE also estimated the monetary value of the health benefits associated with NOX and SO2 emissions reductions anticipated to result from the considered TSLs for CRE. The dollarper-ton values that DOE used are 2.74 4.67 4.90 7.42 8.29 9.02 4.25 7.23 7.59 11.5 12.9 14.0 7.30 12.4 13.0 19.8 22.1 24.0 discussed in section IV.L of this document. Table V.78 shows the present value for NOX emissions reduction for each TSL calculated using 7-percent and 3-percent discount rates, and table V.79 presents similar results for SO2 emissions reductions. The results in these tables reflect application of EPA’s low dollar-per-ton values, which DOE used to be conservative. The time-series of annual values is presented for the proposed TSL in chapter 14 of the NOPR TSD. TABLE V.78—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR CRE SHIPPED IN 2028–2057 TSL 3% Discount rate 7% Discount rate ddrumheller on DSK120RN23PROD with PROPOSALS2 million [2022$] 1 2 3 4 5 6 ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... 1,597 2,721 2,855 4,322 4,834 5,257 623 1,061 1,114 1,686 1,885 2,048 TABLE V.79—PRESENT VALUE OF SO2 EMISSIONS REDUCTION FOR CRE SHIPPED IN 2028–2057 TSL 3% Discount rate 7% Discount rate million [2022$] 1 ................................................................................................................................................................... 2 ................................................................................................................................................................... VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00094 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 145 247 10OCP2 366 624 70289 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.79—PRESENT VALUE OF SO2 EMISSIONS REDUCTION FOR CRE SHIPPED IN 2028–2057—Continued TSL 3 4 5 6 3% Discount rate ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... ................................................................................................................................................................... Not all the public health and environmental benefits from the reduction of greenhouse gases, NOX, and SO2 are captured in the values above, and additional unquantified benefits from the reductions of those pollutants as well as from the reduction of direct PM and other co-pollutants may be significant. DOE has not included monetary benefits of the reduction of Hg emissions because the amount of reduction is very small. 7. Other Factors The Secretary of Energy, in determining whether a standard is economically justified, may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(VII)) No other factors were considered in this analysis. 8. Summary of Economic Impacts Table V.80 presents the NPV values that result from adding the estimates of the potential economic benefits 7% Discount rate 260 393 439 478 655 992 1109 1206 resulting from reduced GHG and NOX and SO2 emissions to the NPV of consumer benefits calculated for each TSL considered in this rulemaking. The consumer benefits are domestic U.S. monetary savings that occur as a result of purchasing the covered equipment, and are measured for the lifetime of equipment shipped in 2028–2057. The climate benefits associated with reduced GHG emissions resulting from the adopted standards are global benefits, and are also calculated based on the lifetime of CRE shipped in 2028–2057. TABLE V.80—CONSUMER NPV COMBINED WITH PRESENT VALUE OF CLIMATE BENEFITS AND HEALTH BENEFITS Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$) 5% Average SC–GHG case .................... 3% Average SC–GHG case .................... 2.5% Average SC–GHG case ................. 3% 95th percentile SC–GHG case .......... 6.6 7.4 7.9 9.3 9.8 11.1 12.0 14.4 9.8 11.2 12.1 14.7 14.6 16.6 18.1 21.9 13.8 16.1 17.7 22.0 ¥9.2 ¥6.7 ¥5.0 ¥0.3 5.5 7.7 9.4 13.7 ¥6.7 ¥4.2 ¥2.5 2.2 Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$) ddrumheller on DSK120RN23PROD with PROPOSALS2 5% Average SC–GHG case .................... 3% Average SC–GHG case .................... 2.5% Average SC–GHG case ................. 3% 95th percentile SC–GHG case .......... 2.8 3.6 4.1 5.5 C. Conclusion When considering new or amended energy conservation standards, the standards that DOE adopts for any type (or class) of covered equipment must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) In determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standard exceed its burdens by, to the greatest extent practicable, considering the seven statutory factors discussed previously. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard must also result in significant conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B)) For this NOPR, DOE considered the impacts of new and amended standards for CRE at each TSL, beginning with the VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 4.1 5.4 6.3 8.7 4.1 5.4 6.4 8.9 maximum technologically feasible level, to determine whether that level was economically justified. Where 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 as DOE discusses the benefits and/or burdens of each TSL, tables in this section present a summary of the results of DOE’s quantitative analysis for each TSL. In addition to the quantitative results presented in the tables, DOE also considers other burdens and benefits that affect economic justification. These include the impacts on identifiable subgroups of consumers who may be disproportionately affected by a national standard and impacts on employment. DOE also notes that the economics literature provides a wide-ranging discussion of how consumers trade off PO 00000 Frm 00095 Fmt 4701 Sfmt 4702 6.0 8.0 9.5 13.3 upfront costs and energy savings in the absence of government intervention. Much of this literature attempts to explain why consumers appear to undervalue energy efficiency improvements. There is evidence that consumers undervalue future energy savings as a result of (1) a lack of information; (2) a lack of sufficient salience of the long-term or aggregate benefits; (3) a lack of sufficient savings to warrant delaying or altering purchases; (4) excessive focus on the short term, in the form of inconsistent weighting of future energy cost savings relative to available returns on other investments; (5) computational or other difficulties associated with the evaluation of relevant tradeoffs; and (6) a divergence in incentives (for example, between renters and owners, or builders and purchasers). Having less than perfect foresight and a high degree of uncertainty about the future, consumers may trade off these types of investments at a higher-than-expected rate between E:\FR\FM\10OCP2.SGM 10OCP2 70290 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules current consumption and uncertain future energy cost savings. 1. Benefits and Burdens of TSLs Considered for CRE Standards Table V.81 and table V.82 summarize the quantitative impacts estimated for each TSL for CRE. The national impacts are measured over the lifetime of CRE purchased in the 30-year period that begins in the anticipated year of compliance with new and amended standards (2028–2057). The energy savings, emissions reductions, and value of emissions reductions refer to full-fuel-cycle results. The efficiency levels contained in each TSL are described in section V.A of this document. TABLE V.81—SUMMARY OF ANALYTICAL RESULTS FOR CRE TSLS: NATIONAL IMPACTS Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 Cumulative FFC National Energy Savings Quads ....................................................... 1.03 1.75 1.83 2.78 3.11 3.38 49.9 422 0.49 93.1 15.3 0.10 55.8 472 0.54 104 17.1 0.12 60.7 514 0.59 113 18.6 0.13 Cumulative FFC Emissions Reduction CO2 (million metric tons) ......................... CH4 (thousand tons) ................................ N2O (thousand tons) ................................ NOX (thousand tons) ................................ SO2 (thousand tons) ................................ Hg (tons) .................................................. 18.4 156 0.18 34.4 5.64 0.04 31.4 266 0.31 58.6 9.60 0.07 33.0 279 0.32 61.5 10.1 0.07 Present Value of Benefits and Costs (3% discount rate, billion 2022$) Consumer Operating Cost Savings ......... Climate Benefits * ..................................... Health Benefits ** ..................................... 5.28 1.00 1.96 8.03 1.71 3.34 8.38 1.79 3.51 12.6 2.71 5.31 12.8 3.04 5.94 11.2 3.30 6.46 Total Benefits† .................................. Consumer Incremental Equipment Costs‡ ................................................... 8.25 13.1 13.7 20.7 21.8 21.0 0.89 2.02 2.51 4.05 5.74 27.7 Consumer Net Benefits .................... Total Net Benefits ............................. 4.39 7.36 6.01 11.1 5.87 11.2 8.59 16.6 7.10 16.1 ¥16.5 ¥6.72 Present Value of Benefits and Costs (7% discount rate, billion 2022$) Consumer Operating Cost Savings ......... Climate Benefits * ..................................... Health Benefits ** ..................................... 2.28 1.00 0.77 3.47 1.71 1.31 3.62 1.79 1.37 5.46 2.71 2.08 5.55 3.04 2.32 4.84 3.30 2.53 Total Benefits† .................................. Consumer Incremental Equipment Costs‡ ................................................... 4.05 6.49 6.79 10.3 10.9 10.7 0.48 1.08 1.35 2.22 3.17 14.9 Consumer Net Benefits .................... 1.80 2.38 2.27 3.24 2.38 ¥10.1 Total Net Benefits ............................. 3.58 5.40 5.44 8.03 7.74 ¥4.24 ddrumheller on DSK120RN23PROD with PROPOSALS2 Note: This table presents the costs and benefits associated with CRE shipped in 2028—2057. These results include benefits to consumers which accrue after 2057 from the equipment shipped in 2028¥2057. * Climate benefits are calculated using four different estimates of the SC–CO2, SC–CH4 and SC–N2O. Together, these represent the global SC–GHG. For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown; however, DOE emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG. ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details. † Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate. ‡ Costs include incremental equipment costs as well as installation costs. TABLE V.82—SUMMARY OF ANALYTICAL RESULTS: MANUFACTURER AND CONSUMER IMPACTS Category TSL 1 * TSL 2 * TSL 3 * TSL 4 * TSL 5 * TSL 6 * 3,182.5 to 3,269.6 (3.2) to (0.5) 3,127.0 to 3,255.5 (4.8) to (0.9) 2,985.9 to 3,529.9 (9.1) to 7.4 Manufacturer Impacts Industry NPV (million 2022$) (No-newstandards case INPV = 3,286.4) ....... Industry NPV (% change) ..................... VerDate Sep<11>2014 21:45 Oct 06, 2023 3,274.2 to 3,290.8 (0.4) to 0.1 Jkt 262001 PO 00000 3,241.9 to 3,279.6 (1.4) to (0.2) Frm 00096 Fmt 4701 3,224.4 to 3,271.4 (1.9) to (0.5) Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 70291 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.82—SUMMARY OF ANALYTICAL RESULTS: MANUFACTURER AND CONSUMER IMPACTS—Continued Category TSL 1 * TSL 2 * TSL 3 * TSL 4 * TSL 5 * TSL 6 * Consumer Average LCC Savings (2022$) CB.SC.L ................................................ CB.SC.M ............................................... HCS.SC.L .............................................. HCS.SC.M ............................................. HCT.SC.I ............................................... HCT.SC.L .............................................. HCT.SC.M ............................................. HZO.RC.L .............................................. HZO.RC.M ............................................. HZO.SC.L .............................................. HZO.SC.M ............................................. SOC.RC.M ............................................ SOC.SC.M ............................................. SVO.RC.M ............................................. SVO.SC.M ............................................. VCS.SC.H ............................................. VCS.SC.I ............................................... VCS.SC.L .............................................. VCS.SC.M ............................................. VCT.RC.L .............................................. VCT.RC.M ............................................. VCT.SC.H .............................................. VCT.SC.I ............................................... VCT.SC.L .............................................. VCT.SC.M ............................................. VOP.RC.L .............................................. VOP.RC.M ............................................. VOP.SC.M ............................................. Shipment-Wtd Average * ....................... $263.1 111.3 7.8 94.1 93.8 NA NA 46.6 40.3 160.9 95.0 986.3 994.6 522.8 175.6 399.5 219.0 193.1 217.3 323.7 308.7 NA 15.8 91.1 18.8 615.4 638.0 143.3 169.8 $263.1 111.3 7.8 94.1 NA NA NA 46.6 40.3 193.6 117.4 986.3 1,015.5 522.8 600.5 399.5 377.4 309.0 240.7 331.0 308.7 NA 77.5 122.8 18.8 1,524.5 707.1 590.0 169.8 $553.2 199.3 7.8 84.9 NA NA NA 46.6 40.3 193.6 117.4 929.5 1,015.5 406.6 600.5 263.8 377.4 309.0 240.7 331.0 133.6 NA 77.5 122.8 18.8 1,524.5 707.1 590.0 192.3 $672.5 208.7 7.8 94.1 93.8 NA NA 46.6 40.3 971.2 226.5 986.3 1,834.7 522.8 692.3 399.5 615.2 375.8 240.7 331.0 308.7 NA 77.5 242.3 82.5 1,524.5 707.1 1,082.3 242.7 $566.9 44.9 7.8 84.9 55.0 NA NA 46.6 40.3 841.9 199.9 929.5 698.4 406.6 602.2 162.5 486.7 260.7 128.8 331.0 133.6 NA 77.5 120.3 82.5 1,524.5 707.1 992.2 165.5 $566.9 ¥74.3 ¥147.3 ¥189.1 ¥306.5 ¥421.6 ¥551.4 46.6 40.3 841.9 199.9 ¥70.5 698.4 406.6 602.2 33.5 486.7 260.7 0.2 ¥2,934.7 ¥3,397.0 ¥1,496.8 ¥1,318.5 ¥1,093.5 ¥1,417.2 1,524.5 707.1 992.2 ¥649.8 2.0 1.0 5.1 0.8 4.8 NA NA 13.0 13.8 2.0 3.3 2.6 2.1 4.8 4.1 0.2 3.1 2.7 1.4 6.4 6.5 NA 8.3 5.3 7.6 3.6 5.7 3.4 4.1 2.2 5.0 5.1 1.8 7.1 NA NA 13.0 13.8 2.8 5.2 3.3 5.4 7.3 4.3 3.7 3.4 3.2 4.1 6.4 10.9 NA 8.3 5.8 7.6 3.6 5.7 3.6 5.5 2.2 5.8 10.8 13.3 14.8 23.5 76.8 13.0 13.8 2.8 5.2 15.9 5.4 7.3 4.3 4.4 3.4 3.2 5.0 52.2 93.9 43.0 35.0 18.5 45.2 3.6 5.7 3.6 23.1 0.2 0.0 22.2 0.0 15.0 NA NA 7.8 10.8 0.2 6.8 0.0 0.0 0.0 4.6 0.0 1.3 45.9 22.2 4.9 32.5 NA NA 7.8 10.8 0.9 14.8 1.4 25.6 18.4 11.0 31.6 1.3 73.7 96.1 99.1 85.8 90.5 91.4 7.8 10.8 0.9 14.8 70.9 25.6 18.4 11.0 52.8 Consumer Simple PBP (years) CB.SC.L ................................................ CB.SC.M ............................................... HCS.SC.L .............................................. HCS.SC.M ............................................. HCT.SC.I ............................................... HCT.SC.L .............................................. HCT.SC.M ............................................. HZO.RC.L .............................................. HZO.RC.M ............................................. HZO.SC.L .............................................. HZO.SC.M ............................................. SOC.RC.M ............................................ SOC.SC.M ............................................. SVO.RC.M ............................................. SVO.SC.M ............................................. VCS.SC.H ............................................. VCS.SC.I ............................................... VCS.SC.L .............................................. VCS.SC.M ............................................. VCT.RC.L .............................................. VCT.RC.M ............................................. VCT.SC.H .............................................. VCT.SC.I ............................................... VCT.SC.L .............................................. VCT.SC.M ............................................. VOP.RC.L .............................................. VOP.RC.M ............................................. VOP.SC.M ............................................. Shipment-Wtd Average * ....................... 1.0 1.1 5.1 0.8 4.8 NA NA 13.0 13.8 0.8 1.1 2.6 0.1 4.8 1.2 0.2 0.4 0.4 0.4 6.2 6.5 NA 4.6 2.0 3.8 4.3 4.1 2.1 2.2 1.0 1.1 5.1 0.8 NA NA NA 13.0 13.8 1.1 1.6 2.6 1.1 4.8 2.7 0.2 1.4 1.5 1.4 6.4 6.5 NA 8.3 2.6 3.8 3.6 5.7 2.6 2.2 1.1 1.6 5.1 1.8 NA NA NA 13.0 13.8 1.1 1.6 3.3 1.1 7.3 2.7 1.8 1.4 1.5 1.4 6.4 10.9 NA 8.3 2.6 3.8 3.6 5.7 2.6 3.1 ddrumheller on DSK120RN23PROD with PROPOSALS2 Percent of Consumers that Experience a Net Cost CB.SC.L ................................................ CB.SC.M ............................................... HCS.SC.L .............................................. HCS.SC.M ............................................. HCT.SC.I ............................................... HCT.SC.L .............................................. HCT.SC.M ............................................. HZO.RC.L .............................................. HZO.RC.M ............................................. HZO.SC.L .............................................. HZO.SC.M ............................................. SOC.RC.M ............................................ SOC.SC.M ............................................. SVO.RC.M ............................................. SVO.SC.M ............................................. VCS.SC.H ............................................. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 0.0 0.0 22.2 0.0 15.0 NA NA 7.8 10.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PO 00000 0.0 0.0 22.2 0.0 NA NA NA 7.8 10.8 0.0 0.2 0.0 0.9 0.0 0.1 0.0 Frm 00097 Fmt 4701 0.0 3.3 22.2 4.9 NA NA NA 7.8 10.8 0.0 0.2 1.4 0.9 18.4 0.1 18.4 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 70292 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules TABLE V.82—SUMMARY OF ANALYTICAL RESULTS: MANUFACTURER AND CONSUMER IMPACTS—Continued Category TSL 1 * VCS.SC.I ............................................... VCS.SC.L .............................................. VCS.SC.M ............................................. VCT.RC.L .............................................. VCT.RC.M ............................................. VCT.SC.H .............................................. VCT.SC.I ............................................... VCT.SC.L .............................................. VCT.SC.M ............................................. VOP.RC.L .............................................. VOP.RC.M ............................................. VOP.SC.M ............................................. Shipment-Wtd Average * ....................... TSL 2 * 0.0 0.0 0.0 0.0 0.0 NA 1.5 0.3 5.7 0.0 0.0 0.6 2.0 TSL 3 * 0.0 0.2 1.6 0.4 0.0 NA 1.1 0.7 5.7 0.0 8.2 0.0 2.0 TSL 4 * 0.0 0.2 1.6 0.4 24.0 NA 1.1 0.7 5.7 0.0 8.2 0.0 4.2 TSL 5 * 3.6 4.3 1.6 0.4 0.0 NA 1.1 18.8 20.1 0.0 8.2 0.4 8.2 TSL 6 * 8.9 17.1 27.0 0.4 24.0 NA 1.1 37.5 20.1 0.0 8.2 1.0 21.9 8.9 17.1 56.2 99.7 100.0 96.9 100.0 98.2 100.0 0.0 8.2 1.0 69.0 ddrumheller on DSK120RN23PROD with PROPOSALS2 Note: The entry ‘‘NA’’ means not applicable because there is no change in the standard at certain TSLs. * Weighted by shares of each equipment class in total projected shipments in 2022. DOE first considered TSL 6, which represents the max-tech efficiency levels for all equipment classes. The design options DOE analyzed at this level included the max-tech technologies for all equipment classes. For all open (i.e., equipment classes without doors) and transparent door equipment classes, DOE expects manufacturers would likely need to incorporate occupancy sensors with dimming capability. Open equipment classes would also likely require the use of night curtains. For equipment classes with transparent doors, DOE expects manufacturers would likely need to incorporate vacuum-insulated glass doors. For selfcontained equipment classes, DOE expects manufacturers would need to incorporate EC evaporator and condenser fan motors, variable-speed compressors, and microchannel condensers. For closed, self-contained equipment classes using forced-air refrigeration systems, DOE expects manufacturers would also need to incorporate evaporator fan control. TSL 6 would save an estimated 3.38 quads of FFC energy over 30 years of shipments (2028–2057), an amount DOE considers significant. Under TSL 6, the NPV of consumer benefits would be ¥$10.1 billion using a discount rate of 7 percent, and ¥$16.5 billion using a discount rate of 3 percent for the same 30-year period. The cumulative emissions reductions at TSL 6 are 60.7 Mt of CO2, 18.6 thousand tons of SO2, 113 thousand tons of NOX, 0.13 tons of Hg, 514 thousand tons of CH4, and 0.59 thousand tons of N2O for the same 30year period. The estimated monetary value of the climate benefits from reduced GHG emissions (associated with the average SC–GHG at a 3-percent discount rate) at TSL 6 is $3.30 billion. The estimated monetary value of the health benefits from reduced SO2 and NOX emissions at TSL 6 is $2.53 billion using a 7-percent discount rate and VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 $6.46 billion using a 3-percent discount rate. Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO2 and NOX emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated total NPV at TSL 6 is ¥$4.24 billion. Using a 3¥percent discount rate for all benefits and costs, the estimated total NPV at TSL 6 are ¥$6.72 billion. The estimated total NPV is provided for additional information; however, DOE primarily relies upon the NPV of consumer benefits when determining whether a proposed standard level is economically justified. At TSL 6, affected purchasers of CRE experience an average LCC savings ranging from ¥$3,397.0. to $1,524.5 with a payback period ranging from 94 years to 2.1 years. For example, for equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and VCT.RC.M, which account for 82% of annual CRE shipments, there is a net LCC savings of $0.171, ¥$1,417.24, $260.731, ¥$1,093.53, and ¥$3,397.0 and a PBP of 5.04, 4539, 3.2, 18.5, and 94 years, respectively. Overall, a majority of CRE purchasers (69.0 percent) would experience a net cost and the LCC savings would be negative for 13 of 28 analyzed equipment classes, representing 48% of annual shipments. Furthermore, the shipment-weightedaverage PBP is estimated at 23 years, which is generally higher than the average CRE lifetime. At TSL 6, the projected change in INPV ranges from a decrease of $300.4 million to an increase of $243.6 million, which corresponds to a decrease of 9.1 percent and an increase of 7.4 percent, respectively. DOE estimates that industry must invest $343.8 million to update equipment designs and source, qualify, and test high-efficiency components across their entire CRE portfolio. In 2027, a year before PO 00000 Frm 00098 Fmt 4701 Sfmt 4702 compliance is required, DOE estimates that approximately 2.2 percent of CRE shipments would meet the efficiency levels analyzed at TSL 6. At this level, nearly all manufacturers would need to spend notable development time incorporating the analyzed max-tech design options across their entire CRE portfolio. However, most design options analyzed involve more efficient components (e.g., high-efficiency motors) and would not necessitate significant capital investment. CRE equipment classes with transparent doors (i.e., HCT.SC.I, HCT.SC.L, HCT.SC.M, SOC.RC.M, SOC.SC.M, VCT.RC.L, VCT.RC.M, VCT.SC.H, VCT.SC.I, VCT.SC.L, and VCT.SC.M) account for approximately 43.8 percent of industry shipments in 2027. For the 71 manufacturers that offer CRE with transparent doors, implementing vacuum-insulated glass would require significant engineering resources and testing time to ensure adequate safety and durability of their equipment in all commercial settings. In interviews, most manufacturers raised concerns about standards requiring a widespread adoption of vacuuminsulated glass as it is still a relatively untested technology in the commercial refrigeration market. Manufacturers expressed concerns about the potential for reduced equipment reliability as vacuum-insulated glass can be relatively more fragile than existing glass door designs and there is very little industry experience with implementing vacuuminsulated glass in CRE applications. DOE estimates that less than 2 percent of shipments of CRE equipment classes with transparent doors would meet the max-tech efficiencies in 2027. In interviews, manufacturers emphasized that there are currently a limited number of suppliers of vacuuminsulated glass for CRE applications. Based on this analysis, the Secretary tentatively concludes that at TSL 6 for CRE, the benefits of energy savings, E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules emission reductions, and the estimated monetary value of the emissions reductions would be outweighed by the negative NPV of consumer benefits, economic burden on many CRE purchasers, and the impacts on manufacturers, including the conversion costs that could result in a reduction in INPV. For the manufacturers of CRE with transparent doors, implementing vacuum-insulated glass would require significant engineering resources and testing time to ensure adequate safety and durability of their equipment in all commercial settings. There is limited industry experience incorporating vacuum-insulated glass into CRE designs. And a majority of CRE purchasers (69.0 percent) would experience a net cost and the average LCC savings would be negative. Consequently, the Secretary has tentatively concluded that TSL 6 is not economically justified. DOE then considered TSL 5, which represents the highest efficiency level with positive LCC savings for each equipment class. For approximately half of the classes, this TSL represents efficiency levels less than max-tech. For most open (i.e., equipment classes without doors) and transparent door equipment classes, DOE expects manufacturers would likely need to incorporate occupancy sensors with dimming capability. Open equipment classes would also likely require the use of night curtains. For most equipment classes with transparent doors, DOE expects manufacturers would need to incorporate triple-pane, krypton-filled glass doors or vacuum-insulated glass doors. For self-contained equipment classes, DOE expects manufacturers would need to incorporate EC evaporator and condenser fan motors and may require microchannel condensers and variable-speed compressors. For closed, self-contained equipment classes using forced-air refrigeration systems, DOE expects manufacturers would also need to incorporate evaporator fan control. TSL 5 would save an estimated 3.11 quads of full fuel cycle energy over 30 years of shipments (2028 to 2057), an amount DOE considers significant. Under TSL 5, the NPV of consumer benefit would be $2.38 billion using a discount rate of 7 percent, and $7.10 billion using a discount rate of 3 percent. The cumulative emissions reductions at TSL 5 are 55.8 Mt of CO2, 17.1 thousand tons of SO2, 104 thousand tons of NOX, 0.12 tons of Hg, 472 thousand tons of CH4, and 0.54 thousand tons of N2O. The estimated monetary value of the climate benefits VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 from reduced GHG emissions (associated with the average SC–GHG at a 3-percent discount rate) at TSL 5 is 3.04 billion. The estimated monetary value of the health benefits from reduced SO2 and NOX emissions at TSL 5 is $2.32 billion using a 7-percent discount rate and $5.94 billion using a 3-percent discount rate. Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO2 and NOX emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated total NPV at TSL 5 is $7.74 billion. Using a 3-percent discount rate for all benefits and costs, the estimated total NPV at TSL 5 is $16.1 billion. The estimated total NPV is provided for additional information, however DOE primarily relies upon the NPV of consumer benefits when determining whether a proposed standard level is economically justified. At TSL 5, affected purchasers for each CRE equipment class experience an average LCC savings ranging from $7.77 to $1,524.52 with a payback period ranging from 1.765 years to 13.8 years. For example, for equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and VCT.RC.M, which account for 82% of annual CRE shipments, there is a net LCC savings of $128.91, $82.53, $260.73, $120.34,1 and $133.625 and a PBP of 4.1, 7.6, 3.2, 5.8, and 10.9 years, respectively. Overall, approximately 78 percent of affected CRE purchasers would experience a net benefit or not be affected at TSL 5. Furthermore, the estimated shipmentweighted-average LCC savings is $165.52 and PBP is 5.5 years, which is lower than the average CRE lifetime. At TSL 5, the projected change in INPV ranges from a decrease of $159.3 million to a decrease of $30.9 million, which correspond to decreases of 4.8 percent and 0.9 percent, respectively. DOE estimates that industry must invest $226.4 million to comply with standards set at TSL 5. In 2027, the year before compliance is required, DOE estimates that approximately 10.8 percent of CRE shipments would meet the efficiency levels analyzed at TSL 5. Similar to TSL 6, DOE expects manufacturers would spend development time updating equipment designs to incorporate high-efficiency components. However, at this level, DOE expects that most manufacturers of CRE with transparent doors could meet the TSL 5 efficiencies without implementing vacuum-insulated glass doors. Of the 11 directly analyzed transparent door equipment classes, only the SOC.SC.M equipment class PO 00000 Frm 00099 Fmt 4701 Sfmt 4702 70293 would likely require vacuum-insulated glass doors to meet the TSL 5 efficiency levels. SOC.SC.M accounts for approximately 0.4 percent of analyzed industry shipments in 2027. After considering the analysis and weighing the benefits and burdens, the Secretary has tentatively concluded that at a standard set at TSL 5 for CRE would be economically justified. At this TSL, the average LCC savings for all affected purchasers is positive. An estimated 67.1 percent of purchasers experience a net benefit, while 21.9 percent of purchasers experience a net LCC cost. The FFC national energy savings are significant and the NPV of consumer benefits is positive using both a 3percent and 7-percent discount rate. Notably, the benefits to consumers vastly outweigh the cost to manufacturers. At TSL 5, the NPV of consumer benefits, even measured at the more conservative discount rate of 7 percent is over 14 times higher than the maximum estimated manufacturers’ loss in INPV. The standard levels at TSL 5 are economically justified even without weighing the estimated monetary value of emissions reductions. When those emissions reductions are included— representing $3.04 billion in climate benefits (associated with the average SC–GHG at a 3-percent discount rate), and $5.94 billion (using a 3-percent discount rate) or $2.32 billion (using a 7-percent discount rate) in health benefits—the rationale becomes stronger still. As stated, DOE conducts the walkdown analysis to determine the TSL that represents the maximum improvement in energy efficiency that is technologically feasible and economically justified as required under EPCA. The walk-down is not a comparative analysis, as a comparative analysis would result in the maximization of net benefits instead of energy savings that are technologically feasible and economically justified, which would be contrary to the statute. 86 FR 70892, 70908. Although DOE has not conducted a comparative analysis to select the proposed energy conservation standards, DOE notes that TSL 5 represents the highest efficiency level for each equipment class with positive LCC savings for each equipment class, and a considerably lower reduction in INPV, and positive consumer NPV compared to TSL 6. Although DOE considered proposed new and amended standard levels for CRE by grouping the efficiency levels for each equipment class into TSLs, DOE evaluates all analyzed efficiency levels in its analysis. For all equipment classes, the proposed standard level E:\FR\FM\10OCP2.SGM 10OCP2 70294 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules represents the maximum energy savings that does not result in negative LCC savings. The ELs at the proposed standard level result in positive LCC savings for all equipment classes, significantly reduce the number of purchasers experiencing a net cost, and reduce the decrease in INPV and conversion costs to the point where DOE has tentatively concluded they are economically justified, as discussed for TSL 5 in the preceding paragraphs. As previously discussed, setting standards at max-tech (TSL 6) would result in negative LCC savings for 13 of the analyzed equipment classes, representing 48 percent of the estimated CRE shipments. Therefore, based on the previous considerations, DOE proposes to adopt the energy conservation standards for CRE at TSL 5. The proposed new and amended energy conservation standards for CRE, which are expressed as kWh/ day, are shown in table V.83. TABLE V.83—PROPOSED NEW OR AMENDED ENERGY CONSERVATION STANDARDS FOR CRE Equipment class ddrumheller on DSK120RN23PROD with PROPOSALS2 VOP.RC.H ............. VOP.RC.M ............. VOP.RC.L .............. VOP.RC.I ............... SVO.RC.H ............. SVO.RC.M ............. SVO.RC.L .............. SVO.RC.I ............... HZO.RC.H ............. HZO.RC.M ............. HZO.RC.L .............. HZO.RC.I ............... VCT.RC.H ............. VCT.RC.M ............. VCT.RC.L .............. VCT.RC.I ............... HCT.RC.M ............. HCT.RC.L .............. HCT.RC.I ............... VCS.RC.H ............. VCS.RC.M ............. VCS.RC.L .............. VCS.RC.I ............... HCS.RC.M ............. HCS.RC.L .............. HCS.RC.I ............... SOC.RC.H ............. Maximum daily energy consumption (kWh/day) 0.31 × TDA + 1.99. 0.56 × TDA + 3.57. 2.04 × TDA + 6.36. 2.59 × TDA + 8.08. 0.32 × TDA + 1.55. 0.58 × TDA + 2.79. 2.04 × TDA + 6.36. 2.59 × TDA + 8.08. 0.19 × TDA + 1.56. 0.34 × TDA + 2.81. 0.54 × TDA + 6.81. 0.69 × TDA + 8.64. 0.07 × TDA + 0.97. 0.134 × TDA + 1.74. 0.47 × TDA + 2.51. 0.56 × TDA + 2.97. 0.16 × TDA + 0.13. 0.34 × TDA + 0.26. 0.38 × TDA + 0.29. 0.06 × V + 0.14. 0.1 × V + 0.26. 0.21 × V + 0.54. 0.25 × V + 0.63. 0.1 × V + 0.26. 0.21 × V + 0.54. 0.25 × V + 0.63. 0.22 × TDA + 0.05. TABLE V.83—PROPOSED NEW OR AMENDED ENERGY CONSERVATION STANDARDS FOR CRE—Continued Maximum daily energy consumption (kWh/day) Equipment class SOC.RC.M ............ SOC.RC.L ............. SOC.RC.I .............. CB.RC.M ............... CB.RC.L ................ VOP.SC.H ............. VOP.SC.M ............. VOP.SC.L .............. VOP.SC.I ............... SVO.SC.H ............. SVO.SC.M ............. SVO.SC.L .............. SVO.SC.I ............... HZO.SC.H ............. HZO.SC.M ............. HZO.SC.L .............. HZO.SC.I ............... VCT.SC.H .............. VCT.SC.M ............. VCT.SC.L .............. VCT.SC.I ............... HCT.SC.M ............. HCT.SC.L .............. HCT.SC.I ............... VCS.SC.H ............. VCS.SC.M ............. VCS.SC.L .............. VCS.SC.I ............... HCS.SC.M ............. HCS.SC.L .............. HCS.SC.I ............... SOC.SC.H ............. SOC.SC.M ............. SOC.SC.L .............. SOC.SC.I ............... CB.SC.M ............... CB.SC.L ................ PD.SC.M ............... VCT.RC.M.PT ....... VCT.SC.M.PT ........ VCT.SC.L.PT ......... VCS.SC.M.PT ....... VCS.SC.L.PT ........ VCT.RC.M.SD ....... VCT.SC.M.SD ....... VCT.RC.M.SDPT .. VCT.SC.M.SDPT ... VCT.RC.M.RI ........ VCT.SC.M.RI ......... VCS.SC.M.RI ........ VCS.SC.L.RI ......... VCT.RC.M.RT ....... VCT.SC.M.RT ....... VCS.SC.M.RT ....... VCS.SC.L.RT ........ HCS.SC.L.FA ........ 0.39 × TDA + 0.1. 0.83 × TDA + 0.2. 1.04 × TDA + 0.25. 0.03 × V + 0.39. 0.13 × V + 1.37. 0.69 × TDA + 1.94. 1.25 × TDA + 3.48. 3.29 × TDA + 9.15. 4.18 × TDA + 11.63. 0.65 × TDA + 1.77. 1.18 × TDA + 3.18. 3.25 × TDA + 8.78. 4.13 × TDA + 11.16. 0.27 × TDA + 2.06. 0.48 × TDA + 3.71. 1.48 × TDA + 5.5. 1.97 × TDA + 7.34. 0.053 × V + 0.85. 0.054 × V + 0.86. 0.234 × V + 2.38. 0.6 × TDA + 3.2. 0.06 × V + 0.37. 0.08 × V + 1.23. 0.34 × TDA + 0.43. 0.0082 × V + 0.21. 0.02 × V + 0.54. 0.155 × V + 0.97. 0.25 × V + 0.88. 0.022 × V + 0.41. 0.043 × V + 0.81. 0.31 × V + 0.81. 0.17 × TDA + 0.33. 0.304 × TDA + 0.59. 1.1 × TDA + 2.1. 1.53 × TDA + 0.36. 0.049 × V + 0.54. 0.180 × V + 1.92. 0.11 × V + 0.81. 0.139 × TDA + 1.81. 0.056 × V + 0.86. 0.243 × V + 2.47. 0.02 × V + 0.56. 0.161 × V + 1.01. 0.143 × TDA + 1.86. 0.058 × V + 0.86. 0.149 × TDA + 1.93. 0.060 × V + 0.86. 0.140 × TDA + 1.83. 0.057 × V + 0.86. 0.02 × V + 0.57. 0.162 × V + 1.02. 0.146 × TDA + 1.9. 0.059 × V + 0.86. 0.02 × V + 0.59. 0.169 × V + 1.06. 0.052 × V + 0.97. Unique design characteristic Pass-through Door ............... Sliding Door .......................... Sliding and Pass-through Doors. Roll-in Door .......................... Roll-through Door ................. Forced Air Evaporator .......... Abbreviation PT. SD. SDPT. RI. RT. FA. 2. Annualized Benefits and Costs of the Proposed Standards The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The annualized net benefit is (1) the annualized national economic value (expressed in 2022$) of the benefits from operating equipment that meet the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase costs), and (2) the annualized monetary value of the climate and health benefits from emission reductions. Table V.84 shows the annualized values for CRE under TSL 5, expressed in 2022$. The results under the primary estimate are as follows. Using a 7-percent discount rate for consumer benefits and costs and NOX and SO2 reduction benefits, and a 3percent discount rate case for GHG social costs, the estimated cost of the proposed standards for CRE is $335 million per year in increased equipment costs, while the estimated annual benefits are $586 million from reduced equipment operating costs, $174 million from climate benefits, and $246 million from health benefits. In this case, the net benefit amounts to $671 million per year. Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards for CRE is $330 million per year in increased equipment costs, while the estimated annual benefits are $738 million in reduced operating costs, $174 million from climate benefits, and $341 million from health benefits. In this case, the net benefit amounts to $923 million per year. TABLE V.84—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR CRE (TSL 5) Million 2022$/year Primary estimate Low-netbenefits estimate High-netbenefits estimate 3% discount rate Consumer Operating Cost Savings ............................................................................................. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00100 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 738 10OCP2 714 774 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 70295 TABLE V.84—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR CRE (TSL 5)—Continued Million 2022$/year Primary estimate Low-netbenefits estimate High-netbenefits estimate Climate Benefits * ......................................................................................................................... Health Benefits ** ......................................................................................................................... 174 341 173 340 179 350 Total Benefits † ..................................................................................................................... Consumer Incremental Equipment Costs .................................................................................... 1253 330 1227 338 1302 328 Net Benefits .......................................................................................................................... 923 890 974 Change in Producer Cashflow (INPV ‡‡) .................................................................................... (17)–(3) (17)–(3) (17)–(3) Consumer Operating Cost Savings ............................................................................................. Climate Benefits * (3% discount rate) .......................................................................................... Health Benefits ** ......................................................................................................................... 586 174 246 569 173 245 613 179 251 Total Benefits † ..................................................................................................................... Consumer Incremental Equipment Costs .................................................................................... 1006 335 987 342 1043 334 Net Benefits .......................................................................................................................... 671 646 709 Change in Producer Cashflow (INPV‡‡) ..................................................................................... (17)–(3) (17)–(3) (17)–(3) 7% discount rate ddrumheller on DSK120RN23PROD with PROPOSALS2 Note: This table presents the costs and benefits associated with CRE shipped in 2028¥2057. These include consumer, climate, and health benefits that accrue after 2057 from the equipment shipped in 2028¥2057. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. * Climate benefits are calculated using four different estimates of the global SC–GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC–GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG. ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate. ‡‡ Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J of this document. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated using the industry weighted average cost of capital value of 10.0 percent that is estimated in the MIA (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For commercial refrigeration equipment, those values are ¥$16.65 million to ¥$3.23 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two manufacturer markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document, to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the annualized net benefits would range from $907 million to $920 million at 3-percent discount rate and would range from $655 million to $668 million at 7-percent discount rate. Parentheses () indicate negative values. D. Reporting, Certification, and Sampling Plan Manufacturers, including importers, must use equipment-specific certification templates to certify compliance to DOE. For CRE, the certification template reflects the general certification requirements specified at 10 CFR 429.12 and the equipment-specific requirements VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 specified at 10 CFR 429.42 DOE is not proposing to amend the equipmentspecific certification requirements for this equipment. PO 00000 VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866, 13563, and 14094 Executive Order (‘‘E.O.’’) 12866, ‘‘Regulatory Planning and Review,’’ as supplemented and reaffirmed by E.O. 13563, ‘‘Improving Regulation and Regulatory Review,’’ 76 FR 3821 (Jan. Frm 00101 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70296 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 21, 2011) and amended by E.O. 14094, ‘‘Modernizing Regulatory Review,’’ 88 FR 21879 (April 11, 2023), requires agencies, to the extent permitted by law, to (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public. DOE emphasizes as well that E.O. 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs (‘‘OIRA’’) in OMB has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons stated in the preamble, this proposed regulatory action is consistent with these principles. Section 6(a) of E.O. 12866 also requires agencies to submit ‘‘significant regulatory actions’’ to OIRA for review. OIRA has determined that this proposed regulatory action constitutes a ‘‘significant regulatory action’’ within the scope of section 3(f)(1) of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE has provided to OIRA an assessment, including the underlying analysis, of benefits and costs anticipated from the proposed regulatory action, together with, to the extent feasible, a quantification of those costs; and an assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, and an explanation as to VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 why the planned regulatory action is preferable to the identified potential alternatives. These assessments are summarized in this preamble and further detail can be found in the technical support document for this rulemaking. B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis (‘‘IRFA’’) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by E.O. 13272, ‘‘Proper Consideration of Small Entities in Agency Rulemaking,’’ 67 FR 53461 (Aug. 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel’s website (www.energy.gov/gc/ office-general-counsel). DOE has prepared the following IRFA for the equipment that are the subject of this proposed rulemaking. For manufacturers of CRE, the SBA has set a size threshold, which defines those entities classified as ‘‘small businesses’’ for the purposes of the statute. DOE used the SBA’s small business size standards to determine whether any small entities would be subject to the requirements of the rule. (See 13 CFR part 121.) The size standards are listed by North American Industry Classification System (‘‘NAICS’’) code and industry description and are available at www.sba.gov/document/support--tablesize-standards. Manufacturing of CRE is classified under NAICS 333415, ‘‘AirConditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing.’’ The SBA sets a threshold of 1,250 employees or fewer for an entity to be considered as a small business for this category. 1. Description of Reasons Why Action Is Being Considered DOE is proposing new and amended energy conservation standards for CRE. EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, part C of EPCA, added by Public Law 95–619, title IV, section 441(a) (42 U.S.C. 6311– PO 00000 Frm 00102 Fmt 4701 Sfmt 4702 6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. This equipment includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E)) EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)–(4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)) On March 28, 2014, DOE published a final rule that prescribed the current energy conservation standards for CRE manufactured on and after March 27, 2017. 79 FR 17725. EPCA provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) This proposed rulemaking is in accordance with DOE’s obligations under EPCA. 2. Objectives of, and Legal Basis for, Rule EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, part C of EPCA, added by Public Law 95–619, title IV, section 441(a) (42 U.S.C. 6311– 6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. EPCA established standards for certain categories of CRE (42 U.S.C. 6313(c)(2)– (4)) and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)) EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the equipment do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA include definitions (42 U.S.C. E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), energy conservation standards (42 U.S.C. 6313), and the authority to require information and reports from manufacturers (42 U.S.C. 6316; 42 U.S.C. 6296). 3. Description on Estimated Number of Small Entities Regulated ddrumheller on DSK120RN23PROD with PROPOSALS2 DOE reviewed this proposed rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. 68 FR 7990. DOE conducted a market assessment to identify potential small manufacturers of CRE. DOE began its assessment by compiling an equipment database of CRE models available in the United States. To develop a comprehensive equipment database of CRE basic models, DOE reviewed its Compliance Certification Database (‘‘CCD’’) 110 supplemented by information from California Energy Commission’s Modernized Appliance Efficiency Database System,111 individual company websites, and prior CRE rulemakings. To identify chef bases, griddle stands, and hightemperature units, DOE reviewed publicly available data from web scraping retail websites. DOE then reviewed the comprehensive equipment database to identify the OEMs of the CRE models identified. DOE consulted publicly available data, such as manufacturer websites, manufacturer specifications and equipment literature, import/export logs (e.g., bills of lading from Panjiva 112), and basic model numbers, to identify OEMs of CRE. DOE further relied on public data and subscription-based market research tools (e.g., Dun & Bradstreet reports 113) to determine company, location, headcount, and annual revenue. DOE also asked industry representatives if they were aware of any small manufacturers during manufacturer interviews. DOE screened out companies that do not offer equipment covered by this rulemaking, do not meet the SBA’s definition of a ‘‘small 110 U.S. Department of Energy’s Compliance Certification Database is available at www.regulations.doe.gov/certification-data/ #q=Product_Group_s%3A*. (last accessed April 13, 2023.) 111 California Energy Commission’s Modernized Appliance Efficiency Database is available at: https://cacertappliances.energy.ca.gov/Pages/ Search/AdvancedSearch.aspx. (last accessed February 2, 2022.) 112 S&P Global. Panjiva Market Intelligence. panjiva.com/import-export/United-States. (last accessed April 13, 2023.) 113 D&B Hoover’s subscription login is accessible at: app.dnbhoovers.com. (last accessed April 13, 2023.) VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 business,’’ or are foreign-owned and operated. DOE initially identified 83 OEMs that sell CRE in the United States. Of the 83 OEMs identified, DOE tentatively determined that 25 companies qualify as small businesses and are not foreignowned and operated. 4. Description and Estimate of Compliance Requirements Including Differences in Cost, if Any, for Different Groups of Small Entities Of the 25 small, domestic CRE OEMs, 24 OEMs manufacture vertical equipment classes (i.e., vertical open (‘‘VOP’’), vertical closed transparent (‘‘VCT’’), or vertical closed solid (‘‘VCS’’)), 8 OEMs manufacture semivertical open (‘‘SVO’’) equipment classes (i.e., medium temperature remote condensing (‘‘RC’’; ‘‘SVO.RC.M’’) or medium temperature self-contained (‘‘SC’’; ‘‘SVO.SC.M’’)), 7 OEMs manufacture service-over-counter (‘‘SOC’’) equipment classes (i.e., SOC.RC.M or SOC.SC.M), 10 OEMs manufacture horizontal equipment classes (i.e., horizontal open (‘‘HZO’’), horizontal closed transparent (‘‘HCT’’), or horizontal closed solid (‘‘HCS’’)), and 3 OEMs manufacture chef bases. For the purposes of this IRFA, DOE assumed that the industry capital conversion costs would be evenly distributed across the OEMs that manufacture each equipment class to avoid underestimating the potential capital investments small manufacturers may incur as a result of the proposed standard. As discussed in section IV.J.2.c of this document, DOE scaled the industry capital conversion costs by the number of OEMs offering models of the respective equipment class. For product conversion costs, DOE assumed all small businesses would choose to redesign or replace models that do not meet the proposed TSL 5 efficiency levels. DOE used basic model counts to scale the industry product conversion costs, as discussed in section IV.J.2.c of this document. DOE expects manufacturers would have to incorporate various high-efficiency components to meet the TSL 5 efficiencies across their CRE offerings. For certain transparent door equipment classes, capital conversion costs may be necessary to incorporate improved door designs. For self-contained equipment classes, many manufacturers would likely have to incorporate VSCs into CRE designs. To incorporate VSCs, which could be larger than existing single-speed compressors, manufacturers may need new tools for the baseplate. Product conversion costs may be necessary to qualify, source, and PO 00000 Frm 00103 Fmt 4701 Sfmt 4702 70297 test new high-efficiency components (e.g., electronically commutated motors). Out of the 24 small OEMs of vertical equipment classes, DOE expects 23 OEMs would incur some conversion costs to redesign models that do not currently the proposed efficiency levels. The remaining small OEM would likely not incur conversion costs as a direct result of the proposed standard as all of their vertical CRE models currently meet or exceed the proposed levels. Vertical equipment classes account for approximately 90.1 percent of industry shipments in 2027. All the VOP and VCT equipment classes would likely require manufacturers to incorporate occupancy sensors to meet TSL 5. DOE further expects VOP equipment classes would also need to incorporate night curtains. DOE expects manufacturers of VOP.SC.M would likely also need to incorporate EC condenser fan motors, VSCs, and microchannel condensers. Some VCT equipment classes would likely need to incorporate triple pane glass with krypton fill. VCT.SC.M, and VCT.SC.L likely would further need to incorporate EC condenser fan motors and VSCs. For most VCS equipment classes, manufacturers would likely need to incorporate evaporator fan controls, EC evaporator fan motors, EC condenser fan motors, VSCs, and microchannel condensers. DOE expects all 8 small OEMs of semi-vertical equipment classes would incur some conversion costs to redesign models that do not currently meet the proposed efficiency levels. Semi-vertical equipment classes account for approximately 2.1 percent of industry shipments in 2027. All semi-vertical equipment classes would likely need to incorporate occupancy sensors and night curtains. SVO.SC.M would also likely require EC evaporator fan motors, EC condenser fan motors, VSCs, and microchannel condensers. Out of the 7 small OEMs of serviceover-counter equipment classes, DOE expects 6 OEMs would incur some conversion costs to redesign models that do not currently the proposed efficiency levels. The remaining small OEM would likely not incur conversion costs as a direct result of the proposed standard as all of their service-over-counter CRE models currently meet or exceed the proposed levels. Service-over-counter equipment classes account for approximately 0.5 percent of industry shipments in 2027. SOC.RC.M and SOC.SC.M would likely incorporate occupancy sensors. SOC.RC.M would also likely require triple pane glass doors with krypton fill. SOC.SC.M would also likely require VIG doors, E:\FR\FM\10OCP2.SGM 10OCP2 70298 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules evaporator fan controls, EC evaporator fan motors, EC condenser fan motors, VSCs, and microchannel condensers. Out of the 10 small OEMs of horizontal equipment classes, DOE expects 9 OEMs would incur some conversion costs to redesign models that do not currently the proposed efficiency levels. The remaining small OEM would likely not incur conversion costs as a direct result of the proposed standard as all of their horizontal CRE models currently meet or exceed the proposed levels. Horizontal equipment classes account for approximately 5.9 percent of industry shipments in 2027. For HZO equipment classes, manufacturers would likely incorporate occupancy sensors. For HZO.SC.M and HZO.SC.L equipment classes, manufacturers would likely incorporate EC evaporator fan motors, EC condenser fan motors, VSCs, and microchannel condensers. DOE expects that HCT.SC.I would likely need to incorporate VSCs and occupancy sensors to meet TSL 5 levels. For HCS equipment classes, manufacturers would likely incorporate EC condenser fan motors. HCS.SC.M would also likely require evaporator fan controls and EC condenser fan motors. DOE expects all 3 small OEMs offering chef base equipment classes to incur some conversion costs to redesign models that do not meet efficiency levels at TSL 5. Chef base equipment classes account for approximately 1.4 percent of industry shipments in 2027. Manufacturers would likely incorporate EC evaporator fan motors, EC condenser fan motors, and VSCs for CB.SC.M. None of the small businesses offer CB.SC.L. Based on annual revenue estimates from market research tools (e.g., Dun & Bradstreet reports), the annual revenue of the small, domestic OEMs identified range from approximately $2.8 million to $448.6 million, with an average annual revenue of approximately $112.9 million. DOE estimates that conversion costs could range from $0.0 million to $15.3 million, with the average per OEM conversion costs of $2.8 million. The estimated total conversion costs as a percent of company revenue over the 3year conversion period range from approximately 0.0 percent to 9.6 percent, with an average of 1.7 percent. See table VI.1 for additional details. TABLE VI.1—POTENTIAL SMALL BUSINESS IMPACTS (TSL 5) Est. conversion costs ($ millions) Company A ............................................................ B ............................................................ C ............................................................ D ............................................................ E ............................................................ F ............................................................ G ............................................................ H ............................................................ I ............................................................. J ............................................................. K ............................................................ L ............................................................ M ........................................................... N ............................................................ O ............................................................ P ............................................................ Q ............................................................ R ............................................................ S ............................................................ T ............................................................ U ............................................................ V ............................................................ W ........................................................... X ............................................................ Y ............................................................ Conversion costs as a % of conversion period revenue** (%) Est. annual revenue ($ millions) 0.25 0.21 1.58 0.00 2.41 0.88 0.05 0.22 1.42 1.78 0.77 0.26 5.46 2.15 7.35 15.31 5.70 0.24 14.29 2.35 0.48 0.63 4.86 0.28 0.56 2.8 4.1 5.5 6.3 10.8 13.6 25.4 26.9 28.6 58.1 71.9 74.9 85.3 96.8 110.3 131.1 142.3 143.1 156.1 156.3 193.7 212.5 269.3 307.9 488.6 3.0 1.7 9.6 0.0 7.4 2.2 0.1 0.3 1.7 1.0 0.4 0.1 2.1 0.7 2.2 3.9 1.3 0.1 3.1 0.5 0.1 0.1 0.6 0.0 0.0 Vertical Semivertical Serviceover-counter Horizontal Chef base X X X .................... X X X X X X X X X X X X X X X X X X X X X .................... .................... X .................... X .................... .................... .................... X .................... .................... .................... .................... .................... X X X .................... .................... .................... .................... .................... X .................... X .................... .................... X .................... X .................... .................... .................... .................... .................... .................... .................... .................... .................... X X X .................... .................... .................... .................... .................... X .................... X .................... .................... .................... X .................... X .................... .................... .................... .................... X .................... X .................... X X X .................... X X .................... .................... X .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... .................... X .................... .................... .................... X X .................... .................... .................... .................... .................... ddrumheller on DSK120RN23PROD with PROPOSALS2 * The ‘‘X’’ indicates that the manufacturer offers CRE models of the respective equipment family. ** This column is calculated by dividing the estimated conversion costs by the revenue during the three year the conversion period: (Est. Conversion Costs) ÷ [(Est. Annual Revenue) × 3 years]. *** All models of directly analyzed CRE equipment classes meet or exceed the proposed efficiency levels. Therefore, DOE tentatively does not expect this manufacturer would incur conversion costs as direct result of the rule, if the standards were finalized as proposed. DOE seeks comments, information, and data on the number of small businesses in the industry, the names of those small businesses, and their market shares by equipment class. DOE also requests comment on the potential impacts of the proposed standards on small manufacturers. 5. Duplication, Overlap, and Conflict With Other Rules and Regulations DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the proposed rule. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 6. Significant Alternatives to the Rule The discussion in the previous section analyzes impacts on small businesses that would result from DOE’s proposed rule, represented by TSL 5. In reviewing alternatives to the proposed rule, DOE examined energy conservation standards set at lower efficiency levels. While TSL 1, TSL 2, TSL 3, and TSL 4 would reduce the impacts on small business manufacturers, it would come at the expense of a reduction in energy savings. TSL 1 achieves 67.0 percent PO 00000 Frm 00104 Fmt 4701 Sfmt 4702 lower energy savings compared to the energy savings at TSL 5. TSL 2 achieves 43.7 percent lower energy savings compared to the energy savings at TSL 5. TSL 3 achieves 41.0 percent lower energy savings compared to the energy savings at TSL 5. TSL 4 achieves 10.6 percent lower energy savings as compared to the energy savings at TSL 5. Based on the presented discussion, establishing standards at TSL 5 balances the benefits of the energy savings at TSL 5 with the potential burdens placed on E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules CRE manufacturers, including small business manufacturers. Accordingly, DOE does not propose one of the other TSLs considered in the analysis, or the other policy alternatives examined as part of the regulatory impact analysis and included in chapter 17 of the NOPR TSD. Additional compliance flexibilities may be available through other means. Manufacturers subject to DOE’s energy efficiency standards may apply to DOE’s Office of Hearings and Appeals for exception relief under certain circumstances. Manufacturers should refer to 10 CFR part 430, subpart E, and 10 CFR part 1003 for additional details. ddrumheller on DSK120RN23PROD with PROPOSALS2 C. Review Under the Paperwork Reduction Act Manufacturers of CRE must certify to DOE that their equipment comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their equipment according to the DOE test procedures for CRE, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer equipment and commercial equipment, including CRE. (See generally 10 CFR part 429). The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (‘‘PRA’’). This requirement has been approved by OMB under OMB control number 1910–1400. Public reporting burden for the certification is estimated to average 35 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number. D. Review Under the National Environmental Policy Act of 1969 DOE is analyzing this proposed regulation in accordance with the National Environmental Policy Act of 1969 (‘‘NEPA’’) and DOE’s NEPA implementing regulations (10 CFR part 1021). DOE’s regulations include a categorical exclusion for rulemakings that establish energy conservation standards for consumer products or industrial equipment. 10 CFR part 1021, VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 subpart D, appendix B5.1. DOE anticipates that this proposed rulemaking qualifies for categorical exclusion B5.1 because it is a rulemaking that establishes energy conservation standards for consumer products or industrial equipment, none of the exceptions identified in categorical exclusion B5.1(b) apply, no extraordinary circumstances exist that require further environmental analysis, and it otherwise meets the requirements for application of a categorical exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review before issuing the final rule. E. Review Under Executive Order 13132 E.O. 13132, ‘‘Federalism,’’ 64 FR 43255 (Aug. 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has tentatively determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the equipment that are the subject of this proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (See 42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) Therefore, no further action is required by Executive Order 13132. F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of E.O. 12988, ‘‘Civil Justice Reform,’’ imposes on Federal agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity, (2) write regulations to PO 00000 Frm 00105 Fmt 4701 Sfmt 4702 70299 minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 3(a), section 3(b) of E.O. 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any, (2) clearly specifies any effect on existing Federal law or regulation, (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction, (4) specifies the retroactive effect, if any, (5) adequately defines key terms, and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of E.O. 12988. G. Review Under the Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995 (‘‘UMRA’’) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104–4, section 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed ‘‘significant intergovernmental mandate,’’ and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70300 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules 12820. DOE’s policy statement is also available at www.energy.gov/sites/prod/ files/gcprod/documents/umra_97.pdf. Although this proposed rule does not contain a Federal intergovernmental mandate, it may require expenditures of $100 million or more in any one year by the private sector. Such expenditures may include: (1) investment in research and development and in capital expenditures by CRE manufacturers in the years between the final rule and the compliance date for the new standards and (2) incremental additional expenditures by consumers to purchase higher-efficiency CRE, starting at the compliance date for the applicable standard. Section 202 of UMRA authorizes a Federal agency to respond to the content requirements of UMRA in any other statement or analysis that accompanies the proposed rule. (2 U.S.C. 1532(c)) The content requirements of section 202(b) of UMRA relevant to a private sector mandate substantially overlap the economic analysis requirements that apply under section 325(o) of EPCA and Executive Order 12866. The SUPPLEMENTARY INFORMATION section of this NOPR and the TSD for this proposed rule respond to those requirements. Under section 205 of UMRA, DOE is obligated to identify and consider a reasonable number of regulatory alternatives before promulgating a rule for which a written statement under section 202 is required. (2 U.S.C. 1535(a)) DOE is required to select from those alternatives the most cost effective and least burdensome alternative that achieves the objectives of the proposed rule unless DOE publishes an explanation for doing otherwise, or the selection of such an alternative is inconsistent with law. As required by 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(m), this proposed rule would establish new and amended energy conservation standards for CRE that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technologically feasible and economically justified, as required by 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(A) and 6295(o)(3)(B). A full discussion of the alternatives considered by DOE is presented in chapter 17 of the TSD for this proposed rule. H. Review Under the Treasury and General Government Appropriations Act, 1999 Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105–277) requires Federal agencies to issue a Family VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 Policymaking Assessment for any rule that may affect family well-being. This proposed rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment. I. Review Under Executive Order 12630 Pursuant to E.O. 12630, ‘‘Governmental Actions and Interference with Constitutionally Protected Property Rights,’’ 53 FR 8859 (Mar. 15, 1988), DOE has determined that this proposed rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution. J. Review Under the Treasury and General Government Appropriations Act, 2001 Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB’s guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE’s guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M–19–15, Improving Implementation of the Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/ 12/f70/DOE% 20Final%20Updated%20IQA %20Guidelines%20Dec%202019.pdf. DOE has reviewed this NOPR under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. K. Review Under Executive Order 13211 E.O. 13211, ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,’’ 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB a Statement of Energy Effects for any proposed significant energy action. A ‘‘significant energy action’’ is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, PO 00000 Frm 00106 Fmt 4701 Sfmt 4702 the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. DOE has tentatively concluded that this regulatory action, which proposes new and amended energy conservation standards for CRE, is not a significant energy action because the proposed standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects on this proposed rule. L. Information Quality On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (‘‘OSTP’’), issued its Final Information Quality Bulletin for Peer Review (‘‘the Bulletin’’). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government’s scientific information. Under the Bulletin, the energy conservation standards rulemaking analyses are ‘‘influential scientific information,’’ which the Bulletin defines as ‘‘scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.’’ 70 FR 2664, 2667. In response to OMB’s Bulletin, DOE conducted formal peer reviews of the energy conservation standards development process and the analyses that are typically used and has prepared a report describing that peer review.114 Generation of this report involved a rigorous, formal, and documented evaluation using objective criteria and qualified and independent reviewers to make a judgment as to the technical/ scientific/business merit, the actual or anticipated results, and the productivity and management effectiveness of programs and/or projects. Because available data, models, and technological understanding have changed since 2007, DOE has engaged 114 The 2007 ‘‘Energy Conservation Standards Rulemaking Peer Review Report’’ is available at energy.gov/eere/buildings/downloads/energyconservation-standards-rulemaking-peer-reviewreport-0 (last accessed May 22, 2023). E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules with the National Academy of Sciences to review DOE’s analytical methodologies to ascertain whether modifications are needed to improve the Department’s analyses. DOE is in the process of evaluating the resulting report.115 ddrumheller on DSK120RN23PROD with PROPOSALS2 VII. Public Participation In response to the June 2022 Preliminary Analysis, DOE received a comment from NAMA requesting the Department to conduct an in person public meeting. NAMA commented that it is requesting an in person public meeting due to the webinar held on August 8, 2022, feeling rushed and to allow time for full dialogue on these important subjects. (NAMA, No. 37, p. 4) After carefully considering NAMA’s request, the Department has decided to grant the request for an in-person public meeting. Consequently, DOE will be hosting an in-person public meeting in addition to the webinar. Please note that attendance will be limited for the inperson public meeting due to room size capacity limits. A. Participation in the Public Meeting and Webinar The time, date, and location of the public meeting are listed in the DATES and ADDRESSES sections at the beginning of this document. If you plan to attend the public meeting, you must notify the Appliance and Equipment Standards Program staff no later than November 1, 2023, either by phone at (202) 287–1445 or by email: ApplianceStandards Questions@ee.doe.gov. Please note advance registration is required and capacity in the meeting room will be limited. Please note that foreign nationals participating in the public meeting are subject to advance security screening procedures which require advance notice prior to attendance at the public meeting. If a foreign national wishes to participate in the public meeting, please inform DOE as soon as possible by contacting Ms. Regina Washington at (202) 586–1214 or by email: Regina.Washington@ee.doe.gov so that the necessary procedures can be completed. DOE requires visitors to have laptops and other devices, such as tablets, checked upon entry into the building. Any person wishing to bring these devices into the building will be required to obtain a property pass. Visitors should avoid bringing these 5 115 The report is available at www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 devices, or allow an extra 45 minutes to check in. Please report to the visitor’s desk to have devices checked before proceeding through security. Due to the REAL ID Act implemented by the Department of Homeland Security (‘‘DHS’’), there have been recent changes regarding ID requirements for individuals wishing to enter Federal buildings from specific States and U.S. territories. DHS maintains an updated website identifying the State and territory driver’s licenses that currently are acceptable for entry into DOE facilities at www.dhs.gov/real-id-enforcementbrief. A driver’s licenses from a State or territory identified as not compliant by DHS will not be accepted for building entry and one of the alternate forms of ID listed below will be required. Acceptable alternate forms of Photo-ID include U.S. Passport or Passport Card; an Enhanced Driver’s License or Enhanced ID-Card issued by States and territories as identified on the DHS website (Enhanced licenses issued by these States and territories are clearly marked Enhanced or Enhanced Driver’s License); a military ID or other Federal Government-issued Photo-ID card. In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE’s website at www.energy.gov/eere/ buildings/public-meetings-andcomment-deadlines. Participants are responsible for ensuring their systems are compatible with the webinar software. B. Procedure for Submitting Prepared General Statements for Distribution Any person who has plans to present a prepared general statement may request that copies of his or her statement be made available at the public meeting. Such persons may submit requests, along with an advance electronic copy of their statement in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to the appropriate address shown in the ADDRESSES section at the beginning of this document. The request and advance copy of statements must be received at least one week before the public meeting and are to be emailed. Please include a telephone number to enable DOE staff to make follow-up contact, if needed. C. Conduct of the Public Meeting DOE will designate a DOE official to preside at the public meeting and may also use a professional facilitator to aid PO 00000 Frm 00107 Fmt 4701 Sfmt 4702 70301 discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. There shall not be discussion of proprietary information, costs or prices, market share, or other commercial matters regulated by U.S. anti-trust laws. After the public meeting and until the end of the comment period, interested parties may submit further comments on the proceedings and any aspect of the rulemaking. The public meeting will be conducted in an informal, conference style. DOE will a general overview of the topics addressed in this proposed rulemaking, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this proposed rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit, as time permits, other participants to comment briefly on any general statements. At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this rulemaking. The official conducting the public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the public meeting. A transcript of the public meeting will be included in the docket, which can be viewed as described in the Docket section at the beginning of this document. In addition, any person may buy a copy of the transcript from the transcribing reporter. D. Submission of Comments DOE will accept comments, data, and information regarding this proposed rule before or after the public meeting, but no later than the date provided in the DATES section at the beginning of this proposed rule. Interested parties may submit comments, data, and other E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 70302 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules information using any of the methods described in the ADDRESSES section at the beginning of this document. Submitting comments via www.regulations.gov. The www.regulations.gov web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment. However, your contact information will be publicly viewable if you include it in the comment itself or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Otherwise, persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments. Do not submit to www.regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (‘‘CBI’’)). Comments submitted through www.regulations.gov cannot be claimed as CBI. Comments received through the website will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section. DOE processes submissions made through www.regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that www.regulations.gov provides after you have successfully uploaded your comment. Submitting comments via email, hand delivery/courier, or postal mail. Comments and documents submitted via email, hand delivery/courier, or postal mail also will be posted to www.regulations.gov. If you do not want your personal contact information to be VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information in a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewable as long as it does not include any comments. Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via postal mail or hand delivery/ courier, please provide all items on a CD, if feasible, in which case it is not necessary to submit printed copies. No telefacsimiles (‘‘faxes’’) will be accepted. Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, that are written in English, and that are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author. Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters’ names compiled into one or more PDFs. This reduces comment processing and posting time. Confidential Business Information. Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email two well-marked copies: one copy of the document marked ‘‘confidential’’ including all the information believed to be confidential, and one copy of the document marked ‘‘non-confidential’’ with the information believed to be confidential deleted. DOE will make its own determination about the confidential status of the information and treat it according to its determination. It is DOE’s policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure). E. Issues on Which DOE Seeks Comment Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues: PO 00000 Frm 00108 Fmt 4701 Sfmt 4702 (1) DOE requests comments on its proposal to require that the proposed standards, if adopted, would apply to all CRE listed in table I.1 manufactured in, or imported into, the United States on or after the date that is 3 years after the date on which the final new and amended standards are published. More generally, DOE requests comment on whether it would be beneficial to CRE manufacturers to align the compliance date of any DOE amended or established standards as closely as possible with the refrigerant prohibition dates proposed by the December 2022 EPA NOPR. (2) DOE requests comment on the impacts to CRE manufacturers and consumers from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). (3) DOE requests comment on the proposed definitions for ‘‘cold-wall evaporator,’’ ‘‘forced-air evaporator,’’ ‘‘pass-through doors,’’ ‘‘roll-in door,’’ ‘‘roll-through doors,’’ ‘‘sliding door,’’ and ‘‘rating temperature.’’ (4) DOE requests comment on blast chiller or freezer design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix D of 10 CFR 431.64. (5) DOE requests comment on refrigerated buffet/preparation table design options, design specifications, and energy consumption data tested per the DOE test procedure located in appendix C of 10 CFR 431.64. (6) DOE requests comment on publicly available market data on CRE manufacturers or identification of any CRE manufacturers with large market shares not identified in Chapter 3 of the TSD NOPR. (7) DOE requests comment on the decision to screen out increased insulation thickness, vacuum-insulated panels, linear compressors, and air curtain design as design options for improving the energy efficiency of CRE. (8) DOE requests comment on its proposal to use baseline levels for CRE equipment based upon the anticipated design changes that will be made by manufacturers in response to the December 2022 EPA NOPR. (9) DOE further requests comment on its estimates of energy-use reduction associated with the design changes made by manufacturers in response to the December 2022 EPA NOPR. (10) DOE requests comment on its proposal to apply an energy use multiplier to certain equipment classes that contain CRE with unique utility and energy use characteristics. DOE additionally requests comment on the proposed multiplier values and equipment classes for which these multipliers would be applied. E:\FR\FM\10OCP2.SGM 10OCP2 ddrumheller on DSK120RN23PROD with PROPOSALS2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules (11) DOE seeks comment on the method for estimating manufacturing production costs. (12) DOE requests comment on the CRE distribution channels and overall on the markups analysis. (13) DOE requests comment on its approach for the energy use analysis. (14) DOE requests comment on its price learning assumptions and methodology. (15) DOE requests comment and data to inform how any of the analyzed design options would require additional installation time, training, or other related skills compared to the baseline equipment. (16) DOE requests comment and data on its assumptions and approach regarding consideration of repair and maintenance costs in the LCC and PBP analyses. Specifically, DOE requests data on the expected lifetimes and repair and maintenance frequencies of the considered design options in this NOPR. (17) DOE requests comment and data regarding the CRE lifetime assumptions and methodology. (18) DOE requests comment and data on the assumed business types and the corresponding CRE lifetimes at which refurbishment may occur. (19) DOE requests comment on its methodology and data to better inform the no-standards-case efficiency distribution for CRE. (20) DOE requests comment on the price elasticity assumptions for the CRE shipments analysis as they relates to the overall CRE market and the market for refurbished CRE. (21) DOE requests comment on its assumption of no efficiency trend for CRE and seeks historical CRE efficiency data, ideally by equipment class or alternatively by equipment family, or overall for the CRE market as a whole. (22) DOE seeks comment on the use of a 1.40 manufacturer markup for all CRE equipment classes analyzed in this proposed rule. DOE also seeks comment on the estimated manufacturer markups and incremental MSPs that result from the analyzed energy conservation standards. (23) DOE requests detailed comment and information on the capital investments associated with each analyzed design option. In particular, DOE requests detailed comment and feedback on the specific changes in equipment and tooling required to incorporate microchannel heat exchangers, as DOE currently models microchannel heat exchangers as a purchased part that can be substituted for tube and fin heat exchangers with minor production line changes. VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 (24) DOE requests comment on the availability of computer chips and other electrical components used in CREs and specifically if these components are used to achieve higher efficiency levels. (25) DOE seeks comments, information, and data on the capital conversion costs and product conversion costs estimated for each TSL. (26) DOE seeks comment on whether manufacturers expect that manufacturing capacity constraints, engineering resource constraints, or laboratory constraints would limit equipment availability to consumers in the timeframe of the new and amended standards compliance date (2028). (27) DOE requests information regarding the impact of cumulative regulatory burden on manufacturers of CRE associated with multiple DOE standards or equipment/productspecific regulatory actions of other Federal agencies. (28) DOE requests comments on the magnitude of costs associated with transitioning CRE designs and production facilities to accommodate low-GWP refrigerants that would be incurred between the publication of this NOPR and the proposed compliance date of new and amended standards. Quantification and categorization of these costs, such as engineering efforts, testing lab time, certification costs, and capital investments (e.g., new charging equipment), would enable DOE to refine its analysis. (29) DOE seeks comments, information, and data on the number of small businesses in the industry, the names of those small businesses, and their market shares by equipment class. DOE also requests comment on the potential impacts of the proposed standards on small manufacturers. (30) Additionally, DOE welcomes comments on other issues relevant to the conduct of this rulemaking that may not specifically be identified in this document. 70303 Signing Authority This document of the Department of Energy was signed on September 28, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register. Signed in Washington, DC, on September 29, 2023. Treena V. Garrett, Federal Register Liaison Officer, U.S. Department of Energy. For the reasons set forth in the preamble, DOE proposes to amend part 431 of chapter II of title 10 of the Code of Federal Regulations, as set forth below: PART 431—ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND INDUSTRIAL EQUIPMENT 1. The authority citation for part 431 continues to read as follows: ■ Authority: 42 U.S.C. 6291–6317; 28 U.S.C. 2461 note. 2. Amend § 431.62 by: a. Adding, in alphabetical order, definitions for ‘‘Cold-wall evaporator’’, ‘‘Forced-air evaporator’’, and ‘‘Passthrough doors’’; ■ b. Revising the definition of ‘‘Rating temperature’’; and ■ c. Adding, in alphabetical order, definitions for ‘‘Roll-in door’’, ‘‘Rollthrough doors’’, and ‘‘Sliding door’’. The additions and revision read as follows: ■ ■ VIII. Approval of the Office of the Secretary § 431.62 Definitions concerning commercial refrigerators, freezers and refrigerator-freezers. The Secretary of Energy has approved publication of this notice of proposed rulemaking and announcement of public meeting. * List of Subjects in 10 CFR Part 431 Administrative practice and procedure, Confidential business information, Energy conservation test procedures, and Reporting and recordkeeping requirements. PO 00000 Frm 00109 Fmt 4701 Sfmt 4702 * * * * Cold-wall evaporator means an evaporator that comprises a portion or all of the commercial refrigerator, freezer, and refrigerator freezer cabinet’s interior surface that transfers heat through means other than fan-forced convection. * * * * * Forced-air evaporator means an evaporator that employs the use of fan- E:\FR\FM\10OCP2.SGM 10OCP2 70304 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules forced convection to transfer heat within the commercial refrigerator, freezer, and refrigerator freezer cabinet. * * * * * Pass-through doors means doors located on both the front and rear of the commercial refrigerator, freezer, and refrigerator freezer. * * * * * Rating temperature means the integrated average temperature a unit must maintain during testing, as determined in accordance with section 2.1. or section 2.2. of appendix B to subpart C of this part, as applicable. * * * * * Roll-in door means a door that includes a door sweep to seal the bottom of the door and may include a ramp that allows wheeled racks of product to be rolled into the commercial refrigerator, freezer, and refrigerator freezer. Roll-through doors means doors located on both the front and rear of the commercial refrigerator, freezer, and refrigerator freezer, that includes a door sweep to seal the bottom of the door and may include a ramp that allows wheeled racks of product to be rolled into and through the commercial refrigerator, freezer, and refrigerator freezer. * * * * * Sliding door means a door that opens when a portion of the door moves in a direction generally parallel to its surface. * * * * * ■ 3. Revise § 431.66 to read as follows: § 431.66 Energy conservation standards and their effective dates. (a) In this section— (1) The term ‘‘V’’ means the volume of a commercial refrigerator, freezer, and refrigerator-freezer, as determined in Rating temperature (°F) Condensing unit configuration Equipment family Remote Condensing (RC) ........... Vertical Open (VOP) .................... Semivertical Open (SVO) ............ Horizontal Open (HZO) ................ Vertical (VCT). Horizontal (HCT). Closed Closed Transparent Transparent Vertical Closed Solid (VCS) ........ Horizontal Closed Solid (HCS) .... Service Over Counter (SOC) ....... Self-Contained (SC) ..................... Vertical Open (VOP) .................... Semivertical Open (SVO) ............ ddrumheller on DSK120RN23PROD with PROPOSALS2 Horizontal Open (HZO) ................ Vertical (VCT). Closed Transparent Vertical Closed Solid (VCS) ........ Horizontal (HCT). VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 Closed PO 00000 Transparent Frm 00110 Fmt 4701 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) Sfmt 4702 accordance with section 3.1. of appendix B to subpart C of this part. (2) The term ‘‘TDA’’ means the total display area of a commercial refrigerator, freezer, and refrigeratorfreezer, as determined in accordance with section 3.2. of appendix B to subpart C of this part. (b) Each commercial refrigerator, freezer, and refrigerator-freezer, except as specified in paragraph (d) of this section, manufactured on or after March 27, 2017 and before [Date 3 Years after publication of the final rule in the Federal Register], shall have a daily energy consumption (in kilowatt-hours per day or ‘‘kWh/day’’), when measured in accordance with the DOE test procedure at § 431.64, that does not exceed the following: (1) For commercial refrigerators, freezers, and refrigerator-freezers other than commercial hybrids, commercial refrigerator-freezers, or wedge cases: Operating temperature (°F) ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 E:\FR\FM\10OCP2.SGM Equipment class designation * VOP.RC.M .. VOP.RC.L ... VOP.RC.I .... SVO.RC.M .. SVO.RC.L ... SVO.RC.I .... HZO.RC.M .. HZO.RC.L ... HZO.RC.I .... VCT.RC.M ... VCT.RC.L .... 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.M .. SOC.RC.L ... SOC.RC.I .... VOP.SC.M ... VOP.SC.L .... VOP.SC.I ..... SVO.SC.M ... SVO.SC.L .... SVO.SC.I ..... HZO.SC.M ... HZO.SC.L .... HZO.SC.I ..... VCT.SC.M ... VCT.SC.L .... VCT.SC.I ..... VCS.SC.M ... VCS.SC.L .... VCS.SC.I ..... HCT.SC.M ... HCT.SC.L .... HCT.SC.I ..... 10OCP2 Maximum daily energy consumption (kWh/day) 0.64 × TDA + 4.07. 2.2 × TDA + 6.85. 2.79 × TDA + 8.7. 0.66 × TDA + 3.18. 2.2 × TDA + 6.85. 2.79 × TDA + 8.7. 0.35 × TDA + 2.88. 0.55 × TDA + 6.88. 0.7 × TDA + 8.74. 0.15 × TDA + 1.95. 0.49 × TDA + 2.61. 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. 0.1 × V + 0.26. 0.21 × V + 0.54. 0.25 × V + 0.63. 0.44 × TDA + 0.11. 0.93 × TDA + 0.22. 1.09 × TDA + 0.26. 1.69 × TDA + 4.71. 4.25 × TDA + 11.82. 5.4 × TDA + 15.02. 1.7 × TDA + 4.59. 4.26 × TDA + 11.51. 5.41 × TDA + 14.63. 0.72 × TDA + 5.55. 1.9 × TDA + 7.08. 2.42 × TDA + 9. 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. 0.06 × V + 0.37. 0.08 × V + 1.23. 0.56 × TDA + 0.43. 70305 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules Condensing unit configuration Rating temperature (°F) Equipment family Horizontal Closed Solid (HCS) .... Operating temperature (°F) ≥32.0 <32.0 ≤¥5.0 ≥32.0 <32.0 ≤¥5.0 ≥32.0 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) Service Over Counter (SOC) ....... Pull-Down (PD) ............................ Equipment class designation * HCS.SC.M ... HCS.SC.L .... HCS.SC.I ..... SOC.SC.M .. SOC.SC.L ... SOC.SC.I .... PD.SC.M ..... Maximum daily energy consumption (kWh/day) 0.05 × V + 0.91. 0.06 × V + 1.12. 0.34 × V + 0.88. 0.52 × TDA + 1. 1.1 × TDA + 2.1. 1.53 × TDA + 0.36. 0.11 × V + 0.81. * The meaning of the letters in this column is indicated in the columns to the left. (2) For commercial hybrids and commercial refrigerator-freezers, the maximum daily energy consumption (MDEC) for each model shall be the sum of the MDEC values for all of its compartments. For each compartment, measure the TDA or volume of that compartment, and determine the appropriate equipment class based on that compartment’s equipment family, condensing unit configuration, and designed operating temperature. The MDEC limit for each compartment shall be the calculated value obtained by entering that compartment’s TDA or volume into the standard equation in paragraph (b)(1) of this section for that compartment’s equipment class. Measure the calculated daily energy consumption (CDEC) or total daily energy consumption (TDEC) for the model: (i) For commercial hybrids and commercial refrigerator-freezers where two or more independent remote condensing units are each connected to separate, individual compartments, measure the total refrigeration load of each compartment separately according to appendix B to subpart C of this part. The CDEC for the model shall be the sum of the compressor energy consumption (CEC) for each compartment, fan energy consumption (FEC), lighting energy consumption (LEC), anti-condensate energy consumption (AEC), defrost energy consumption (DEC), condensate evaporator pan energy consumption (PEC), and other applicable energy consumption (OEC). (ii) For commercial hybrids and commercial refrigerator-freezers where two or more compartments are connected to one remote condensing unit, measure the total refrigeration load of the model according to appendix B to subpart C of this part. (A) Calculate a weighted adjusted dew point temperature for the model by: (1) Multiplying the adjusted dew point temperature of each compartment by the volume of that compartment, (2) Summing the resulting values for all compartments; and (3) Dividing the resulting total by the total volume of all compartments. (B) Calculate the CEC for the model using the total refrigeration load and the weighted average adjusted dew point temperature. The CDEC for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and OEC. (iii) For commercial hybrids and commercial refrigerator-freezers connected to a self-contained condensing unit, measure the TDEC for the model according to appendix B to subpart C of this part. (3) For wedge cases, measure the CDEC or TDEC according to appendix B Rating temperature (°F) Condensing unit configuration Equipment family Remote Condensing (RC) .. Vertical Open (VOP) ........................................................ ddrumheller on DSK120RN23PROD with PROPOSALS2 Semivertical Open (SVO) ................................................ Horizontal Open (HZO) .................................................... Vertical Closed Transparent (VCT) ................................. VerDate Sep<11>2014 23:16 Oct 06, 2023 Jkt 262001 PO 00000 Frm 00111 Fmt 4701 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) Sfmt 4702 to subpart C of this part. For wedge cases in equipment classes for which a volume metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (b)(1) of this section. For wedge cases of equipment classes for which a TDA metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (b)(1) of this section incorporating a value for the TDA that is the product of: (i) The vertical height of the aircurtain (or glass in a transparent door) and (ii) The largest overall width of the case, when viewed from the front. (c) Each commercial refrigerator, freezer, and refrigerator-freezer, except as specified in paragraph (d) of this section, manufactured on or after [Date 3 years after publication of the final rule in the Federal Register], shall have a daily energy consumption (in kilowatthours per day or ‘‘kWh/day’’), when measured in accordance with the DOE test procedure at § 431.64, that does not exceed the following: (1) For commercial refrigerators, freezers, and refrigerator-freezers other than commercial hybrids, commercial refrigerator-freezers, or wedge cases: Operating temperature (°F) Equipment class designation* >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 VOP.RC.H VOP.RC.M VOP.RC.L VOP.RC.I SVO.RC.H SVO.RC.M SVO.RC.L SVO.RC.I HZO.RC.H HZO.RC.M HZO.RC.L HZO.RC.I VCT.RC.H VCT.RC.M VCT.RC.M.PT VCT.RC.M.SD VCT.RC.M.SDPT VCT.RC.M.RI E:\FR\FM\10OCP2.SGM 10OCP2 Maximum daily energy consumption (kWh/day) 0.31 0.56 2.04 2.59 0.32 0.58 2.04 2.59 0.19 0.34 0.54 0.69 0.07 0.134 0.139 0.143 0.149 0.140 × × × × × × × × × × × × × × × × × × TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA TDA + + + + + + + + + + + + + + + + + + 1.99 3.57 6.36 8.08 1.55 2.79 6.36 8.08 1.56 2.81 6.81 8.64 0.97 1.74 1.81 1.86 1.93 1.83 70306 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules Condensing unit configuration Rating temperature (°F) Equipment family Horizontal Closed Transparent (HCT) ............................. Vertical Closed Solid (VCS) ............................................ Horizontal Closed Solid (HCS) ........................................ Service Over Counter (SOC) ........................................... Chef Base (CB) ............................................................... Self-Contained (SC) ............ Vertical Open (VOP) ........................................................ Semivertical Open (SVO) ................................................ Horizontal Open (HZO) .................................................... Vertical Closed Transparent (VCT) ................................. Vertical Closed Solid (VCS) ............................................ Horizontal Closed Transparent (HCT) ............................. Horizontal Closed Solid (HCS) ........................................ Service Over Counter (SOC) ........................................... Chef Base (CB) ............................................................... Pull-Down (PD) ................................................................ Operating temperature (°F) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 55.0 (H) 38.0 (M) <32.0 ≤¥13.0 ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 ≥32.0 <32.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 >40.0 40.0≥ × ≥32.0 0.0 (L) <32.0 ¥15.0 (I) 55.0 (H) 38.0 (M) ≤¥13.0 >40.0 40.0≥ × ≥32.0 0.0 (L) <32.0 ¥15.0 (I) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) ≤¥13.0 ≥32.0 <32.0 ≤¥13.0 ≥32.0 <32.0 ¥15.0 (I) 55.0 (H) 38.0 (M) 0.0 (L) ¥15.0 (I) 38.0 (M) 0.0 (L) 38.0 (M) ≤¥13.0 >40.0 40.0≥ × ≥32.0 <32.0 ≤¥13.0 ≥32.0 <32.0 ≥32.0 Equipment class designation* VCT.RC.M.RT VCT.RC.L VCT.RC.I HCT.RC.M HCT.RC.L HCT.RC.I VCS.RC.H VCS.RC.M VCS.RC.L VCS.RC.I HCS.RC.M HCS.RC.L HCS.RC.I SOC.RC.H SOC.RC.M SOC.RC.L SOC.RC.I CB.RC.M CB.RC.L VOP.SC.H VOP.SC.M VOP.SC.L VOP.SC.I SVO.SC.H SVO.SC.M SVO.SC.L SVO.SC.I HZO.SC.H HZO.SC.M HZO.SC.L HZO.SC.I VCT.SC.H VCT.SC.M VCT.SC.M.PT VCT.SC.M.SD VCT.SC.M.SDPT VCT.SC.M.RI VCT.SC.M.RT VCT.SC.L VCT.SC.L.PT VCT.SC.I VCS.SC.H VCS.SC.M VCS.SC.M.PT VCS.SC.M.RI VCS.SC.M.RT VCS.SC.L VCS.SC.L.PT VCS.SC.L.RI VCS.SC.L.RT VCS.SC.I HCT.SC.M HCT.SC.L HCT.SC.I HCS.SC.M HCS.SC.L HCS.SC.L.FA HCS.SC.I SOC.SC.H SOC.SC.M SOC.SC.L SOC.SC.I CB.SC.M CB.SC.L PD.SC.M Maximum daily energy consumption (kWh/day) 0.146 × TDA + 1.9 0.47 × TDA + 2.51 0.56 × TDA + 2.97 0.16 × TDA + 0.13 0.34 × TDA + 0.26 0.38 × TDA + 0.29 0.06 × V + 0.14 0.1 × V + 0.26 0.21 × V + 0.54 0.25 × V + 0.63 0.1 × V + 0.26 0.21 × V + 0.54 0.25 × V + 0.63 0.22 × TDA + 0.05 0.39 × TDA + 0.1 0.83 × TDA + 0.2 1.04 × TDA + 0.25 0.03 × V + 0.39 0.13 × V + 1.37 0.69 × TDA + 1.94 1.25 × TDA + 3.48 3.29 × TDA + 9.15 4.18 × TDA + 11.63 0.65 × TDA + 1.77 1.18 × TDA + 3.18 3.25 × TDA + 8.78 4.13 × TDA + 11.16 0.27 × TDA + 2.06 0.48 × TDA + 3.71 1.48 × TDA + 5.5 1.97 × TDA + 7.34 0.053 × V + 0.85 0.054 × V + 0.86 0.056 × V + 0.86 0.058 × V + 0.86 0.060 × V + 0.86 0.057 × V + 0.86 0.059 × V + 0.86 0.234 × V + 2.38 0.243 × V + 2.47 0.6 × TDA + 3.2 0.0082 × V + 0.21 0.02 × V + 0.54 0.02 × V + 0.56 0.02 × V + 0.57 0.02 × V + 0.59 0.155 × V + 0.97 0.161 × V + 1.01 0.162 × V + 1.02 0.169 × V + 1.06 0.25 × V + 0.88 0.06 × V + 0.37 0.08 × V + 1.23 0.34 × TDA + 0.43 0.022 × V + 0.41 0.043 × V + 0.81 0.052 × V + 0.97 0.31 × V + 0.81 0.17 × TDA + 0.33 0.304 × TDA + 0.59 1.1 × TDA + 2.1 1.53 × TDA + 0.36 0.049 × V + 0.54 0.180 × V + 1.92 0.11 × V + 0.81 ddrumheller on DSK120RN23PROD with PROPOSALS2 * The meaning of the letters in this column are indicated in the columns to the left or as follows: ‘‘.PT’’ represents pass-through doors; ‘‘.SD’’ represents sliding doors; ‘‘.SDPT’’ represents sliding and pass-through doors; ‘‘.RI’’ represents roll-in doors; ‘‘.RT’’ represents roll-through doors; and ‘‘.FA’’ represents forced air evaporators. (2) For commercial hybrids and commercial refrigerator-freezers, the MDEC for each model shall be the sum of the MDEC values for all of its compartments. For each compartment, measure the TDA or volume of that compartment, and determine the VerDate Sep<11>2014 23:16 Oct 06, 2023 Jkt 262001 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 PO 00000 Frm 00112 Fmt 4701 Sfmt 4702 volume into the standard equation in paragraph (c)(1) of this section for that compartment’s equipment class. Measure the CDEC or TDEC for the model: (i) For commercial hybrids and commercial refrigerator-freezers where two or more independent remote E:\FR\FM\10OCP2.SGM 10OCP2 Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS2 condensing units are each connected to separate, individual compartments, measure the total refrigeration load of each compartment separately according to appendix B to subpart C of this part. The CDEC for the model shall be the sum of the CEC for each compartment, FEC, LEC, AEC, DEC, PEC, and OEC. (ii) For commercial hybrids and commercial refrigerator-freezers where two or more compartments are connected to one remote condensing unit, measure the total refrigeration load of the model according to appendix B to subpart C of this part. (A) Calculate a weighted adjusted dew point temperature for the model by: (1) Multiplying the adjusted dew point temperature of each compartment by the volume of that compartment, (2) Summing the resulting values for all compartments, and VerDate Sep<11>2014 21:45 Oct 06, 2023 Jkt 262001 (3) Dividing the resulting total by the total volume of all compartments. (B) Calculate the CEC for the model using the total refrigeration load and the weighted average adjusted dew point temperature. The CDEC for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and OEC. (iii) For commercial hybrids and commercial refrigerator-freezers connected to a self-contained condensing unit, measure the TDEC for the model according to appendix B to subpart C of this part. (3) For wedge cases, measure the CDEC or TDEC according to appendix B to subpart C of this part. For wedge cases in equipment classes for which a volume metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (c)(1) of this section. For PO 00000 Frm 00113 Fmt 4701 Sfmt 9990 70307 wedge cases of equipment classes for which a TDA metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (c)(1) of this section incorporating a value for the TDA that is the product of: (i) The vertical height of the aircurtain (or glass in a transparent door) and (ii) The largest overall width of the case, when viewed from the front. (d) The energy conservation standards in paragraph (b) of this section do not apply to chef bases or griddle stands. The energy conservation standards in paragraphs (b) through (c) of this section do not apply to buffet tables or preparation tables, blast chillers, blast freezers, or mobile refrigerated cabinets. [FR Doc. 2023–21987 Filed 10–6–23; 8:45 am] BILLING CODE 6450–01–P E:\FR\FM\10OCP2.SGM 10OCP2

Agencies

DEPARTMENT OF ENERGY

[Federal Register Volume 88, Number 194 (Tuesday, October 10, 2023)]
[Proposed Rules]
[Pages 70196-70307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21987]



[[Page 70195]]

Vol. 88

Tuesday,

No. 194

October 10, 2023

Part III





Department of Energy





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10 CFR Part 431





Energy Conservation Program: Energy Conservation Standards for 
Commercial Refrigerators, Freezers, and Refrigerator-Freezers; Proposed 
Rule

Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / 
Proposed Rules

[[Page 70196]]


=======================================================================
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DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2017-BT-STD-0007]
RIN 1904-AD82


Energy Conservation Program: Energy Conservation Standards for 
Commercial Refrigerators, Freezers, and Refrigerator-Freezers

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of proposed rulemaking and announcement of public 
meeting.

-----------------------------------------------------------------------

SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer equipment 
and certain commercial and industrial equipment, including commercial 
refrigerators, freezers, and refrigerator-freezers (``commercial 
refrigeration equipment'' or ``CRE''). EPCA also requires the U.S. 
Department of Energy (``DOE'' ``the Department'') to periodically 
determine whether more stringent standards would be technologically 
feasible and economically justified, and would result in significant 
energy savings. In this notice of proposed rulemaking (``NOPR''), DOE 
proposes new and amended energy conservation standards for CRE, and 
also announces a public meeting to receive comment on these proposed 
standards and associated analyses and results.

DATES: 
    Comments: DOE will accept comments, data, and information regarding 
this NOPR no later than December 11, 2023.
    Comments regarding the likely competitive impact of the proposed 
standard should be sent to the Department of Justice contact listed in 
the ADDRESSES section on or before November 9, 2023.
    Meeting: DOE will hold a public meeting on Tuesday, November 7th, 
2023, from 10 a.m. to 4 p.m., in Washington, DC. This meeting will also 
be broadcast as a webinar.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 6E-069, 1000 Independence Avenue SW, 
Washington, DC 20585. See section VII of this document, ``Public 
Participation,'' for further details, including procedures for 
attending the in-person meeting, webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants.
    Interested persons are encouraged to submit comments using the 
Federal Rulemaking Portal at www.regulations.gov under docket number 
EERE-2017-BT-STD-0007. Follow the instructions for submitting comments. 
Alternatively, interested persons may submit comments, identified by 
docket number EERE-2017-BT-STD-0007, by any of the following methods:
    (1) Email: [email protected]. Include the docket number 
EERE-2017-BT-STD-0007 in the subject line of the message.
    (2) Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 287-1445. If possible, please submit all items on a compact disc 
(``CD''), in which case it is not necessary to include printed copies.
    (3) Hand Delivery/Courier: Appliance and Equipment Standards 
Program, U.S. Department of Energy, Building Technologies Office, 950 
L'Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 
287-1445. If possible, please submit all items on a CD, in which case 
it is not necessary to include printed copies.
    No telefacsimiles (``faxes'') will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section VII of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at www.regulations.gov. All documents in the 
docket are listed in the www.regulations.gov index. However, not all 
documents listed in the index may be publicly available, such as 
information that is exempt from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2017-BT-STD-0007. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket. See 
section VII of this document for information on how to submit comments 
through www.regulations.gov.
    EPCA requires the Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice Antitrust Division invites 
input from market participants and other interested persons with views 
on the likely competitive impact of the proposed standards. Interested 
persons may contact the Division at [email protected] on or 
before the date specified in the DATES section. Please indicate in the 
``Subject'' line of your email the title and Docket Number of this 
proposed rulemaking.

FOR FURTHER INFORMATION CONTACT: 
    Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 586-9870. Email: [email protected].
    Ms. Kristin Koernig, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-3593. Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for CRE
    C. Deviation From Process Rule
    1. Framework Document
    2. Public Comment Period
    3. Amended Test Procedures
III. General Discussion
    A. General Comments
    B. Scope of Coverage
    C. Test Procedure
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared To Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Equipment
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Equipment Classes and Definitions
    a. Current Equipment Classes
    b. New Definitions
    c. Equipment Class Modifications
    2. CRE Market
    3. Technology Options
    a. Compressors

[[Page 70197]]

    b. R-290
    c. Insulation
    d. Doors
    e. Evaporators and Condensers
    f. Fan Motors
    g. Defrost
    B. Screening Analysis
    1. Screened-Out Technologies
    a. Increased Insulation Thickness
    b. Vacuum-Insulated Panels
    c. Linear Compressors
    d. Air Curtain Design
    2. Remaining Technologies
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Baseline Energy Use
    b. Higher Efficiency Levels
    c. Engineering Spreadsheet Model
    d. Industry Trade Association Survey
    2. Cost Analysis
    3. Cost-Efficiency Results
    D. Markups Analysis
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Repair and Maintenance Costs
    6. Equipment Lifetime
    7. Residual Value
    8. Discount Rates
    9. Energy Efficiency Distribution in the No-New-Standards Case
    10. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Equipment Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs
    d. Manufacturer Markup Scenarios
    3. Manufacturer Interviews
    a. Changes to the Cabinet Structure
    b. Supply Chain Concerns
    4. Discussion of MIA Comments
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for CRE Standards
    2. Annualized Benefits and Costs of the Proposed Standards
    D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866, 13563, and 14094
    B. Review Under the Regulatory Flexibility Act
    1. Description of Reasons Why Action Is Being Considered
    2. Objectives of, and Legal Basis for, Rule
    3. Description on Estimated Number of Small Entities Regulated
    4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    5. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    6. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
VII. Public Participation
    A. Participation in the Public Meeting and Webinar
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    The Energy Policy and Conservation Act, Public Law 94-163, as 
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency 
of a number of consumer products and certain industrial equipment. (42 
U.S.C. 6291-6317) Title III, part C of EPCA established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes CRE, the subject of this proposed 
rulemaking.
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 
(December 27, 2020), which reflect the last statutory amendments 
that impact parts A and A-1 of EPCA.
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in a significant 
conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
    EPCA established standards for certain categories of CRE (42 U.S.C. 
6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to 
determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)). 
EPCA also provides that not later than 6 years after issuance of any 
final rule establishing or amending a standard, DOE must publish either 
a notice of determination that standards for the equipment do not need 
to be amended, or a notice of proposed rulemaking including new 
proposed energy conservation standards (proceeding to a final rule, as 
appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1))
    In accordance with these and other statutory provisions discussed 
in this document, DOE analyzed the benefits and burdens of six trial 
standard levels (``TSLs'') for CRE. The TSLs and their associated 
benefits and burdens are discussed in detail in sections V.A through 
V.C of this document. As discussed in section V.C, DOE has tentatively 
determined that TSL 5 represents the maximum improvement in energy 
efficiency that is technologically feasible and economically justified 
and to establish new energy conservation standards for covered 
equipment not yet subject to energy conservation standards. The 
proposed standards, which are expressed in maximum daily energy 
consumption (``MDEC''), are shown in table I.1. These proposed 
standards, if adopted, would apply to all CRE listed in table I.1 
manufactured in, or imported into, the United States on or after the 
date that is (1) 3 years after the date on which the final new and 
amended standards are published or (2) if the Secretary determines, by 
rule, that 3 years is inadequate, not later than 5 years after the date 
on which the final

[[Page 70198]]

rule is published. (42 U.S.C. 6313(c)(6)(C)).
    DOE notes that the U.S. Environmental Protection Agency (``EPA'') 
proposed refrigerant restrictions pursuant to the American Innovation 
and Manufacturing Act (``AIM Act'') \2\ affecting CRE in a NOPR 
published on December 15, 2022 (``December 2022 EPA NOPR''). 87 FR 
76738. The proposal would prohibit manufacture or import of such CRE 
starting January 1, 2025, and would ban sale, distribution, purchase, 
receipt, or export of such CRE starting January 1, 2026. Id. at 87 FR 
76809. See section IV.C.1.a of this document for more details. DOE 
understands that it would be beneficial to CRE equipment manufacturers 
to align the compliance date of any DOE amended or established 
standards as closely as possible with the refrigerant prohibition dates 
proposed by the December 2022 EPA NOPR. Therefore, DOE is proposing 
that the proposed standards, if adopted, would apply to all CRE listed 
in table I.1 manufactured in, or imported into, the United States on or 
after the date that is 3 years after the date on which the final new 
and amended standards are published.
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    \2\ Under subsection (i) of the AIM Act, entitled ``Technology 
Transitions,'' the EPA may by rule restrict the use of 
hydrofluorocarbons (``HFCs'') in sectors or subsectors where they 
are used. A person or entity may also petition EPA to promulgate 
such a rule. ``H.R.133--116th Congress (2019-2020): Consolidated 
Appropriations Act, 2021.'' Congress.gov, Library of Congress, 
December 27, 2020, available at www.congress.gov/bill/116thcongress/house-bill/133.

        Table I.1--Proposed Energy Conservation Standards for CRE
------------------------------------------------------------------------
                                                    Maximum daily energy
                  Equipment class                     consumption (kWh/
                                                            day)
------------------------------------------------------------------------
VOP.RC.H..........................................     0.31 x TDA + 1.99
VOP.RC.M..........................................     0.56 x TDA + 3.57
VOP.RC.L..........................................     2.04 x TDA + 6.36
VOP.RC.I..........................................     2.59 x TDA + 8.08
SVO.RC.H..........................................     0.32 x TDA + 1.55
SVO.RC.M..........................................     0.58 x TDA + 2.79
SVO.RC.L..........................................     2.04 x TDA + 6.36
SVO.RC.I..........................................     2.59 x TDA + 8.08
HZO.RC.H..........................................     0.19 x TDA + 1.56
HZO.RC.M..........................................     0.34 x TDA + 2.81
HZO.RC.L..........................................     0.54 x TDA + 6.81
HZO.RC.I..........................................     0.69 x TDA + 8.64
VCT.RC.H..........................................     0.07 x TDA + 0.97
VCT.RC.M..........................................    0.134 x TDA + 1.74
VCT.RC.L..........................................     0.47 x TDA + 2.51
VCT.RC.I..........................................     0.56 x TDA + 2.97
HCT.RC.M..........................................     0.16 x TDA + 0.13
HCT.RC.L..........................................     0.34 x TDA + 0.26
HCT.RC.I..........................................     0.38 x TDA + 0.29
VCS.RC.H..........................................       0.06 x V + 0.14
VCS.RC.M..........................................        0.1 x V + 0.26
VCS.RC.L..........................................       0.21 x V + 0.54
VCS.RC.I..........................................       0.25 x V + 0.63
HCS.RC.M..........................................        0.1 x V + 0.26
HCS.RC.L..........................................       0.21 x V + 0.54
HCS.RC.I..........................................       0.25 x V + 0.63
SOC.RC.H..........................................     0.22 x TDA + 0.05
SOC.RC.M..........................................      0.39 x TDA + 0.1
SOC.RC.L..........................................      0.83 x TDA + 0.2
SOC.RC.I..........................................     1.04 x TDA + 0.25
CB.RC.M...........................................       0.03 x V + 0.39
CB.RC.L...........................................       0.13 x V + 1.37
VOP.SC.H..........................................     0.69 x TDA + 1.94
VOP.SC.M..........................................     1.25 x TDA + 3.48
VOP.SC.L..........................................     3.29 x TDA + 9.15
VOP.SC.I..........................................    4.18 x TDA + 11.63
SVO.SC.H..........................................     0.65 x TDA + 1.77
SVO.SC.M..........................................     1.18 x TDA + 3.18
SVO.SC.L..........................................     3.25 x TDA + 8.78
SVO.SC.I..........................................    4.13 x TDA + 11.16
HZO.SC.H..........................................     0.27 x TDA + 2.06
HZO.SC.M..........................................     0.48 x TDA + 3.71
HZO.SC.L..........................................      1.48 x TDA + 5.5
HZO.SC.I..........................................     1.97 x TDA + 7.34
VCT.SC.H..........................................      0.053 x V + 0.85
VCT.SC.M..........................................      0.054 x V + 0.86
VCT.SC.L..........................................      0.234 x V + 2.38
VCT.SC.I..........................................       0.6 x TDA + 3.2
HCT.SC.M..........................................       0.06 x V + 0.37
HCT.SC.L..........................................       0.08 x V + 1.23
HCT.SC.I..........................................     0.34 x TDA + 0.43
VCS.SC.H..........................................     0.0082 x V + 0.21
VCS.SC.M..........................................       0.02 x V + 0.54
VCS.SC.L..........................................      0.155 x V + 0.97
VCS.SC.I..........................................       0.25 x V + 0.88
HCS.SC.M..........................................      0.022 x V + 0.41
HCS.SC.L..........................................      0.043 x V + 0.81
HCS.SC.I..........................................       0.31 x V + 0.81
SOC.SC.H..........................................     0.17 x TDA + 0.33
SOC.SC.M..........................................    0.304 x TDA + 0.59
SOC.SC.L..........................................       1.1 x TDA + 2.1
SOC.SC.I..........................................     1.53 x TDA + 0.36
CB.SC.M...........................................      0.049 x V + 0.54
CB.SC.L...........................................      0.180 x V + 1.92
PD.SC.M...........................................       0.11 x V + 0.81
VCT.RC.M.PT.......................................    0.139 x TDA + 1.81
VCT.SC.M.PT.......................................      0.056 x V + 0.86
VCT.SC.L.PT.......................................      0.243 x V + 2.47
VCS.SC.M.PT.......................................       0.02 x V + 0.56
VCS.SC.L.PT.......................................      0.161 x V + 1.01
VCT.RC.M.SD.......................................    0.143 x TDA + 1.86
VCT.SC.M.SD.......................................      0.058 x V + 0.86
VCT.RC.M.SDPT.....................................    0.149 x TDA + 1.93
VCT.SC.M.SDPT.....................................      0.060 x V + 0.86
VCT.RC.M.RI.......................................    0.140 x TDA + 1.83
VCT.SC.M.RI.......................................      0.057 x V + 0.86
VCS.SC.M.RI.......................................       0.02 x V + 0.57
VCS.SC.L.RI.......................................      0.162 x V + 1.02
VCT.RC.M.RT.......................................     0.146 x TDA + 1.9
VCT.SC.M.RT.......................................      0.059 x V + 0.86
VCS.SC.M.RT.......................................       0.02 x V + 0.59
VCS.SC.L.RT.......................................      0.169 x V + 1.06
HCS.SC.L.FA.......................................      0.052 x V + 0.97
------------------------------------------------------------------------
The equipment classes are separated by equipment family, condensing unit
  configuration, and operating temperature. Equipment Families: VOP--
  Vertical Open; SVO--Semi-Vertical Open; HZO--Horizontal Open; VCT--
  Vertical Closed Transparent; HCT--Horizontal Closed Transparent; VCS--
  Vertical Closed Solid; HCS--Horizontal Closed Solid; SOC--Service Over
  Counter; CB--Chef Base; PD--Pull Down. Condensing Unit Configurations:
  RC--Remote Condensing; SC--Self Contained. Operating Temperatures: H--
  High Temperature; M--Medium Temperature; L--Low Temperature; I--Ice
  Cream Temperature.


Table I.2--Description of Coefficients for Proposed Maximum Daily Energy
                      Consumption Standards for CRE
------------------------------------------------------------------------
       Unique design characteristic                 Abbreviation
------------------------------------------------------------------------
Pass-through Door........................  PT
Sliding Door.............................  SD
Sliding and Pass-through Doors...........  SDPT
Roll-in Door.............................  RI
Roll-through Door........................  RT
Forced Air Evaporator....................  FA
------------------------------------------------------------------------

    DOE requests comments on its proposal to require that the proposed 
standards, if adopted, would apply to all CRE listed in table I.1 
manufactured in, or imported into, the United States on or after the 
date that is 3 years after the date on which the final new and amended 
standards are published. More generally, DOE requests comment on 
whether it would be beneficial to CRE manufacturers to align the 
compliance date of any DOE amended or established standards as closely 
as possible with the refrigerant prohibition dates proposed by the 
December 2022 EPA NOPR.

A. Benefits and Costs to Consumers

    Table I.3 presents DOE's evaluation of the economic impacts of the 
proposed standards--represented by TSL 5--on consumers of CRE, as 
measured by the average life-cycle cost (``LCC'') savings and the 
simple payback period (``PBP'').\3\ The average LCC savings are 
positive for all equipment classes, and the PBP is less than the 
average lifetime for the vast majority of CRE equipment classes,\4\ 
which is estimated to be 13.9 years (see section IV.F.7 of this 
document).
---------------------------------------------------------------------------

    \3\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.F.8 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is measured relative 
to the baseline product (see section IV.F.9 of this document).
    \4\ For the HZO.RC.M equipment class, the estimated PBP at TSL 5 
is 13.8 years for an estimated average lifetime of approximately 13 
years.

[[Page 70199]]



     Table I.3--Impacts of Proposed Energy Conservation Standards on
                            Consumers of CRE
------------------------------------------------------------------------
                                       Average LCC       Simple payback
          Equipment class            savings (2022$)     period (years)
------------------------------------------------------------------------
CB.SC.L...........................             566.92                2.2
CB.SC.M...........................              44.90                5.0
HCS.SC.L..........................               7.77                5.1
HCS.SC.M..........................              84.89                1.8
HCT.SC.I..........................              55.03                7.1
HCT.SC.L *........................  .................  .................
HCT.SC.M *........................  .................  .................
HZO.RC.L..........................              46.57               13.0
HZO.RC.M..........................              40.29               13.8
HZO.SC.L..........................             841.89                2.8
HZO.SC.M..........................             199.91                5.2
SOC.RC.M..........................             929.51                3.3
SOC.SC.M..........................             698.37                5.4
SVO.RC.M..........................             406.59                7.3
SVO.SC.M..........................             602.17                4.3
VCS.SC.H..........................             162.47                3.7
VCS.SC.I..........................             486.70                3.4
VCS.SC.L..........................             260.73                3.2
VCS.SC.M..........................             128.81                4.1
VCT.RC.L..........................             331.04                6.4
VCT.RC.M..........................             133.62               10.9
VCT.SC.H *........................  .................  .................
VCT.SC.I..........................              77.46                8.3
VCT.SC.L..........................             120.34                5.8
VCT.SC.M..........................              82.53                7.6
VOP.RC.L..........................            1524.52                3.6
VOP.RC.M..........................             707.13                5.7
VOP.SC.M..........................             992.17                3.6
------------------------------------------------------------------------
* For these equipment classes, TSL 5 corresponds to efficiency level 0.

    DOE's analysis of the impacts of the proposed standards on 
consumers is described in section IV.F of this document.

B. Impact on Manufacturers \5\
---------------------------------------------------------------------------

    \5\ All monetary values in this document are expressed in 2022 
dollars.
---------------------------------------------------------------------------

    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the base year through the 
end of the analysis period (2023-2057). Using a real discount rate of 
10.0 percent, DOE estimates that the INPV for manufacturers of CRE in 
the case without new and amended standards is $3,286.4 million. Under 
the proposed standards, the change in INPV is estimated to range from -
4.8 percent to -0.9 percent, which is approximately -$159.3 million to 
-$30.9 million. In order to bring equipment into compliance with new 
and amended standards, it is estimated that the industry would incur 
total conversion costs of $226.4 million.\6\
---------------------------------------------------------------------------

    \6\ Conversion costs are incurred between the publication of the 
final rule (modeled as 2025) and the compliance year (modeled as 
2028) and are included in the change in INPV presented in this 
section.
---------------------------------------------------------------------------

    DOE's analysis of the impacts of the proposed standards on 
manufacturers is described in section IV.J of this document. The 
analytic results of the manufacturer impact analysis (``MIA'') are 
presented in section V.B.2 of this document.

C. National Benefits and Costs

    DOE's analyses indicate that the proposed energy conservation 
standards for CRE would save a significant amount of energy. Relative 
to the case without new and amended standards, the lifetime energy 
savings for CRE purchased in the 30-year period that begins in the 
anticipated year of compliance with the new and amended standards 
(2028-2057) amount to 3.11 quadrillion British thermal units (``Btu''), 
or quads.\7\ This represents a savings of 16.8 percent relative to the 
energy use of these equipment in the case without new or amended 
standards (referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------

    \7\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.H.2 of this document.
---------------------------------------------------------------------------

    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for CRE ranges from $2.4 billion (at 
a 7-percent discount rate) to $7.1 billion (at a 3-percent discount 
rate). This NPV expresses the estimated total value of future 
operating-cost savings minus the estimated increased equipment costs 
for CRE purchased in 2028-2057.
    In addition, the proposed standards for CRE are projected to yield 
significant environmental benefits. DOE estimates that the proposed 
standards would result in cumulative emission reductions (over the same 
period as for energy savings) of 55.8 million metric tons (``Mt'') \8\ 
of carbon dioxide (``CO2''), 17.1 thousand tons of sulfur 
dioxide (``SO2''), 104.2 thousand tons of nitrogen oxides 
(``NOX''), 472 thousand tons of methane 
(``CH4''), 0.54 thousand tons of nitrous oxide 
(``N2O''), and 0.12 tons of mercury (``Hg'').\9\
---------------------------------------------------------------------------

    \8\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \9\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the Inflation Reduction Act. See section IV.K of this 
document for further discussion of AEO2023 assumptions that effect 
air pollutant emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using four different estimates of the social 
cost of CO2 (``SC-

[[Page 70200]]

CO2''), the social cost of methane (``SC-CH4''), 
and the social cost of nitrous oxide (``SC-N2O''). Together 
these represent the social cost of GHG (``SC-GHG''). DOE used interim 
SC-GHG values (in terms of benefit per ton of GHG emissions avoided) 
developed by an Interagency Working Group on the Social Cost of 
Greenhouse Gases (``IWG'').\10\ The derivation of these values is 
discussed in section IV.L of this document. For presentational 
purposes, the climate benefits associated with the average SC-GHG at a 
3-percent discount rate are estimated to be $3.04 billion. DOE does not 
have a single central SC-GHG point estimate and it emphasizes the 
importance and value of considering the benefits calculated using all 
four sets of SC-GHG estimates.
---------------------------------------------------------------------------

    \10\ To monetize the benefits of reducing GHG emissions this 
analysis uses the interim estimates presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates Under Executive Order 13990 published in February 
2021 by the IWG. (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions using benefit per ton estimates 
from the Environmental Protection Agency,\11\ as discussed in section 
IV.L of this document. DOE estimated the present value of the health 
benefits would be $2.32 billion using a 7-percent discount rate, and 
$5.94 billion using a 3-percent discount rate.\12\ DOE is currently 
only monetizing health benefits from changes in ambient fine 
particulate matter (PM2.5) concentrations from two 
precursors (SO2 and NOX), and from changes in 
ambient ozone from one precursor (for NOX), but will 
continue to assess the ability to monetize other effects such as health 
benefits from reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------

    \11\ U.S. EPA. Estimating the Benefit per Ton of Reducing 
Directly Emitted PM2.5, PM2.5 Precursors and 
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
    \12\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

    Table I.4 summarizes the monetized benefits and costs expected to 
result from the proposed standards for CRE. There are other important 
unquantified effects, including certain unquantified climate benefits, 
unquantified public health benefits from the reduction of toxic air 
pollutants and other emissions, unquantified energy security benefits, 
and distributional effects, among others.

  Table I.4--Summary of Monetized Benefits and Costs of Proposed Energy
                 Conservation Standards for CRE (TSL 5)
------------------------------------------------------------------------
                                                         Billion 2022$
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................               12.8
Climate Benefits *...................................               3.04
Health Benefits **...................................               5.94
                                                      ------------------
    Total Benefits [dagger]..........................               21.8
Consumer Incremental Equipment Costs.................               5.74
                                                      ------------------
    Net Benefits.....................................               16.1
Change in Producer Cashflow (INPV[Dagger][Dagger])...      (0.16)-(0.03)
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................               5.55
Climate Benefits * (3% discount rate)................               3.04
Health Benefits **...................................               2.32
------------------------------------------------------------------------
    Total Benefits [dagger]..........................               10.9
Consumer Incremental Equipment Costs.................               3.17
                                                      ------------------
    Net Benefits.....................................               7.74
Change in Producer Cashflow (INPV[Dagger][Dagger])...      (0.16)-(0.03)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE
  shipped in 2028-2057. These results include consumer, climate, and
  health benefits that accrue after 2057 from the equipment shipped in
  2028-2057.
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5-percent, 3-percent, and 5-percent
  discount rates; 95th percentile at 3-percent discount rate) (see
  section IV.L of this document). Together these represent the global SC-
  GHG. For presentational purposes of this table, the climate benefits
  associated with the average SC-GHG at a 3-percent discount rate are
  shown; however, DOE emphasizes the importance and value of considering
  the benefits calculated using all four sets of SC-GHG estimates. To
  monetize the benefits of reducing GHG emissions, this analysis uses
  the interim estimates presented in the Technical Support Document:
  Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
  Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
  health benefits that can be quantified and monetized. For presentation
  purposes, total and net benefits for both the 3-percent and 7-percent
  cases are presented using the average SC-GHG with 3-percent discount
  rate.

[[Page 70201]]

 
[Dagger][Dagger] Operating Cost Savings are calculated based on the life
  cycle costs analysis and national impact analysis as discussed in
  detail below. See sections IV.F and IV.H of this document. DOE's NIA
  includes all impacts (both costs and benefits) along the distribution
  chain beginning with the increased costs to the manufacturer to
  manufacture the equipment and ending with the increase in price
  experienced by the consumer. DOE also separately conducts a detailed
  analysis on the impacts on manufacturers (the MIA). See section IV.J.
  In the detailed MIA, DOE models manufacturers' pricing decisions based
  on assumptions regarding investments, conversion costs, cashflow, and
  margins. The MIA produces a range of impacts, which is the rule's
  expected impact on the INPV. The change in INPV is the present value
  of all changes in industry cash flow, including changes in production
  costs, capital expenditures, and manufacturer profit margins. Change
  in INPV is calculated using the industry weighted average cost of
  capital value of 10.0 percent that is estimated in the MIA (see
  chapter 12 of the NOPR TSD for a complete description of the industry
  weighted average cost of capital). For commercial refrigeration
  equipment, those values are -$159 million to -$31 million. DOE
  accounts for that range of likely impacts in analyzing whether a TSL
  is economically justified. See section V.C of this document. DOE is
  presenting the range of impacts to the INPV under two manufacturer
  markup scenarios: the Preservation of Gross Margin scenario, which is
  the manufacturer markup scenario used in the calculation of Consumer
  Operating Cost Savings in this table, and the Preservation of
  Operating Profit scenario, where DOE assumed manufacturers would not
  be able to increase per-unit operating profit in proportion to
  increases in manufacturer production costs. DOE includes the range of
  estimated INPV in the above table, drawing on the MIA explained
  further in section IV.J of this document, to provide additional
  context for assessing the estimated impacts of this proposal to
  society, including potential changes in production and consumption,
  which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE
  were to include the INPV into the net benefit calculation for this
  proposed rule, the net benefits would range from $15.94 billion to
  $16.07 billion at 3-percent discount rate and would range from $7.58
  billion to $7.71 billion at 7-percent discount rate. Parentheses ()
  indicate negative values. DOE seeks comment on this approach.

    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in equipment purchase prices and 
installation costs, plus (3) the value of climate and health benefits 
of emission reductions, all annualized.\13\
---------------------------------------------------------------------------

    \13\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2023, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030), and then discounted the present value from each year 
to 2023. Using the present value, DOE then calculated the fixed 
annual payment over a 30-year period, starting in the compliance 
year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered equipment and are measured for the lifetime of CRE shipped in 
2028-2057. The benefits associated with reduced emissions achieved as a 
result of the proposed standards are also calculated based on the 
lifetime of CRE shipped in 2028-2057. Total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social 
costs with 3-percent discount rate. Estimates of SC-GHG values are 
presented for all four discount rates in section V.L of this document.
    Table I.5 presents the total estimated monetized benefits and costs 
associated with the proposed standard, expressed in terms of annualized 
values. The results under the primary estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $334.6 million per year in increased equipment 
costs, while the estimated annual benefits are $586.1 million in 
reduced equipment operating costs, $174.4 million in climate benefits, 
and $245.5 million in health benefits. In this case, the net benefit 
would amount to $671.4 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $329.8 million per year in 
increased equipment costs, while the estimated annual benefits are 
$737.7 million in reduced operating costs, $174.4 million in climate 
benefits, and $341.3 million in health benefits. In this case, the net 
benefit would amount to $923.5 million per year.

  Table I.5--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for CRE (TSL 5)
----------------------------------------------------------------------------------------------------------------
                                                                                Million 2022$/year
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           737.7           714.3           773.7
Climate Benefits *..............................................           174.4           173.5           178.9
Health Benefits **..............................................           341.4           339.7           349.9
                                                                 -----------------------------------------------
    Total Benefits [dagger].....................................          1253.3          1227.5          1302.8
Consumer Incremental Equipment Costs............................           329.8           337.9           328.3
                                                                 -----------------------------------------------
    Net Benefits................................................           923.5           889.5           974.1
Change in Producer Cashflow (INPV [Dagger][Dagger]).............        (17)-(3)        (17)-(3)        (17)-(3)
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           586.1           569.3           613.0
Climate Benefits * (3% discount rate)...........................           174.4           173.5           178.9
Health Benefits **..............................................           245.5           244.7           250.9
    Total Benefits [dagger].....................................          1006.0           987.5          1042.8
Consumer Incremental Equipment Costs............................           334.6           341.7           333.5
    Net Benefits................................................           671.4           645.7           709.3

[[Page 70202]]

 
Change in Producer Cashflow (INPV [Dagger][Dagger]).............        (17)-(3)        (17)-(3)        (17)-(3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE shipped in 2028-2057. These results include
  benefits to consumers which accrue after 2057 from the equipment shipped in 2028-2057. The Primary, Low Net
  Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference
  case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental
  equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Net
  Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive
  projected price trends are explained in sections V.F.1 and V.H.3 of this document. Note that the Benefits and
  Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
  at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate, and it
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
  impact analysis as discussed in detail below. See sections IV.F and IV.H. DOE's NIA includes all impacts (both
  costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to
  manufacture the equipment and ending with the increase in price experienced by the consumer. DOE also
  separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J. In the
  detailed MIA, DOE models manufacturers' pricing decisions based on assumptions regarding investments,
  conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected
  impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including
  changes in production costs, capital expenditures, and manufacturer profit margins. The annualized change in
  INPV is calculated using the industry weighted average cost of capital value of 10.0 percent that is estimated
  in the MIA (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of
  capital). For commercial refrigeration equipment, those values are -$16.65 million to -$3.23 million. DOE
  accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section
  V.C. DOE is presenting the range of impacts to the INPV under two manufacturer markup scenarios: the
  Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of
  Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit scenario, where DOE
  assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in
  manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above
  table, drawing on the MIA explained further in section IV.J, to provide additional context for assessing the
  estimated impacts of this proposal to society, including potential changes in production and consumption,
  which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to include the INPV into the
  annualized net benefit calculation for this proposed rule, the annualized net benefits would range from $906.8
  million to $920.3 million at 3-percent discount rate and would range from $654.7 million to $668.2 million at
  7-percent discount rate. Parentheses ( ) indicate negative values. DOE seeks comment on this approach.

    DOE's analysis of the national impacts of the proposed standards is 
described in sections V.H, V.K, and V.L of this document.

D. Conclusion

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. Specifically, with regards to 
technological feasibility, design options used to achieve these 
standard levels are already commercially available for all equipment 
classes covered by this proposal. As for economic justification, DOE's 
analysis shows that the benefits of the proposed standard exceed, to a 
great extent, the burdens of the proposed standards.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for CRE is $334.6 million per year in increased 
equipment costs, while the estimated annual benefits are $586.1 million 
in reduced equipment operating costs, $174.4 million in climate 
benefits and $245.5 million in health benefits. The net benefit amounts 
to $671.4 million per year.
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\14\ For 
example, some covered products and equipment have substantial energy 
consumption occur during periods of peak energy demand. The impacts of 
these equipment on the energy infrastructure can be more pronounced 
than equipment with relatively constant demand. Accordingly, DOE 
evaluates the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

    \14\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
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    As previously mentioned, the standards are projected to result in 
estimated national energy savings of 3.11 quad FFC, the equivalent of 
the primary annual energy use of 33 million homes. The NPV of consumer 
benefit for these projected energy savings is $2.38 billion using a 
discount rate of 7 percent, and $7.10 billion using a discount rate of 
3 percent. The cumulative emissions reductions associated with these 
energy savings are 55.8 Mt of CO2, 17.1 thousand tons of 
SO2, 104.2 thousand tons of NOX, 0.12 tons of Hg, 
472.0 thousand tons of CH4, and 0.54 thousand tons of 
N2O. The estimated monetary value of the climate benefits 
from reduced GHG emissions (associated with the average SC-GHG at a 3-
percent discount rate) is $ 3.04 billion. The estimated monetary value 
of the health benefits from reduced SO2 and NOX 
emissions is $ 2.32 billion using a 7-percent discount rate and $ 5.94 
billion using a 3-percent discount rate. As such, DOE has initially 
determined the energy savings from the proposed standard levels are 
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B). A more 
detailed discussion of the basis for these tentative conclusions is 
contained in the

[[Page 70203]]

remainder of this document and the accompanying technical support 
document (``NOPR TSD'').\15\
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    \15\ The NOPR TSD is available in the docket for this rulemaking 
at www.regulations.gov/docket/EERE-2017-BT-STD-0007.
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    DOE also considered more stringent energy efficiency levels as 
potential standards and is still considering them in this rulemaking. 
However, DOE has tentatively concluded that the potential burdens of 
the more stringent energy efficiency levels would outweigh the 
projected benefits.
    Based on consideration of the public comments DOE receives in 
response to this document and related information collected and 
analyzed during the course of this rulemaking effort, DOE may adopt 
energy efficiency levels presented in this document that are either 
higher or lower than the proposed standards, or some combination of 
level(s) that incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposed rule, as well as some of the relevant 
historical background related to the establishment of standards for 
CRE.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer equipment and certain industrial equipment. Title III, part 
C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. This equipment 
includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E))
    EPCA established standards for certain categories of CRE (42 U.S.C. 
6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to 
determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B))
    EPCA further provides that, not later than 6 years after the 
issuance of any final rule establishing or amending a standard, DOE 
must publish either a notice of determination that standards for the 
equipment do not need to be amended, or a NOPR including new proposed 
energy conservation standards (proceeding to a final rule, as 
appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1))
    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316; 42 U.S.C. 6296).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 
EPCA. (See 42 U.S.C. 6316(a) and 42 U.S.C. 6316(e) (applying the 
preemption waiver provisions of 42 U.S.C. 6297))
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of each covered equipment. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) 
Manufacturers of covered equipment must use the Federal test procedures 
as the basis for: (1) certifying to DOE that their equipment complies 
with the applicable energy conservation standards adopted pursuant to 
EPCA (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)), and (2) making 
representations about the efficiency of that equipment (42 U.S.C. 
6314(d)). Similarly, DOE must use these test procedures to determine 
whether the equipment complies with relevant standards promulgated 
under EPCA. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) The DOE test 
procedures for CRE appear at title 10 of the Code of Federal 
Regulations (``CFR'') part 431, subpart C, appendix B (``appendix B'').
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including CRE. Any new or 
amended standard for a covered equipment must be designed to achieve 
the maximum improvement in energy efficiency that the Secretary of 
Energy determines is technologically feasible and economically 
justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any 
standard that would not result in the significant conservation of 
energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3))
    Moreover, DOE may not prescribe a standard: (1) for certain 
equipment, including CRE, if no test procedure has been established for 
the equipment, or (2) if DOE determines by rule that the standard is 
not technologically feasible or economically justified. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed 
standard is economically justified, DOE must determine whether the 
benefits of the standard exceed its burdens. (42 U.S.C. 6316(e)(1); 42 
U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after 
receiving comments on the proposed standard, and by considering, to the 
greatest extent practicable, the following seven statutory factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the equipment subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment that are likely to result from the standard;
    (3) The total projected amount of energy (or as applicable, water) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
equipment likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') considers 
relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing an equipment complying with an 
energy conservation standard level will be less than three times the 
value of the energy savings during the first year that the consumer 
will receive as a result of the standard, as calculated under the 
applicable test procedure. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(iii))
    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered 
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(1)) Also, the 
Secretary

[[Page 70204]]

may not prescribe an amended or new standard if interested persons have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States in any 
covered equipment type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for a covered equipment that has two or 
more subcategories. DOE must specify a different standard level for a 
type or class of equipment that has the same function or intended use, 
if DOE determines that equipment within such group: (A) consume a 
different kind of energy from that consumed by other covered equipment 
within such type (or class); or (B) have a capacity or other 
performance-related feature which other equipment within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)(1)) In determining 
whether a performance-related feature justifies a different standard 
for a group of equipment, DOE must consider such factors as the utility 
to the consumer of the feature and other factors DOE deems appropriate. 
(Id.) Any rule prescribing such a standard must include an explanation 
of the basis on which such higher or lower level was established. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)(2))

B. Background

1. Current Standards
    On March 28, 2014, DOE published a final rule in the Federal 
Register that prescribed the current energy conservation standards for 
CRE manufactured on and after March 27, 2017 (``March 2014 Final 
Rule''). 79 FR 17725. These standards are set forth in DOE's 
regulations at 10 CFR 431.66(e).
    For CRE with two or more compartments (i.e., hybrid refrigerators, 
hybrid freezers, hybrid refrigerator-freezers, and non-hybrid 
refrigerator-freezers), 10 CFR 431.66(e)(2) specifies that the maximum 
daily energy consumption for each model shall be the sum of the 
applicable standard for each of the compartments, as specified in 10 
CFR 431.66(e)(1). For wedge cases, 10 CFR 431.66(e)(3) specifies 
instructions to comply with the applicable standards specified in 10 
CFR 431.66(e)(1).\16\ Certain exclusions to the standards at 10 CFR 
431.66(e)(1) are specified at 10 CFR 431.66(f) (i.e., the energy 
conservation standards do not apply to salad bars, buffet tables, and 
chef bases or griddle stands).
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    \16\ A wedge case is a CRE that forms the transition between two 
regularly shaped display cases. 10 CFR 431.62.
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2. History of Standards Rulemaking for CRE
    On July 16, 2021, DOE published a request for information (``RFI'') 
in the Federal Register to undertake an early assessment review for 
amended energy conservation standards for CRE to determine whether to 
amend applicable energy conservation standards for this equipment. 
(``July 2021 RFI'') 86 FR 37708. Specifically, through the published 
notice and request for information, DOE sought data and information 
that could enable the agency to determine whether amended energy 
conservation standards would: (1) result in a significant savings of 
energy; (2) be technologically feasible; and (3) be economically 
justified. Id.
    On June 28, 2022, DOE published in the Federal Register a 
notification of the availability of a preliminary technical support 
document for CRE (``June 2022 Preliminary Analysis''). 87 FR 38296. In 
that notification, DOE sought comment on the analytical framework, 
models, and tools that DOE used to evaluate potential standards for 
CRE, the results of preliminary analyses performed, and the potential 
energy conservation standard levels derived from these analyses, which 
DOE presented in the accompanying Preliminary TSD (``June 2022 
Preliminary TSD'').\17\ Id. DOE held a public meeting related to the 
June 2022 Preliminary Analysis on August 8, 2022 (hereafter, the 
``August 8, 2022, public meeting'').
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    \17\ The June 2022 Preliminary TSD is available in the docket 
for this rulemaking at www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
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    DOE received comments in response to the June 2022 Preliminary 
Analysis from the interested parties listed in table II.1.

             Table II.1--Written Comments Received in Response to the June 2022 Preliminary Analysis
----------------------------------------------------------------------------------------------------------------
                                                                       Comment No. in
               Commenter(s)                       Abbreviation           the docket          Commenter type
----------------------------------------------------------------------------------------------------------------
AHT Cooling Systems......................  AHT.......................              48  Manufacturer.
Air-Conditioning, Heating and              AHRI......................              46  Trade Association.
 Refrigeration Institute.
Appliance Standards Awareness Project,     Joint Commenters..........              39  Efficiency Organizations.
 American Council for an Energy-Efficient
 Economy, and the Natural Resources
 Defense Council.
California Investor-Owned Utilities......  CA IOUs...................              43  Energy Utilities.
Continental Refrigerator.................  Continental...............              38  Manufacturer.
Hillphoenix..............................  Hillphoenix...............            * 42  Manufacturer.
Hussmann Corporation.....................  Hussmann..................              45  Manufacturer.
ITW-Food Equipment Group, LLC dba          ITW.......................              41  Manufacturer.
 Traulsen/Kairak.
National Automatic Merchandising           NAMA......................              37  Trade Association.
 Association.
North American Association of Food         NAFEM.....................              40  Trade Association.
 Equipment Manufacturers.
Northwest Energy Efficiency Alliance.....  NEEA......................              47  Efficiency Organizations.
Zero Zone, Inc...........................  Zero Zone.................              44  Manufacturer.
----------------------------------------------------------------------------------------------------------------
* Hillphoenix requested that its response be treated as Confidential Business Information.

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\18\ 
Where interested parties have provided written comments that are 
substantively consistent with their oral comments provided during the 
August 8, 2022, public meeting, DOE cites the written comments 
throughout this document. DOE did not identify any oral comments 
provided during the August 8, 2022, public

[[Page 70205]]

meeting, that are substantively different from written comments 
provided by interested parties.
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    \18\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for CRE. (Docket No. EERE-2017-BT-STD-
0007, which is maintained at www.regulations.gov). The references 
are arranged as follows: (commenter name, comment docket ID number, 
page of that document).
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C. Deviation From Process Rule

    In accordance with 10 CFR 431.4 and section 3(a) of 10 CFR part 
430, subpart C, appendix A (``Process Rule''), DOE notes that it is 
deviating from the provision in the Process Rule regarding the pre-NOPR 
and NOPR stages for an energy conservation standard rulemaking.
1. Framework Document
    Section 6(a)(2) of the Process Rule states that if DOE determines 
it is appropriate to proceed with a rulemaking, the preliminary stages 
of a rulemaking to issue or amend an energy conservation standard that 
DOE will undertake will be a framework document and preliminary 
analysis, or an advance notice of proposed rulemaking. While DOE 
published a preliminary analysis for this rulemaking (see 87 FR 38296), 
DOE did not publish a framework document in conjunction with the 
preliminary analysis. DOE notes, however, that chapter 2 of the June 
2022 Preliminary TSD that accompanied the June 2022 Preliminary 
Analysis--entitled Analytical Framework, Comments from Interested 
Parties, and DOE Responses--describes the general analytical framework 
that DOE used in evaluating and developing potential new and amended 
energy conservation standards.\19\ As such, publication of a separate 
framework document would be largely redundant of chapter 2 of the June 
2022 Preliminary TSD.
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    \19\ The June 2022 Preliminary TSD is available in the docket 
for this rulemaking at www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
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2. Public Comment Period
    Section 6(f)(2) of the Process Rule specifies that the length of 
the public comment period for a NOPR will be not less than 75 calendar 
days. For this NOPR, DOE is instead providing a 60-day comment period, 
consistent with EPCA requirements. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(p).
    As noted previously, DOE requested comment in the July 2021 RFI on 
the analysis conducted in support of the last energy conservation 
standard rulemaking for CRE and provided a 45-day comment period. (See 
86 FR 37708). In its June 2022 Preliminary Analysis and accompanying 
TSD, for which DOE provided a 60-day comment period, DOE's analysis 
remained largely the same as the analysis conducted in support of the 
last energy conservation standards rulemaking for CRE. DOE requested 
comment in the June 2022 Preliminary Analysis on the analysis conducted 
in support of this current rulemaking. In this NOPR, DOE incorporated 
the most recent data inputs but largely relied on many of the same 
analytical assumptions and approaches used in the June 2022 Preliminary 
Analysis. Given that the analysis presented in this NOPR remains 
largely the same as the June 2022 Preliminary Analysis, and in light of 
the 45-day comment period DOE has already provided with the July 2021 
RFI and the 60-day comment period DOE has already provided with its 
June 2022 Preliminary Analysis, DOE has determined that a 60-day 
comment period is appropriate and will provide interested parties with 
a meaningful opportunity to comment on the proposed rule.
3. Amended Test Procedures
    Section 8(d)(1) of the Process Rule specifies that test procedure 
rulemakings establishing methodologies used to evaluate proposed energy 
conservation standards will be finalized prior to publication of a NOPR 
proposing new or amended energy conservation standards. Additionally, 
new test procedures and amended test procedures that impact measured 
energy use or efficiency will be finalized at least 180 days prior to 
the close of the comment period for (1) a NOPR proposing new or amended 
energy conservation standards or (2) a notice of proposed determination 
that standards do not need to be amended.
    On September 26, 2023, DOE published a Federal Register notice 
amending and establishing test procedures for CRE (``September 2023 
Test Procedure Final Rule''). 88 FR 66152. DOE determined that the 
amendments adopted in the September 2023 Test Procedure Final Rule will 
not alter the measured efficiency of CRE currently subject to energy 
conservation standards. 88 FR 66152, 66156. However, the measured 
energy use for chef bases or griddle stands and high-temperature 
refrigerators would likely change as a result of the September 2023 
Test Procedure Final Rule. Nonetheless, the September 2023 Test 
Procedure Final Rule aligns with the requirements that the CRE industry 
has developed or proposed. Specifically, AHRI 1200-2023 \20\ was 
approved by the American National Standards Institute on June 12, 2023, 
and addendum B to ASHRAE 72-2022 \21\ was proposed on September 15, 
2023. AHRI 1200-2023 specifies that high-temperature refrigerators 
shall be tested at an integrated average temperature of 55 [deg]F 
 2.0 [deg]F, consistent with the September 2023 Test 
Procedure Final Rule. The addendum B to ASHRAE 72-2022 proposal 
specifies a dry-bulb temperature of 86.0 [deg]F with a tolerance for 
the average over test period of  1.8 [deg]F and a tolerance 
for the individual measurements of  3.6 [deg]F; wet-bulb 
temperature of 73.7 [deg]F with a tolerance for the average over test 
period of  1.8 [deg]F and a tolerance for the individual 
measurements of  3.6 [deg]F; and radiant heat temperature 
of greater than or equal to 81.0 [deg]F, consistent with the September 
2023 Test Procedure Final Rule. Both AHRI 1200-2023 and the proposed 
addendum B to ASHRAE 72-2022 were developed by the CRE industry over 
several years, and the September 2023 Test Procedure Final Rule aligns 
with the provisions included in both test standards for chef bases or 
griddle stands and high-temperature refrigerators. As such, DOE finds 
it appropriate to deviate from the requirement that the amended test 
procedures for chef bases or griddle stands and high-temperature 
refrigerators be finalized at least 180 days prior to the close of the 
comment period for this NOPR.
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    \20\ AHRI Standard 1200-2023 (I-P), 2023 Standard for 
Performance Rating of Commercial Refrigerated Display Merchandisers 
and Storage Cabinets, copyright 2023.
    \21\ Proposed Addendum b to Standard 72-2022, Method of Testing 
Open and Closed Commercial Refrigerators and Freezers. See https://osr.ashrae.org/Online-Comment-Database/ShowDoc2/Table/DocumentAttachments/FileName/4130-72-2022%20Addendum%20b.21_072823_chair_approved.pdf/download/false.
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III. General Discussion

    DOE developed this proposal after considering oral and written 
comments, data, and information from interested parties that represent 
a variety of interests. The following discussion addresses issues 
raised by these commenters.

A. General Comments

    This section summarizes general comments received from interested 
parties regarding rulemaking timing and process.
    NEEA generally supported the process outlined in the June 2022 
Preliminary Analysis. (NEEA, No. 47 at p. 5) NEEA commented that DOE's 
analysis in the June 2022 Preliminary TSD showed a strong standard for 
CRE equipment would be economically justified and deliver significant 
energy savings to the Nation. (Id.) As a result, NEEA recommended DOE 
adopt increased efficiency standards for existing classes

[[Page 70206]]

of CRE and continue to push the industry toward more-efficient products 
and greater energy savings across all CRE equipment classes via 
technical, market, and economic analyses. (Id.) NEEA recommended 
further that DOE consider energy-saving technologies in CRE and that 
DOE collect additional data for analysis. (Id.) NEEA stated that they 
believe further analysis of specific features would help establish 
stronger standards, especially when the analysis improved 
representativeness of equipment in the market and appropriately 
characterized energy use and energy savings. (Id.) NEEA stated it 
recognized CRE as a complex energy conservation standard with many 
combinations of equipment and a variety of use cases and commended DOE 
for the depth of analysis and concerted efforts to incorporate new 
classes and utilize available data for analysis. (Id.) NEEA commented 
that DOE's analysis demonstrated significant cost-effective savings, 
and NEEA recommended DOE adopt increased energy conservation standards 
for existing CRE equipment classes as supported by the analysis in the 
June 2022 Preliminary TSD. (Id.)
    Other commenters expressed concern with the rulemaking timeline. 
NAFEM commented that it had previously requested a comment period 
extension, which was denied, and requested to see the CRE engineering 
spreadsheets, which were provided on August 18, 2022, leaving an 11-
calendar-day review period. (NAFEM, No. 40 at p. 2) NAFEM acknowledged 
that DOE had initiated multiple energy efficiency rulemakings on a 
compressed schedule, but NAFEM stated that this did not serve as 
justification for neglecting to provide important information and 
adequate time for review. (Id.) NAFEM disagreed with DOE's 
justification that the comment period could be shortened due to 
similarities between the June 2022 Preliminary TSD and its 2014 
counterpart. (Id.) NAFEM commented that many of its concerns regarding 
the July 2021 RFI were dismissed or remain unresolved in the June 2022 
Preliminary TSD. (Id.) Furthermore, NAFEM commented that DOE's claim 
was inaccurate that the engineering spreadsheets ``do not contain any 
new or additional information that was not already published with the 
TSD in June.'' (Id.) NAFEM added that it would have had two additional 
weeks to analyze the spreadsheets if DOE had adhered to the appendix A 
Process Rule permitting no less than a 75-day comment period. (Id. at 
pp. 2-3) NAFEM concluded that it was unable to provide a complete list 
of errors or concerns due to insufficient time and presented its 
comments as representative, but not exhaustive, of the types of 
problems and inaccuracies contained in the spreadsheets. (Id. at p. 3)
    Hussmann commented that it supports the comments provided by AHRI 
and NAFEM and noted that it and other commenters were denied extensions 
to the August 29, 2022, comment deadline. (Hussmann, No. 45 at p. 1). 
Hussmann stated that it hopes discussions with DOE will improve this 
rulemaking. (Id.)
    NAMA shared its view that, despite this CRE rulemaking being one of 
the most complex DOE has undertaken within EERE, DOE reduced the time 
for public comment. (NAMA, No. 37 at p. 4) NAMA additionally commented 
that DOE released the engineering spreadsheets on August 8, 2022, 
leaving only 7 working days for review prior to the comment receipt 
deadline, and that this limited notice violated all elements of the 
notice and comment in the Administrative Procedure Act.\22\ (Id.) NAMA 
added that the United States has admonished other countries for similar 
regulatory actions. (Id.)
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    \22\ See 5 U.S.C. 551-559.
---------------------------------------------------------------------------

    ITW commented that the June 2022 Preliminary TSD made clear the 
importance of the CRE engineering spreadsheet, prompting ITW to request 
that DOE grant access to the spreadsheet. (ITW, No. 41 at p. 1). ITW 
stated that DOE provided the spreadsheet but did not extend the comment 
period to allow adequate time for review of information ITW considered 
critical. (Id.)
    In response to comments regarding timing and the 2022 Engineering 
Spreadsheet Related to the Preliminary Analysis for Commercial 
Refrigerators, Refrigerator-Freezers and Freezers Standards 
(``engineering spreadsheet''), DOE published this document in the 
rulemaking docket on August 18, 2022 after commenters requested its 
publication. This practice was consistent with prior rulemakings 
conducted for CRE, such as when DOE did not include an engineering 
spreadsheet with the notice of availability of preliminary technical 
support document published on March 30, 2011 (``March 2011 Preliminary 
Analysis''). Instead, DOE published the engineering spreadsheet with 
its NOPR on September 11, 2013. Similarly, in this rulemaking, DOE did 
not publish the engineering spreadsheet used for the preliminary 
analysis at the time of the June 2022 Preliminary Analysis publication. 
Consistent with past practice, DOE is publishing the engineering 
spreadsheet that supports this NOPR analysis along with this NOPR.
    With respect to comments regarding the comment-period, DOE 
discusses deviations from the Process Rule, and the justifications for 
such deviations, in section II.C of this NOPR.
    In response to comments regarding the Administrative Procedure Act, 
5 U.S.C. 553 provides requirements for a notice of proposed rulemaking. 
The June 2022 Preliminary Analysis was not a notice of proposed 
rulemaking as it was a notification that announced the availability of 
the preliminary analysis DOE had conducted for purposes of evaluating 
the need for amended energy conservation standards for CRE. However, 
DOE provided notice of that preliminary analysis and sought comment on 
the analysis. See 87 FR 38296. The June 2022 Preliminary Analysis was 
in compliance with EPCA and the Process Rule.
    Other commenters had general comments regarding the June 2022 
Preliminary Analysis, the accompanying June 2022 Preliminary TSD, and 
the rulemaking process. NAMA commented that the June 2022 Preliminary 
TSD is flawed and should be re-written, with CRE categories split into 
ranges by size. (NAMA, No. 37 at p. 8) NAMA stated that if the 
engineering analysis were to be incorrect, then the technology 
screening would be incorrect also, which means the baseline machine 
design was incorrect and the rest of the report could not be used. 
(Id.) NAMA recommended that DOE begin the process again, using machines 
that are currently available on the market as its baseline. (Id.) NAMA 
also recommended that DOE use low-GWP refrigerants and incorporate most 
of the design options shown in table 5.8.10 of NAMA's written 
submission, along with current costs. (Id.) NAMA added that if this 
approach is not possible, DOE should acknowledge the costs already 
incurred by manufacturers to meet the goals established by the Biden 
Administration to reduce global warming. (Id.)
    NAMA commented that while it appreciated DOE's willingness to hold 
a hearing on the proposed energy efficiency standards levels, it 
believed that the August 8, 2022, public meeting was rushed and 
abruptly terminated before all questions were answered. (NAMA, No. 37 
at p. 4) NAMA requested that DOE return to ``in-person'' meetings to 
support dialogue on these subjects. (Id.)

[[Page 70207]]

    NAMA commented that the market dynamic was currently distorted due 
to the COVID-19 pandemic and a lack of available equipment, making 
efficiency a secondary priority to availability. (Id. at p. 16)
    NAMA recommended that DOE should cease the rulemaking on this 
category of CRE until after the beverage vending machines rulemaking is 
in the final rule stage and until the test procedure for CRE equipment 
is finalized. (Id. at p. 17) NAMA commented that due to the fact that 
the rulemakings for beverage vending machines and CRE affect the same 
manufacturers, overlapping comment periods result in result increased 
complexity to the responses. (Id.) NAMA also stated that a final test 
procedure should be established before setting future standard levels, 
and that the Process Rule requires DOE to finish the test procedure 
rulemaking before engaging in cost and energy calculations for a new 
standard. (Id.) NAMA further commented that DOE has requested comments 
on the CRE test procedure at the same time as it requested comments on 
the NOPR for future standards levels. (Id.) NAMA stated that, it is 
illogical to set future standards levels because the final test 
procedure for CRE is not yet known. (Id.)
    Finally, NAMA commented that it does not believe the June 2022 
Preliminary TSD or other documents for this rulemaking reflect the 
state of the CRE industry in 2022 or the projections for equipment 
manufactured after this rule becomes effective. (Id. at p. 19) NAMA 
requested that DOE conduct a complete revision of all energy efficiency 
changes, the base case, the standards cases, and the economic analysis 
after the test procedure final standard is issued and the Cooperative 
Research and Development Agreement (``CRADA'') \23\ extension is 
complete. (Id.) NAMA stated its belief that accurate information will 
show that a new set of standards levels for the classes of CRE covered 
by NAMA is unwarranted. (Id.) NAMA commented that the payback period 
will grow significantly when the net present value is re-calculated 
using accurate numbers. (Id.) NAMA recommended allowing manufacturers 
to complete the change to hydrocarbon refrigerants, which NAMA asserted 
would have up to 10 times the environmental impact of any new DOE 
standards. (Id.)
---------------------------------------------------------------------------

    \23\ Most of the activities of the 2019-2021 CRADA were directed 
toward reduction of the risk involved in a possible leak situation 
if it were ever to occur. ORNL did extensive testing on leak 
scenarios and proposed new methods to reduce the risk from such a 
leak in a public space.
---------------------------------------------------------------------------

    In response to NAMA's comments, DOE is maintaining the current 
equipment class structure in this NOPR, except for the new equipment 
classes which are proposed and discussed in section IV.A.1.c of this 
document. In accordance with section 6(d)(3) of the Process Rule, DOE 
may make any necessary changes to the engineering analysis or the 
candidate standard levels based on consideration of the comments 
received. DOE notes that it considered CRE that are currently available 
on the market when developing the NOPR engineering analysis. DOE 
acknowledges and accounts for the December 2022 EPA NOPR in this NOPR 
analysis. As noted in section I of this document, the December 2022 EPA 
NOPR would prohibit manufacture or import of such CRE starting January 
1, 2025, and would ban sale, distribution, purchase, receipt, or export 
of such CRE starting January 1, 2026. 87 FR 76809. The December 2022 
EPA NOPR compliance date would occur prior to the expected the 
compliance date of any DOE amended or established standards (i.e., on 
or after the date that is 3 years after the date on which the final new 
and amended standards are published). Thus, the transition to 
refrigerants in compliance with the December 2022 EPA NOPR (including 
hydrocarbon refrigerants) would have already occurred prior to the 
expected the compliance date of any DOE amended or established 
standards. Additionally, DOE considered the December 2022 EPA NOPR when 
developing the NOPR engineering analysis baseline as discussed in 
section IV.C.1.a of this document. In the no-new-standards case, DOE 
incorporated the cost of refrigerant transition as discussed in section 
IV.J.2.c of this document. DOE also revised the components considered 
in the engineering analysis baseline in this NOPR as discussed in 
section IV.C.1.a of this document and updated the costs as discussed in 
section IV.C.2. of this document. In response to market distortions, 
DOE used the latest shipments, market shares, and MPCs based on 
manufacturer feedback. Supply chain constraints are discussed in 
section V.B.2.c of this document.
    In response to the comments about the August 8, 2022, public 
meeting, DOE notes that it responded to all questions asked during the 
August 8, 2022, public meeting.\24\ Similar to the process with the 
June 2022 Preliminary Analysis, DOE welcomes comments in response to 
this NOPR and participation in the public meeting, and DOE provides 
information on public participation in response to this NOPR in section 
VII. of this document.
---------------------------------------------------------------------------

    \24\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0049.
---------------------------------------------------------------------------

    DOE notes that section 8(d)(1) of the Process Rule specifies that 
test procedure rulemakings establishing methodologies used to evaluate 
proposed energy conservation standards will be finalized prior to 
publication of a NOPR proposing new and amended energy conservation 
standards. Additionally, energy conservation standards for refrigerated 
bottled or canned beverage vending machines are separate from CRE, and 
evaluated through a separate rulemaking process, and are located at 10 
CFR 431.296.
    AHT stated that there is a high risk of eliminating the entire 
equipment class if DOE were to further increase restrictions for 
horizontal closed transparent self-contained low temperature 
(``HCT.SC.L''), horizontal closed transparent self-contained medium 
temperature (``HCT.SC.M''), horizontal closed transparent self-
contained ice-cream freezer (``HCT.SC.I''), and vertical closed 
transparent self-contained low temperature (``VCT.SC.L.'') equipment 
classes and recommended that DOE maintain the current regulatory 
framework in design options and efficiency standards for these 
equipment classes. (AHT, No. 48 at p. 6)
    In response to AHT's comments, DOE has revised the components 
considered in the engineering analysis baseline in this NOPR as 
discussed in section IV.C.1.a of this document and presented the 
results of this NOPR analysis in section V of this document. DOE also 
notes that it observed CRE models currently available and rated to the 
DOE Compliance Certification Database (``CCD'') that currently comply 
with the proposed energy conservation standards in this NOPR for the 
equipment classes listed in AHT's comment.

B. Scope of Coverage

    This NOPR covers those commercial refrigeration equipment that meet 
the definition of ``commercial refrigerators, refrigerator-freezers, 
and freezers,'' as codified at 10 CFR 431.62.
    A ``commercial refrigerator, freezer, and refrigerator-freezer'' 
means refrigeration equipment that--(1) is not consumer equipment (as 
defined in Sec.  430.2); (2) is not designed and marketed exclusively 
for medical, scientific, or research purposes; (3) operates at a 
chilled, frozen, combination chilled and frozen, or variable 
temperature; (4) displays or stores merchandise and other perishable

[[Page 70208]]

materials horizontally, semi-vertically, or vertically; (5) has 
transparent or solid doors, sliding or hinged doors, a combination of 
hinged, sliding, transparent, or solid doors, or no doors; (6) is 
designed for pull-down temperature applications or holding temperature 
applications; and (7) is connected to a self-contained condensing unit 
or to a remote condensing unit. 10 CFR 431.62.
    However, this NOPR does not include some types of commercial 
refrigerators, refrigerator-freezers, and freezers that meet the 
definition at 10 CFR 431.62. These include blast chillers, blast 
freezers, buffet tables or preparation tables, and mobile refrigerated 
cabinets.
    See section IV.A.1 of this document for discussion of the equipment 
classes analyzed in this NOPR.

C. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered equipment must use these test procedures to 
certify to DOE that their equipment complies with energy conservation 
standards and to quantify the efficiency of their equipment. (42 U.S.C. 
6314(d); 42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)) DOE's current energy 
conservation standards for CRE are expressed in terms of maximum daily 
energy consumption as measured using appendix B. (See 10 CFR 431.66(e))

D. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, DOE conducts a 
screening analysis based on information gathered on all current 
technology options and prototype designs that could improve the 
efficiency of the products or equipment that are the subject of the 
rulemaking. As the first step in such an analysis, DOE develops a list 
of technology options for consideration in consultation with 
manufacturers, design engineers, and other interested parties. DOE then 
determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially-available equipment or in working prototypes to be 
technologically feasible. 10 CFR 431.4; sections 6(b)(3)(i) and 7(b)(1) 
of the Process Rule.
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on equipment utility or availability; (3) adverse impacts on 
health or safety, and (4) unique-pathway proprietary technologies. 10 
CFR 431.4; sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of the Process 
Rule. Section IV.B of this document discusses the results of the 
screening analysis for CRE, particularly the designs DOE considered, 
those it screened out, and those that are the basis for the standards 
considered in this rulemaking. For further details on the screening 
analysis for this rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a new or amended standard for a type or 
class of covered equipment, it must determine the maximum improvement 
in energy efficiency or maximum reduction in energy use that is 
technologically feasible for such equipment. (42 U.S.C. 6316(e)(1); 42 
U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE 
determined the maximum technologically feasible (``max-tech'') 
improvements in energy efficiency for CRE, using the design parameters 
for the most efficient equipment available on the market or in working 
prototypes. The max-tech levels that DOE determined for this rulemaking 
are described in section IV.C.1.b of this proposed rule and in chapter 
5 of the NOPR TSD.

E. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from application of the 
TSL to CRE purchased in the 30-year period that begins in the year 2028 
with the proposed standards (2028-2057).\25\ The savings are measured 
over the entire lifetime of CRE purchased in the previous 30-year 
period. DOE quantified the energy savings attributable to each TSL as 
the difference in energy consumption between each standards case and 
the no-new-standards case. The no-new-standards case represents a 
projection of energy consumption that reflects how the market for 
equipment would likely evolve in the absence of new and amended energy 
conservation standards.
---------------------------------------------------------------------------

    \25\ Each TSL is composed of specific efficiency levels for each 
product class. The TSLs considered for this NOPR are described in 
section V.A of this document. DOE conducted a sensitivity analysis 
that considers impacts for products shipped in a 9-year period. Note 
that the analysis does not consider benefits and costs resulting 
from the December 2022 EPA NOPR.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet model 
to estimate national energy savings (``NES'') from potential amended 
and new standards for CRE. The NIA spreadsheet model (described in 
section IV.H of this document) calculates energy savings in terms of 
site energy, which is the energy directly consumed by equipment at the 
locations where they are used. For electricity, DOE reports national 
energy savings in terms of primary energy savings, which is the savings 
in the energy that is used to generate and transmit the site 
electricity. DOE also calculates NES in terms of FFC energy savings. 
The FFC metric includes the energy consumed in extracting, processing, 
and transporting primary fuels (i.e., coal, natural gas, petroleum 
fuels), and thus presents a more complete picture of the impacts of 
energy conservation standards.\26\ DOE's approach is based on the 
calculation of an FFC multiplier for each of the energy types used by 
covered products or equipment. For more information on FFC energy 
savings, see section IV.H.1 of this document.
---------------------------------------------------------------------------

    \26\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (August 18, 2011), as 
amended at 77 FR 49701 (August 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standards for covered equipment, DOE 
must determine that such action would result in significant energy 
savings. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\27\ For 
example, some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these equipment on the energy infrastructure can be more pronounced 
than equipment with relatively constant demand. Accordingly, DOE 
evaluates the significance of energy savings on a case-by-case basis, 
taking into account the significance of cumulative FFC national energy 
savings, the cumulative FFC emissions reductions, and the need to

[[Page 70209]]

confront the global climate crisis, among other factors.
---------------------------------------------------------------------------

    \27\ The numeric threshold for determining the significance of 
energy savings established in a final rule published on February 14, 
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule 
published on December 12, 2021 (86 FR 70892, 70906).
---------------------------------------------------------------------------

    As stated, the standard levels proposed in this document are 
projected to result in national energy savings of 3.11 quad FFC, the 
equivalent of the primary annual energy use of 33 million homes. Based 
on the amount of FFC savings, the corresponding reduction in emissions, 
and the need to confront the global climate crisis, DOE has initially 
determined the energy savings from the proposed standard levels are 
``significant'' within the meaning of 42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(3)(B).

F. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has 
addressed each of those seven factors in this proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential new or amended standard 
on manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period. The industry-wide impacts analyzed include (1) INPV, which 
values the industry on the basis of expected future cash flows, (2) 
cash flows by year, (3) changes in revenue and income, and (4) other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new and amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national net present value of 
the consumer costs and benefits expected to result from particular 
standards. DOE also evaluates the impacts of potential standards on 
identifiable subgroups of consumers that may be affected 
disproportionately by a standard; for CRE, DOE evaluated the impacts on 
small businesses.
    DOE requests comment on the impacts to CRE manufacturers and 
consumers from the Inflation Reduction Act (IRA) and the Infrastructure 
Investment and Jobs Act (IIJA).
b. Savings in Operating Costs Compared To Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered equipment in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered equipment 
that are likely to result from a standard. (42 U.S.C. 6316(e)(1); 42 
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC 
and PBP analysis.
    The LCC is the sum of the purchase price of equipment (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the equipment. The LCC analysis requires a variety of inputs, such as 
equipment prices, equipment energy consumption, energy prices, 
maintenance and repair costs, equipment lifetime, and discount rates 
appropriate for consumers. To account for uncertainty and variability 
in specific inputs, such as equipment lifetime and discount rate, DOE 
uses a distribution of values, with probabilities attached to each 
value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered equipment in the first full year of compliance 
with new and amended standards. The LCC savings for the considered 
efficiency levels are calculated relative to the case that reflects 
projected market trends in the absence of new and amended standards. 
DOE's LCC and PBP analysis is discussed in further detail in section 
IV.F of this document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(III)) As discussed in section III.E of this document, 
DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Equipment
    In establishing equipment classes and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards 
proposed in this document would not reduce the utility or performance 
of the equipment under consideration in this proposed rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a proposed standard. (42 U.S.C. 6316(e)(1); 42 
U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to 
determine the impact, if any, of any lessening of competition likely to 
result from a proposed standard and to transmit such determination to 
the Secretary within 60 days of the publication of a proposed rule, 
together with an analysis of the nature and extent of the impact. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a 
copy of this proposed rule to the Attorney General with a request that 
the Department of Justice (``DOJ'') provide its determination on this 
issue. DOE will publish and respond to the Attorney General's 
determination in the final rule. DOE invites comment from the public 
regarding the competitive impacts that are likely to result from this 
proposed rule. In addition, stakeholders may also provide comments 
separately to DOJ regarding these potential impacts. See the ADDRESSES 
section for information to send comments to DOJ.

[[Page 70210]]

f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards 
are likely to provide improvements to the security and reliability of 
the Nation's energy system. Reductions in the demand for electricity 
also may result in reduced costs for maintaining the reliability of the 
Nation's electricity system. DOE conducts a utility impact analysis to 
estimate how standards may affect the Nation's needed power generation 
capacity, as discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The proposed standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and GHGs associated with energy production and use. DOE 
conducts an emissions analysis to estimate how potential standards may 
affect these emissions, as discussed in section IV.K of this document; 
the estimated emissions impacts are reported in section V.B.6 of this 
document. DOE also estimates the economic value of emissions reductions 
resulting from the considered TSLs, as discussed in section IV.L of 
this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant 
information regarding economic justification that does not fit into the 
other categories described previously, DOE could consider such 
information under ``other factors.''
2. Rebuttable Presumption
    EPCA creates a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
equipment that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. (42 U.S.C. 
6316(e(1)); 42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses 
generate values used to calculate the effects that proposed energy 
conservation standards would have on the payback period for consumers. 
These analyses include, but are not limited to, the 3-year payback 
period contemplated under the rebuttable-presumption test. In addition, 
DOE routinely conducts an economic analysis that considers the full 
range of impacts to consumers, manufacturers, the Nation, and the 
environment, as required under 42 U.S.C. 6316(e)(1) and 42 U.S.C. 
6295(o)(2)(B)(i). The results of this analysis serve as the basis for 
DOE's evaluation of the economic justification for a potential standard 
level (thereby supporting or rebutting the results of any preliminary 
determination of economic justification). The rebuttable presumption 
payback calculation is discussed in section V.B.1.c of this proposed 
rule.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to CRE. Separate subsections address each 
component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards proposed in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended and new 
energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipments projections and 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential energy 
conservation standards. DOE uses the third spreadsheet tool, the 
Government Regulatory Impact Model (``GRIM''), to assess manufacturer 
impacts of potential standards. These three spreadsheet tools are 
available on the DOE website for this proposed rulemaking: 
www.regulations.gov/docket/EERE-2017-BT-STD-0007. Additionally, DOE 
used output from the 2023 version of the Energy Information 
Administration's (``EIA's'') Annual Energy Outlook (``AEO''), a widely 
known energy projection for the United States, for the emissions and 
utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the equipment 
concerned, including the purpose of the equipment, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the equipment. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly-available 
information. The subjects addressed in the market and technology 
assessment for this rulemaking include (1) a determination of the scope 
of the rulemaking and equipment classes, (2) manufacturers and industry 
structure, (3) existing efficiency programs, (4) shipments information, 
(5) market and industry trends; and (6) technologies or design options 
that could improve the energy efficiency of CRE. The key findings of 
DOE's market assessment are summarized in the following sections. See 
chapter 3 of the NOPR TSD for further discussion of the market and 
technology assessment.
1. Equipment Classes and Definitions
    When evaluating and establishing energy conservation standards, DOE 
may establish separate standards for a group of covered equipment 
(i.e., establish a separate equipment class) if DOE determines that 
separate standards are justified based on the type of energy used, or 
if DOE determines that a product's capacity or other performance-
related feature justifies a different standard. (42 U.S.C. 6316(e)(1); 
42 U.S.C. 6295(q)) In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such 
factors as the utility of the feature to the consumer and other factors 
DOE determines are appropriate. (Id.)
a. Current Equipment Classes
    DOE currently separates CRE into 49 equipment classes, which are 
categorized according to the following performance-related features: 
(1) operating temperature--refrigerator (>=32 [deg]F), freezer (<32 
[deg]F), or ice-cream freezer (<=-5 [deg]F); (2) presence of doors--
open or closed; (3) door type--solid or transparent; (4) condensing 
unit--remote or self-contained; (5) configuration--horizontal, 
vertical, semi-vertical, or service over counter; (6) temperature pull-
down capability. Definitions supporting the equipment classes are as 
follows:
    Closed solid means equipment with doors, and in which more than 75 
percent of the outer surface area of all doors on a unit are not 
transparent.
    Closed transparent means equipment with doors, and in which 25 
percent or more of the outer surface area of all doors on the unit are 
transparent.
    Commercial freezer means a unit of commercial refrigeration 
equipment in which all refrigerated compartments in the unit are 
capable of operating below 32 [deg]F (2 [deg]F).

[[Page 70211]]

    Commercial refrigerator means a unit of commercial refrigeration 
equipment in which all refrigerated compartments in the unit are 
capable of operating at or above 32 [deg]F (2 [deg]F).
    Commercial refrigerator, freezer, and refrigerator-freezer means 
refrigeration equipment that--(1) Is not a consumer product (as defined 
in Sec.  430.2);
    (2) Is not designed and marketed exclusively for medical, 
scientific, or research purposes;
    (3) Operates at a chilled, frozen, combination chilled and frozen, 
or variable temperature;
    (4) Displays or stores merchandise and other perishable materials 
horizontally, semi-vertically, or vertically;
    (5) Has transparent or solid doors, sliding or hinged doors, a 
combination of hinged, sliding, transparent, or solid doors, or no 
doors;
    (6) Is designed for pull-down temperature applications or holding 
temperature applications; and
    (7) Is connected to a self-contained condensing unit or to a remote 
condensing unit.
    Door means a movable panel that separates the interior volume of a 
unit of commercial refrigeration equipment from the ambient environment 
and is designed to facilitate access to the refrigerated space for the 
purpose of loading and unloading product. This includes hinged doors, 
sliding doors, and drawers. This does not include night curtains.
    Holding temperature application means a use of commercial 
refrigeration equipment other than a pull-down temperature application, 
except a blast chiller or freezer.
    Horizontal Closed means equipment with hinged or sliding doors and 
a door angle greater than or equal to 45[deg].
    Horizontal Open means equipment without doors and an air-curtain 
angle greater than or equal to 80[deg] from the vertical.
    Ice-cream freezer means:
    (1) Prior to the compliance date(s) of any amended energy 
conservation standard(s) issued after January 1, 2023 for ice-cream 
freezers, a commercial freezer that is capable of an operating 
temperature at or below -5.0 [deg]F and that the manufacturer designs, 
markets, or intends specifically for the storing, displaying, or 
dispensing of ice cream or other frozen desserts; or
    (2) Upon the compliance date(s) of any amended energy conservation 
standard(s) issued after January 1, 2023 for ice-cream freezers, a 
commercial freezer that is capable of an operating temperature at or 
below -13.0 [deg]F and that the manufacturer designs, markets, or 
intends specifically for the storing, displaying, or dispensing of ice 
cream or other frozen desserts.
    Pull-down temperature application means a commercial refrigerator 
with doors that, when fully loaded with 12 ounce beverage cans at 90 
degrees F, can cool those beverages to an average stable temperature of 
38 degrees F in 12 hours or less.
    Remote condensing unit means a factory-made assembly of 
refrigerating components designed to compress and liquefy a specific 
refrigerant that is remotely located from the refrigerated equipment 
and consists of 1 or more refrigerant compressors, refrigerant 
condensers, condenser fans and motors, and factory supplied 
accessories.
    Self-contained condensing unit means a factory-made assembly of 
refrigerating components designed to compress and liquefy a specific 
refrigerant that is an integral part of the refrigerated equipment and 
consists of 1 or more refrigerant compressors, refrigerant condensers, 
condenser fans and motors, and factory supplied accessories.
    Semivertical open means equipment without doors and an air-curtain 
angle greater than or equal to 10[deg] and less than 80[deg] from the 
vertical.
    Service over counter means equipment that has sliding or hinged 
doors in the back intended for use by sales personnel, with glass or 
other transparent material in the front for displaying merchandise, and 
that has a height not greater than 66 inches and is intended to serve 
as a counter for transactions between sales personnel and customers.
    Transparent means greater than or equal to 45-percent light 
transmittance, as determined in accordance with the ASTM Standard E 
1084-86 (Reapproved 2009), at normal incidence and in the intended 
direction of viewing.
    Vertical Closed means equipment with hinged or sliding doors and a 
door angle less than 45[deg].
    Vertical Open means equipment without doors and an air-curtain 
angle greater than or equal to 0[deg] and less than 10[deg] from the 
vertical.
    10 CFR 431.62.
    On March 28, 2014, DOE published in the Federal Register the March 
2014 Final Rule that established the current equipment classes and 
corresponding standards for CRE. 79 FR 17725. DOE currently sets forth 
energy conservation standards and relevant definitions for CRE 
equipment classes at 10 CFR 431.66 and 10 CFR 431.62, respectively. 
Table IV.1 shows the current CRE equipment classes and standards.

                                    Table IV.1--Current CRE Equipment Classes
----------------------------------------------------------------------------------------------------------------
                                                    Operating                              Maximum daily energy
Condensing unit configuration  Equipment family    temperature       Equipment class      consumption (kilowatt-
                                                    ([deg]F)           designation           hours per day) *
----------------------------------------------------------------------------------------------------------------
Remote Condensing (RC).......  Vertical Open               >=32  VOP.RC.M..............        0.64 x TDA + 4.07
                                (VOP).                      <32  VOP.RC.L..............         2.2 x TDA + 6.85
                                                           <=-5  VOP.RC.I..............         2.79 x TDA + 8.7
                               Semivertical                >=32  SVO.RC.M..............        0.66 x TDA + 3.18
                                Open (SVO).                 <32  SVO.RC.L..............         2.2 x TDA + 6.85
                                                           <=-5  SVO.RC.I..............         2.79 x TDA + 8.7
                               Horizontal Open             >=32  HZO.RC.M..............        0.35 x TDA + 2.88
                                (HZO).                      <32  HZO.RC.L..............        0.55 x TDA + 6.88
                                                           <=-5  HZO.RC.I..............         0.7 x TDA + 8.74
                               Vertical Closed             >=32  VCT.RC.M..............        0.15 x TDA + 1.95
                                Transparent                 <32  VCT.RC.L..............        0.49 x TDA + 2.61
                                (VCT).
                                                           <=-5  VCT.RC.I..............        0.58 x TDA + 3.05
                               Horizontal                  >=32  HCT.RC.M..............        0.16 x TDA + 0.13
                                Closed                      <32  HCT.RC.L..............        0.34 x TDA + 0.26
                                Transparent
                                (HCT).
                                                           <=-5  HCT.RC.I..............         0.4 x TDA + 0.31
                               Vertical Closed             >=32  VCS.RC.M..............           0.1 x V + 0.26
                                Solid (``VCS'').            <32  VCS.RC.L..............          0.21 x V + 0.54

[[Page 70212]]

 
                                                           <=-5  VCS.RC.I..............          0.25 x V + 0.63
                               Horizontal                  >=32  HCS.RC.M..............           0.1 x V + 0.26
                                Closed Solid                <32  HCS.RC.L..............          0.21 x V + 0.54
                                (HCS).
                                                           <=-5  HCS.RC.I..............          0.25 x V + 0.63
                               Service Over                >=32  SOC.RC.M..............        0.44 x TDA + 0.11
                                Counter (SOC).              <32  SOC.RC.L..............        0.93 x TDA + 0.22
                                                           <=-5  SOC.RC.I..............        1.09 x TDA + 0.26
Self-Contained (SC)..........  Vertical Open               >=32  VOP.SC.M..............        1.69 x TDA + 4.71
                                (VOP).                      <32  VOP.SC.L..............       4.25 x TDA + 11.82
                                                           <=-5  VOP.SC.I..............        5.4 x TDA + 15.02
                               Semivertical                >=32  SVO.SC.M..............         1.7 x TDA + 4.59
                                Open (SVO).                 <32  SVO.SC.L..............       4.26 x TDA + 11.51
                                                           <=-5  SVO.SC.I..............       5.41 x TDA + 14.63
                               Horizontal Open             >=32  HZO.SC.M..............        0.72 x TDA + 5.55
                                (HZO).                      <32  HZO.SC.L..............         1.9 x TDA + 7.08
                                                           <=-5  HZO.SC.I..............           2.42 x TDA + 9
                               Vertical Closed             >=32  VCT.SC.M..............           0.1 x V + 0.86
                                Transparent                 <32  VCT.SC.L..............          0.29 x V + 2.95
                                (VCT).
                                                           <=-5  VCT.SC.I..............        0.62 x TDA + 3.29
                               Vertical Closed             >=32  VCS.SC.M..............          0.05 x V + 1.36
                                Solid (VCS).                <32  VCS.SC.L..............          0.22 x V + 1.38
                                                           <=-5  VCS.SC.I..............          0.34 x V + 0.88
                               Horizontal                  >=32  HCT.SC.M..............          0.06 x V + 0.37
                                Closed                      <32  HCT.SC.L..............          0.08 x V + 1.23
                                Transparent
                                (HCT).
                                                           <=-5  HCT.SC.I..............        0.56 x TDA + 0.43
                               Horizontal                  >=32  HCS.SC.M..............          0.05 x V + 0.91
                                Closed Solid                <32  HCS.SC.L..............          0.06 x V + 1.12
                                (HCS).
                                                           <=-5  HCS.SC.I..............          0.34 x V + 0.88
                               Service Over                >=32  SOC.SC.M..............           0.52 x TDA + 1
                                Counter (SOC).              <32  SOC.SC.L..............          1.1 x TDA + 2.1
                                                           <=-5  SOC.SC.I..............        1.53 x TDA + 0.36
                               Pull-Down (PD)..            >=32  PD.SC.M...............          0.11 x V + 0.81
----------------------------------------------------------------------------------------------------------------
* The term ``V'' means the chilled or frozen compartment volume (ft\3\) as defined in the Association of Home
  Appliance Manufacturers (``AHAM'') Standard HRF 1-2008. The term ``TDA'' means the total display area (ft\2\)
  of the case, as defined in Air-Conditioning, Heating, and Refrigeration Institute (``AHRI'') Standard 1200-
  2006.

b. New Definitions
    In the June 2022 Preliminary TSD, DOE sought comment on whether 
updates to the existing equipment class structure are appropriate. In 
response, ITW commented that DOE failed to recognize that manufacturers 
might use other options to produce cabinets with increased heat loads 
due to their physical features (other than those required by a simple 
reach-in refrigerator), citing the following applications as examples: 
(1) pass-through refrigerators--cabinets with doors on both sides, 
providing access to stored items from either side; (2) roll-in 
refrigerators--cabinets with ramps and door sweeps that allow for 
loading of bakery carts; and (3) roll-through refrigerators--cabinets 
with ramps and door sweeps on both sides that allow for bakery carts to 
move in and out from one side to the other. (ITW, No. 41 at p. 33)
    NAFEM stated that it and other commenters recommended separating 
forced-air and cold-wall refrigeration systems into different 
categories in response to the July 2021 RFI, yet it appeared that DOE 
deferred making a decision until a future proposed rule. (NAFEM, No. 40 
at p. 3)
    Continental commented that DOE should provide separate equipment 
classes and standard levels to segregate forced-air from cold-wall 
models, as well as roll-in from reach-in models, and pass-through from 
non-pass-through models, because these equipment types have 
differentiating characteristics that impact energy consumption, and 
separate energy standard levels are needed to avoid weighting standards 
in an unfair manner. (Continental, No. 38 at p. 2)
    In response to commenter's suggestions and after a review of 
similar terms defined by the California Code of Regulations,\28\ DOE is 
proposing to define the terms ``cold-wall evaporator,'' ``forced-air 
evaporator,'' ``pass-through doors,'' ``roll-in door,'' ``roll-through 
doors,'' and ``sliding door'' as follows:
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    \28\ See https://govt.westlaw.com/calregs/Document/I7AE76FC19E3011EDA9D5EB8195EB4110?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default
)&bhcp=1.
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    Cold-wall evaporator means an evaporator that comprises a portion 
or all of the commercial refrigerator, freezer, and refrigerator 
freezer cabinet's interior surface that transfers heat through means 
other than fan-forced convection.
    Forced-air evaporator means an evaporator that employs the use of 
fan-forced convection to transfer heat within the commercial 
refrigerator, freezer, and refrigerator freezer cabinet.

[[Page 70213]]

    Pass-through doors means doors located on both the front and rear 
of the commercial refrigerator, freezer, and refrigerator freezer.
    Roll-in door means a door that includes a door sweep to seal the 
bottom of the door and may include a ramp that allows wheeled racks of 
product to be rolled into the commercial refrigerator, freezer, and 
refrigerator freezer.
    Roll-through doors means doors located on both the front and rear 
of the commercial refrigerator, freezer, and refrigerator freezer, that 
includes a door sweep to seal the bottom of the door and may include a 
ramp that allows wheeled racks of product to be rolled into and through 
the commercial refrigerator, freezer, and refrigerator freezer.
    Sliding door means a door that opens when a portion of the door 
moves in a direction generally parallel to its surface.
    In addition to proposing to define the terms ``cold-wall 
evaporator,'' ``forced-air evaporator,'' ``pass-through doors,'' 
``roll-in door,'' ``roll-through doors,'' and ``sliding door,'' DOE is 
proposing to allow certain equipment classes that contain CRE with 
forced-air evaporators, CRE with pass-through doors, CRE with roll-in 
doors, CRE with roll-through doors, and CRE with sliding doors to use a 
higher amount of energy use than the proposed standards, if the 
standard has been proposed to be amended for an equipment class, while 
also complying with EPCA's ``anti-backsliding'' provision. This 
proposal recognizes the unique utility and different energy use 
characteristics of certain types of CRE. DOE discusses these unique 
utility and different energy use characteristics in further detail in 
section IV.C.1.a.
    DOE has also reviewed the current definitions for CRE at 10 CFR 
431.62 and is proposing to revise the definition for ``rating 
temperature'' to update the reference to the required integrated 
average temperature (``IAT'') or lowest application product temperature 
(``LAPT''), as applicable, as follows:
    Rating temperature means the integrated average temperature a unit 
must maintain during testing, as determined in accordance with section 
2.1. or section 2.2. of appendix B to subpart C of part 431, as 
applicable.
    DOE requests comment on the proposed definitions for ``cold-wall 
evaporator,'' ``forced-air evaporator,'' ``pass-through doors,'' 
``roll-in door,'' ``roll-through doors,'' ``sliding door,'' and 
``rating temperature.''
c. Equipment Class Modifications
    In the June 2022 Preliminary TSD, DOE had initially determined that 
additional equipment classes may be appropriate to address certain CRE 
available on the market. Specifically, DOE initially determined to 
split several commercial refrigerator equipment classes and establish 
separate classes for high-temperature refrigerators. Also, DOE 
initially determined to establish standards for chef bases or griddle 
stands with operating temperatures of >=32 [deg]F or <32 [deg]F (10 CFR 
431.66(f) currently excludes chef bases or griddle stands from energy 
conservation standards). See chapter 3 of the June 2022 Preliminary TSD 
for additional details.
    In the September 2023 Test Procedure Final Rule, DOE established 
and amended definitions and test procedures for high-temperature 
refrigerators, medium-temperature refrigerators, and chef bases or 
griddle stands. 88 FR 66152, 66154-66155. Specifically, DOE established 
definitions for ``high-temperature refrigerators'' and ``medium-
temperature refrigerators,'' amended the definition for ``chef bases or 
griddle stands,'' and incorporated by reference AHRI Standard 1200-2023 
(I-P), which provides a IAT of 55 [deg]F 2.0 [deg]F for 
which high-temperature refrigerators may be tested. Id. DOE also 
established a definition for ``low-temperature freezers'' and amended 
the definition for ``ice-cream freezers.'' Id. The newly established 
and amended definitions in the test procedure final rule are as 
follows.
    Chef base or griddle stand means commercial refrigeration equipment 
that has a maximum height of 32 inches, including any legs or casters, 
and that is designed and marketed for the express purpose of having a 
griddle or other cooking appliance placed on top of it that is capable 
of reaching temperatures hot enough to cook food.
    High-temperature refrigerator means a commercial refrigerator that 
is not capable of an operating temperature at or below 40.0 [deg]F.
    Medium-temperature refrigerator means a commercial refrigerator 
that is capable of an operating temperature at or below 40.0 [deg]F.
    Ice-cream freezer means:
    (1) Prior to the compliance date(s) of any amended energy 
conservation standard(s) issued after January 1, 2023 for ice-cream 
freezers, a commercial freezer that is capable of an operating 
temperature at or below -5.0 [deg]F and that the manufacturer designs, 
markets, or intends specifically for the storing, displaying, or 
dispensing of ice cream or other frozen desserts; or
    (2) Upon the compliance date(s) of any amended energy conservation 
standard(s) issued after January 1, 2023 for ice-cream freezers, a 
commercial freezer that is capable of an operating temperature at or 
below -13.0 [deg]F and that the manufacturer designs, markets, or 
intends specifically for the storing, displaying, or dispensing of ice 
cream or other frozen desserts.
    Low-temperature freezer means a commercial freezer that is not an 
ice-cream freezer.

    88 FR 66152, 66223-66224.
    Based on CRE models certified to DOE's Compliance Certification 
Management System (``CCMS'') under the LAPT designation for commercial 
refrigerators, DOE has tentatively determined that high-temperature 
refrigerators can be categorized under the self-contained and remote 
condensing unit configurations and under the vertical closed 
transparent (``VCT''), vertical closed solid (``VCS''), service over 
counter (``SOC''), vertical open (``VOP''), semi-vertical open 
(``SVO''), and horizontal open (``HZO'') equipment families. For these 
equipment families with high-temperature equipment, DOE proposes to 
sub-categorize them as high-temperature refrigerators (operating 
temperature greater than 40.0 [deg]F) and medium-temperature 
refrigerators (operating temperature greater than or equal to 32.0 
[deg]F and less than or equal to 40.0 [deg]F). DOE proposes to maintain 
the categorization of commercial refrigerator (operating temperature 
greater than or equal to 32.0 [deg]F) for the remaining equipment 
families (i.e., any horizontal closed transparent (``HCT''), horizontal 
closed solid (``HCS''), chef bases (``CB''), or pull-down (``PD'') 
equipment that operates above 40 [deg]F, if commercialized, would be 
considered a ``commercial refrigerator'' and required to comply with 
the ``medium-temperature refrigerator'' standard when tested at the 
LAPT). For this NOPR, DOE has directly analyzed high temperature 
refrigerators in the self-contained condensing unit configuration for 
the VCT and VCS equipment families.
    DOE has also tentatively determined that chef bases or griddle 
stands can be categorized under the self-contained condensing unit 
configuration and the >=32 [deg]F or <32 [deg]F operating temperatures 
(i.e., commercial refrigerator or low-temperature freezer, 
respectively).

[[Page 70214]]

    Accordingly, DOE is considering potential equipment classes for 
high-temperature refrigerators and chef bases or griddle stands and is 
proposing potential equipment class structure modifications as 
presented in table IV.2.

                    Table IV.2--Proposed Equipment Classes and Equipment Class Modifications
----------------------------------------------------------------------------------------------------------------
                                                                         Operating
 Condensing unit configuration   Equipment family       Rating          temperature         Equipment class
                                                    temperature **       ([deg]F)             designation
----------------------------------------------------------------------------------------------------------------
Self-Contained (SC)...........  Vertical Open      HR (55 [deg]F)..  x >40...........  VOP.SC.H *
                                 (VOP).            MR (38 [deg]F)..  40 >= x >=32....  VOP.SC.M
                                                   LF (0 [deg]F)...  x <32...........  VOP.SC.L
                                                   IF (-15 [deg]F).  x <=-13.........  VOP.SC.I
                                Semivertical Open  HR (55 [deg]F)..  x >40...........  SVO.SC.H *
                                 (SVO).            MR (38 [deg]F)..  40 >= x >=32....  SVO.SC.M
                                                   LF (0 [deg]F)...  x <32...........  SVO.SC.L
                                                   IF (-15 [deg]F).  x <=-13.........  SVO.SC.I
                                Horizontal Open    HR (55 [deg]F)..  x >40...........  HZO.SC.H *
                                 (HZO).            MR (38 [deg]F)..  40 >= x >=32....  HZO.SC.M
                                                   LF (0 [deg]F)...  x <32...........  HZO.SC.L
                                                   IF (-15 [deg]F).  x <=-13.........  HZO.SC.I
                                Vertical Closed    HR (55 [deg]F)..  x >40...........  VCT.SC.H *
                                 Transparent       MR (38 [deg]F)..  40 >= x >=32....  VCT.SC.M
                                 (VCT).            LF (0 [deg]F)...  x <32...........  VCT.SC.L
                                                   IF (-15 [deg]F).  x <=-13.........  VCT.SC.I
                                Vertical Closed    HR (55 [deg]F)..  x >40...........  VCS.SC.H *
                                 Solid (VCS).      MR (38 [deg]F)..  40 >= x >=32....  VCS.SC.M
                                                   LF (0 [deg]F)...  x <32...........  VCS.SC.L
                                                   IF (-15 [deg]F).  x <=-13.........  VCS.SC.I
                                Horizontal Closed  CR (38 [deg]F)..  x >=32..........  HCT.SC.M
                                 Transparent       LF (0 [deg]F)...  x <32...........  HCT.SC.L
                                 (HCT).            IF (-15 [deg]F).  x <=-13.........  HCT.SC.I
                                Horizontal Closed  CR (38 [deg]F)..  x >=32..........  HCS.SC.M
                                 Solid (HCS).      LF (0 [deg]F)...  x <32...........  HCS.SC.L
                                                   IF (-15 [deg]F).  x <=-13.........  HCS.SC.I
                                Service Over       HR (55 [deg]F)..  x >40...........  SOC.SC.H *
                                 Counter (SOC).    MR (38 [deg]F)..  40 >= x >=32....  SOC.SC.M
                                                   LF (0 [deg]F)...  x <32...........  SOC.SC.L
                                                   IF (-15 [deg]F).  x <=-13.........  SOC.SC.I
                                Pull-Down (PD)...  CR (38 [deg]F)..  x >=32..........  PD.SC.M
                                Chef Base (CB)...  CR (38 [deg]F)..  x >=32..........  CB.SC.M *
                                                   LF (0 [deg]F)...  x <32...........  CB.SC.L*
Remote Condensing (RC)........  Vertical Open      HR (55 [deg]F)..  x >40...........  VOP.RC.H *
                                 (VOP).            MR (38 [deg]F)..  40 >= x >=32....  VOP.RC.M
                                                   LF (0 [deg]F)...  x <32...........  VOP.RC.L
                                                   IF (-15 [deg]F).  x <=-13.........  VOP.RC.I
                                Semivertical Open  HR (55 [deg]F)..  x >40...........  SVO.RC.H *
                                 (SVO).            MR (38 [deg]F)..  40 >= x >=32....  SVO.RC.M
                                                   LF (0 [deg]F)...  x <32...........  SVO.RC.L
                                                   IF (-15 [deg]F).  x <=-13.........  SVO.RC.I
                                Horizontal Open    HR (55 [deg]F)..  x >40...........  HZO.RC.H *
                                 (HZO).            MR (38 [deg]F)..  40 >= x >=32....  HZO.RC.M
                                                   LF (0 [deg]F)...  x <32...........  HZO.RC.L
                                                   IF (-15 [deg]F).  x <=-13.........  HZO.RC.I
                                Vertical Closed    HR (55 [deg]F)..  x >40...........  VCT.RC.H *
                                 Transparent       MR (38 [deg]F)..  40 >= x >=32....  VCT.RC.M
                                 (VCT).            LF (0 [deg]F)...  x <32...........  VCT.RC.L
                                                   IF (-15 [deg]F).  x <=-13.........  VCT.RC.I
                                Horizontal Closed  CR (38 [deg]F)..  x >=32..........  HCT.RC.M
                                 Transparent       LF (0 [deg]F)...  x <32...........  HCT.RC.L
                                 (HCT).            IF (-15 [deg]F).  x <=-13.........  HCT.RC.I
                                Vertical Closed    HR (55 [deg]F)..  x >40...........  VCS.RC.H *
                                 Solid (VCS).      MR (38 [deg]F)..  40 >= x >=32....  VCS.RC.M
                                                   LF (0 [deg]F)...  x <32...........  VCS.RC.L
                                                   IF (-15 [deg]F).  x <=-13.........  VCS.RC.I
                                Horizontal Closed  CR (38 [deg]F)..  x >=32..........  HCS.RC.M
                                 Solid (HCS).      LF (0 [deg]F)...  x <32...........  HCS.RC.L
                                                   IF (-15 [deg]F).  x <=-13.........  HCS.RC.I
                                Service Over       HR (55 [deg]F)..  x >40...........  SOC.RC.H *
                                 Counter (SOC).    MR (38 [deg]F)..  40 >= x >=32....  SOC.RC.M
                                                   LF (0 [deg]F)...  x <32...........  SOC.RC.L
                                                   IF (-15 [deg]F).  x <=-13.........  SOC.RC.I
                                Chef Base (CB)...  CR (38 [deg]F)..  x >=32..........  CB.RC.M *
                                                   LF (0 [deg]F)...  x <32...........  CB.RC.L *
----------------------------------------------------------------------------------------------------------------
* Proposed new equipment class.

[[Page 70215]]

 
** HR--High-Temperature Refrigerator.
LF--Low Temperature Freezer.
MR--Medium-Temperature Refrigerator.
IF--Ice-Cream Freezer.
CR--Commercial Refrigerator.

    DOE received several comments in response to the June 2022 
Preliminary Analysis regarding the amendments to the equipment classes 
for CRE.
Equipment Classes With Newly Proposed Standards
    NEEA supported DOE's proposed definitions in the June 2022 CRE Test 
Procedure NOPR for blast chillers and blast freezers, buffet tables and 
preparation tables, and high-temperature CRE, noting that these 
definitions allowed consideration of potential standards, 
categorization of equipment classes, and testing of the equipment 
separate from other CRE. (NEEA, No. 47 at p. 2)
    The Joint Commenters supported DOE's consideration of potential 
standards for additional equipment categories. (Joint Commenters, No. 
39 at p. 1) The Joint Commenters stated that DOE found cost-effective 
potential energy savings for chef bases/griddle stands and high-
temperature refrigerators in the June 2022 Preliminary TSD and 
commented that they support DOE setting standards for these equipment 
classes. (Id.)
    The CA IOUs commended DOE for proposing to expand the scope of the 
energy conservation standards for CRE to include chef bases or griddle 
stands and high-temperature refrigeration. (CA IOUs, No. 43 at p. 1) 
The CA IOUs stated that these added product classes constitute a 
significant inventory of equipment with a substantial cumulative energy 
load that were previously outside the scope of DOE's regulation. (Id. 
at pp. 1-2)
    AHRI commented that it has no objection to the added equipment 
classes detailed in the June 2022 Preliminary TSD. (AHRI, No. 46 at p. 
2) However, Continental recommended that DOE delay inclusion of any new 
categories until applicable industry standard test procedures are 
published and have been thoroughly evaluated. (Continental, No. 38 at 
p. 2)
    DOE has proposed standards for new equipment classes (e.g., chef 
bases, and high-temperature refrigerators) in this NOPR, as supported 
by commenters. And as described in the September 2023 Test Procedure 
Final Rule, DOE has incorporated by reference the latest versions of 
ASHRAE 72 and AHRI 1200, which were evaluated by each respective 
committee and subject to public reviews, in the CRE test procedure. 88 
FR 66152. In addition, based on the September 2023 Test Procedure Final 
Rule, chef bases or griddle stands must be tested at a dry-bulb 
temperature of 86.0 [deg]F and wet-bulb temperature of 73.7 [deg]F. 88 
FR 66152, 66203. Therefore, DOE has considered higher ambient 
temperature conditions in the analysis of chef bases or griddle stands 
compared to other CRE, which are tested at a dry-bulb temperature of 
75.2 [deg]F and wet-bulb temperature of 64.4 [deg]F. See chapter 5 of 
the NOPR TSD for additional information.
Equipment Classes Without Proposed Standards
    NEEA recommended that DOE analyze the new equipment classes and 
consider adopting efficiency standards that would better reflect the 
specific energy consumption of equipment subclasses, resulting in more 
significant energy savings. (NEEA, No. 47 at p. 4) NEEA commented that 
DOE had analyzed two of the four new product classes and, as was shown 
in the CRE June 2022 Preliminary TSD analysis, energy conservation 
standards were viable for high-temperature CRE and chef bases and 
griddle stands. (Id.) NEEA commented that for vertical closed 
transparent self-contained high temperature (``VCT.SC.H''), vertical 
closed solid self-contained high temperature (``VCS.SC.H''), and chef 
bases self-contained low temperature (``CB.SC.L''), the average life-
cost savings ranged from $300-$500 at EL 3, presenting justification of 
the energy and cost savings for these equipment classes. (Id.) NEEA 
added that DOE should conduct similar analyses on blast chillers and 
buffet tables, citing DOE's test procedures for these classes as key to 
allowing data collection. (Id. at p. 4) NEEA commented that DOE's 
analysis of high-temperature refrigerators and chef bases indicated 
that additional significant savings would likely be available from 
these products. (Id.)
    Similarly, the Joint Commenters commented that DOE stated DOE 
lacked sufficient information to fully analyze buffet/preparation 
tables and blast chillers/freezers in the June 2022 Preliminary TSD, 
but the Joint Commenters noted that the California Energy Commission 
(``CEC'') Modernized Appliance Efficiency Database System (``MAEDbS'') 
includes over 100 buffet/preparation tables with a broad range of 
energy usage. (Joint Commenters, No. 39 at p. 1) The Joint Commenters 
requested that DOE further investigate the energy usage and savings 
potential for these products. (Id.)
    However, Continental agreed with DOE that a preliminary analysis of 
energy consumption for buffet tables and preparation tables is not 
appropriate until a standard test procedure is established for these 
equipment types. (Continental. No. 38 at p. 2).
    Consistent with comments from NEEA and based on the new rating 
temperature in the September 2023 Test Procedure Final Rule for high-
temperature refrigerators, DOE is proposing to amend the energy 
conservation standards for high-temperature refrigerators and to 
establish energy conservation standards for chef bases or griddle 
stands in this NOPR. See table IV.2.
    With respect to the comments from NEEA and the Joint Commenters 
regarding blast chillers and blast freezers, DOE notes that it lacks 
sufficient data and information regarding blast chillers and blast 
freezer performance, and related design options, for units tested via 
the DOE test procedure. As stated in the September 2023 Test Procedure 
Final Rule, blast chillers and blast freezers are designed for ``rapid 
temperature pull-down'' capable of reducing the internal temperature 
from 135 [deg]F to 40 [deg]F within a period of 4 hours. 88 FR 66152, 
66189. Therefore, in this NOPR, DOE is not currently able to model 
expected performance of this equipment because the established test 
procedure is significantly different from the test procedure applicable 
to other CRE categories, which are intended for ``holding temperature 
application''. Due to a lack of data and information regarding 
performance of blast chillers and blast freezers, DOE has not conducted 
an analysis of potential energy conservation standards for these 
equipment categories.
    DOE requests comment on blast chiller or freezer design options, 
design specifications, and energy consumption data tested per the DOE 
test procedure located in appendix D of 10 CFR 431.64.
    With respect to the comments from NEEA and the Joint Commenters 
regarding buffet tables and preparation tables, while DOE acknowledges 
that

[[Page 70216]]

CEC's MAEDbS database contains data for buffet/preparation tables, DOE 
notes that title 20 of the California Code of Regulations requires 
refrigerated buffet/preparation tables to follow the ANSI/ASTM F2143-01 
test method.\29\ This test method has been revised several times, with 
ASTM F2143-16 being the most recent version. In the September 2023 Test 
Procedure Final Rule, DOE stated that ASTM F2143-16 cannot be 
referenced as a standalone test method but determined the approach 
based on ASTM F2143-16 with additional requirements is representative 
for buffet/preparation tables. 88 FR 66152, 66175. Therefore, in this 
NOPR, DOE is not able to model expected performance of this equipment 
at this time because the established test procedure is significantly 
different from the test procedure applicable to other CRE categories, 
and from the test procedure used to measure energy consumption for the 
CEC's MAEDbS. Due to a lack of data and information regarding 
performance and related design options of refrigerated buffet/
preparation tables, DOE has not conducted an analysis of potential 
energy conservation standards for these equipment categories.
---------------------------------------------------------------------------

    \29\ See table A-1 in 20 CCR section 1604.a.2 located at https://govt.westlaw.com/calregs/Document/ID5812C41DABD11ED852BC9A091C0DD8F?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default
).
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    DOE requests comment on refrigerated buffet/preparation table 
design options, design specifications, and energy consumption data 
tested per the DOE test procedure located in appendix C of 10 CFR 
431.64.
Customer Order Storage Cabinets
    The CA IOUs supported creating a separate equipment class for 
customer-order refrigerated storage lockers. (CA IOUs, No. 43 at p. 10) 
The CA IOUs commented that they expect the refrigerated storage locker 
market to increase as grocery delivery and pick up continues to be a 
growing segment of grocery sales. (Id.) The CA IOUs stated that they 
support aggregating the maximum daily energy consumption values for all 
compartments in a refrigerated storage locker according to 10 CFR 
431.66(e)(2). (Id.) The CA IOUs also pointed out that ``temperature 
controlled pick up lockers'' can be refrigerated lockers; however, some 
of these models can be either refrigerated or heated or neither. (Id.)
    The CA IOUs recommended that DOE analyze the individual 
refrigerator, freezer, and refrigerator/freezer compartments in 
customer-order refrigerated storage lockers as a separate equipment 
family as noted in the CA IOUs comments on DOE's July 2021 CRE Test 
Procedure RFI. (Id.) The CA IOUs highlighted the Traulsen waiver \30\ 
to show that these compartments will have distinct door-opening 
conditions compared to the CRE equipment families. (Id.)
---------------------------------------------------------------------------

    \30\ CA IOUs provided the footnote reference 83 FR 46148 for the 
granted waiver.
---------------------------------------------------------------------------

    In response to the CA IOUs comments, DOE has not conducted an 
analysis specifically for customer order storage cabinets in this 
NOPR.\31\ DOE has analyzed a representative volume for the VCS 
equipment families of which customer order storage cabinets are 
typically included. In the September 2023 Test Procedure Final Rule, 
DOE provides a discussion of customer order storage cabinets and 
determination to adopt a test procedure based on existing test 
procedure waivers. 88 FR 66152, 66211-66213.
---------------------------------------------------------------------------

    \31\ DOE defines customer order storage cabinet at Sec.  431.62 
to mean a commercial refrigerator, freezer, or refrigerator-freezer 
that stores customer orders and includes individual, secured 
compartments with doors that are accessible to customers for order 
retrieval.
---------------------------------------------------------------------------

Comments on Specific Equipment Classes
    The Joint Commenters recommended that DOE analyze additional 
equipment classes and stated that DOE did not directly analyze the 
vertical closed solid remote condensing medium temperature 
(``VCS.RC.M''), vertical closed solid remote condensing low temperature 
(``VCS.RC.L''), horizontal closed transparent remote condensing medium 
temperature (``HCT.RC.M''), or horizontal closed transparent remote 
condensing low temperature (``HCT.RC.L'') equipment classes in the June 
2022 Preliminary TSD. (Joint Commenters, No. 39 at p. 2) The Joint 
Commenters commented that the number of models for each of these 
classes in the CCD suggests their market share could be larger than the 
estimated volume of shipments for these classes in the analysis for the 
March 2014 Final Rule. (Id.) The Joint Commenters stated that there are 
nearly 500 VCS.RC.M models certified in the CCD, and there are more 
HCT.RC.M models in the CCD than horizontal closed transparent self-
contained medium temperature (``HCT.SC.M''), an equipment class that 
was analyzed by DOE in the June 2022 Preliminary TSD. (Id.) The Joint 
Commenters commented that, based on these data, the market share of 
these equipment classes may be larger than estimated, and the Joint 
Commenters encouraged DOE to analyze these additional equipment 
classes. (Id.)
    AHRI asked that DOE clarify whether DOE removed the vertical self-
contained class from the June 2022 Preliminary TSD. (AHRI, No. 46 at p. 
2) And Zero Zone commented that it did not see any evaluation of solid-
door remote commercial refrigerators and inquired whether DOE is 
dropping that equipment class or has no plans to change the energy 
requirements. (Zero Zone, No. 44 at p. 5)
    With respect to the comments from the Joint Commenters, AHRI, and 
Zero Zone, DOE notes that the equipment classes mentioned by the Joint 
Commenters were not directly analyzed as primary equipment classes in 
the June 2022 Preliminary Analysis, but are analyzed as secondary 
equipment classes in this NOPR using DOE's primary to secondary 
equipment class multipliers. See chapter 5 of the NOPR TSD for 
additional details on secondary equipment classes. Additionally, DOE 
notes that in the June 2022 Preliminary Analysis, DOE analyzed vertical 
closed solid, self contained equipment, as well as other vertical self-
contained equipment (e.g., vertical open self-contained medium 
temperature (``VOP.SC.M'') and vertical closed transparent self-
contained medium temperature (``VCT.SC.M'')). See table 5.8.1 of the 
June 2022 Preliminary TSD for a full list of primary equipment classes 
DOE analyzed in the June 2022 Preliminary Analysis.
    AHRI commented that breaking equipment classes into smaller (under 
30 cubic feet) and larger units (over 30 cubic feet) could be 
beneficial. (AHRI, No. 46 at p. 7) Additionally, NAMA commented that 
DOE appeared to have overlooked or not fully recognized the existence 
of smaller refrigerated single- and double-door beverage (and food) 
coolers. (NAMA, No. 37 at p. 5) NAMA stated that energy efficiency 
analyses of larger (e.g., 60 cubic feet) units may not be applicable to 
smaller (e.g., 24 cubic feet) units. (Id.) NAMA recommended that, for 
purposes of DOE analysis, units under 30 cubic feet should be 
considered differently from those over 30 cubic feet in refrigerated 
volume. (Id.)
    In response to the June 2021 Test Procedure RFI, True Manufacturing 
Company, Inc. (``True'') commented that there are examples where the 
ice-cream freezer maximum allowable energy consumption is less than for 
an equivalent commercial freezer.\32\ (Docket No. EERE-2017-BT-TP-0008,

[[Page 70217]]

True, No. 4 at p. 3) True provided three examples of common VCT.SC.L 
CREs found in the marketplace where the maximum DOE energy allowance 
for the ice-cream freezer is less than that of the equivalent 
commercial freezer. (Id.) True also commented that when comparing the 
VCS.SC.I and VCS.SC.L formulas, for cabinets with a volume of 4 cubic 
feet or less, the energy use allowance for the ice-cream freezer is 
less than for the equivalent commercial freezer. (Id.)
---------------------------------------------------------------------------

    \32\ See www.regulations.gov/comment/EERE-2017-BT-TP-0008-0004.
---------------------------------------------------------------------------

    Additionally, in response to the July 2021 RFI, Glastender, Inc. 
(``Glastender'') provided a chart and commented that the energy 
allowance for VCT.SC.M CRE is less than the energy allowance for 
VCS.SC.M CRE when the refrigerated volume is less than 10 cubic feet. 
(Glastender, No. 4 at p. 1). Glastender commented that it believed the 
requirement curves were generated from primarily larger volume models 
and smaller volume refrigerators need to be considered when generating 
new curves. (Id.)
    In response to comments from AHRI and NAMA, DOE is maintaining the 
current equipment class structure in this NOPR, except for the new 
equipment classes which are proposed and discussed in section IV.A.1.c 
of this document. DOE considers all volumes and TDAs when developing 
the proposed standards in this NOPR in addition to the representative 
volume or TDA for each directly analyzed equipment class. Based on 
market research and feedback received during manufacturer interviews, 
DOE expects the use of sliding and pass-through doors represent 
equipment utilities that have unique energy use characteristics that 
differentiate CRE in the VCT.SC.M equipment class and that beverage 
coolers are a common type of equipment in the VCT.SC.M equipment class 
that use sliding and pass-through doors. Therefore, based on market 
research and feedback received during manufacturer interviews, DOE has 
proposed separate energy use equations based on an energy consumption 
multiplier for CRE with sliding and pass-through doors.
    In response to comments from AHRI, NAMA, True, and Glastender, DOE 
considered all volumes and TDAs when developing the proposed standards 
in this NOPR in addition to the representative volume or TDA for each 
directly analyzed equipment class. When developing the proposed 
standards in this NOPR, DOE generally applied the energy use reduction 
percentage selected in section V.C of this document to the baseline 
energy use equation's slope and intercept. However, in three directly 
analyzed equipment classes, VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE has 
tentatively determined that, based on the efficiency distribution of 
the market across the equipment classes, additional consideration is 
necessary. For these three classes, DOE maintained the current standard 
equation intercept and calculated a slope based on the current 
intercept and the proposed energy use level at the representative 
volume or TDA. This approach addresses the standard line crossover that 
True and Glastender mentioned in their comments and better represents 
the energy use characteristics of CRE at volumes and TDAs that are 
smaller than the representative volume or TDA for these three classes. 
Additionally, DOE reviewed the proposed standard for VCT.SC.I and 
VCT.SC.L and observed that the standard lines do not have the crossover 
that True mentioned in its comment.
    See section IV.C.1 of this document and chapter 5 of the NOPR TSD 
for additional details.
    The Joint Commenters recommended that DOE eliminate the equipment 
class for pull-down CREs. (Joint Commenters, No. 39 at p. 2) The Joint 
Commenters stated that while there are currently no pull-down models 
certified in DOE's CCD, the Joint Commenters are concerned that models 
could be certified as pull-down CRE in the future in order to be 
subject to a less-stringent standard. (Id.)
    In response to the Joint Commenters, DOE notes that the ``pull-down 
temperature application'' is defined in 42 U.S.C. 6311(9)(d) and the 
equipment class was established by the Energy Policy Act of 2005 (Pub. 
L. 109-58).\33\ In the September 2023 Test Procedure Final Rule, DOE 
established verification provisions for pull-down temperature 
applications based on the EPCA definition, which are intended to ensure 
CRE are certified correctly as pull-down temperature applications. 88 
FR 66152, 66187-66189. Therefore, DOE is not proposing to eliminate the 
equipment class for pull-down CREs in this NOPR.
---------------------------------------------------------------------------

    \33\ See 119 STAT. 639 at https://www.govinfo.gov/content/pkg/PLAW-109publ58/pdf/PLAW-109publ58.pdf.
---------------------------------------------------------------------------

Equipment Rating
    The CA IOUs recommended changing the key metric for service over 
the counter (``SOC'') refrigeration from total display area (``TDA'') 
to either refrigerated volume or refrigerated floor area. (CA IOUs, No. 
43 at pp. 9-10). The CA IOUs commented that the current energy 
conservation standard for SOC is based on TDA, which incentivizes the 
use of more glass to increase the TDA and the corresponding maximum 
daily energy consumption. (Id. at p. 9) The CA IOUs stated that basing 
the energy conservation standard for SOC equipment on refrigerated 
volume would ensure that any increases in an SOC unit's maximum 
allowable energy consumption is directly linked to an increase in the 
equipment's useful holding capacity. (Id.) The CA IOUs commented that 
this change would ensure that manufacturers wanting to increase TDA 
would be incentivized to use glass with better thermal insulation 
properties. (Id.) The CA IOUs commented also that switching to a 
refrigerated volume metric would also be more consistent with other 
closed refrigeration categories with display functionality, such as 
refrigerators with glass doors. (Id.) The CA IOUs stated that the 
burden of shifting to refrigerated volume as a metric could be 
minimized by allowing either physical measurement or measurement based 
on a diagram or computer-aided design (``CAD'') drawing. (Id. at p. 10) 
The CA IOUs added that an alternative metric for deli cases without 
shelving could also be refrigerated floor area, which would be the 
available surface area for product, although the CA IOUs noted that 
most SOC refrigerators are sold with shelving that can be added or 
removed depending on food product being displayed. (Id.)
    However, in response to the July 2021 RFI, other commenters 
indicated that TDA is the appropriate metric for the respective 
equipment classes, and the industry has adapted to the use of TDA or 
volume and that no change is necessary (see chapter 2 of the June 2022 
Preliminary TSD for additional information). Therefore, in this NOPR, 
DOE has not evaluated revising the capacity metrics for any equipment 
classes.
    The CA IOUs commented that they support the proposal to rate 
equipment capable of operating at temperatures of multiple equipment 
classes at all relevant temperature conditions. (CA IOUs, No. 43 at p. 
8-9)
    Consistent with the CA IOUs comment, in the September 2023 Test 
Procedure Final Rule, DOE specified in 10 CFR 429.42 that basic models 
of CRE that operate in multiple equipment classes must be certified and 
comply with the energy conservation standards for each applicable 
equipment class. 88 FR 66152, 66162.
2. CRE Market
    In response to the June 2022 Preliminary Analysis, DOE received

[[Page 70218]]

several comments regarding the CRE market.
    NAMA commented that it was not listed in the proposed regulation or 
list of manufacturers. (NAMA, No. 37 at p. 4) NAMA added that the names 
of CRE manufacturers represented by NAMA, which were filed in the DOE's 
CCMS, were not mentioned. (Id.)
    In response to this comment from NAMA, for this NOPR, DOE updated 
its assessment of manufacturer trade groups to include NAMA and 
reviewed the list of CRE manufacturers based on the list of supporters 
on NAMA's website.\34\ See chapter 3 of the NOPR TSD for additional 
information regarding CRE original equipment manufacturers (``OEMs'') 
and manufacturer trade groups.
---------------------------------------------------------------------------

    \34\ DOE reviewed the ``2022 Annual Dues Donors'' accessible at 
namanow.org/foundation/supporters/ to identify members of NAMA (last 
accessed March 31, 2023).
---------------------------------------------------------------------------

    Continental commented that relying on manufacturer model counts in 
the CCD is not an accurate way of approximating company market share 
and stated that model counts in DOE's CCD reflect the variety of models 
offered, but do not represent the sales or market share of a company. 
(Continental, No. 38, p. 2)
    In the June 2022 Preliminary TSD, DOE used manufacturer model 
counts to identify key CRE OEMs operating in the United States. DOE 
presented an abridged list of OEMs with more than 1-percent share of 
basic model listings in chapter 3 of the June 2022 Preliminary TSD. DOE 
understands that model counts do not reflect company market shares. For 
this NOPR, DOE conducted confidential manufacturer interviews. During 
these interviews, DOE asked manufacturers about their estimated CRE 
market share, annual shipments by equipment class, and the estimated 
market shares of other CRE manufacturers. DOE used the information from 
confidential interviews, data from the shipments analysis, and model 
listings from CCD to estimate manufacturer market shares, which were 
then used to weight certain inputs used in the MIA (e.g., industry 
financial parameters, manufacturer markups). DOE does not present these 
company-specific market share estimates in the NOPR TSD chapter 3 as 
the information is protected under nondisclosure agreements (``NDAs''). 
See chapter 3 of the NOPR TSD for additional details on the CRE market 
and manufacturers.
    DOE requests comment on publicly available market data on CRE 
manufacturers or identification of any CRE manufacturers with large 
market shares not identified in Chapter 3 of the NOPR TSD.
3. Technology Options
    In the preliminary market analysis and technology assessment, DOE 
identified technology options that would be expected to improve the 
efficiency of CRE, as measured by the DOE test procedure and shown in 
table IV.3.

                 Table IV.3--Technology Options for CRE
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Insulation:
    Improved resistivity of insulation (insulation type).
    Increased insulation thickness.
    Vacuum-insulated panels.
Lighting:
    Higher-efficiency lighting.
    Occupancy Sensors.
Improved transparent doors: *
    Low-emissivity coatings.*
    Inert gas fill.*
    Vacuum-insulated glass.*
    Additional panes.*
    Anti-sweat heater controls.*
    Anti-fog films.*
    Frame design.*
Compressor.**
    Improved compressor efficiency.**
    Alternative refrigerants.**
    Variable-speed compressors.**
    Linear compressors.**
Evaporator:
    Increased surface area.
    Improved evaporator coil design.
    Low-pressure differential evaporator.
Condenser: **
    Increased surface area.**
    Tube-and-fin enhancements.**
    Microchannel heat exchanger.**
Fans and fan motors:
    Evaporator fan motors.
    Evaporator fan blades.
    Evaporator fan controls.
    Condenser fan motors.**
    Condenser fan blades.**
    Condenser fan controls.**
Other technologies:
    Defrost systems.
    Expansion valve improvements.
    Air curtain design.***
    Night curtains.***
    Liquid suction heat exchanger.**
------------------------------------------------------------------------
* Only applies to equipment classes with doors.
** Only applies to self-contained equipment classes.
*** Only applies to equipment classes without doors (open equipment
  classes).

    DOE received several comments in response to the June 2022 
Preliminary Analysis regarding the technology options.
a. Compressors
    NEEA referred to its previous comment to the July 2021 RFI that DOE 
consider the energy-use impact of compressor technologies like scroll 
compressors and variable-speed compressors. (NEEA No. 47 at pp. 4-5) 
NEEA commented that DOE had expressed agreement with NEEA in the June 
2022 Preliminary TSD that variable-speed compressors represented an 
energy-saving technology and estimated that implementing variable-speed 
compressors could save 3-38 percent of energy consumption, depending on 
equipment class. (Id. at p. 4) NEEA pointed out that DOE had not tested 
a model with a variable-speed compressor and encouraged DOE to further 
research the energy-savings potential of variable-speed compressors in 
CRE. (Id.) NEEA commented that, in the June 2022 Preliminary TSD Table 
5.5.1,\35\ DOE noted propane variable-speed compressors as a design 
option for a majority of CRE equipment classes. (Id.) NEEA encouraged 
DOE to collect data and consider other equipment classes that could 
utilize variable-speed compressors to improve the energy-savings 
potential and common use of this technology option. (Id. at pp. 4-5)
---------------------------------------------------------------------------

    \35\ Technical Support Document: Commercial Refrigeration 
Equipment: Table 5.5.1 Design Options by Equipment. Class. PreTSD 
CRE 2022. June 2022. https://www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------

    Consistent with the preliminary analysis, DOE has included R-290 
variable-speed compressors as a technology option in this NOPR. Due to 
the refrigerant transition in response to the December 2022 EPA NOPR, 
DOE has analyzed R-290 compressors (single and variable speed) for all 
self-contained equipment classes. See section IV.C.1 of this document 
and chapter 5 of the NOPR TSD for additional details on the refrigerant 
transition and analyzed compressors. Additionally, scroll compressors 
have not been included as a design option in this NOPR. While DOE has 
not observed scroll compressors in any directly analyzed models, DOE is 
aware that scroll compressors may be used on very large, self-contained 
CRE. Based on market research, DOE observed that fixed-speed scroll 
compressors have similar efficiencies to hermetic, reciprocating 
compressors; therefore, DOE has not considered scroll compressors in 
this analysis.
    Continental commented that variable-speed compressors hold promise 
for reducing energy consumption of self-contained CRE, but the 
increased technical complexity and related increases in material and 
service costs have thus far limited use of this technology. 
(Continental, No. 38 at p. 2) Similarly, AHRI commented that variable-
speed compressors do not

[[Page 70219]]

contribute significantly to energy savings in specific products and 
present additional technical challenges for servicers. (AHRI, No. 46 at 
p. 5) Further, AHRI commented that DOE should not assume that equipment 
employing variable-speed compressors will automatically have an energy-
efficiency increase of 15-20 percent and that this design option is 
more complex and requires more careful analysis. (Id.)
    To estimate the performance impacts of transitioning to a variable-
speed compressor, DOE incorporated the performance data for variable-
speed R-290 compressors currently available on the market into DOE's 
engineering spreadsheet. DOE assumed that variable-speed compressors 
would operate at the minimum speed under steady-state operation. DOE 
also assumed that the fan motors would operate during the compressor 
run time (i.e., the fan motor operating duration would likely increase 
compared to a single-speed compressor). Overall, DOE estimated a 0.5-25 
percent energy consumption reduction when implementing variable-speed 
compressors, with savings varying depending on equipment class. See 
chapters 3 and 5 of the NOPR TSD for additional details on variable 
speed compressors.
b. R-290
    NAMA stated that it began evaluating the changes necessary for CRE 
to utilize lower GWP refrigerants, such as R-290, in 2018, and NAMA 
pointed out that the ASHRAE 15 standard was changed in the summer of 
2020 to allow CRE using up to 114 grams of A-3 refrigerants to be 
placed in public places and that CRE with A-3 refrigerants began to 
appear in the U.S. market in the first quarter of 2021. (NAMA, No. 37 
at p. 6) NAMA stated that manufacturers had to re-design heat 
exchangers, use new compressors and expansion valves, and make all 
switches, electrical components, motors, wiring, connectors, and larger 
electrical components (e.g., compressors) compliant with ``spark-proof 
connections'' to manufacture machines using A-3 refrigerant. (Id. at 
pp. 6-7) NAMA commented that the June 2022 Preliminary TSD did not 
adequately address this level of re-design using expensive components, 
nor the re-design of factories to comply with health and safety 
regulations through greater ventilation, safety sensors, and other 
measures. (Id. at p.7) NAMA noted that every model, product line, 
quality assurance facility, factory, warehouse, and service center must 
be updated to install, warehouse, and service units with R-290 
refrigerant, and only a handful of State and local building codes have 
been updated to accommodate these changes. (Id.) NAMA stated that 
significant work remains to be done in finalizing these codes, and they 
are unlikely to be complete before 2026. (Id.) NAMA commented that DOE 
did not address this transition in the June 2022 Preliminary TSD. (Id.)
    Similarly, AHRI commented that the June 2022 Preliminary TSD cited 
an example of a transition from an R-134a (ASHRAE Class A1) to an R-290 
(propane or an ASHRAE Class A3) compressor as the only required change, 
but AHRI added that compressors, switches, and other components in the 
system must also be upgraded to comply with UL60335-2-89 requirements 
to reduce the risk of ignition. (AHRI, No. 46 at p. 13)
    The CA IOUs noted that their comments to the July 2021 RFI stated 
that since energy conservation standards were last analyzed, the market 
has developed higher-efficiency compressors, and self-contained CRE has 
increasingly shifted to R-290. (CA IOUs, No. 43 at pp. 4-6) While the 
CA IOUs thanked DOE for analyzing these technology advances, they noted 
that the June 2022 Preliminary TSD analyzes the refrigerant propane as 
a technology option for nearly all self-contained refrigeration 
categories except for vertical open self-contained medium temperature 
(``VOP.SC.M''), semi-vertical self-contained medium temperature 
(``SVO.SC.M''), and horizontal glass self-contained ice cream 
(``HCT.SC.I'') categories. (Id. at pp. 4-5) The CA IOUs stated that 
propane had already become an industry standard for self-contained 
refrigeration equipment, and the CA IOUs recommended considering it as 
a baseline refrigerant for all self-contained refrigeration categories. 
(Id. at p. 5) The CA IOUs further commented that the June 2022 
Preliminary TSD excludes variable-speed compressors as a technology 
option for almost all categories where it does not consider propane as 
an option. (Id.) The CA IOUs commented that variable-speed compressors 
can use any refrigerant and are not limited to propane. (Id.) The CA 
IOUs stated that the current market availability of variable-speed 
compressors that use refrigerants other than propane is limited to 
compressors above 1 horsepower, and the CA IOUs recommended that DOE 
work with manufacturer stakeholders to determine future market 
availability of variable-speed compressors for all refrigerants. (Id. 
at pp. 5-6)
    NEEA stated support for DOE's consideration of propane refrigerants 
as an energy-saving technology option in the technology assessment and 
engineering analysis for CRE, but NEEA noted that table 5.5.18 in the 
June 2022 Preliminary TSD showed that DOE had not considered propane as 
an option for all CRE equipment classes. (NEEA, No. 47 at p. 4) NEEA 
commented that CRE refrigerants are transitioning from 
hydrofluorocarbons (``HFC'') refrigerants to alternative options like 
propane (R-290) and NEEA anticipated an increase in the use of propane 
in other equipment classes. (Id.) NEEA recommended that DOE ensure its 
analysis take into consideration the current availability of propane 
products in the product classes not currently considered by DOE as a 
design option (e.g., VOP.SC.M and SVO.SC.M). (Id.) NEEA further 
recommended DOE anticipate that more products would likely become 
available with propane refrigerants if the charge limit (currently 150 
grams under the EPA's Significant New Alternatives Policy (``SNAP'')) 
for propane were to increase, as allowed in ASHRAE 15-2022. (Id.)
    Similarly, the Joint Commenters commented that DOE excluded propane 
compressors as a design option for some equipment classes due to 
propane charge limits, but the Joint Commenters further commented that 
ASHRAE 15 is proposing to increase the charge limits for higher-
flammability refrigerants. (Joint Commenters, No. 39 at p. 2) 
Additionally, the Joint Commenters stated that models are available on 
the market in some of the equipment classes for which DOE excluded 
propane technology options, including the VOP.SC.M, SVO.SC.M, and 
HCT.SC.I categories. (Id. at pp. 2-3) The Joint Commenters recommended 
that DOE consider propane refrigerant for these additional equipment 
classes. (Id. at p. 3)
    In the June 2022 Preliminary Analysis, DOE considered only CRE that 
could meet the 150-gram charge limit for R-290, per the EPA's SNAP 
regulations.\36\ Based on the December 2022 EPA NOPR's proposed GWP 
limits, DOE anticipates EPA will harmonize with UL 60335-2-89 and allow 
R-290 charge limits of 304g for closed CRE and 494g for open CRE. 
Therefore, DOE has updated its engineering analysis in the NOPR to 
analyze R-290 compressors as a technology option for all self-contained 
CRE. See section IV.C.1 of this

[[Page 70220]]

document and chapter 5 of the NOPR TSD for additional information.
---------------------------------------------------------------------------

    \36\ See https://www.govinfo.gov/content/pkg/FR-2015-04-10/pdf/2015-07895.pdf.
---------------------------------------------------------------------------

    Additionally, based on information gathered from interviews, 
component data, and teardowns, DOE has reevaluated the cost associated 
with the switch to R-290 on self-contained units. Because DOE has 
analyzed R-290 as the baseline for all self-contained classes in 
response to the December 2022 EPA NOPR, the costs associated with 
additional components necessary to comply with safety standards for R-
290 are incorporated into the core case cost.\37\ See the engineering 
analysis in section IV.C.1 of this document for more detail on the 
refrigerant transition.
---------------------------------------------------------------------------

    \37\ The ``core case'' consists of components, such as 
structural members, shelving, wiring, air curtain grilles, and trim, 
that do not change at higher design option levels. To develop the 
core case cost, DOE dismantled units available on the market 
component-by component to develop a bill of materials and cost model 
for the core of the refrigerated case. The core case cost is just 
one component of the overall baseline cost, which takes into account 
all manufacturer production costs associated with baseline 
equipment. Therefore, changes in CRE case design due to the 
transition to R-290are accounted for in the core case and design 
option manufacturer production costs.
---------------------------------------------------------------------------

c. Insulation
    AHT commented that the combination of an additional half inch of 
insulation and vacuum-insulated panels (``VIPs'') does not make sense 
and should not be included as two cumulative potential savings. (AHT, 
No. 48 at p. 6)
    Based on feedback from manufacturers, DOE has not analyzed 
increased insulation thickness or VIPs as a design option in this NOPR. 
See section IV.B.1 of this document and chapters 3 and 4 of the NOPR 
TSD for additional information.
    ITW commented that, in terms of improved resistivity of insulation, 
some manufacturers have introduced new hydrofluorolefin (``HFO'') low-
GWP blowing agents with claims of improved efficiencies and thermal 
resistivities from 2 to 11 percent compared to the previous typical 
HFC-245fa blowing agents and that DOE expected that manufacturers had 
already incorporated these new agents into models currently available 
on the market. (ITW, No. 41 at p. 25) ITW commented that, in fact, such 
claims for HFOs were ``marketing hype'' and without much promised 
improvement in thermal performance. (Id.)
    Regarding ITW's comment on foam blowing agents, DOE calibrated its 
engineering analysis based on directly analyzed units, and, therefore, 
DOE expects that the analysis represents the foam blowing agents 
currently in use for units available on the market.
d. Doors
    AHT commented that the best design option to save energy for open 
CRE is to add transparent doors. (AHT, No. 48 at p. 1) AHT noted that 
the existing equipment class definitions and corresponding energy 
conservation standards permit manufacturers that cannot reach the 
energy limits for closed transparent units to remove the transparent 
doors, which would then require compliance with the increased energy 
limits of open units. (Id.)
    AHRI commented that efficient doors are generally used today, but 
there remain instances where charge sizes are insufficient and may only 
be allowed to be increased sufficiently if doors are not present on 
equipment. (AHRI, No. 46 at p. 13)
    Zero Zone commented that a commenter referenced Zero Zone marketing 
literature for customer preference on certain types of cases with doors 
in section 2.3.2.5 of the June 2022 Preliminary TSD. (Zero Zone, No 44 
at p. 5). Zero Zone stated that an interview with two grocers is not an 
exhaustive industry study and also noted that, since that marketing 
literature was published, Zero Zone has developed an open-case product 
line. (Id.)
    With respect to the comment from AHT, AHRI, and Zero Zone, DOE 
notes that open cases provide distinct utility with respect to features 
such as unobstructed view and access to product, as well as simplified 
stocking, cleaning, and maintenance. While DOE understands there are 
different charge size limitations for refrigerant safety for open and 
closed CRE, DOE has tentatively determined to not analyze the addition 
of doors to open cases or the removal of doors on closed cases due to 
the distinct utility differences between open and closed CRE.
e. Evaporators and Condensers
    Continental commented that larger evaporator coils take up more 
internal space, reducing product storage and utility of the equipment. 
(Continental, No. 38 at p. 2)
    Zero Zone disagreed with DOE's evaluation of the high-performance 
coil. (Zero Zone, No. 44 at p. 4) Zero Zone commented that using wavy 
fins without changing the fin pitch in an application with high-glide 
refrigerants can lead to a build up of frost and ice across the 
evaporator coil. (Id.) Zero Zone commented additionally that adding 
another tube row transverse to airflow without a change to the physical 
dimensions of the coil will compact the tubes, impeding airflow and 
causing the accumulation of frost and snow. (Id.) Zero Zone stated that 
it does not believe the addition of either of these design changes to 
an evaporator coil would create a ``high-performance'' coil. (Id.) Zero 
Zone commented that if coil design allowed for an increased evaporator 
temperature, a superheat setting at a value that avoids liquid 
carryover and compressor damage would be very difficult. (Id.) Zero 
Zone provided a white paper called ``High-glide Refrigerants: What's 
the Point?'' to describe the challenges with superheat settings in door 
cases. (Id.)
    Based on feedback from manufacturer interviews and commenters, DOE 
has not considered increased evaporator or condenser sizes in this 
NOPR. DOE has tentatively determined that manufacturers have maximized 
the heat exchanger size without reducing internal storage or increasing 
the external dimensions of the unit, both of which would impact product 
utility. In addition, due to refrigerant transition in response to the 
December 2022 EPA NOPR, DOE has analyzed refrigerants with charge size 
limitations in this NOPR. Because manufacturers have only partially 
converted to refrigerants that would be allowed per the December 2022 
EPA NOPR, there is still uncertainty in refrigerant charge size, and 
therefore the evaporator and condenser design, required for all sizes 
of CRE.
    In the June 2022 Preliminary Analysis, DOE analyzed ``baseline'' 
and ``high efficiency'' evaporator and condenser design options. While 
DOE understands the exact characteristics of the evaporator or 
condenser may change depending on equipment class, the evaporator and 
condenser design options normalize the overall conductance-area 
(``UA'') based on the design load. Based on stakeholder comments, 
interviews with manufacturers, and CoilDesigner \38\ simulation, DOE 
tentatively determined that the ``high efficiency'' evaporator and 
condenser design options are representative of current manufacturer 
designs. Therefore, DOE tentatively determined to analyze the ``high 
efficiency'' evaporator and condenser coil as ``baseline'' in this NOPR 
and remove the ``high efficiency'' evaporator and condenser design 
options in the NOPR. See chapters 3 and 5 of the TSD for additional 
details.
---------------------------------------------------------------------------

    \38\ See https://ots-rd.com/software-development/for further 
information on the CoilDesigner software.
---------------------------------------------------------------------------

    Zero Zone commented that it believes one CRE manufacturer holds a 
patent on split-circuit evaporators. (Zero Zone, No. 44 at p. 5) Zero 
Zone stated that

[[Page 70221]]

DOE suggested manufacturers use this product with propane even though 
DOE does not include patented design options in rulemakings. (Id.) Zero 
Zone commented that DOE should plan energy levels around the use of A2L 
refrigerants in large, self-contained appliances instead of focusing on 
propane. (Id.)
    Based on a limited review of patents listed for split-circuit 
evaporators, DOE was able to find several patents for dual circuit 
evaporators, which are all either expired or abandoned.\39\ Zero Zone 
did not specify what is meant by ``split-circuit evaporators,'' and DOE 
was unable to locate any patent that would impact CRE manufacturer's 
ability to use evaporators with multiple circuits. Additionally, Zero 
Zone did not specify the manufacturer that it believes holds a patent 
on split-circuit evaporators. As such, DOE has tentatively determined 
that each manufacturer's design is unique and would not infringe on 
active patents and notes that even if there is an intellectual property 
claim on a specific split-circuit design, manufacturers could use a 
multiple circuit design with multiple evaporators without necessarily 
using split-circuit evaporators.
---------------------------------------------------------------------------

    \39\ See https://patents.google.com/patent/US3537274; https://patents.google.com/patent/US3866439A/en; https://patents.google.com/patent/US20120137724A1/en.
---------------------------------------------------------------------------

f. Fan Motors
    Zero Zone commented that it already uses electronically commutated 
motors (``ECM'') fan motors to meet the current energy standard and 
stated that it believes most of industry is also using this style of 
motor. (Zero Zone, No. 44 at p. 5) Zero Zone requested that DOE include 
the ECM motor in the base model. (Id.) Zero Zone stated that the 
opening height for this type of product has a disproportional impact on 
energy consumption because larger opening heights disproportionally 
increase energy use. (Id.) Zero Zone commented that DOE's models 
account for this characteristic. (Id.)
    DOE has maintained fan motor improvements as a technology option in 
this NOPR. As indicated by Zero Zone, DOE has observed that ECM fan 
motors are incorporated to a large extent in CRE. While DOE has 
observed ECMs incorporated in baseline equipment for multiple analyzed 
equipment classes, DOE has tentatively determined that certain baseline 
equipment still incorporates other less-efficient motor types. For 
these classes, DOE has maintained a transition to ECMs as a design 
option change. DOE has also updated its motor costs relative to the 
June 2022 Preliminary Analysis in this analysis to reflect current 
pricing. See chapter 3 and 5 of the NOPR TSD for additional details.
    Zero Zone commented that DOE suggested using permanent magnet 
synchronous motors for CRE. (Zero Zone, No. 44 at p. 6) Zero Zone noted 
that the study DOE references was completed in 2019, and the motors 
have not permeated the market since that time. (Id.) Zero Zone stated 
that the motors of such fans operate at 1800 RPM, creating unacceptable 
fan noise, and although its fan suppliers are aware of this technology, 
they do not recommend this style of motor for use in CRE. (Id.) Zero 
Zone recommended screening permanent magnet synchronous motors from use 
in CRE. (Id.)
    In response to Zero Zone, DOE has observed that permanent magnet 
synchronous motors are available on the market for CRE. However, DOE 
has not identified specific commercialized designs of permanent magnet 
synchronous motors with the appropriate size and rated airflow for the 
equipment analyzed in this NOPR. Based on these observations along with 
further discussions with manufacturers, DOE has not considered 
permanent magnet synchronous motors as a design option in this NOPR, as 
discussed further in section IV.C.1 of this document and chapter 5 of 
the NOPR TSD.
g. Defrost
    Continental commented that, to its knowledge, variable defrost 
controls have not proven to reduce energy consumption in CRE. 
(Continental, No. 38 at p. 2)
    Zero Zone commented that variable defrost is an unreliable option 
that results in lost food product and therefore a monetary impact when 
it does not operate as intended. (Zero Zone, No. 44 at p. 4) Zero Zone 
commented that the potential energy savings of variable defrost are 
outweighed by the potential loss of product. (Id.)
    While DOE considered variable defrost as a design option in the 
preliminary analysis, DOE has tentatively determined to not consider 
this design option in the NOPR. For further discussion, see section 
IV.C.1.b of this document and chapter 5 of the NOPR TSD.

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in commercially viable, existing 
prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the projected compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the product to 
subgroups of consumers, or result in the unavailability of any covered 
product type with performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as products generally available in the United States at the time, 
it will not be considered further.
    (4) Safety of technologies. If it is determined that a technology 
would have significant adverse impacts on health or safety, it will not 
be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving a 
given efficiency level, it will not be considered further, due to the 
potential for monopolistic concerns.
    (See 10 CFR 431.4; sections 6(b)(3) and 7(b) of the Process Rule).
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed in 
the following sections.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
    DOE received the following comments in response to the June 2022 
Preliminary Analysis regarding the screening analysis.
    ITW listed six design options that ITW stated sounded good but 
proved problematic: variable-speed

[[Page 70222]]

compressors that force other components to run; synchronous-reluctance 
fan motors with performance that does not match CRE applications; 
enhanced-UA condenser or evaporator coils that increase energy 
consumption; microchannel condenser coils that cannot be cleaned; 
additional one-half-inch insulation that adds cost but not value; and 
vacuum-insulated panels that prove too fragile for CRE. (ITW, No. 41 at 
pp. 34-35)
    AHRI provided feedback on Table 4.3.1 ``Retained Design Options,'' 
stating that improved transparent doors; higher efficiency lighting; 
ECM motors; evaporator and condenser fans, motors, blades and controls 
(closed self-contained cases); compressors; and variable-speed 
compressor horizontal closed transparent self-contained ice cream 
freezer (``HCT.SCI'') (specific to some specific smaller self-contained 
equipment) were already in use to meet the current standard. (AHRI, No. 
46 at p. 15) AHRI stated vacuum-insulated glass (``VIG'') was not 
economically viable. (Id.) AHRI stated thicker insulation, synchronous-
speed motors, and larger evaporators (due to space constraints) had 
reduced utility. (Id.) AHRI stated vacuum-insulated panels (prone to 
puncture, cannot be repaired), microchannel condensers (leak and plug 
during operation), evaporator and condenser fans, motors, blades, and 
controls (open cases), high-tech defrost fans (do not necessarily save 
energy and are unreliable), variable-defrost systems (do not reduce 
energy consumption), expansion valves, and larger evaporators 
(limitations due to flammable refrigerants) are not technically viable. 
(Id.) AHRI noted that in previous comments to DOE these options were 
considered to be max-tech, but, after further consultation with 
members, AHRI found them to be not technically viable design options. 
(Id.) AHRI stated that antisweat controls and night curtains, and 
occupancy sensors had a limited market. (Id.) And AHRI concluded that 
variable speed compressors (specific to some smaller, self-contained 
equipment--already used in some equipment) were a viable design option. 
(Id.)
    Zero Zone commented that vacuum-insulated glass is not a viable 
design option. (Zero Zone, No. 44 at p. 6) Zero Zone stated that its 
door supplier reported that the one vacuum-insulated glass supplier in 
the United States no longer offers the product because its high cost 
prevented customers from using it. (Id.)
    NAMA commented that several of the design options shown in the June 
2022 Preliminary TSD could reduce the overall machine capacity, such as 
larger condensers or evaporators, more insulation, and changes to the 
type of glass that require new structural components. (NAMA, No. 37 at 
p. 15) NAMA commented that the external dimensions of a CRE appliance 
are limited by the height of breakrooms and built-in areas, and the 
width and length are limited by the machine's integration with other 
machines with which CRE are paired. (Id.) NAMA commented that the June 
2022 Preliminary TSD did not address the resultant change in utility or 
performance caused by a reduction in overall capacity. (Id.) NAMA 
stated that smaller capacity resulted in customers opening the door for 
longer periods of time and necessitated more frequent re-stocking, 
making the appliance more difficult for business owners to operate. 
(Id.)
    NAMA also commented that several of the design options suggested by 
DOE (e.g., lower-wattage refrigeration systems, vacuum-panel 
insulation, different evaporators or condensers, and lower-wattage fan 
motors) could affect the overall performance of the machine. (Id.) NAMA 
stated that overall performance of CRE is critical and can be 
significantly affected by a difference of 1 degree Celsius. (Id.) NAMA 
requested that DOE review the design options for energy efficiency and 
also their ability to maintain critical design features and 
performance. (Id.)
    Based on these comments, DOE has tentatively determined to screen 
out two technology options mentioned by commenters, increased 
insulation thickness and vacuum-insulated panels, which are discussed 
in more detail in section IV.B.1 of this document.
    However, DOE disagrees with commenters that permanent magnet 
synchronous motors meet the criteria of ``impacts on product utility'' 
because, although the permanent magnet synchronous motors currently 
available on the market are not optimized for size and rated airflow of 
CRE,\40\ there is not a significant adverse impact on the utility of 
the product. DOE also disagrees with commenters that increased 
evaporator or condenser surface areas meet the criteria of ``impacts on 
product utility'' because there is not a significant adverse impact on 
the utility of the product unless the increased evaporator or condenser 
requires a reduction in the overall CRE capacity. DOE notes that it did 
not consider any technology options that reduce the overall CRE 
capacity, consistent with the criteria ``impacts on product utility.''
---------------------------------------------------------------------------

    \40\ See www.qmpower.com/wp-content/uploads/2022/06/Product_Info-QSync_12W_60Hz-6.2.22-WEB.pdf.
---------------------------------------------------------------------------

    DOE also disagrees with commenters that microchannel condensers, 
evaporator fan controls, variable defrost systems, expansion valve 
improvements, and increased evaporator surface area meet the criteria 
of ``technological feasibility.'' Microchannel heat exchangers are 
often used in the automobile industry, and the stationary air 
conditioning and refrigeration markets have seen recent increases in 
implementation of microchannel heat exchangers. As noted by commenters 
and based on feedback during manufacturer interviews, DOE only 
considered evaporator fan controls as a design option on closed self-
contained CRE equipment classes. DOE notes that the amount of energy 
saved for each design option is not a criterion for the screening 
analysis and is discussed in the engineering analysis. For increased 
evaporator surface area, DOE considered the limitations due to 
flammable refrigerants (e.g., R-290) consistent with industry safety 
standards as discussed in section IV.C.1.a of this document.
    Additionally, DOE disagrees with commenters that vacuum-insulated 
glass is not a viable design option. DOE is aware of vacuum-insulated 
glass door suppliers outside of the United States and notes that that 
``not economically viable'' is not one of the screening criteria 
specified in the Process Rule. DOE considered the cost of each design 
option in the engineering analysis.
    Finally, in response to commenters, DOE notes that ``high-tech 
defrost fans,'' ``lower-wattage refrigeration systems,'' and ``lower-
wattage fan motors'' are not technology options DOE has analyzed in the 
preliminary or NOPR analysis.
    DOE discusses the screened-out technologies in section IV.B.1 of 
this document, lists the remaining technology options in section IV.B.2 
of this document, and discusses the design options in section IV.C of 
this document and chapter 5 of the NOPR TSD.
1. Screened-Out Technologies
    For CRE, the screening criteria were applied to the technology 
options to either retain or eliminate technology for consideration in 
the engineering analysis. The screened-out technology options and the 
rationale for screening out each technology option considered in this 
analysis is detailed below.
a. Increased Insulation Thickness
    In response to the June 2022 Preliminary Analysis, Continental 
commented that increasing insulation thickness, even by half an inch as

[[Page 70223]]

proposed by DOE, would expand equipment sizes and/or reduce internal 
capacity, both of which would have significant negative impact on 
utility for the end user. (Continental, No. 38 at p. 2)
    Zero Zone commented that DOE's expectation that manufacturers will 
increase the thickness of insulation does not take into account the 
importance of physical dimensions in CRE equipment. (Zero Zone, No. 44 
at p. 4) Zero Zone added that customers need replacement equipment that 
will fit in the existing available space and fit through 80-inch 
doorways. (Id.) Zero Zone stated that increasing the thickness of the 
internal insulation reduces the refrigerated volume, and equipment 
classes that use refrigerated volume in their allowable energy 
calculation would therefore see a ``double hit.'' (Id.) Zero Zone 
asserted that the resources in engineering design hours and retooling 
costs for the sheet metal necessary to accommodate such adjustments to 
insulation would be overly burdensome to manufacturers. (Id. at pp. 4-
5) Zero Zone stated that increasing the thickness of internal 
insulation would result in stranded inventory for manufacturers and 
would affect end users' ability to replace their aging equipment due to 
size limitations. (Id. at p. 5)
    As discussed in chapter 3 of the NOPR TSD, increasing insulation 
thickness increases the thermal resistivity of the exterior of the 
unit, which in turn reduces the heat load that must be removed by the 
CRE's refrigeration system. However, to increase insulation thickness, 
either an increase to the size of the unit or a decrease to the 
refrigerated volume of the unit must occur. Because CRE is typically 
required to meet standard dimensions to fit into a fixed amount of 
space, the refrigerated volume of the unit may need to be decreased to 
accommodate increased insulation thickness, thus limiting the capacity 
of the unit. As a result, DOE has tentatively determined that increased 
insulation thickness meets the screening criterion of ``impacts on 
product utility.'' In this NOPR, DOE has screened out increased 
insulation thickness as a design option for improving the energy 
efficiency of CRE.
b. Vacuum-Insulated Panels
    In response to the June 2022 Preliminary Analysis, Continental 
commented that vacuum-insulated panels are relatively expensive, 
introduce significant complexity to manufacturing, reduce equipment 
structural stability, are subject to damage, and are not easily 
replaceable, requiring replacement of the entire unit. (Continental, 
No. 38 at p. 2)
    AHRI commented that cost estimates in the June 2022 Preliminary TSD 
were significantly underestimated related to pandemic-related scarcity 
pricing. (AHRI, No. 46 at pp. 14-15) AHRI stated it planned to complete 
a survey to clarify the cost of vacuum panels (estimated by DOE to be 
considerably less expensive than is accurate) among other components, 
but could not do so within the 30-day deadline, especially given that 
the comment period for the test procedure and the walk-in cooler and 
walk-in freezer Preliminary TSD overlapped. (Id. at p. 15) AHRI stated 
that components are difficult to obtain because of longer shipping 
times and this impacts research and development and testing timelines 
and time for listing through nationally recognized testing 
laboratories. (Id.) AHRI commented that these factors should be 
considered in future timing and rulemaking processes. (Id.)
    Zero Zone commented that vacuum-insulation panels are 
insufficiently robust and can lose their vacuum through bending or 
flexing. (Zero Zone, No 44 at p. 6) Zero Zone commented also that it 
can be difficult to determine the vacuum has been lost until the final 
product operation reveals condensation. (Id.) Zero Zone stated that 
large commercial refrigerators flex during shipping and customers 
fasten items to commercial refrigerators with screws, which can 
increase the risk of failure when using vacuum panels. (Id.) Zero Zone 
noted that a vacuum panel failure in a continuous line-up of remote 
commercial refrigerators results in the entire line up being moved to 
access the panel, which can result in replacement of the refrigerator. 
(Id.) Zero Zone recommended that DOE should not include vacuum-
insulated panels as a design option. (Id.)
    As discussed in chapter 3 of the NOPR TSD, VIPs allow reduction in 
insulation thickness while maintaining or increasing thermal 
resistivity, due to the reduced conductivity that occurs in a low 
vacuum. Because VIPs consist of an outer airtight membrane surrounding 
a core material to form a cavity, any puncture to a panel renders the 
VIP ineffective. This may prevent customers from being able to install 
any screws or fasteners into the panel. VIPs cannot be repaired once a 
leak is detected in the field and would require replacement upon 
puncture or failure. In the June 2022 Preliminary Analysis TSD, DOE 
stated that it had not observed VIPs incorporated in CRE but had 
observed VIPs used in other refrigeration products (e.g., consumer 
refrigerators) (see section 2.5.1.6 of the June 2022 Preliminary TSD).
    Based on comments received and feedback during manufacturer 
interviews, DOE has tentatively determined that because of the 
significant difference in shelf loads between commercial and consumer 
refrigeration units, CRE may require brackets or other supporting 
structures to accommodate the heavier shelf loads, installed with 
screws or fasteners that could puncture the VIP. As a result, DOE has 
tentatively determined that vacuum-insulated panels meet the screening 
criterion of ``impacts on product utility.'' In this NOPR, DOE has 
screened out vacuum-insulated panels as a design option for improving 
the energy efficiency of CRE.
c. Linear compressors
    As discussed in chapter 3 of the June 2022 Preliminary TSD and 
chapter 3 of the NOPR TSD, linear compressors use a linear rather than 
rotary motion to reduce the need for a crankshaft and linkage, 
resulting in reduced friction and side forces. Most linear compressors 
use a free-piston arrangement and can be controlled for a range of 
capacities. Compressor manufacturers had begun development on linear 
compressors for residential refrigerators. However, a lack of 
availability on the market of linear compressors with a large enough 
cooling capacity for commercial refrigeration sizes has prevented 
further development of this technology for commercial refrigeration 
applications and, therefore, DOE has tentatively determined that linear 
compressors meet the screening criterion of ``practicability to 
manufacture, install, and service.'' DOE did not receive any comments 
on its tentative determination to screen out linear compressors in 
response to the June 2022 Preliminary Analysis, and, in this NOPR, DOE 
has screened out linear compressors as a design option for improving 
the energy efficiency of CRE.
d. Air curtain design
    As discussed in chapter 3 of the June 2022 Preliminary TSD and 
chapter 3 of the NOPR TSD, an air curtain is a fan-powered device that 
creates a moving wall (curtain) of air, which separates two spaces of 
different temperatures. Air curtains are used in CRE to minimize the 
infiltration of warmer external air into the refrigerated space. DOE's 
research had presented the possibility of advanced air-curtain designs 
with levels of performance beyond the traditional air curtains 
generally employed in open display cases being used in the CRE 
industry.

[[Page 70224]]

However, DOE has tentatively determined that advanced air-curtain 
designs are currently only in the research stage and, therefore, DOE 
has initially determined that advanced air-curtain designs meet the 
screening criterion of ``practicability to manufacture, install, and 
service.'' DOE did not receive any comments on its tentative 
determination to screen out air curtains in response to the June 2022 
Preliminary Analysis, and, in this NOPR, DOE has screened out improved 
air curtains as a design option for improving the energy efficiency of 
CRE.
2. Remaining Technologies
    Through a review of each technology, DOE tentatively concludes that 
all of the other identified technologies listed in section IV.A.2 of 
this document met all five screening criteria to be examined further as 
design options in DOE's NOPR analysis. In summary, DOE did not screen 
out the following technology options presented in table IV.4.

            Table IV.4--Remaining Technology Options for CRE
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Insulation.............................  Evaporator
Improved resistivity of insulation       Increased surface area
 (insulation type).
Lighting...............................  Improved evaporator coil design
Higher-efficiency lighting.............  Low-pressure differential
                                          evaporator
Occupancy Sensors......................  Condenser **
Improved transparent doors *...........  Increased surface area **
Low-emissivity coatings *..............  Tube-and-fin enhancements **
Inert gas fill *.......................  Microchannel heat exchanger **
Vacuum-insulated glass *...............  Compressor **
Additional panes *.....................  Improved compressor efficiency
                                          **
Anti-sweat heater controls *...........  Alternative refrigerants **
Anti-fog films *.......................  Variable-speed compressors **
Frame design *.........................  Other technologies
Fans and fan motors....................  Defrost systems
Evaporator fan motors..................  Expansion valve improvements
Evaporator fan blades..................  Night curtains ***
Evaporator fan controls................  Liquid suction heat exchanger
                                          **
Condenser fan motors **................  ...............................
Condenser fan blades **................  ...............................
Condenser fan controls **..............  ...............................
------------------------------------------------------------------------
* Only applies to equipment classes with doors.
** Only applies to self-contained equipment classes.
*** Only applies to equipment classes without doors (open equipment
  classes).

    DOE has initially determined that these technology options are 
technologically feasible because they are being used or have previously 
been used in commercially available equipment or working prototypes. 
DOE also finds that all of the remaining technology options meet the 
other screening criteria (i.e., practicable to manufacture, install, 
and service and do not result in adverse impacts on consumer utility, 
product availability, health, or safety, unique-pathway proprietary 
technologies). For additional details, see chapter 4 of the NOPR TSD.
    DOE requests comment on the decision to screen out increased 
insulation thickness, vacuum-insulated panels, linear compressors, and 
air curtain design as design options for improving the energy 
efficiency of CRE.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of CRE. There are two 
elements to consider in the engineering analysis: the selection of 
efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of equipment cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
equipment, DOE considers technologies and design option combinations 
not eliminated by the screening analysis. For each equipment class, DOE 
estimates the baseline cost, as well as the incremental cost for the 
equipment at efficiency levels above the baseline. The output of the 
engineering analysis is a set of cost-efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
1. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing equipment (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design-option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual equipment on the market) may be 
extended using the design-option approach to ``gap fill'' levels (to 
bridge large gaps between other identified efficiency levels) and/or to 
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on 
the market).
    In this rulemaking, DOE relies on a design-option approach, 
supported with the testing and reverse engineering of directly analyzed 
CRE. The design options were incrementally added to the baseline 
configuration and continued through the ``max-tech'' configuration 
(i.e., implementing the ``best available'' combination of available 
design options).
    Consistent with the March 2014 Final Rule analysis (see chapter 5 
of the

[[Page 70225]]

March 2014 Final Rule TSD \41\), DOE estimated the performance of 
design option combinations using an engineering analysis spreadsheet 
model. This model estimates the daily energy consumption of CRE in kWh/
day at various performance levels using a design-option approach. DOE 
generally relied on test data, CCD information, feedback from 
manufacturer interviews, publicly available component information, and 
reverse engineering to support and calibrate the engineering analysis 
spreadsheet model. The model calculates energy consumption at each 
performance level separately for each analysis configuration.
---------------------------------------------------------------------------

    \41\ See www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    In the March 2014 Final Rule analysis, DOE selected 25 high 
shipment volume equipment classes, referred to as ``primary'' classes, 
to analyze directly in the engineering analysis (see chapter 5 of the 
March 2014 Final Rule TSD \42\). In this NOPR, DOE has followed a 
similar approach of directly analyzing 28 primary equipment classes. 
DOE directly analyzed the same primary equipment classes as the March 
2014 Final Rule, except that the PD.SC.M equipment class was not 
included, and DOE directly analyzed four new equipment classes: 
VCT.SC.H, VCS.SC.H, chef base self-contained medium temperature 
(``CB.SC.M''), chef base self-contained low temperature (``CB.SC.L''). 
Additional details of the engineering analysis are available in chapter 
5 of the NOPR TSD.
---------------------------------------------------------------------------

    \42\ See www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

a. Baseline Energy Use
    For each equipment class, DOE generally selects a baseline model as 
a reference point for each class, and measures changes resulting from 
potential energy conservation standards against the baseline. The 
baseline model in each equipment class represents the characteristics 
of equipment typical of that class (e.g., capacity, physical size). 
Generally, a baseline model is one that just meets current energy 
conservation standards, or, if no standards are in place, the baseline 
is typically the most common or least efficient unit on the market.
    In the June 2022 Preliminary TSD, DOE utilized the current 
standards for CRE for classes with current standards and the energy 
consumption based on the assumed baseline specifications modeled in the 
engineering analysis spreadsheet for classes without current standards 
as the baseline energy use for each analyzed equipment class. For 
higher efficiency levels, DOE assessed CRE efficiencies as a percent 
improvement relative to the baseline model. This provided a consistent 
efficiency comparison across each equipment class. DOE considered the 
efficiency improvements associated with implementing available design 
options beyond the baseline to the max-tech efficiency level. See 
chapter 5 of the June 2022 Preliminary TSD for additional details.
    In response to the June 2022 Preliminary Analysis, Zero Zone 
commented that, while it believes DOE is developing models and setting 
energy levels based on average energy values, no data were provided to 
confirm or deny that suspicion. (Zero Zone, No. 44 at p. 2) Zero Zone 
stated that setting energy values at an average expected level and 
requiring manufacturers to have all products meet the average energy 
level is incorrect, and such approach necessitates that manufacturers 
develop equipment with low enough average energy levels that the worst 
measured performance of any product is less than DOE's average value. 
(Id.) Zero Zone provided figures illustrating that if DOE's regulated 
average energy requirement is 30 kWh/day, then industry must shift to a 
new average that is less than the uncertainty level in order to be sure 
that products do not exceed the energy level requirement. (Id.) Zero 
Zone requested that DOE account for this lower energy level penalty and 
provide which options are included in each energy level so that Zero 
Zone can fully evaluate the proposals. (Id. at p. 3)
    Zero Zone additionally commented that DOE's proposed CRE test 
procedure requires manufacturers to calculate the uncertainty level and 
apply it to their rating, but DOE does not appear to apply the test 
requirements for uncertainty to its own work. (Id. at p. 2) Zero Zone 
stated that DOE proposed a 5-percent tolerance on total display area, 
but that one variation caused a 4.62-percent variation in allowable 
energy swinging on Zero Zone's five-door case. (Id.) Zero Zone 
requested that DOE take into account all uncertainty when estimating 
energy consumption of CRE. (Id.)
    In response to the comment from Zero Zone, DOE notes that the 
engineering spreadsheet model that is used to develop the baseline and 
efficiency levels is calibrated using publicly available CCD data, 
which are subject to the requirements of the determination of 
represented value at 10 CFR 429.42(a), as well as ENERGY STAR data and 
manufacturer-submitted data. The DOE requirements specify that 
manufacturers must determine the represented value, which includes the 
certified rating, for each basic model of commercial refrigerator, 
freezer, or refrigerator-freezer either by testing, in conjunction with 
the applicable sampling provisions, or by applying an alternative 
efficiency determination method (``AEDM''). In the case where the 
reported value is derived from testing, at least two or more units 
should be tested pursuant to 10 CFR 429.42 and the appropriate sampling 
statistics must be applied in order to develop the represented value. 
79 FR 22277, 22296. Any represented value of energy consumption or 
other measure of energy use of a basic model for which consumers would 
favor lower values shall be greater than or equal to the higher of: (1) 
the mean of the sample or, (2) the upper 95 percent confidence limit 
(UCL) of the true mean divided by 1.10. 10 CFR 429.42(a)(1)(ii)(A). 
These requirements provide a statistical assessment of test results 
used to determine the represented value for a basic model which 
indicates a high level of confidence that the model population average 
energy use is less than or equal to the standard. DOE did not consider 
additional uncertainty in the proposed maximum daily energy consumption 
standard equation in this NOPR analysis.
    DOE expects that Zero Zone is referring to section J., Enforcement 
Provisions, of the June 2022 Test Procedure NOPR and the respective 
proposed regulatory text at 10 CFR 429.134. As stated in the June 2022 
Test Procedure NOPR, product-specific enforcement provisions specify 
which ratings or measurements DOE will use to determine compliance with 
applicable energy or water conservation standards. 87 FR 39164, 39211. 
Generally, DOE provides that the certified metric is used for 
enforcement purposes (e.g., calculation of the applicable energy 
conservation standard) if the average value measured during assessment 
and enforcement testing is within a specified percent of the rated 
value. Id. Otherwise, the average measured value would be used. Id. DOE 
proposed to add a new product-specific enforcement provision section 
stating that the certified volume for CRE will be considered valid only 
if the measurement(s) (either the measured volume for a single unit 
sample or the average of the measured volumes for a multiple unit 
sample) is within five percent of the certified volume; otherwise, the 
measured volume would be used as the basis for determining the

[[Page 70226]]

applicable energy conservation standard. Id. at 87 FR 39212. Similarly, 
DOE proposed that the certified TDA for CRE will be considered valid 
only if the measurement(s) (either the measured TDA for a single unit 
sample or the average of the measured TDAs for a multiple unit sample) 
is within five percent of the certified TDA. Id. If the certified TDA 
is found to not be valid, the measured TDA would be used to determine 
the applicable energy conservation standard. Id. These proposals in the 
June 2022 Test Procedure NOPR are specific to how DOE conducts 
enforcement testing and a tolerance on the certified volume or TDA of a 
given CRE model is used to decide whether the certified volume or TDA 
will be used to determine compliance with the applicable standard, or, 
if the average measured volume or TDA is outside of the tolerance, the 
average measured volume or TDA of the assessment and enforcement units 
will be used to determine compliance with the applicable standard.
    Refrigerants. In response to the June 2022 Preliminary Analysis, 
DOE received several comments from stakeholders regarding how 
refrigerants were considered in the preliminary engineering analysis.
    AHRI commented that many states that adopted the SNAP Rules do not 
allow the use of the refrigerant R404A. (AHRI, No. 46 at p. 3) AHRI 
requested clarification regarding whether this addresses self-contained 
cases. (Id.)
    NAFEM expressed concern about DOE's position not to account for 
future refrigerant regulatory changes by the EPA. (NAFEM, No. 40 at p. 
3). NAFEM stated its concern that DOE had not analyzed refrigerant 
transitions of remote condensing systems in the June 2022 Preliminary 
TSD and had declined to evaluate alternative refrigerants as a design 
option for remote CRE due to the lack of a test procedure. (Id.) NAFEM 
recommended that DOE and EPA better coordinate their actions to achieve 
their mutual goals, and NAFEM volunteered to educate DOE technical 
staff so that any proposed rule accurately reflects industry knowledge. 
(Id.)
    The Joint Commenters requested that DOE analyze propane refrigerant 
for additional equipment classes. (Joint Commenters, No. 39 at p. 1)
    AHRI commented that a preliminary transition was in process from R-
404A to refrigerants with a global warming potential of approximately 
1500 and refrigerants used in colder temperature applications have a 
GWP of 2200. (AHRI, No. 46 at p. 12) AHRI noted that most lower-GWP 
refrigerants were limited by building codes because the necessary 
standard, UL 60335-2-89, was just published recently in October 2021. 
(Id.) AHRI commented that the second, more complex and costly 
refrigerant transition in January 2026 was unaccounted for in the June 
2022 Preliminary TSD, and that the two transitions will have a 
significant reduction in radiative-forcing, short-lived climate-
polluting HFCs and should be taken into consideration in the social 
cost of carbon and environmental impact assessments. (Id.)
    AHRI commented that EPA does not yet allow for R-290 or an ASHRAE 
Class A3 refrigerant to be used and few of the thousands of State and 
local building codes have been updated to charge refrigeration 
equipment and store necessary quantities to supply end-user needs. (Id. 
at p. 13) AHRI stated that significant work must be done to finalize 
codes prior to the anticipated 2026 transition and AHRI noted that AZ, 
CO, IN, ME, MO, NY, TN, TX, VT, WA, and WV would allow for the use 
these new refrigerants once the EPA listed them. (Id. at pp. 13-14)
    AHRI pointed out that manufacturers are still testing refrigerants 
for the 2026 transition, and that because refrigerant and component 
manufacturers have largely been focused on larger markets than many of 
the equipment types sold in the CRE space, not all of the details are 
known about the impact of specific refrigerants to energy efficiency. 
(Id. at p. 13) AHRI stated, however, that some proposed blends are 
known to have higher glide and lower efficiencies (some significantly 
lower) than those in use, especially for colder-temperature 
applications. (Id.) AHRI commented that, in addition, the energy 
efficiency impact of an important mitigation strategy related to 
refrigerants has not been addressed--the need to continuously operate 
fans to reduce the risk of reaching a flammable concentration. (Id.) 
AHRI noted that, in some cases, glide is high enough that evaporator 
re-design is needed, making costs even higher to conform with energy 
conservation standards. (Id.)
    AHRI commented that most lower-GWP refrigerants have a different 
flammability classification than those currently used today and cost 
estimates must also include new electrical components required to be 
``spark-proof'' to eliminate the risk of ignition in case of a leak. 
(Id. at p. 12) AHRI noted that motors, wiring, compressors, and other 
components must all comply with this flammability classification, 
making them more costly than estimated in the June 2022 Preliminary 
TSD. (Id.)
    NAMA stated that several of the design options mentioned in the 
June 2022 Preliminary TSD are either not available or not realistic in 
NAMA equipment, such as the change to an A-3 refrigerant that would 
require nearly a dozen other components to also be changed. (NAMA, No. 
37 at p. 7).
    NAMA commented that DOE failed to mention the CRADA between the 
NAMA Foundation, DOE, and Oak Ridge National Laboratory (``ORNL'') in 
the June 2022 Preliminary TSD. (Id. at p. 12) NAMA stated that most of 
the activities during the 2019-2021 CRADA were focused on reducing the 
risk during a potential leak situation. (Id.) NAMA stated that in 
nearly all scenarios tested by ORNL, additional fans were necessary to 
reduce the mixture of air and refrigerant below the lower flammability 
limit (``LFL''), but the energy used by these fans was not accounted 
for in the June 2022 Preliminary TSD. (Id.) NAMA commented that the 
proposed DOE test procedure would actually penalize self-contained 
bottle cooler manufacturers for using additional ventilation. (Id.) 
NAMA further stated that the COVID-19 pandemic had delayed progress in 
the CRADA and that NAMA had requested an extension so that the 
remaining items (over half) could be studied. (Id.) NAMA commented that 
these remaining items look at possible energy efficiency gains, and the 
lack of results had put its industry behind schedule to meet any new 
energy efficiency requirements from DOE. (Id.) NAMA requested that DOE 
delay new minimum energy efficiency standards until manufacturers have 
the research from ORNL to pursue the research and development of new 
technologies. (Id.)
    Zero Zone commented that DOE asserted multi-circuit evaporators are 
a design option that would allow larger pieces of equipment to use 
propane in multiple small systems. (Zero Zone, No. 44 at p. 5) Zero 
Zone commented that using propane in systems over 150 grams requires 
additional leak-mitigation equipment. (Id.) Zero Zone stated that until 
the release of UL 60335-2-89, CRE could only use 150-gram charges of 
propane and were not required to have mitigation strategies, which 
explains why DOE has not observed mitigation on CRE on the market. 
(Id.) Zero Zone requested that DOE include the mitigation cost in its 
evaluation. (Id.)
    As recommended by stakeholders, DOE is considering the impact of 
the December 2022 EPA NOPR on CRE in this NOPR. As described in section 
I of this document, DOE understands that it would be beneficial to CRE 
equipment

[[Page 70227]]

manufacturers to align the compliance date of any DOE amended or 
established standards as closely as possible with the refrigerant 
prohibition dates proposed by the December 2022 EPA NOPR. Therefore, 
DOE is proposing that the proposed standards, if adopted, would apply 
to all CRE listed in table I.1 manufactured in, or imported into, the 
United States on or after the date that is 3 years after the date on 
which the final established and amended standards are published. The 
December 2022 EPA NOPR proposed to prohibit manufacture or import of 
such CRE starting January 1, 2025, which is at least 3 years earlier 
than the expected compliance date for any amended CRE standards 
associated with the proposals in this document. Hence, the proposed 
refrigerant prohibitions listed in the December 2022 EPA NOPR are 
assumed to be enacted for the purpose of DOE's analysis in support of 
this NOPR.
    Refrigerants not prohibited from use in CRE in the December 2022 
EPA NOPR are presumed to be permitted for use in CRE. Table IV.5 
summarizes the relevant provisions from the December 2022 EPA NOPR.

           Table IV.5--December 2022 EPA NOPR Summary for CRE
------------------------------------------------------------------------
                                   Proposed GWP
     Sectors and subsectors            limit          Compliance date
------------------------------------------------------------------------
Retail food refrigeration--stand-            150  January 1, 2025.
 alone units.
Retail food refrigeration--                  150  January 1, 2025.
 refrigerated food processing
 and dispensing equipment.
Retail food refrigeration--                  150  January 1, 2025.
 supermarket systems with
 refrigerant charge capacities
 of 200 pounds or greater.
Retail food refrigeration--                  300  January 1, 2025.
 supermarket systems with
 refrigeration charge capacities
 less than 200 pounds charge.
Retail food refrigeration--                  300  January 1, 2025.
 supermarket systems, high
 temperature side of cascade
 system.
Retail food refrigeration--                  150  January 1, 2025.
 remote condensing units with
 refrigerant charge capacities
 of 200 pounds or greater.
Retail food refrigeration--                  300  January 1, 2025.
 remote condensing units with
 refrigerant charge capacities
 less than 200 pounds.
Retail food refrigeration--                  300  January 1, 2025.
 remote condensing units, high
 temperature side of cascade
 systems.
------------------------------------------------------------------------

    In the December 2022 EPA NOPR, self-contained CRE (EPA refers to 
self-contained CRE as ``stand-alone equipment'') are limited to a GWP 
of 150 for all DOE self-contained equipment classes. Commercial 
refrigeration equipment has typically used R-404A or R-134a 
refrigerant, which have a GWP above 150. Because of the high GWP of R-
404A and R-134a, significant research has been conducted to find 
alternative refrigerants with less or no GWP. Naturally occurring 
substances such as carbon dioxide, ammonia, and hydrocarbons 
(specifically propane (i.e., R-290) for commercial refrigeration 
equipment) all have very low GWP. DOE notes that several manufacturers 
currently rate CRE models to both ENERGY STAR \43\ and DOE \44\ with 
CRE equipment using R-290 (GWP of 3) and manufacturers indicated in 
manufacturer interviews that the industry is planning to transition to 
R-290 for self-contained CRE. EPA currently lists R-290 as acceptable 
with use conditions for self-contained CRE,\45\ however, EPA has not 
yet updated the use conditions for R-290 consistent with the latest 
industry safety standards for CRE. EPA currently lists R-290 as 
acceptable with use conditions for a refrigerant charge of up to 150 
grams in self-contained CRE, but in a recent proposed rule, EPA 
proposed to increase the allowable charge to 304 grams for closed 
equipment and 494 grams for open equipment to harmonize with the 
maximum charge quantity allowed by industry safety standards \46\ and 
to be consistent with the December 2022 EPA NOPR (i.e., prohibitions 
for retail food refrigeration--standalone units, when using or intended 
to use a regulated substance, or a blend containing a regulated 
substance with a global warming potential of 150 or greater). 
Therefore, DOE has tentatively determined that once EPA finalizes the 
proposed increases to the allowable charge limits, all self-contained 
CRE equipment can use R-290.
---------------------------------------------------------------------------

    \43\ See www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results.
    \44\ See www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
    \45\ See www.epa.gov/snap/substitutes-stand-alone-equipment.
    \46\ SNAP Proposed Rule 26 (88 FR 33722) harmonizes with UL 
Standard 60335-2-89, Edition 2, published on October 27, 2021.
---------------------------------------------------------------------------

    DOE expects that the use of R-290 generally will improve efficiency 
as compared with the refrigerants currently in use (e.g., R-404A), 
which are proposed to be prohibited by the December 2022 EPA NOPR, 
because R-290 has higher refrigeration-cycle efficiency than the 
current refrigerants. Thus, DOE expects the December 2022 EPA NOPR to 
require redesign that will improve the efficiency of self-contained CRE 
equipment. Hence, the baseline levels for self-contained CRE in this 
NOPR reflect the design changes made by manufacturers in response to 
the December 2022 EPA NOPR, which incorporates refrigerant conversion 
to R-290. The expected efficiency improvement associated with this 
refrigerant change varies by class and is presented in table IV.6.
    DOE considered the requirement for components to be ``spark-proof'' 
for use with the R-290 refrigerant (i.e., propane) and the associated 
costs were included in the cost of baseline models.
    In chapter 2 of the June 2022 Preliminary TSD, DOE stated that DOE 
has not observed any additional leak monitoring or ventilation 
components for leak mitigation in any analyzed self-contained equipment 
that currently incorporates R-290 refrigerant.\47\ (See June 2022 
Preliminary TSD, Chapter 2). As a result, for the representative 
equipment sizes considered in the preliminary engineering analysis, DOE 
initially determined that leak mitigation controls are not needed and 
therefore did not account for any additional energy consuming 
components with the transition to R-290 refrigerant. (Id.) Based on the 
CRE that DOE tested and tore down in support of this NOPR, DOE

[[Page 70228]]

has not observed any refrigerant leak mitigation controls that consume 
additional energy use for self-contained CRE that use 150 grams of R-
290 or less. DOE expects that any refrigerant leak mitigation controls 
that manufacturers implement on self-contained CRE would not use any 
additional energy use as measured according to the DOE test procedure 
(e.g., any ventilation fans used to disperse refrigerant in the event 
of a refrigerant leak would not be on and using energy unless a 
refrigerant leak was detected).
---------------------------------------------------------------------------

    \47\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------

    In response to the comment from NAMA, DOE acknowledges the ongoing 
research at ORNL under the CRADA. DOE recognizes that leak mitigation 
technologies are still under development and requests comment and data 
on the use of such technologies, how they may impact CRE energy use as 
measured according to the DOE test procedure, and the associated cost 
of such technologies. DOE welcomes any additional comments and 
supporting data, including any additional results of the CRADA, in 
response to this NOPR.
    DOE is also aware of small CRE equipment using R-600a, which is a 
similar refrigerant to R-290. DOE has tentatively determined that R-
600a has similar refrigeration-cycle efficiency as R-290 and that the 
performance of CRE using R-290 is representative of CRE using R-600a.
    As discussed in section IV.C.1.a, remote condensing CRE have 
proposed GWP limits of either 150 or 300, depending on the refrigerant 
system charge size or refrigerant system type. In chapter 2 of the June 
2022 Preliminary TSD, DOE noted that the current and proposed DOE test 
procedures account for the refrigeration load of remote cases plus any 
energy consumed by components within the equipment.\48\ (See June 2022 
TSD, Chapter 2) By reference to table 1 in AHRI 1200, the test 
procedure calculates an expected compressor energy consumption 
associated with the case refrigeration load, independent of compressor 
details including refrigerant type. (Id.) Hence, DOE initially 
determined that alternative refrigerants in remote CRE cases do not 
result in changes in measured energy consumption. (Id.) Therefore, DOE 
did not consider alternative refrigerants in remote CRE cases in the 
preliminary engineering analysis. (Id.) In this NOPR, DOE has 
tentatively determined that the current standard is representative of 
the baseline energy use for remote-condensing CRE using refrigerants 
that comply with the December 2022 EPA NOPR when tested according to 
the DOE test procedure.
---------------------------------------------------------------------------

    \48\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------

    DOE's analysis considers that these efficiency improvements, 
equipment costs, and manufacturer investments required to comply with 
the December 2022 EPA NOPR will be in effect prior to the time of 
compliance for the proposed amended DOE CRE standards for all CRE 
equipment classes and sizes. DOE has updated its baseline equipment 
costs to reflect current costs based on feedback received during 
manufacturer interviews, information collected during CRE teardowns, 
and market research.

   Table IV.6--Effect of Use of R-290 on Energy Use in Baseline Models
------------------------------------------------------------------------
                                                            Energy use
                                                             reduction
                     Equipment class                         below DOE
                                                           standard (%)
------------------------------------------------------------------------
VOP.SC.M................................................             4.4
SVO.SC.M................................................             9.2
HZO.SC.M................................................            19.5
HZO.SC.L................................................             4.8
VCT.SC.M................................................            18.8
VCT.SC.L................................................             2.8
VCS.SC.M................................................            20.5
VCS.SC.L................................................             8.5
HCT.SC.M................................................             0.0
HCT.SC.L................................................             0.0
HCS.SC.M................................................            20.1
HCS.SC.L................................................            22.1
SOC.SC.M................................................             2.7
VCT.SC.I................................................             0.0
HCT.SC.I................................................             0.0
VCS.SC.I................................................             3.3
------------------------------------------------------------------------

    The expected energy efficiency improvement associated with the 
change to R-290 is based on R-290 single-speed compressors currently 
available on the market suitable for CRE equipment. In this NOPR, DOE 
did not consider additional single-speed compressor efficiency 
improvements beyond the baseline because DOE expects that the single-
speed compressors currently available on the market for refrigerants 
that comply with the December 2022 EPA NOPR represent the maximum 
single-speed compressor efficiency achievable for each respective 
equipment class.
    DOE requests comment on its proposal to use baseline levels for CRE 
equipment based upon the anticipated design changes that will be made 
by manufacturers in response to the December 2022 EPA NOPR.
    DOE further requests comment on its estimates of energy-use 
reduction associated with the design changes made by manufacturers in 
response to the December 2022 EPA NOPR.
    Baseline Components. NAMA commented that the June 2022 Preliminary 
TSD contained errors and appeared to have been prepared prior to 
significant changes that occurred from 2019-2022. (NAMA, No. 37, p. 4-
5) NAMA commented also that features DOE seemed to believe represented 
future improvements to design had already been implemented, leading to 
inaccurate baseline model assumptions by DOE about energy efficiency 
levels and incremental costs. (Id. at p. 5)
    NAMA stated that DOE's design changes, project energy efficiency 
improvements, and cost data on the 12 design options under 
consideration appeared outdated by 10 years and applicable only to very 
large machines greater than 50 cubic feet in volume. (Id. at p. 7) NAMA 
further commented that the design options were not representative of 
the possible changes, availability, and costs associated with 
refrigerated bottle coolers and small self-contained display cabinets. 
(Id.) NAMA recommended that DOE change its categories and make 
allowances for the differences in energy efficiency between small and 
large equipment, as well as differences in cost and cost-benefit 
analysis. (Id. at p. 9) NAMA commented that DOE could use data on 
shipments to modify DOE percentages according to sales-weighted 
numbers. (Id.) NAMA proposed that DOE restructure its categories in the 
June 2022 Preliminary TSD to include two ranges: Range 1, which would 
be less than 30 cubic feet, and Range 2, which would be 30 cubic feet 
and over in volume. (Id.) NAMA commented that it believes using these 
categories would enable a more accurate assessment of the energy 
savings and cost burden. (Id.)
    NAFEM and NAMA commented that the design options in the 2014 TSD 
were so stringent that industry had to go beyond DOE's standards and 
incorporate features such as LED lighting, brushless DC evaporator fan 
motors, high-performance doors, and brushless DC condenser fan motors. 
(NAFEM, No. 40 at pp. 5-6; NAMA, No. 37 at p. 5)
    Zero Zone similarly stated that it disagrees with the design 
options that fall above the 2017 equipment class maximum daily energy 
consumption standard level and that LED lighting, high-efficiency fan 
motors (like ECM), and high-performance doors are already employed to 
meet current maximum energy consumption levels. (Zero Zone, No. 44 at 
p. 3) Zero Zone commented that this information is available on company 
specification sheets and that an analysis using this available 
information would show that the slope

[[Page 70229]]

of the manufacturer production costs versus daily energy use in DOE's 
engineering spreadsheet should be re-evaluated. (Id.)
    ITW recommended adding technologies to the baseline as they were 
applied by industry, citing examples including ECM fans, high-
efficiency compressors, and evaporator fan controls. (ITW, No. 41 at p. 
34)
    NAFEM and NAMA stated that because these and other technologies 
were already necessary to meet the 2014 standard, DOE should not be 
able to claim any new energy efficiency benefits when incorporating 
such technologies into the June 2022 Preliminary TSD. (NAFEM, No. 40 at 
p. 6; NAMA, No. 37 at p. 5) Zero Zone similarly commented that DOE's 
graph in the June 2022 Preliminary TSD indicates that using high-
performance doors would reduce the calculated daily energy use from 
35.14 kWh/day to 26.60 kWh/day, but Zero Zone stated that this design 
option is already employed by manufacturers, and that DOE is therefore 
double counting the impact of high-performance doors. (Zero Zone, No. 
44 at p. 3).
    AHRI commented that design options included in the June 2022 
Preliminary TSD--such as high efficiency doors, fans, motors, and ECM 
in self-contained cases--are largely already incorporated by 
manufacturers to meet current standards and that counting them a second 
time will not cause the equipment to meet the proposed energy 
efficiency levels. (AHRI, No. 46 at p. 3) AHRI noted that vacuum-packed 
doors and insulation are a few of the recommended design options that 
are not already in use by manufacturers. (Id.) AHRI commented that low-
temperature vertical closed transparent (``VCT'') classes already use 
high-efficiency doors and that DOE's model is incorrect regarding low-
temperature VCT equipment classes as DOE assumes no-sweat anti-heat. 
(Id. at p. 6) AHRI noted that DOE's baseline does not meet current 
energy-efficiency standards, as the current standard for VCT remote low 
temperature allowable is 34.46 kWh/day compared to 35.14 kWh/day in 
DOE's baseline design without design options. (Id.) AHRI noted also 
that there is no room for anti-sweat controls under the ASHRAE test 
conditions and therefore this technology is not logical. (Id.)
    AHRI commented that many potential energy saving scenarios in the 
June 2022 Preliminary TSD contain elements that are already in use or 
are technically impractical for refrigeration equipment. (Id. at p. 14) 
AHRI stated that the tear-down analysis must have used equipment built 
before 2019, which would have excluded design features needed to meet 
current energy conservation standards, such as efficient doors and LED 
lights. (Id.) AHRI commented that variable-speed compressors are 
impactful with significant changing loads, but not for most 
refrigeration systems. (Id.) AHRI also stated that the analysis failed 
to recognize concerns with proposed product features; for example, 
retailers generally do not want occupancy lighting because a light that 
is off indicates to consumers that equipment is not working properly 
and that food may be spoiled. (Id.) AHRI commented that energy-saving 
opportunities are lower after the elimination of design features that 
are technically infeasible, already in use, or cost prohibitive. (Id.) 
AHRI stated that design options are also limited by the equipment 
footprint: larger compressors or additional insulation requirements 
increase case sizes and reduce storage capacity, creating less utility 
and requiring remodeling to fit in current spaces. (Id.) AHRI commented 
that the June 2022 Preliminary TSD failed to address the impact of 
design options on performance or other design features, such as 
temperature, and offered the example of the VCT.RC.M equipment class in 
which some OEMs have begun incorporating high-efficiency, triple-pane 
doors and increased insulation. (Id.) AHRI stated the baseline 
components in the tear-down analysis included evaporator fans that are 
shaded pole motors and have not been used in years. (Id.)
    Continental stated that some selections in the June 2022 
Preliminary TSD technology options have not been sufficiently evaluated 
for their current usage, anticipated contribution to energy reduction, 
technological viability, cost impact, and/or bearing on the utility of 
the equipment. (Continental, No. 38 at p. 2) Continental noted that 
many manufacturers already use improved transparent doors, high-
efficiency LED lighting, and high-efficiency ECM fans to meet current 
standards for DOE and/or ENERGY STAR. (Id.)
    Zero Zone commented that DOE did not conduct manufacturer 
interviews. (Zero Zone, No. 44 at p. 5) Zero Zone stated that each of 
its models in the compliance database uses a unique code to identify 
the components provided. (Id.) Zero Zone questioned how DOE determined 
what is included in this base line. (Id.)
    With respect to comments from NAMA, NAFEM, ITW, AHRI, Continental, 
and Zero Zone, DOE followed a similar approach to the March 2014 Final 
Rule analysis in the June 2022 Preliminary Analysis but incorporated 
additional design options and updated the design option assumptions 
based on publicly available manufacturer specifications and preliminary 
test data. In support of this NOPR, manufacturer interviews were 
conducted and interviews yielded feedback on several aspects of the 
June 2022 Preliminary Analysis, including typical CRE baseline 
components. Further, DOE has reviewed the current CRE market, 
incorporated feedback from the June 2022 Preliminary Analysis, and 
incorporated information gathered during manufacturer interviews to 
update the baseline components in this NOPR to reflect current designs 
and ensure that design options have not already been implemented in a 
representative baseline CRE for each equipment class.
    For the June 2022 Preliminary Analysis, DOE directly analyzed 
multiple equipment classes intended to represent the majority of 
industry shipments for CRE. Within each analyzed equipment class, DOE 
also selected a volume or TDA for the analysis to best represent the 
range of equipment available in that equipment class. For currently 
covered equipment classes, the representative volumes and TDAs selected 
were consistent with those analyzed for the March 2014 Final Rule. DOE 
has retained the June 2022 Preliminary Analysis approach in this NOPR. 
Although the NOPR analysis is conducted at one representative volume or 
TDA for each directly analyzed class, DOE considers the components, 
design options, costs, and energy use characteristics of CRE across the 
entire equipment class.
    See chapter 5 of the NOPR TSD for additional details on the 
baseline components in each equipment class.
    AHT commented that internal LED lighting is a common characteristic 
in all closed transparent equipment classes, yet in the June 2022 
Preliminary Analysis, DOE does not indicate lights for the baseline 
design options for horizontal closed transparent self-contained 
equipment classes (HCT.SC.M, HCT.SC.L, HCT.SC.I). (AHT, No. 48 at p. 1) 
AHT stated that good internal illumination is of high importance for 
these units because their purpose is to display refrigerated or frozen 
food to the end consumer, whereas open units may be sufficiently 
illuminated with external ceiling lights. (Id. at pp. 1-2) AHT 
commented that DOE's energy rating regulation does not consider the 
energy consumption of such external lights or the additional headload, 
further disadvantaging closed

[[Page 70230]]

units compared to open units. (Id. at p. 2) AHT commented that the 
energy consumption of open units relying on external lights is 
substantially higher than the test result suggests because the 
additional lighting is often higher than the 800 lux stated in the test 
procedure. (Id.)
    AHT commented that manufacturers have already incorporated many of 
the proposed design options to meet current limits for HCT.SC.M/L/I and 
provided the example of a unit from the HCT.SC.M equipment class with 
around 25 ft\2\ of TDA, which already uses high-efficiency 
reciprocating compressors, brushless DC condenser fan motors, variable-
speed compressors, and an additional half inch of insulation to achieve 
the measured consumption of 1.9 kWh/24h in the test. (Id. at pp. 2-3)
    Based on a review of these comments, manufacturer feedback, and the 
available equipment on the market, DOE has included lighting and 
additional components at the baseline for horizontal closed transparent 
CRE equipment in this NOPR. See chapter 5 of the NOPR TSD for 
additional details.
    Regarding fan motors, the CA IOUs referred DOE to their comments on 
the July 2021 RFI in which they stated that there has been continued 
improvement in fan motors since energy conservation standards were last 
analyzed. (CA IOUs, No. 43 at p. 2) The CA IOUs expressed gratitude 
that DOE included electronically commutated permanent magnet motors, 
also known as brushless permanent magnet motors or brushless DC motors 
and synchronous motors; however, the CA IOUs also commented that the 
list of fan motor technology options analyzed for the closed-door 
refrigeration categories is incomplete, as shown in the CA IOUs Table 
1, which lists all analyzed fan types alongside all self-contained 
equipment families. (Id. at pp. 2-3) The CA IOUs recommended that the 
evaporator fan technology options analyzed in the vertical closed 
refrigeration category also be analyzed for the horizontal closed 
refrigeration category. (Id. at p. 2) The CA IOUs stated that several 
horizontal glass case manufacturers offer medium- to low-temperature 
convertible units, suggesting that analyzing the same technology 
options for these two equipment classes makes sense. (Id.)
    The Joint Commenters recommended that DOE analyze evaporator 
technologies for horizontal, closed CREs as DOE had done for the 
majority of CRE equipment classes. (Joint Commenters, No. 39 at p. 2) 
The Joint Commenters stated that DOE's analysis found that these 
evaporator-related technology options result in significant energy 
savings for other equipment classes analyzed. (Id.) The Joint 
Commenters stated that they are unsure why DOE excluded evaporator 
technology options for horizontal closed CREs. (Id.)
    In response to the comments from the CA IOUs and the Joint 
Commenters, DOE notes that the horizontal closed category (horizontal 
closed transparent or solid equipment classes) consists of CRE that 
utilize either cold-wall or forced-air evaporators depending on the 
equipment class. DOE observed that each primary equipment class that 
utilizes forced air evaporators has an evaporator fan and motor and 
each primary equipment class that utilizes cold-wall evaporators does 
not have an evaporator fan and motor. Therefore, classes with a cold-
wall evaporator did not have an evaporator fan motor design option. See 
chapter 5 of the NOPR TSD for additional details.
    The CA IOUs commented that the June 2022 Preliminary TSD analysis 
for several equipment categories (e.g., chef bases/griddle stands, 
semi-vertical open, and horizontal closed transparent) assumes shaded-
pole motors as the baseline; however, the CA IOUs stated that shaded-
pole motors are rarely used in new equipment in the industry and 
recommended that DOE analyze permanent split capacitor (``PSC'') motors 
as the baseline. (CA IOUs, No. 43 at p. 3) Similarly, AHRI commented 
that there are inconsistencies with the assumptions made regarding 
efficiency levels in the June 2022 Preliminary TSD: (1) the VOP.RC.M 
(open dairy cases) class in the baseline already have ECMs, which 
should have been the baseline motor, and (2) LED lighting contributing 
to increased efficiency. (AHRI, No. 46 at p. 2)
    With respect to the comment from the CA IOUs, for chef bases or 
griddle stands, DOE has tentatively determined that, based on teardowns 
conducted in support of this NOPR, shaded-pole motors (``SPMs'') are 
used for fan motors in baseline equipment. See chapter 5 of the NOPR 
TSD for additional details.
    Regarding the equipment noted by commenters, DOE has also updated 
baseline components in this NOPR for all equipment classes (including 
those components and classes mentioned by commenters) to better reflect 
baseline CRE. See chapter 5 of the NOPR TSD for additional detail.
    Equipment Classes with Unique Energy Use Characteristics. ITW 
commented that, in terms of design-options compliance with the MDEC 
value, DOE failed to recognize that manufacturers might use other 
options farther down the list of compliant design options to produce 
cabinets with increased heat loads due to their physical features 
(other than those required by a simple reach-in refrigerator), citing 
the following applications as examples: (1) pass-through 
refrigerators--cabinets with doors on both sides, providing access to 
stored items from either side; (2) roll-in refrigerators--cabinets with 
ramps and door sweeps that allow for loading of bakery carts; and (3) 
roll-through refrigerators--cabinets with ramps and door sweeps on both 
sides that allow for bakery carts to move in and out from one side to 
the other. (ITW, No. 41 at p. 33) ITW commented that in the 2014 TSD, 
DOE proposed many of the same design options to achieve compliance and 
manufacturers adopted many of the options, such as ECM fans and high-
efficiency compressors, with the industry trending toward R-290 
refrigeration systems. (Id.) ITW commented that DOE does not prescribe 
technologies; it recommends them and industry selects the technology 
used for compliance. (Id.)
    NAFEM stated that it and other commenters recommended separating 
forced-air and cold-wall refrigeration systems into different 
categories, yet DOE deferred making a decision until a future proposed 
rule. (NAFEM, No. 40 at p. 3) NAFEM commented that the preliminary TSD 
stage is the appropriate stage to adopt a position on these categories 
and that DOE's deferral missed an opportunity for DOE to work with 
NAFEM members to fully understand the issues. (Id.)
    NAFEM also commented that DOE's decision to defer accounting for 
different door configurations (roll-in, roll-through, and pass-through 
doors) presented a similar missed opportunity for DOE to work with 
NAFEM members. (Id.)
    With respect to the comments from ITW and NAFEM, DOE recognizes 
that certain CRE equipment classes may contain equipment that utilize 
either forced-air evaporators or cold-wall evaporators and that certain 
CRE equipment classes may contain equipment that have different door 
configurations (e.g., roll-in, roll-through, and pass-through). Based 
on CCD data, information from commenters and manufacturer interviews, 
and DOE's directly analyzed units showing an energy use difference 
between certain types of CRE, DOE has tentatively determined to include 
separate energy use equations based on an energy use multiplier for 
certain equipment classes that contain CRE with unique utility. This 
energy use multiplier will require models with certain characteristics 
(e.g.,

[[Page 70231]]

roll-in doors, roll-thru doors, pass-thru doors, forced-air 
evaporators) to comply with an energy conservation standard that has a 
higher maximum daily energy consumption than the proposed energy 
conservation standard for a specific equipment class. DOE has initially 
determined that the energy use multipliers do not result in maximum 
daily energy consumptions that are higher than the current energy 
conservation standard for a given equipment class (i.e., complying with 
EPCA's ``anti-backsliding'' provision, which prevents the Secretary 
from prescribing any amended standard that either increases the maximum 
allowable energy use or decreases the minimum required energy 
efficiency of a covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(1))).
    In section IV.A.1.b of this NOPR, DOE proposes definitions for 
pass-through, roll-in, roll-through, and sliding doors. Based on CCD 
data, information from commenters and manufacturer interviews, and 
DOE's directly analyzed units showing an energy use difference between 
certain types of CRE, DOE has tentatively developed an energy use 
multiplier for equipment classes that DOE observed CRE with pass-
through, roll-in, roll-through, or sliding doors on the market. DOE has 
tentatively developed multipliers for pass-through, sliding, and roll-
in doors (roll-through is a combination of pass-through and roll-in), 
which in combination account for all the different door designs 
currently observed on the market. See table IV.7 for additional 
details.

             Table IV.7--Description of Equipment Class Multipliers for Unique Door Characteristics
----------------------------------------------------------------------------------------------------------------
                                                                                                     Equipment
               Door type                   Applicable equipment     Equipment type  coefficient        class
                                                 classes                                            multiplier
----------------------------------------------------------------------------------------------------------------
Pass-through..........................  VCT.RC.M; VCT.SC.M;        PT...........................            1.04
                                         VCT.SC.L; VCS.SC.M;
                                         VCS.SC.L.
Sliding...............................  VCT.RC.M; VCT.SC.M.......  SD...........................            1.07
Pass-through and Sliding..............  VCT.RC.M; VCT.SC.M.......  SDPT.........................            1.11
Roll-in...............................  VCT.RC.M; VCT.SC.M;        RI...........................            1.05
                                         VCS.SC.M; VCS.SC.L.
Roll-through..........................  VCT.RC.M; VCT.SC.M;        RT...........................            1.09
                                         VCS.SC.M; VCS.SC.L.
----------------------------------------------------------------------------------------------------------------

    In section IV.A.1.b of this NOPR, DOE additionally proposes 
definitions for cold-wall and forced-air evaporators. Based on CCD 
data, information from commenters and manufacturer interviews, and 
DOE's directly analyzed units showing an energy use difference between 
certain types of CRE, DOE has tentatively developed an energy use 
multiplier for equipment classes that were directly analyzed in this 
NOPR as CRE with a cold-wall evaporator and which DOE observed CRE with 
forced-air evaporators in those equipment classes on the market. DOE 
has tentatively developed this multiplier to account for the additional 
energy use associated with a forced-air evaporator as compared to a 
cold-wall evaporator. See table IV.8 for additional details.

             Table IV.8--Description of Equipment Class Multipliers for Unique Refrigeration Systems
----------------------------------------------------------------------------------------------------------------
                                                                                                     Equipment
         Refrigeration system              Applicable equipment      Equipment type coefficient        class
                                                 classes                                            multiplier
----------------------------------------------------------------------------------------------------------------
Forced Air............................  HCS.SC.L.................  FA...........................             1.2
----------------------------------------------------------------------------------------------------------------

    DOE requests comment on its proposal to apply an energy use 
multiplier to certain equipment classes that contain CRE with unique 
utility and energy use characteristics. DOE additionally requests 
comment on the proposed multiplier values and equipment classes for 
which these multipliers would be applied.
b. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest efficiency unit currently available on the market. DOE 
also defines a ``max-tech'' efficiency level to represent the maximum 
possible efficiency for a given equipment.
    After conducting the screening analysis described in section IV.B 
of this document and chapter 4 of the NOPR TSD, DOE considered the 
remaining design options in the engineering analysis to achieve higher 
efficiency levels. See chapter 5 of the NOPR TSD for additional detail 
on the design options.
    Design Options beyond Baseline. In response to the June 2022 
Preliminary Analysis, the CA IOUs recommended analyzing variable-speed 
fan control as a technology option for vertical, medium-temperature 
refrigerators. (CA IOUs, No. 43 at p. 2)
    With respect to the recommendation from the CA IOUs, DOE has not 
considered variable-speed fan technology as a design option for this 
NOPR. For open cases, the evaporator fan must run continuously to 
maintain the air curtain so any variable-speed function could disrupt 
the air curtain. For closed cases, DOE did not receive any data to show 
energy use savings associated with variable-speed fan control and has 
tentatively determined that variable-speed fan control would not reduce 
energy use according to the DOE test procedure. DOE notes that it did 
consider evaporator fan control (i.e., cycling the evaporator fan on 
and off as opposed to running constantly) as a design option. See 
chapter 5 of the NOPR TSD for additional information.
    NAFEM commented that DOE should make it easier for the public to 
understand how it calculates possible improvements that reduce energy 
consumption, providing the example of the efficiency of permanent-
magnet synchronous motors (also known as synchronous-reluctance 
motors). (NAFEM, No. 40 at p. 6) NAFEM commented that these motors, for 
which NAFEM stated DOE claimed a theoretical efficiency of 75 percent, 
are not available in the rated wattages found in the 2022 spreadsheet, 
despite being the basis for two design-level options. (Id.)
    Based on feedback during manufacturer interviews, feedback from 
commenters, and a review of the current market, DOE has tentatively 
determined to remove permanent-magnet synchronous motors (previously 
referred to as synchronous-reluctance motors) from the NOPR analysis 
because motors currently available on the market

[[Page 70232]]

do not span the range of CRE fan wattages and revolutions per minute 
needed for proper operation. For more information, see chapter 5 of the 
NOPR TSD.
    The CA IOUs commented that the June 2022 Preliminary TSD 
inconsistently considered variable defrost for certain low- and medium-
temperature categories. (CA IOUs, No. 43 at p. 6) As an example, the CA 
IOUs stated that the June 2022 Preliminary TSD analyzed variable 
defrost for horizontal open self-contained cases--medium temperature 
(``HZO.SC.M'') but not horizontal open self-contained cases--low 
temperature (``HZO.SC.L''). (Id.) The CA IOUs recommended that DOE 
review technology options analyzed across equipment categories for 
consistency and that DOE analyze variable defrost as a technology 
option for vertical glass door self-contained freezers (``VCT.SC.L'') 
and vertical solid door self-contained ice cream freezers 
(``VCS.SC.I'') because there are after-market controllers available to 
enable variable defrost in any freezer category. (Id.)
    While DOE considered variable defrost as a design option in the 
June 2022 Preliminary Analysis, DOE has tentatively determined to 
remove this design option in the NOPR. Based on manufacturer feedback 
and test data, DOE has tentatively determined that there is variation 
across equipment classes and defrost types that would not allow for a 
variable-defrost control design option that is representative of each 
class. And based on discussions with manufacturers, all manufacturers 
are already controlling the defrost period on a time- or temperature-
based defrost specific to each individual model to minimize the defrost 
time and energy consumption. For further discussion, see chapter 5 of 
the NOPR TSD.
    AHT commented that it is unable to comprehend the listed energy-
saving potentials for the different temperature classes and the values 
seem incorrect. (AHT, No. 48 at p. 6) AHT asked why the potential 
savings for variable-speed compressors, for example, are rated at 20 
percent in the ice cream class, 35 percent in the low-temperature 
class, and zero percent in the medium-temperature class. (Id.)
    DOE reviewed its engineering spreadsheet model and compressors 
analyzed and tentatively determined the discrepancy noted by AHT occurs 
because of the energy efficiency ratios (``EERs'') for single-speed and 
variable-speed compressors available on the market. Based on 
compressors analyzed from several manufacturers of CRE compressors, 
single-speed compressors available on the market, operating at medium 
back pressure (``MBP'') (medium-temperature refrigerators), typically 
have EERs more similar to those of variable-speed compressors available 
on the market, operating at MBP, when compared to compressors operating 
at low back pressure (``LBP'') (low-temperature freezers and ice-cream 
freezers). This means that there is less potential energy savings for 
medium-temperature refrigerators that use variable-speed compressors. 
The difference in EERs is based on the operation of a single-speed vs 
variable-speed compressor, which has a significant decrease in cooling 
capacity as the operating temperature decreases. See chapter 5 of the 
NOPR TSD for additional details on the compressor analysis.
    Efficiency Levels and Max-Tech. AHRI commented that DOE has not 
defined efficiency levels in adequate detail and recommended that DOE 
verify its analysis for accuracy and consistency. (AHRI, No. 46 at p. 
3)
    NAMA commented that DOE should reduce the demands to make 
additional changes and acknowledge that manufacturers have already made 
changes that would contribute significantly to the Administration's 
climate change initiatives. (NAMA, No. 37 at p. 8) NAMA stated that the 
actual energy savings that can be attributed to DOE's design options in 
the June 2022 Preliminary TSD engineering analysis are closer to a 5-
10-percent reduction from baseline energy usage after removing design 
options that are not technically feasible or that were accomplished 
years ago. (Id.) NAMA noted that its estimate of a 5-10-percent 
reduction is significantly lower than DOE's estimate of a 41-percent 
reduction in energy use. (Id.)
    DOE has considered commenters' feedback, information gathered 
through manufacturer interviews, and additional testing of analysis 
units to update the analysis, including the efficiency levels and max 
tech. See chapters 3 and 5 of the NOPR TSD for a description of each 
design option and how each is incorporated into the NOPR analysis.
    AHT commented that the limits from the March 2014 Final Rule have 
almost eliminated the equipment classes HCT.SC.M, HCT.SC.L, and 
HCT.SC.I. (AHT, No. 48 at p. 2) AHT stated that the closed units within 
these classes are among the most efficient food display equipment in 
retail stores and corresponding open units consume far more energy 
while being regulated less strictly. (Id.) AHT commented that the 72.6-
percent reduction of energy consumption for the HCT.SC.M, the 60.4-
percent reduction of energy consumption for the HCT.SC.L, and the 61.6-
percent reduction of energy consumption for the HCT.SC.I are 
impossible, and AHT recommended repeating the engineering analysis for 
these equipment classes. (Id. at p. 3-6)
    DOE has considered commenters' feedback, information gathered 
through manufacturer interviews, and additional testing of analysis 
units to update the analysis for horizontal closed transparent 
equipment. See chapter 5 of the NOPR TSD for additional details on the 
baseline specifications and design options analyzed for these equipment 
classes.
    The Joint Commenters stated that, for several of the equipment 
classes analyzed, multiple models at comparable sizes in DOE's CCD 
exceed the max-tech efficiency level in the engineering analysis. 
(Joint Commenters, No. 39 at p. 3) The Joint Commenters provided an 
example that DOE's max-tech level for the representative service over 
counter remote condensing medium temperature (``SOC.RC.M'') unit is 
14.7 kWh/day, yet there are multiple models in the CCD at a comparable 
size with energy consumption as low as about 10 kWh/day. (Id.) The 
Joint Commenters added that multiple models of vertical open self-
contained medium temperature (``VOP.SC.M'') units significantly exceed 
DOE's max-tech level of 23.5 kWh/day at similar total display areas. 
(Id.) The Joint Commenters stated that models are available beyond 
DOE's max-tech levels for additional equipment classes as well and 
recommended that DOE set max-tech levels that are at least as high as 
efficiencies currently available on the market. (Id.)
    While DOE considers the maximum efficiency level for CRE available 
on the market, there are certain components or technologies for 
equipment classes that manufacturers may choose to implement that are 
not directly analyzed as a design option. For example, some 
manufacturers may have different airflow designs for open cases that 
affect energy use, which are calibrated specific to a CRE model, 
referred to as an ``air curtain''. Air curtains are only applicable on 
open units (such as the VOP.SC.M equipment class mentioned by the Joint 
Commenters) and are intended to mitigate heat infiltration into the 
CRE. See section IV.B.1.d of this NOPR or chapters 3 and 4 of the NOPR 
TSD for additional details on air curtains. DOE analyzes design options 
that pass the

[[Page 70233]]

screening criteria and have a measurable impact on CRE efficiency.
c. Engineering Spreadsheet Model
    In performing the engineering analysis in the March 2014 Final 
Rule, DOE selected representative units for each primary equipment 
class to serve as analysis points in the development of cost-efficiency 
curves. 79 FR 17726, 17746. In selecting these units, DOE researched 
the offerings of major manufacturers to select models that were 
generally representative of the typical offerings produced within the 
given equipment class. Id. Unit sizes, configurations, and features 
were based on high-shipment-volume designs prevalent in the market. Id. 
Using these data, a set of specifications was developed defining a 
representative unit for each primary equipment class. Id. These 
specifications include geometric dimensions, quantities of components 
(such as fans), operating temperatures, and other case features that 
are necessary to calculate energy consumption. Id. Modifications to the 
units modeled were made as needed to ensure that those units were 
representative of typical models from industry, rather than a specific 
unit offered by one manufacturer. Id. This process created a 
representative unit for each equipment class with typical 
characteristics for physical parameters (e.g., volume, TDA), and 
minimum performance of energy-consuming components (e.g., fans, 
lighting). Id.
    As noted in the Executive Summary of the June 2022 Preliminary 
Analysis, DOE analyzed the same representative volumes and TDAs 
developed in the March 2014 Final Rule. See 79 FR 17726, 17746. In the 
June 2022 Preliminary Analysis, DOE kept the same design specifications 
in most cases, but updated some design specifications to better match 
the directly analyzed units available on the market. DOE received 
several comments on the updates made to the engineering spreadsheet 
model, summarized below.
    NAFEM stated that, as demonstrated in its 2015 brief,\49\ errors 
and omissions in the engineering spreadsheet have significant effects 
on DOE's CRE analyses and final standards-setting process. (NAFEM, No. 
40 at p. 2) NAFEM commented that its members could provide important 
information to DOE to improve and correct its engineering spreadsheets 
to make any future proposed CRE rules less controversial and more 
representative of real-world applications. (Id. at p. 4) NAFEM stated 
that any concerns identified by NAFEM are only limited examples of 
issues it believes exist throughout the document. (Id.)
---------------------------------------------------------------------------

    \49\ NAFEM included its 2015 brief in addition to their comment 
responses. NAFEM specifically referenced pp. 35-51 for this comment.
---------------------------------------------------------------------------

    NAFEM stated that ITW compared the March 2014 Final Rule 
engineering spreadsheet to the 2022 engineering spreadsheet related to 
the preliminary analysis for CRE. (NAFEM, No. 40 at p. 4) NAFEM 
commented that the equipment classes subject to review were VCT.SC.M, 
VCT.SC.L, VCS.SC.M, and VCS.SC.L, which included self-contained 
refrigerators and freezers at medium and low temperatures with both 
solid and transparent vertical closed doors. (Id.) NAFEM commented that 
many of the observations provided by ITW applied to other equipment 
classes as well. (Id. at p. 5)
    ITW commented that the CRE engineering spreadsheet made generalized 
assumptions that could be considered opinion versus facts and all 
product types in an equipment class are not reflected. (ITW, No. 41 at 
p. 2) ITW commented that the spreadsheet requires validation, that 
costs are inaccurate to the point of being useless, that more 
collaboration with manufacturers is needed, and that DOE should build 
confidence in the spreadsheet by making it more visible. (Id.)
    Zero Zone commented that some of DOE's models have errors and asked 
that DOE share the raw data for these models, including, at minimum, 
the type and number of models that were reverse engineered and/or lab 
tested. (Zero Zone, No. 44 at p. 1)
    With respect to the comments from NAFEM, ITW, and Zero Zone, DOE 
developed and calibrated the engineering spreadsheet model based on 
test data from directly analyzed units, feedback from manufacturer 
interviews, and market data from the CCD. DOE has also published the 
engineering spreadsheet model for the June 2022 Preliminary Analysis 
and for this NOPR. In support of this NOPR, DOE tested 70 CRE models 
and reverse engineered 47 CRE models. These models consisted of all 
equipment families within the scope of this NOPR except pull-down 
temperature applications, and all temperature classes. The volume range 
of these models is 3 ft\3\-69 ft\3\ and the TDA range is 5 ft\2\-32 
ft\2\.
    NAFEM requested an explanation regarding the 75-percent reduction 
in ``Infiltrated Air Mass Flow (lb/hr)'' on the 2022 engineering 
spreadsheet under ``Design Specifications'' when compared with the 2014 
spreadsheet. (NAFEM, No. 40 at p. 6)
    ITW similarly commented that DOE failed to provide any supporting 
documentation, calculations, or impact analysis for updates from the 
2013 and 2014 CRE engineering spreadsheets to the 2022 revision used to 
estimate performance in terms of Infiltrated Air Mass Flow [lb/hr] and 
Polyurethane Foam K-Factor [Btu*in/ft\2\h[deg]F]. (ITW, No. 41 at p. 
18) ITW commented that some design specifications listed in table 
5A.2.5 through table 5A.2.8 were updated in the June 2022 Preliminary 
TSD while other changes received only brief commentary, such as 
``Improved Resistivity of Insulation'' found in section 3.3.1.1 
concerning polyurethane foam. (Id.) ITW further commented that this 
issue was discovered at the end of the comment period and that said 
comment period required extension because the changes do not represent 
a thermal efficiency improvement for polyurethane foam insulation. 
(Id.) ITW questioned why two differing methods were used to calculate 
the ``Conduction Through Walls and Solid Doors [Btu/hr]'' and requested 
justification for the change, stating that one formula in the 
spreadsheet or the other could be correct, but not both. (Id.)
    ITW added that DOE spent considerable time in 2013 and 2014 
developing the energy consumption model and calculating the right 
values for Infiltrated Air Mass Flow [lb/hr], working with 
manufacturers' detailed specifications, calculating sensible and latent 
heat loads due to infiltration, and reviewing and revising the 
infiltrated air mass flow values for certain equipment classes, 
including VCT and VCS based on stakeholder feedback. (Id. at pp. 18-23) 
ITW commented that, by contrast, in the 2022 CRE engineering 
spreadsheet, DOE made significant changes to the Infiltrated Air Mass 
Flow value for 17 different equipment classes, including VCT and VCS 
models, without an explanation other than DOE did update design 
specifications. (Id. at p. 23) ITW stated that the formulas used to 
calculate the ``Load Due to Infiltration [Btu/hr]'' on the engineering 
spreadsheet tab ``Calculations'' and the CRE cabinet specification have 
not changed from 2014. (Id.) ITW summarized its comment by stating DOE 
needed to explain this discrepancy or recalculate the 17 classes with 
revised or reverted values for Infiltrated Air Mass Flow [lb/hr]. (Id.) 
ITW concluded that its calculations resulted in the following 
assumptions: (1) DOE underestimated by 28 percent the theoretical 
quantity of heat (BTU/hr) infiltrating the representative 49 (cu ft) 
VCS.SC.M model during the 2014 CRE

[[Page 70234]]

rulemaking; (2) DOE would overstate a decline in thermal performance 
for the foam insulation by 25 percent for the same model in the June 
2022 Preliminary TSD; (3) if 1 and 2 were correct, DOE would need to 
correct its energy use model for all equipment classes; and (4) 
discrepancies in DOE's own parameter Conduction Through Walls and Solid 
Doors [Btu/hr] between the 2014 TSD and the June 2022 Preliminary TSD 
should have been flagged for further explanation and discussion in the 
June 2022 Preliminary TSD. (Id. at pp. 25-26)
    ITW commented that DOE discarded specific data when faced with 
energy consumption values above the MDEC for the baseline unit in the 
2022 engineering spreadsheet, instead calculating new values for the 
baseline unit and not DOE's own energy model. (Id. at p. 34) ITW 
questioned whether DOE trusted its engineering spreadsheet. (Id.)
    Based on comments received from NAFEM and ITW, DOE has re-evaluated 
the infiltrated air-mass flow and insulation design specifications in 
this NOPR. Based on feedback provided from manufacturers during 
manufacturer interviews, DOE updated the infiltrated air-mass flow and 
insulation design specifications in this NOPR to be more consistent 
with the March 2014 Final Rule. See chapter 5 of the NOPR TSD for 
additional details.
    Zero Zone commented that the fraction of power into case for 
evaporator motors is missing. (Zero Zone, No. 44 at p. 3) Zero Zone 
stated that this heat load is illustrated in the component load in the 
model diagram tab but not included in the daily energy consumption 
calculations. (Id.)
    DOE reviewed the engineering spreadsheet model published to the 
docket \50\ and found that this calculation was included (see the 
``Calculations'' tab, row 176).
---------------------------------------------------------------------------

    \50\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0032.
---------------------------------------------------------------------------

    ITW commented that to review data in the CRE engineering 
spreadsheets, the Excel macros needed to function, but the 2013 and 
2014 CRE engineering spreadsheet macros were not found to be executable 
in Excel using a 64-bit Windows 10 computer and instead required Excel 
running on a 32-bit WindowsNT machine. (ITW, No. 41 at p. 6)
    In response to the comment from ITW, DOE notes that the data and 
formulas are reviewable regardless of the version of the Windows 
operating system being used because the macros do not affect the 
underlying data and formulas.
d. Industry Trade Association Survey
    In response to the June 2022 Preliminary Analysis, three industry 
trade associations surveyed their members to provide feedback to DOE on 
the June 2022 Preliminary Analysis. The survey is located on the 
docket,\51\ and DOE has provided a summary of the engineering-related 
results of the survey.
---------------------------------------------------------------------------

    \51\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0050.
---------------------------------------------------------------------------

    AHRI, NAMA, and NAFEM stated that more than 50 percent of the data 
in the survey was shared by small businesses (<1250 employees). (Trade 
Associations Survey, No. 50 at p. 8) The manufacturers surveyed 
manufacture all equipment types (to varying degrees) directly analyzed 
in the June 2022 Preliminary Analysis, besides VCT.SC.I equipment. (Id. 
at pp. 9-10)
    The survey provided a heat map of design options currently used 
across different equipment classes. (Id. at p. 11) AHRI, NAMA, and 
NAFEM noted that all members reported using LED lighting and are 
unaware of any higher-efficiency lighting that could be incorporated 
into their equipment. (Id.) DOE notes that, based on the survey, all 
design options besides vacuum-insulated panels are currently used by at 
least a small percentage of the market, but many technologies are used 
by less than 50 percent of manufacturers surveyed. (See Id.)
    AHRI, NAMA, and NAFEM provided a chart asking manufacturers why 
certain design options were not used. (Id. at p. 12) The responses 
included: ``not economically justified,'' ``reduced utility,'' ``not 
technologically feasible, '' ``limited market (not as desireable),'' 
``already in use to meet current ECS,'' and ``option not available for 
this equipment.'' (Id.) AHRI, NAMA, and NAFEM added that the most 
common response was that the design options were already in use by 
manufacturers, and the second most common response was that those 
design options not already in use were not economically justified. 
(Id.)
    AHRI, NAMA, and NAFEM stated that some manufacturers identified 
ways to use design options to meet EL 1-3 proposed in the June 2022 
Preliminary Analysis; however, no manufacturers thought EL 4-6 was 
feasible for any equipment class. (Id. at p. 14) As a follow up to what 
ELs manufacturers thought were appropriate, AHRI, NAMA, and NAFEM 
stated that manufacturers responded that a 1-percent increase in energy 
efficiency over today's levels would be acceptable, and numerous 
responses stated that max tech has already been achieved. (Id. at p. 
15)
    AHRI, NAMA, and NAFEM commented that manufacturers reported using 
the most energy-efficient foam insulation available, with an average K 
factor of 0.15. (Id. at p. 19) AHRI, NAMA, and NAFEM stated that 
manufacturers primarily use high-pressure, two-component foam systems, 
with the remainder using an application technique, such as foam boards 
and spray polyurethane foam insulation. (Id.) AHRI, NAMA, and NAFEM 
noted that refurbished equipment is not reinsulated to meet the current 
standard. (Id.) AHRI, NAMA, and NAFEM also commented that increased 
thickness either increases the cabinet footprint or decreases internal 
dimensions in cases, making them more costly for consumers, especially 
for equipment replacement, which would require a redesign of the 
architecture of the store. (Id.) AHRI, NAMA, and NAFEM commented that 
survey respondents stated that increased insulation thickness would 
require a new foam mixture, as well as tooling and design changes, and 
decrease the display/storage area or increase the footprint of the 
equipment. (Id. at p. 20)
    AHRI, NAMA, and NAFEM noted that survey respondents indicated that 
VIPs could not be incorporated into the foam matrix without early 
failures, raising concerns that VIPs are not a viable design option. 
(Id. at p. 19)
    DOE has considered the results of this survey as part of its NOPR 
engineering analysis.
2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
equipment, and the availability and timeliness of purchasing the 
equipment on the market. The cost approaches are summarized as follows:
     Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available equipment, component by component, 
to develop a detailed bill of materials for the equipment.
     Catalog teardowns: In lieu of physically deconstructing 
equipment, DOE identifies each component using parts diagrams 
(available from manufacturer websites or appliance

[[Page 70235]]

repair websites, for example) to develop the bill of materials for the 
equipment.
     Price surveys: If neither a physical nor catalog teardown 
is feasible (e.g., for tightly integrated products such as fluorescent 
lamps, which are infeasible to disassemble and for which parts diagrams 
are unavailable) or cost-prohibitive and otherwise impractical (e.g., 
large commercial boilers), DOE conducts price surveys using publicly 
available pricing data published on major online retailer websites and/
or by soliciting prices from distributors and other commercial 
channels.
    In the present case, DOE conducted the analysis using physical and 
catalog teardowns. See chapter 5 of the NOPR TSD for additional 
details.
    DOE received several comments in response to the June 2022 
Preliminary Analysis related to the manufacturer production costs 
(``MPCs'').
    NAFEM commented that it compared inflation index and cost model 
values in DOE's engineering spreadsheets with ITW's own calculations 
for the same values. (NAFEM, No. 40 at p. 5) NAFEM stated that 
significant discrepancies existed between DOE's and ITW's calculations 
of the inflation index for evaporator and condenser fan motors, 
evaporator coil, condenser coil, insulation, and core case cost. (Id.)
    NAFEM commented also that it found inaccuracies in DOE's 
calculations used for a cost analysis of design-level technology 
options. (Id. p. 5) For example, according to NAFEM, the simulated 
condenser and evaporator coil costs for self-contained models were off 
or low by 250 percent and the costs for evaporator and condenser fan 
blades were off by more than 300 percent, having not been updated since 
before DOE published the March 2014 Final Rule. (Id.)
    NAFEM commented that it reviewed the calculations and assumptions 
for DOE's energy analysis at the 16 design option levels, and NAFEM 
noted that ITW would supply DOE with a current inflation rate for 
review as a cost structure update for 2022. (Id. at pp. 5-6)
    NAMA commented that it conducted an analysis of the effect of 
present inflation levels on the cost of components, summarizing the 
results of its analysis in a table showing the major components in 
efficiency compared with cost increases from October 2020 to April 2021 
and from October 2021 to April 2022. (NAMA, No. 37 at pp. 13-14) NAMA 
recommended that DOE factor in the unprecedented inflation of basic 
constituents in CRE machines into the costs shown for design options 
and into the economic analysis. (Id. at p. 14)
    ITW presented several examples of spreadsheet data comparing the 
2014 TSD and June 2022 Preliminary TSD engineering spreadsheets. (ITW, 
No. 41 at pp. 36-47) ITW noted that, for all evaluations, MPC appeared 
to be down in 2022 relative to the 2014 reference, but the 2022 
engineering spreadsheet did not reflect actual market changes, and when 
specifications and ordering were held to the 2014 reference, energy was 
up. (Id. at p. 37) ITW summarized that, as a result, the 2014 and 2022 
engineering spreadsheets did not appear to have a strong correlation. 
(Id.)
    AHRI commented that the baseline case should be modified to reflect 
current market prices, including the use of LEDs and energy-efficient 
doors, enhanced frames, and ECM fan motors. (AHRI, No. 46 at p. 6) AHRI 
commented that components were incorporated and upgraded to meet DOE's 
previous CRE energy-efficiency requirements and that the no-standards-
case efficiency distribution will need to be amended based on those 
corrections. (Id.) AHRI stated that prices of various design options 
need to be upgraded for the no-standards-case efficiency distribution. 
(Id.)
    ITW commented that, in DOE's engineering analysis in the June 2022 
Preliminary TSD, DOE failed to establish an accurate baseline cost and, 
as a result, justification for any change to the MDEC was suspect to 
bias and/or error. (ITW, No. 41 at pp. 27-28) ITW commented that costs 
have not fallen by 12.4 percent or even remained flat as stated in the 
June 2022 Preliminary TSD, section 5.6 Core Case Costs, and that, in 
fact, costs have risen by up to 24.9 percent. (Id. at p. 28) ITW 
commented that it cannot make determinations or move forward without 
correcting the cost issue found in the June 2022 Preliminary TSD, 
considering that costs have not gone down since 2013 or 2014. (Id.)
    In response to these comments, DOE has updated the NOPR analysis to 
reflect current inflation rates (i.e., 2022 dollars) and component and 
design option costs based on feedback from commenters, feedback from 
manufacturer interviews, a review of market data, and teardowns of 
directly analyzed units. See chapter 5 of the NOPR TSD for additional 
details.
    NAFEM commented that DOE should make it easier for the public to 
understand how it calculates possible improvements that reduce energy 
consumption. (NAFEM, No. 40 at p. 6) NAFEM identified the costs of 
microchannel condenser coils as an example where it believes improved 
clarity would be beneficial. (Id.)
    With respect to the comment from NAFEM, DOE has further described 
the cost and efficiency assumptions for each design option, including 
microchannel condensers, in chapter 5 of the NOPR TSD.
    NAMA commented that it found errors in the June 2022 Preliminary 
TSD for design options as follows: (a) high-efficiency reciprocating 
compressor for VCS.SC.M is shown at a cost of $9.23 but for VCT.SC.M it 
is shown as $4.01; (b) UA evaporator coil is shown for VCT.SC.H at 
$16.01 but for VCT.RC.M is $65.84, for VCS.SC.M is $14.33 and for 
VCT.SC.M is $22.90; (c) variable-speed compressor for VCS.SC.M is 
$72.54, for VCT.SC.M is $79.27 but for VCT.SC.L is $168.34; and (d) VIG 
door for VCT.SC.M is $837.38 but for VCT.RC.M is projected at 
$2,095.84. (NAMA, No. 37 at pp. 10-11) NAMA requested DOE's 
justification for variations in the cost of the same component and 
further stated that this rulemaking should be withdrawn and replaced 
with accurate estimates, particularly for machines under 30 cubic feet 
in capacity. (Id. at p. 12)
    With respect to the comment from NAMA, DOE assigns design 
specifications and costs for each equipment class based on a 
representative volume or TDA. Therefore, components may be a different 
size or capacity than other equipment classes, which likely yields a 
different cost. DOE expects that the different representative volumes 
or TDAs account for the differences described by NAMA. For example, the 
VCT.SC.M primary equipment class analyzed has 2 doors, whereas the 
VCT.RC.M primary equipment class analyzed has 5 doors. For more 
information on the design option costs, see chapter 5 of the NOPR TSD.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a multiplier (the manufacturer markup) to the MPC. 
The resulting manufacturer selling price (``MSP'') is the price at 
which the manufacturer distributes a unit into commerce. DOE developed 
an industry average manufacturer markup by examining the prior CRE 
rulemaking and annual Securities and Exchange Commission (``SEC'') 10-K 
reports \52\ filed by publicly traded manufacturers primarily engaged 
in commercial refrigeration manufacturing and whose combined equipment 
range includes CRE. 79 FR 17725, 17758. See section IV.J.2.d of this

[[Page 70236]]

document and chapter 12 of the NOPR TSD for additional information on 
the manufacturer markup.
---------------------------------------------------------------------------

    \52\ U.S. Securities and Exchange Commission's Electronic Data 
Gathering, Analysis, and Retrieval system is available at 
www.sec.gov/edgar/searchedgar/companysearch (last accessed March 30, 
2023).
---------------------------------------------------------------------------

    DOE seeks comment on the method for estimating manufacturing 
production costs.
3. Cost-Efficiency Results
    The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of daily energy consumption 
(in kWh) versus MPC (in dollars). DOE developed curves representing the 
primary equipment classes. The methodology for developing the curves 
started with determining the energy consumption for baseline equipment 
and MPCs for this equipment. Above the baseline, design options were 
implemented until all available technologies were employed (i.e., at a 
max-tech level). See chapter 5 of the NOPR TSD for additional detail on 
the engineering analysis and appendix 5B of the NOPR TSD for complete 
cost-efficiency results.
    In response to the June 2022 Preliminary Analysis, the Joint 
Commenters recommended that DOE evaluate additional, intermediate-
efficiency levels for certain equipment classes that fall between the 
downstream efficiency levels currently analyzed. (Joint Commenters, No. 
39 at p. 4) The Joint Commenters commented that EL 5 for the VCS.SC.M 
equipment class is cost effective but EL 6 is not; however, an 
intermediate level between EL 5 and EL 6 (a so-called ``EL 5.5'') could 
be cost effective. (Id.) The Joint Commenters stated that they provided 
a table (table 1) showing examples of classes in which an intermediate 
efficiency level may be cost effective. (Id.)
    NAMA stated that DOE had requested comments on the design options 
for each equipment class, but provided very little information on which 
commenters can base comments. (NAMA, No. 37 at p. 10) NAMA provided a 
detailed review of each of the design options considered by DOE in 
annex A to its comment and commented that DOE estimated that options 
AD4, 8, 9, 11, 12, and 13 in table 5.8.8 (results for VCT.SC.M) each 
have energy savings of less than 3 percent. (Id. at pp. 10, 21-40) NAMA 
further stated that the change suggested by AD4 is not possible. (Id. 
at p. 10) NAMA commented that for other options, the savings potential 
is very small despite being extremely expensive, even using DOE's 
estimates, which NAMA stated are erroneous. (Id.) NAMA stated that it 
provided significantly different energy savings and cost estimates that 
it believes to be more accurate than those provided by DOE. (Id.)
    In response to the comments from the Joint Commenters and NAMA, DOE 
updated the EL structure in its NOPR analysis to better reflect the 
cost-effective design path that manufacturers can take to achieve the 
ELs. DOE notes that design options are typically ordered by cost 
effectiveness, which may result in design options with low energy 
savings and high costs at the end of the design option order. DOE has 
updated the NOPR analysis based on comments received and manufacturer 
interview feedback. DOE provides additional details on design options 
in chapters 3-5 of the NOPR TSD.

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., wholesaler 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices, which are then used in the LCC 
and PBP analysis. At each step in the distribution channel, companies 
mark up the price of the equipment to cover business costs and profit 
margin.
    In the June 2022 Preliminary Analysis, DOE considered the following 
distribution channels:
    1a. Contractor channel with replacement (Manufacturer [rarr] 
Wholesaler [rarr] Mechanical Contractor [rarr] Consumer)
    1b. Contractor channel with new construction (Manufacturer [rarr] 
Wholesaler [rarr] Mechanical Contractor [rarr] General Contractor 
[rarr] Consumer)
    2. Wholesale channel (Manufacturer [rarr] Wholesaler [rarr] 
Consumer)
    3. National account channel (Manufacturer [rarr] Consumer).
    Following the June 2022 Preliminary Analysis, AHRI suggested that 
DOE should revise several channels, create a fourth channel for reused 
or refurbished equipment, and refer to consumers as ``end-users'' 
because the term consumer may imply individuals or families. (AHRI, No. 
46 at pp. 3-4) AHRI also recommended DOE to include other CRE purchaser 
categories, such as buyer's clubs, restaurant consortiums, food service 
consultants, and governmental bids. (Id.). Further, in the Trade 
Associations Survey, some manufacturers proposed including an 
additional channel under channel 2 for OEM to OEM that ``moves through 
a supply chain similarly to a wholesaler.'' (Trade Associations Survey, 
No. 50 at p. 24)
    In consideration of the AHRI feedback, DOE included an additional 
national account channel in which manufacturers sell the equipment to 
contractors, who in turn sell the equipment to end users. With regard 
to the suggested addition of distribution channels for reused or 
refurbished equipment, DOE notes that the markup analysis only pertains 
to new equipment purchases; therefore, DOE did not consider such 
distribution channels in the markups analysis. However, refurbishments 
were considered in the LCC analysis (see section IV.F of this document 
for details). In the Trade Associations Survey, no market share inputs 
were provided for the OEM-to-OEM channel. As a result, DOE did not 
consider this in the final distribution channels. DOE re-estimated the 
market shares of distribution channels based on manufacturer inputs 
from the Trade Associations Survey. DOE clarifies that it considers all 
purchasers of CRE in its analyses and is using the term CRE 
``purchaser'' and ``consumer'' interchangeably in this document.
    The CA IOUs commented that DOE should separate distribution 
channels by condensing unit configuration. (CA IOUs, No. 43 at p. 6) 
The CA IOUs stated that there are differences in the sales structure 
for remote-condensing and self-contained equipment that necessitate a 
separate pricing analysis. (Id.)
    DOE acknowledges that equipment with different condensing unit 
configurations would have different applications and thus different 
sales structures. In the markups analysis, DOE contends that each 
equipment type (e.g., display cases and solid-door equipment) consists 
of equipment with different condensing unit configurations, and their 
relative pricing structures are already reflected through the channels 
market shares. For example, the display-case equipment type is 
represented by a higher fraction of remote-condensing units used in 
large grocery store chains; hence, a greater share of shipments go 
through the national account channel, which provides better price 
advantages.
    DOE developed baseline and incremental markups for each actor in 
the distribution chain. Baseline markups are applied to the price of 
equipment with baseline efficiency, while incremental markups are 
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental 
markup is typically less than the baseline markup and is designed to 
maintain similar per-unit

[[Page 70237]]

operating profit before and after new and amended standards.\53\
---------------------------------------------------------------------------

    \53\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that in markets that are reasonably 
competitive, it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    DOE developed baseline and incremental markups for wholesalers and 
contractors using U.S. Census Bureau data from the 2017 Annual 
Wholesale Trade Report and the 2017 U.S. Economic Census, respectively.
    DOE requests comment on the CRE distribution channels and overall 
on the markups analysis.
    Chapter 6 of the NOPR TSD provides details on DOE's development of 
the markups analysis for CRE.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of CRE at different efficiencies in representative 
U.S. commercial buildings, and to assess the energy savings potential 
of increased CRE efficiency. The energy use analysis estimates the 
range of energy use of CRE in the field (i.e., as they are actually 
used by consumers). The energy use analysis provides the basis for 
other analyses DOE performed, particularly assessments of the energy 
savings and the savings in consumer operating costs that could result 
from adoption of amended or new standards.
    For CRE, DOE calculated the energy consumption of the equipment as 
part of the engineering analysis (see chapter 5 of the NOPR TSD).
    DOE requests comment on its approach for the energy use analysis.
    Chapter 7 of the NOPR TSD addresses DOE's energy use analysis for 
CRE.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
CRE. The effect of new and amended energy conservation standards on 
individual purchasers usually involves a reduction in operating cost 
and an increase in purchase cost. DOE used the following two metrics to 
measure consumer impacts:
     The LCC is the total consumer expense of an equipment over 
the life of that equipment, consisting of total installed cost 
(manufacturer selling price, distribution chain markups, sales tax, and 
installation costs) plus operating costs (expenses for energy use, 
maintenance, and repair). To compute the operating costs, DOE discounts 
future operating costs to the time of purchase and sums them over the 
lifetime of the equipment.
     The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of CRE in the absence of new and 
amended energy conservation standards. In contrast, the PBP for a given 
efficiency level is measured relative to the baseline equipment.
    For each considered efficiency level in each equipment class, DOE 
calculated the LCC and PBP for a nationally representative set of 
commercial buildings that use CRE. DOE developed commercial buildings 
samples from the DOE EIA's 2018 Commercial Buildings Energy Consumption 
Survey (``2018 CBECS'').\54\ DOE divided the 2018 CBECS sample into 
building types characterized by their principal building activity 
(CBECS variable ``PBA'') using a subset of the data that excluded 
vacant buildings. DOE then grouped building types into six categories: 
(1) large food sales, (2) small food sales, (3) large food service, (4) 
small food service, (5) large other, and (6) small other. DOE defined 
small buildings as those less than or equal to 5,000 ft\2\, while large 
buildings are defined as those greater than 5,000 ft\2\. For each 
sample commercial building, DOE determined the energy consumption and 
the appropriate energy price of CRE. By developing a representative 
sample of CRE purchasers, the analysis captures the variability in 
energy prices associated with the use of CRE.
---------------------------------------------------------------------------

    \54\ U.S. Department of Energy--Energy Information 
Administration. 2018 Commercial Buildings Energy Consumption Survey 
(CBECS). 2018. Available at www.eia.gov/consumption/commercial/data/2018/ (last accessed February 1, 2023).
---------------------------------------------------------------------------

    Inputs to the calculation of total installed cost include the cost 
of the equipment--which includes MPCs, manufacturer markups, retailer 
and distributor markups, and sales taxes--and installation costs. 
Inputs to the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, equipment lifetimes, and discount rates. DOE created 
distributions of values for equipment lifetime, discount rates, and 
sales taxes, with probabilities attached to each value, to account for 
their uncertainty and variability.
    The computer model DOE uses to calculate the LCC relies on a Monte 
Carlo simulation to incorporate uncertainty and variability into the 
analysis. The Monte Carlo simulations randomly sample input values from 
the probability distributions and CRE user samples. For this 
rulemaking, DOE conducted probability analyses by randomly sampling 
from probability distributions using Python. To calculate the LCC and 
PBP for CRE, DOE performed 10,000 Monte Carlo simulations for each 
variable. During a single trial, random values are selected from the 
defined probability distributions for each variable, which enables the 
estimation of LCC and PBP with uncertainty evaluation. The analytical 
results include a distribution of 10,000 data points showing the range 
of LCC savings for a given efficiency level relative to the no-new-
standards case efficiency distribution. In performing an iteration of 
the Monte Carlo simulation for a given purchaser, equipment efficiency 
is chosen based on its probability. If the chosen equipment efficiency 
is greater than or equal to the efficiency of the standard level under 
consideration, the LCC calculation reveals that a consumer is not 
impacted by the standard level. By accounting for consumers who already 
purchase more-efficient equipment, DOE avoids overstating the potential 
benefits from increasing equipment efficiency.
    DOE calculated the LCC and PBP for consumers of CRE as if each were 
to purchase new equipment in the expected year of required compliance 
with new and amended standards. New and amended standards would apply 
to CRE manufactured 3 years after the date on which any new and amended 
standards are published. (42 U.S.C. 6313(c)(6)(C)(i). At this time, DOE 
estimates publication of a final rule in the second half of 2024. 
Therefore, for purposes of its analysis, DOE used 2028 as the first 
full year of compliance with any amended standards for CRE.
    Table IV.9 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the Python model,

[[Page 70238]]

and of all the inputs to the LCC and PBP analyses, are contained in 
chapter 8 of the NOPR TSD and its appendices.

                    Table IV.9--Summary of Inputs and Methods for the LCC and PBP Analysis *
----------------------------------------------------------------------------------------------------------------
                         Inputs                                               Source/method
----------------------------------------------------------------------------------------------------------------
Equipment Cost.........................................  Derived by multiplying MPCs by manufacturer and
                                                          retailer markups and sales tax, as appropriate. Apply
                                                          price learning between present (2022) and compliance
                                                          year (2028) for LED lighting and variable-speed
                                                          compressor electronics, using historical data to
                                                          derive a price scaling index to project equipment
                                                          costs for those components.
Installation Costs.....................................  Assumed not to change with efficiency level and,
                                                          therefore, not considered in the LCC and PBP analyses.
Annual Energy Use......................................  Obtained from the test procedure for each equipment
                                                          class at each considered efficiency level.
Energy Prices..........................................  Electricity: Edison Electric Institute Typical Bills
                                                          and Average Rates reports.
                                                         Variability: Regional energy prices across nine census
                                                          divisions.
Energy Price Trends....................................  Based on AEO2023 \55\ price projections.
Repair and Maintenance Costs...........................  Material costs derived from the engineering analysis
                                                          and labor costs derived from RS Means 2023. Assumed
                                                          additional labor time for maintaining equipment with
                                                          microchannel heat exchangers; considered replacement
                                                          of LED lighting, evaporators, condensers, and
                                                          compressors; assumed LED lighting repair frequency
                                                          decreases due to the presence of occupancy sensor.
Equipment Lifetime.....................................  Average: 10 years for large businesses and 20 years for
                                                          small buildings.
Discount Rates.........................................  Approach involves identifying all possible debt or
                                                          asset classes that might be used to purchase the
                                                          considered equipment or might be affected indirectly.
                                                          Primary data source was the Federal Reserve Board's
                                                          Survey of Consumer Finances.
Compliance Date........................................  2028.
----------------------------------------------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources mentioned in this table are provided in the
  sections following the table or in chapter 8 of the NOPR TSD.

1. Equipment Cost
---------------------------------------------------------------------------

    \55\ For further information, see the Assumptions to AEO2023 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed March 30, 2023).
---------------------------------------------------------------------------

    To calculate consumer equipment costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline equipment and higher-efficiency equipment because DOE applies 
an incremental markup to the increase in MSP associated with higher-
efficiency equipment.
    DOE used a price learning analysis to account for changes in LED 
lamp prices that are expected to occur between the time for which DOE 
has data for lamp prices (2022) and the assumed compliance date of the 
rulemaking (2028). See chapter 8 of the NOPR TSD for more details on 
how price learning for LED lighting was applied.
    In response to the June 2022 Preliminary Analysis, the Joint 
Commenters noted that while DOE included price trends for lighting 
design options, other design options, such as variable-speed 
compressors and high-efficiency fans were not included, and the Joint 
Commenters encouraged DOE to incorporate price trends for additional 
CRE design options. (Joint Commenters, No. 39 at p. 5)
    As discussed in section IV.C of this document, DOE included 
variable-speed compressors as a technology option for higher efficiency 
levels in certain equipment classes. To develop future prices specific 
for that technology, DOE applied a different price trend to the 
electronic control board of the variable-speed compressor. DOE 
estimated that the cost of that control board was 50 percent of the 
cost of the variable frequency drive (``VFD'') included in the variable 
speed compressor. DOE used Producer Price Index (``PPI'') data on 
``semiconductors and related device manufacturing'' between 1967 and 
2021 to estimate the historic price trend of electronic components in 
the control.\56\ The regression, performed as an exponential trend line 
fit, results in an R-square of 0.99, with an annual price decline rate 
of 6.5 percent. See chapter 8 of the TSD for further details on this 
topic.
---------------------------------------------------------------------------

    \56\ Semiconductors and related device manufacturing PPI series 
ID: PCU334413334413; www.bls.gov/ppi/.
---------------------------------------------------------------------------

    DOE requests comment on its price learning assumptions and 
methodology.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment.
    In response to the June 2022 Preliminary Analysis, the CA IOUs 
commented that DOE overestimated installation costs for self-contained 
equipment compared to remote condensing equipment. (CA IOUs, No. 43 at 
p. 7) DOE notes that, in the LCC and PBP, such costs were assumed not 
to vary by EL within the same equipment class, and, therefore, were not 
considered in the June 2022 Preliminary Analysis.
    AHRI commented that more efficient equipment can be more expensive 
to install and may require more time to set up due to additional 
programming, equipment size changes with type of insulation used, and 
technician training. (AHRI, No. 46 at p. 5) Thus, AHRI concluded that 
installation cost may change with efficiency level. (Id.) Similarly, 
AHRI, NAMA, and NAFEM commented that adding components to CRE and 
increasing their energy efficiency would lead to increased installation 
costs due to additional programing time and floor space rearrangement 
needs. (Trade Associations Survey, No. 50 at p. 25) AHRI, NAMA, and 
NAFEM also stated that technicians require additional technical 
training to install such equipment. (Id.)
    In response to these comments, DOE found no evidence that any of 
the analyzed design options considered in this NOPR require additional 
installation time. DOE estimates that installation workers may already 
have the required skills to install the analyzed design options or 
would adjust their labor rates equally across all efficiency levels if 
necessary skills are lacking. Therefore, as in the June 2022 
Preliminary Analysis, DOE assumed that installation costs do not vary 
by efficiency level (within the same equipment class) and did not 
account for installation costs in the LCC and PBP analyses.

[[Page 70239]]

    DOE requests comment and data to inform how any of the analyzed 
design options would require additional installation time, training, or 
other related skills compared to the baseline equipment.
3. Annual Energy Consumption
    For each equipment class, DOE determined the annual energy 
consumption for each sample equipment user of CRE at different 
efficiency levels using the approach described in section IV.E of this 
document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the equipment 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2022 for each census division 
using data from Edison Electric Institute (``EEI'') Typical Bills and 
Average Rates reports. Based upon comprehensive, industry-wide surveys, 
this semi-annual report presents typical monthly electric bills and 
average kilowatt-hour costs to the customer as charged by investor-
owned utilities. For the commercial sector, DOE calculated electricity 
prices using the methodology described in Coughlin and Beraki 
(2019).\57\
---------------------------------------------------------------------------

    \57\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. Available at ees.lbl.gov/publications/non-residential-electricity-prices (last accessed March 9, 2023).
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region, and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis. For CRE, 
DOE calculated weighted-average values for average and marginal price 
for the nine census divisions for the commercial sector for both large-
size (greater than 5,000 ft\2\) and small-size (less than 5,000 ft\2\) 
buildings. As the EEI data are published separately for summer and 
winter, DOE calculated seasonal prices for each division and sector. 
Each EEI utility in a given region was assigned a weight based on the 
number of consumers it serves. DOE adjusted these regional weighted-
average prices to account for systematic differences between investor-
owned utilities (``IOUs'') and publicly owned utilities (``POUs''), as 
the latter are not included in the EEI data set. See chapter 8 of the 
NOPR TSD for details.
    To estimate energy prices in future years, DOE multiplied the 2022 
energy prices by the projection of annual average price changes for 
each of the nine census divisions from the Reference case in AEO2023, 
which has an end year of 2050.\58\ To estimate price trends after 2050, 
a simple average of the 2046-2050 values was used for 2051 and all 
subsequent years.
---------------------------------------------------------------------------

    \58\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed March 28, 2023).
---------------------------------------------------------------------------

5. Repair and Maintenance Costs
    Repair costs are associated with repairing or replacing equipment 
components that have failed in an appliance or equipment; maintenance 
costs are associated with maintaining the operation of the equipment. 
Typically, small incremental increases in equipment efficiency entail 
no, or only minor, changes in repair and maintenance costs compared to 
baseline efficiency equipment. DOE does not account for lost time when 
CRE fails or breaks, as DOE does not have data indicating how that 
would affect outcomes considered in the LCC, such as operating cost. In 
the June 2022 Preliminary Analysis, DOE calculated repair costs by 
considering the typical failure rate of refrigeration system components 
(compressor, lighting, and evaporator and condenser fan motors), 
component MPCs and associated markups, and the labor cost of repairs, 
which is assumed to be performed by private vendors. As discussed in 
sections 8.3.3 and 8.3.4 of the June 2022 Preliminary Analysis TSD, DOE 
considered the following specific CRE components and associated failure 
probabilities during typical CRE lifetime in its repair cost approach: 
compressor (25 percent), evaporator fan motor (50 percent), condenser 
fan motor (25 percent), and LED lighting (100 percent), with the 
presence of occupancy sensors decreasing LED lighting repair frequency 
by half.
    In response to the June 2022 Preliminary Analysis, Continental 
commented that microchannel condenser coils require more frequent 
cleaning due to the accumulation of debris and are more susceptible to 
corrosion and leaks, which often requires replacement. (Continental No. 
38 at p. 2) And AHRI stated that microchannel condenser coils require 
more frequent cleaning. (AHRI, No. 46 at pp. 5-6)
    In response to these comments regarding the impact of microchannel 
condenser coils on repair and maintenance costs and based on feedback 
from manufacturer interviews, DOE agrees with commenters that 
microchannel condenser coils are subject to more accumulation of 
debris, which may result in extended cleaning time. However, DOE found 
no evidence that microchannel condenser coils may be more susceptible 
to corrosion and leaks, or that these problems are not repairable with 
similar labor and material inputs as baseline units. Accordingly, DOE 
has updated its maintenance costs of equipment with microchannel 
condenser coils to account for an additional 10 minutes of annual 
cleaning.
    Continental commented that controls for defrost, lighting, and 
anti-sweat heaters can be challenging for technicians to diagnose and 
fix, leading to additional labor time and material replacement costs. 
(Continental No. 38 at p. 2) AHRI, NAMA, and NAFEM commented that 
adding higher-efficiency CRE components leads to increased repair and 
maintenance costs due to the component purchase price and labor time. 
(Trade Associations Survey, No. 50 at p. 26)
    With respect to the comments from Continental and AHRI, NAMA, and 
NAFEM, DOE clarifies that neither vacuum-insulated panels nor controls 
for defrost and anti-sweat heaters are considered design options. DOE 
did not consider preventative maintenance for other design options, 
such as lighting occupancy sensors and night curtains, because DOE 
assumed they have similar average lifetimes to the equipment in which 
they are installed.
    AHRI commented that additional labor costs should be considered for 
flammable refrigerants. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM 
commented that equipment using alternative refrigerants (R-290) should 
have higher repair costs because leaks are harder to detect. (Trade 
Associations Survey, No. 50 at p. 26) DOE reiterates in response that 
equipment classes are analyzed individually and all analyzed self-
contained equipment classes use R-290, so there are no refrigerant 
changes by efficiency level.
    AHRI commented that labor shortages have caused an increase in 
servicing costs. (AHRI, No. 46 at p. 15) AHRI, NAMA, and NAFEM 
commented that there is a shortage of qualified service technicians for 
CRE in the United States

[[Page 70240]]

and higher standards would exacerbate the issue and lead to longer 
equipment downtimes for food retailers. (Trade Associations Survey, No. 
50 at p. 30) In response to these comments, DOE clarifies that short-
term labor supply variations are not included in its analysis because 
economic theory maintains that labor markets are expected to adjust in 
the long-term period considered in the LCC analysis.
    DOE requests comment and data on its assumptions and approach 
regarding consideration of repair and maintenance costs in the LCC and 
PBP analyses. Specifically, DOE requests data on the expected lifetimes 
and repair and maintenance frequencies of the considered design options 
in this NOPR.
6. Equipment Lifetime
    DOE used a lifetime distribution to characterize the probability 
that CRE will be retired from service at a given age. For the June 2022 
Preliminary Analysis, consistent with the approach followed in the 
March 2014 Final Rule, which was based on discussions with industry 
experts, DOE had assumed that lifetime of CRE is correlated to the 
frequency of store renovations. DOE had also estimated an average 
lifetime of 10 years for all large-size and small food-service 
buildings and 15 years for small food-sales buildings, and other 
businesses with CRE (per the CBECS sample) correlating such buildings 
with businesses that may have longer renovation cycles, such as 
independent grocery stores.\59\ DOE also assumed that the probability 
function for the annual survival of CRE would take the form of a 
Weibull distribution. A Weibull distribution is a probability 
distribution commonly used to measure failure rates.\60\ Further, in 
the June 2022 Preliminary Analysis, due to lack of data to suggest 
otherwise, DOE had assumed that retired but functional CRE had low 
salvage value and that the refurbished/used market for CRE was 
negligible. Therefore, DOE had not considered such CRE in the LCC 
analysis.
---------------------------------------------------------------------------

    \59\ See section 8.3.5 of the June 2022 Preliminary Analysis TSD 
and section 8.2.3.5 of the March 2014 Final Rule TSD for details.
    \60\ Weibull distributions are commonly used to model appliance 
lifetimes.
---------------------------------------------------------------------------

    In response to the June 2022 Preliminary Analysis, AHRI commented 
that smaller businesses use their equipment for 15-25 years due to the 
cost of upgrading. (AHRI, No. 46 at p. 6) AHRI added that, in some 
cases, compressor racks may be used for 30-40 years, while display 
cases are switched out once during this time. (Id.) AHRI commented that 
businesses replacing CRE may also buy used equipment or ``reskin'' 
equipment by changing out sheet metal panels and bumpers. (Id.) NAMA 
recommended that DOE estimate the number of refurbished machines with 
an increased energy usage versus refurbished energy-compliant ones. 
(NAMA, No. 37 at p. 16)
    Based on these comments, DOE has adjusted the mean lifetime 
distribution assumption for CRE to 10 years for large-size buildings 
and 20 years for small-size buildings, with a maximum lifetime of 40 
years for each. DOE clarifies that it does not analyze the energy use 
of refurbished CRE because such equipment is not subject to new 
standards. However, DOE accounted for purchasers who sell their CRE to 
a refurbisher before the end of the equipment lifetime, by assigning a 
credit equivalent to the residual value of the used equipment at the 
selling year. See the following section (IV.F.7) for details on the 
residual value approach.
    DOE requests comment and data regarding the CRE lifetime 
assumptions and methodology.
    See chapter 8 of the NOPR TSD for more information.
7. Residual Value
    To model the phenomenon of CRE sold for refurbishment, DOE utilized 
a residual value for such equipment in the LCC. The residual value 
represents the remaining dollar value of surviving CRE at the average 
age of refurbishment, estimated to be 5 years for small-size food 
service buildings (e.g., restaurants) and 10 years for small-size food 
sales and other commercial buildings. To account for the value of CRE 
with remaining life to the consumer, the LCC model applies this 
residual value as a ``credit'' at the end of the CRE lifetime and 
discounts it back to the start of the analysis period. Per manufacturer 
feedback, this was only applied to a fraction of self-contained CRE in 
small buildings, totaling about 10 percent of all CRE in the LCC 
sample.
    DOE requests comment and data on the assumed business types and the 
corresponding CRE lifetimes at which refurbishment may occur.
8. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to commercial consumers to estimate the present value of future 
operating cost savings.
    For purchasers of CRE in the commercial sector, DOE used the cost 
of capital to estimate the present value of cash flows to be derived 
from a typical company project or investment. Most companies use both 
debt and equity capital to fund investments, so the cost of capital is 
the weighted-average cost to the firm of equity and debt financing. 
This corporate finance approach is referred to as the weighted-average 
cost of capital. DOE used currently available economic data in 
developing commercial discount rates, with Damodaran Online being the 
primary data source.\61\ The weighted-average discount rates for the 
commercial sector for CRE is 6.4 percent.
---------------------------------------------------------------------------

    \61\ Damodaran, A. Data: Cost of Capital by Industry Sector, 
United States. 2023. (Last accessed March 1, 2023.) https://
pages.stern.nyu.edu/~adamodar/.
---------------------------------------------------------------------------

    See chapter 8 of the NOPR TSD for further details on the 
development of discount rates.
9. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy 
conservation standards).
    To estimate the energy efficiency distribution of CRE for 2028, DOE 
used test data, feedback from manufacturer interviews, surveys (see 
Trade Associations Survey, No. 50), and the Single Compartment 
Commercial Refrigeration Equipment data from DOE's CCMS, accessed in 
March 2023.\62\ As discussed in the engineering analysis, DOE assumed 
that all manufacturers will switch to R-290 in response to the December 
2022 EPA NOPR, a proposed rule to restrict use of certain HFC 
refrigerants in specific equipment, including CRE. The EPA compliance 
date is 2025, which is earlier than the expected DOE CRE ECS compliance 
date of 2028. This approach reduces the potential maximum energy 
savings below the baseline compared to the June 2022 Preliminary 
Analysis.
---------------------------------------------------------------------------

    \62\ U.S. Department of Energy. Compliance Certification 
Management System (CCMS) for Refrigeration Equipment--Commercial, 
Single Compartment. Available at www.regulations.doe.gov/certification-data/CCMS-4-Refrigeration_Equipment_-_Commercial__Single_Compartment.html#q=Product_Group_s%3A%22Refrigeration%20Equipment%20-%20Commercial%2C%20Single%20Compartment%22 (last 
accessed April 4, 2023).
---------------------------------------------------------------------------

    To create a robust sample for the energy efficiency distribution 
used in the LCC analysis, DOE grouped the 28 CRE equipment classes into 
21 separate groups. For the equipment classes that DOE relied on CCMS 
model count data

[[Page 70241]]

to formulate the efficiency distributions, this approach was used to 
allow equipment classes with a limited sample to share the efficiency 
distribution of a group of similar classes with a larger sample in the 
CCMS. DOE compared energy use data from the CCMS with energy use 
equations from the engineering analysis to derive model counts at each 
efficiency level. Equipment classes whose efficiency distributions were 
derived from aggregated data from manufacturer interviews, surveys, and 
test data were assigned their own groups. The estimated market shares 
for the no-new-standards case for CRE and the corresponding groupings 
are shown in table IV.10. See chapter 8 of the NOPR TSD for further 
information on the derivation of the efficiency distributions.
    In response to the June 2022 Preliminary Analysis, Continental 
commented that DOE's approach to derive the no-standards-case 
efficiency distribution by relying on manufacturer model counts in the 
CCMS database is erroneous. (Continental, No. 38 at p. 2) Continental 
stated that model counts in DOE's CCMS do not reflect sales or market 
share, but rather the variety of different models that manufacturers 
offer. (Id.)
    For this NOPR, as discussed in previous sections, DOE was able to 
conduct manufacturer interviews and collect shipments data for several 
equipment classes. The equipment classes for which data was collected 
account for 85 percent of total shipments and are marked with an 
asterisk in table IV.10. For the remainder of the equipment classes for 
which DOE was not able to collect representative shipments data from 
manufacturers, DOE utilized the CCMS database to estimate the no-new-
standards-case efficiency distribution.

                                           Table IV.10--No-New-Standards Case Efficiency Distributions in 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Market share by efficiency level
                   Equipment class                       Group   ---------------------------------------------------------------------------------------
                                                                   EL 0 (%)   EL 1 (%)   EL 2 (%)   EL 3 (%)   EL 4 (%)   EL 5 (%)   EL 6 (%)   EL 7 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M.............................................          1         73         27          0  .........  .........  .........  .........  .........
VOP.RC.L.............................................          1         73         27          0  .........  .........  .........  .........  .........
VOP.SC.M *...........................................          2         86          5          4          0          0          5  .........  .........
VCT.RC.M.............................................          3         93          1          6          0          0  .........  .........  .........
VCT.RC.L.............................................          3         93          1          6          0  .........  .........  .........  .........
VCT.SC.H *...........................................          4         60         15         17          5          0          0          0          3
VCT.SC.M *...........................................          5         48         17         17          1          0          0         17          0
VCT.SC.L*............................................          6         35          5          0         50          0          0         10          0
VCT.SC.I.............................................          7         44         19         27         10          0  .........  .........  .........
VCS.SC.H *...........................................          8         70         30          0          0          0          0          0          0
VCS.SC.M *...........................................          9         71          8          2         11          3          5  .........  .........
VCS.SC.L*............................................         10         77          8          0          1         14          0          0  .........
VCS.SC.I.............................................         11        100          0          0          0          0          0          0  .........
SVO.RC.M.............................................         12         76         24          0  .........  .........  .........  .........  .........
SVO.SC.M.............................................         13         66          2          2          8          8          2          1         10
SOC.RC.M.............................................         14         98          1          1          0          0  .........  .........  .........
SOC.SC.M.............................................         15         36          7          9          6         15          0          2         25
HZO.RC.M.............................................         16        100          0  .........  .........  .........  .........  .........  .........
HZO.RC.L.............................................         16        100          0  .........  .........  .........  .........  .........  .........
HZO.SC.M.............................................         17         81          4         15          0          0          0  .........  .........
HZO.SC.L.............................................         17         81          4         15          0          0          0  .........  .........
HCT.SC.M.............................................         18         72          6          0          9          2          0          2          9
HCT.SC.L.............................................         18         72          6          0          9          2          0          2          9
HCT.SC.I.............................................         18         72          6          0          9          2          0          2          9
HCS.SC.M.............................................         19         88         12          0          0  .........  .........  .........  .........
HCS.SC.L.............................................         19         88         12          0          0  .........  .........  .........  .........
CB.SC.M *............................................         20         50         40         10          0          0          0          0  .........
CB.SC.L *............................................         21         70         30          0          0          0          0          0  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The distributions for these equipment classes were derived from aggregated data from the Trade Associations Survey, test data, and manufacturer
  interview data.

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the CRE purchased by 
each sample CRE purchaser in the no-new-standards case. The resulting 
percent shares within the sample match the market shares in the 
efficiency distributions.
    While DOE acknowledges that economic factors may play a role when 
consumers purchase CRE, assignment of CRE efficiency for a given 
installation, based solely on economic measures such as life-cycle cost 
or simple payback period, most likely would not fully and accurately 
reflect actual real-world installations. There are a number of market 
failures discussed in the economics literature that illustrate how 
purchasing decisions in the commercial sector with respect to energy 
efficiency are unlikely to be perfectly correlated with energy use. One 
study in particular showed evidence of substantial gains in energy 
efficiency that could have been achieved without negative repercussions 
on profitability, but the investments had not been undertaken by 
firms.\63\ The study found that multiple organizational and 
institutional factors caused firms to require shorter payback periods 
and higher returns than the cost of capital for alternative investments 
of similar risk. A number of other case studies similarly demonstrate 
the existence of market failures preventing the adoption of energy-
efficient technologies in a variety of commercial sectors around the 
world, including

[[Page 70242]]

office buildings,\64\ supermarkets,\65\ and the electric motor 
market.\66\
---------------------------------------------------------------------------

    \63\ DeCanio, S.J. (1998). ``The Efficiency Paradox: 
Bureaucratic and Organizational Barriers to Profitable Energy-Saving 
Investments,'' Energy Policy, 26(5), 441-454.
    \64\ Prindle 2007, op. cit. Howarth, R.B., Haddad, B.M., and 
Paton, B. (2000). ``The economics of energy efficiency: insights 
from voluntary participation programs,'' Energy Policy, 28, 477-486.
    \65\ Klemick, H., Kopits, E., Wolverton, A. (2017). ``Potential 
Barriers to Improving Energy Efficiency in Commercial Buildings: The 
Case of Supermarket Refrigeration,'' Journal of Benefit-Cost 
Analysis, 8(1), 115-145.
    \66\ de Almeida, E.L.F. (1998), ``Energy efficiency and the 
limits of market forces: The example of the electric motor market in 
France'', Energy Policy, 26(8), 643-653. Xenergy, Inc. (1998), 
United States Industrial Electric Motor Systems Market Opportunity 
Assessment (Available at: www.energy.gov/sites/default/files/2014/04/f15/mtrmkt.pdf) (Last accessed Jan. 3, 2023).
---------------------------------------------------------------------------

    DOE requests comment on its methodology and data to better inform 
the no-standards-case efficiency distribution for CRE.
10. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more 
efficient equipment, compared to baseline equipment, through energy 
cost savings. Payback periods that exceed the life of the equipment 
mean that the increased total installed cost is not recovered in 
reduced operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the equipment and the change in the 
first-year annual operating expenditures relative to the baseline. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    As noted previously, EPCA establishes a rebuttable presumption that 
a standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing equipment complying with 
an energy conservation standard level will be less than three times the 
value of the first year's energy savings resulting from the standard, 
as calculated under the applicable test procedure. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)). For each considered 
efficiency level, DOE determined the value of the first year's energy 
savings by calculating the energy savings in accordance with the 
applicable DOE test procedure and multiplying those savings by the 
average energy price projection for the year in which compliance with 
the new and amended standards would be required.

G. Shipments Analysis

    DOE uses projections of annual equipment shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\67\ 
The shipments model takes an accounting approach, tracking market 
shares of each equipment class and the vintage of units in the stock. 
Stock accounting uses equipment shipments as inputs to estimate the age 
distribution of in-service equipment stocks for all years. The age 
distribution of in-service equipment stocks is a key input to 
calculations of both the NES and NPV, because operating costs for any 
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

    \67\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    The shipments analysis projects units of open and closed 
refrigeration cases sold in future years in each of food sales, food 
service, and all other applications combined. These equipment 
classifications and applications are defined in EIA's 2018 CBECS. DOE 
estimates demand for these equipment categories in these applications 
by calculating demand coming from new construction as well as the 
replacement of retiring units, for each year.
    To calculate new demand for these equipment classes in each 
application, DOE combined new and existing floorspace projections from 
AEO2023 with saturation estimates based on 2018 CBECS and AEO2023. 
Shipments to meet this demand for these CRE equipment categories in 
each application are then disaggregated across the analyzed CRE 
classes, using fixed market shares derived from data collected during 
manufacturer interviews.
    To compute demand for replacements, DOE used the lifetime 
distributions determined in the LCC analysis, which estimates an 
average lifetime of 10 years for large grocery/multi-line stores (food-
sales buildings) and restaurants (food-service buildings), and an 
average lifetime of 20 years for small food-sales and food-service 
buildings, with a maximum lifetime of 40 years for all equipment. In 
each analysis year of the model, DOE calculated retirements across the 
distribution to compute all demand arising from the retirements.
    In response to the June 2022 Preliminary Analysis, AHRI stated that 
significantly higher-cost equipment would drive growth of the 
refurbished equipment market and lead to continued use of older 
equipment with lower efficiencies and higher GWP refrigerants. (AHRI, 
No. 46 at p. 15) As discussed in section IV.F.6 of this NOPR, DOE 
revised its assumptions of lifetime of equipment for small buildings 
from 15 years at the stage of the preliminary analysis to 20 years in 
this NOPR. To account for the use of refurbished equipment, DOE assumed 
an elasticity effect for a fraction of the CRE shipments, which is 
limited to small-size buildings. DOE applied an elasticity constant of 
-0.5 to shipments for small-size buildings and scaled this constant 
down to -0.15 over a period of 20 years (then constant thereafter) from 
the current year of calculations.
    DOE requests comment on the price elasticity assumptions for the 
CRE shipments analysis as they relate to the overall CRE market and the 
market for refurbished CRE.
    AHRI stated that DOE incorrectly estimated the number of existing 
units in use, as well as their average lifespan and noted that there 
are significantly more units in current use than DOE estimated. (Id. at 
p. 7). In response, DOE notes that it collected shipments data during 
manufacturer interviews and re-estimated the market shares for each 
equipment class based on the collected data. DOE then used the shipment 
and stock estimates from the floorspace and saturations calculations 
and scaled them to the data obtained from the manufacturers for the 
year 2022. DOE notes that, due to lack of shipments data for some 
equipment classes with a small market share, DOE estimated their 
shipments based on other equipment classes with similar characteristics 
for those equipment classes. For example, in this NOPR, DOE assumed 
that shipments of VCT.SC.H are one percent of VCT.SC.I and that 
shipments for HZO.SC.M are equivalent to HZO.SC.L. More information on 
these assumptions can be found in chapter 9 of the NOPR TSD. DOE also 
compared its shipments data with the numbers provided by ENERGY STAR in 
its unit shipment and market penetration report for the calendar year 
2021.\68\ DOE's shipment results are generally consistent with the 
figures provided by ENERGY STAR,

[[Page 70243]]

which reported 50-percent market penetration for the reported year.
---------------------------------------------------------------------------

    \68\ ENERGY STAR[supreg]. ENERGY STAR[supreg] Unit Shipment and 
Market Penetration Report Calendar Year 2021 Summary. 2021. U.S. 
Environmental Protection Agency and U.S. Department of Energy. (Last 
accessed April 11, 2022.) https://energystar.gov/sites/default/files/asset/document/2021%20Unit%20Shipment%20Data%20Summary%20Report_0.pdf.
---------------------------------------------------------------------------

    Historically, the annual amount of CRE capacity shipped has been 
depicted in linear feet, which is also an alternative way to express 
shipments data. DOE determined the linear feet shipped for any given 
year by multiplying each unit shipped by its associated average length 
and then summing all the linear footage values. Chapter 9 of the NOPR 
TSD presents the representative equipment-class lengths used for the 
conversion of per-unit shipments to linear footage within each 
equipment class.
    AHRI commented that changes to market shares would result in 
corresponding changes to shipping methodologies and added that some of 
the imposed requirements would cause retailers to favor open cases, or 
to take doors off completely. (AHRI, No. 46 at pp. 7-8) AHRI added that 
the impact of pending refrigerant regulations is unknown. (Id. at p. 8) 
AHRI also stated that because door cases have a greater maximum 
allowable charge compared to cases with doors, customers wishing to use 
A2L refrigerants may choose to use larger commercial refrigerators 
without doors. (Id. at p. 8) In response to these comments, DOE did not 
find any significant shift from closed cases to open cases or vice 
versa. The ratio between closed cases and open cases is approximately 
93 percent and 7 percent respectively, as derived from manufacturer 
provided data for the year 2022. Based on these data, DOE concluded 
that any shift in the market may already have occurred and currently 
DOE does not anticipate any new market trends in this direction.
    AHRI shared, in response to DOE's inquiring about market trends in 
the June 2022 Preliminary Analysis, that architecture in facilities is 
anticipated to change due to the refrigerant transition. (AHRI, No. 46 
at p. 7) AHRI added that these changes are due in part to the lack of 
available refrigerants and the likely consequent growth in market share 
in self-contained and smaller units. (Id.) AHRI commented that a great 
deal of uncertainty exists about this direction. (Id.) DOE appreciates 
AHRI's comments and continues to request information on market trends 
and shipments data to better inform the shipments analysis.
    Chapter 9 of the NOPR TSD provides additional details regarding the 
shipments analysis.

H. National Impact Analysis

    The NIA assesses the NES and the NPV from a national perspective of 
total consumer costs and savings that would be expected to result from 
new and amended standards at specific efficiency levels.\69\ 
(``Consumer'' in this context refers to consumers of the equipment 
being regulated.) DOE calculates the NES and NPV for the potential 
standard levels considered based on projections of annual equipment 
shipments, along with the annual energy consumption and total installed 
cost data from the energy use and LCC analyses. For the present 
analysis, DOE projected the energy savings, operating cost savings, 
equipment costs, and NPV of consumer benefits over the lifetime of CRE 
sold from 2028 through 2057.
---------------------------------------------------------------------------

    \69\ The NIA accounts for impacts in the 50 States and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new and amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
equipment class in the absence of new and amended energy conservation 
standards. For this projection, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. DOE compares the no-new-standards case with 
projections characterizing the market for each equipment class if DOE 
adopted new and amended standards at specific energy efficiency levels 
(i.e., the TSLs or standards cases) for that class. For the standards 
cases, DOE considers how a given standard would likely affect the 
market shares of equipment with efficiencies greater than the standard.
    DOE utilized the Python programming language for its shipments' 
analysis. The final results of the shipments analysis are available in 
the NIA spreadsheet developed for this analysis, accessible at 
www.regulations.gov/docket/EERE-2017-BT-STD-0007. Interested parties 
can review DOE's analyses by changing various input quantities within 
the spreadsheet. The NIA spreadsheet model uses typical values (as 
opposed to probability distributions) as inputs.
    Table IV.11 summarizes the inputs and methods DOE used for the NIA 
analysis for the NOPR. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPR TSD for further details.

   Table IV.11--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
            Inputs                               Method
------------------------------------------------------------------------
Shipments.....................  Annual shipments from shipments model.
Compliance Date of Standard...  2028.
Efficiency Trends.............  N/A (No efficiency trends were applied).
Annual Energy Consumption per   Expressed as a function of energy use at
 Unit.                           each TSL.
Total Installed Cost per Unit.  Expressed as a function of cost at each
                                 TSL.
                                Incorporates projection of future
                                 equipment prices.
Annual Energy Cost per Unit...  Annual weighted-average values as a
                                 function of the annual energy
                                 consumption per unit and energy prices.
Repair and Maintenance Cost     Annual, weighted-average values from the
 per Unit.                       LCC model.
Energy Price Trends...........  AEO2023 projections (to 2050) and
                                 extrapolation thereafter.
Energy Site-to-Primary and FFC  A time-series conversion factor based on
 Conversion.                     AEO2023.
Discount Rate.................  3 percent and 7 percent.
Present Year..................  2023.
------------------------------------------------------------------------

1. Equipment Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.9 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for each of the 
considered equipment classes for the first full year of anticipated 
compliance (2028) with an amended or new standard.

[[Page 70244]]

    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2028). In this scenario, the market 
shares of equipment in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of equipment above the standard would 
remain unchanged.
    In the absence of data on trends in efficiency, DOE assumed no 
efficiency trend over the analysis period for both the no-new-standards 
and standards cases. For a given equipment class, market shares by 
efficiency level were held fixed to their estimated distribution in 
2028.\70\
---------------------------------------------------------------------------

    \70\ DOE notes that, as discussed in section IV.C.1.a.i of this 
document, DOE has accounted for CRE efficiency trends by assuming 
that all self-contained units will have transitioned to R-290 
(propane) by 2028.
---------------------------------------------------------------------------

    DOE requests comment on its assumption of no efficiency trend for 
CRE and seeks historical CRE efficiency data, ideally by equipment 
class or alternatively by equipment family, or overall for the CRE 
market as a whole.
2. National Energy Savings
    The national energy savings analysis involves a comparison of 
national energy consumption of the considered equipment between each 
potential standards case and the case with no new and amended energy 
conservation standards. DOE calculated the national energy consumption 
by multiplying the number of units (stock) of each equipment (by 
vintage or age) by the unit energy consumption (also by vintage). DOE 
calculated annual NES based on the difference in national energy 
consumption for the no-new-standards case and for each higher 
efficiency standard case. DOE estimated energy consumption and savings 
based on site energy and converted the electricity consumption and 
savings to primary energy (i.e., the energy consumed by power plants to 
generate site electricity) using annual conversion factors derived from 
AEO2023. Cumulative energy savings are the sum of the NES for each year 
over the timeframe of the analysis.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 document, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (``NEMS'') is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \71\ 
that EIA uses to prepare its AEO. The FFC factors incorporate losses in 
production and delivery in the case of natural gas (including fugitive 
emissions) and additional energy used to produce and deliver the 
various fuels used by power plants. The approach used for deriving FFC 
measures of energy use and emissions is described in appendix 10B of 
the NOPR TSD.
---------------------------------------------------------------------------

    \71\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed 
March 9, 2023).
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are (1) total annual installed cost, (2) total 
annual operating costs (energy costs and repair and maintenance costs), 
and (3) a discount factor to calculate the present value of costs and 
savings. DOE calculates net savings each year as the difference between 
the no-new-standards case and each standards case in terms of total 
savings in operating costs versus total increases in installed costs. 
DOE calculates operating cost savings over the lifetime of each 
equipment shipped during the projection period.
    As discussed in section IV.F.1 of this document, DOE developed 
price trends for CRE with variable speed compressors and CRE with LED 
lighting. DOE applied the same trends to project component prices for 
each representative unit of each equipment class containing variable 
speed compressors and/or LED lighting. By 2057, which is the end date 
of the projection period, the average CRE LED lighting price is 
expected to drop by approximately 25 percent, while the average price 
of variable speed compressors is expected to drop by approximately 42 
percent, relative to projected 2028 prices. Because these component 
prices do not typically contribute substantively to the overall price 
of equipment, overall equipment prices are projected to decrease by at 
most 7 percent by 2057 relative to 2028. The price of equipment at the 
current baseline efficiency level is expected to drop by at most 3 
percent in the same period. For details on the price learning 
methodology and assumptions, see chapter 8 of the NOPR TSD.
    The energy cost savings are calculated using the estimated energy 
savings in each year and the projected price of the appropriate form of 
energy. To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by the projection of annual national-
average commercial energy price changes in the Reference case from 
AEO2023, which has an end year of 2050. To estimate price trends after 
2050, the 2046-2050 average was used for all years. To estimate repair 
and maintenance costs, DOE considered the typical failure rate of 
refrigeration system components, component MPCs and associated markups, 
and the labor cost of repairs. As part of the NIA, DOE also analyzed 
scenarios that used inputs from variants of the AEO2023 Reference case 
that have lower and higher economic growth. Those cases have lower and 
higher energy price trends and stock compared to the Reference case. 
NIA results based on these cases are presented in appendix 10C of the 
NOPR TSD.
    Use of higher-efficiency equipment is occasionally associated with 
a direct rebound effect, which refers to an increase in utilization of 
the equipment due to the increase in efficiency. DOE did not find any 
data on the rebound effect specific to CRE that would indicate that 
end-users or CRE purchasers would alter the utilization of their 
equipment as a result of an increase in efficiency. CRE are typically 
plugged in and operate continuously; therefore, DOE assumed a rebound 
rate of 0.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE uses these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (``OMB'') to Federal agencies on the development of regulatory 
analysis.\72\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to

[[Page 70245]]

reflect a consumer's perspective. The 7-percent real value is an 
estimate of the average before-tax rate of return to private capital in 
the U.S. economy. The 3-percent real value represents the ``social rate 
of time preference,'' which is the rate at which society discounts 
future consumption flows to their present value.
---------------------------------------------------------------------------

    \72\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
georgewbush-whitehouse.archives.gov/omb/memoranda/m03-21.html (last 
accessed February 17, 2023).
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new and amended energy 
conservation standards on consumers, DOE evaluates the impact on 
identifiable subgroups of consumers that may be disproportionately 
affected by a new or amended national standard. The purpose of a 
subgroup analysis is to determine the extent of any such 
disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels.
    In response to the June 2022 Preliminary Analysis, AHRI commented 
that the cost per energy efficiency improvement will be very high and 
especially challenging for small business owners, and in particular for 
restaurants and small retailers located in rural and urban food 
deserts, in which profit margins are low. (AHRI, No. 46 at p. 8)
    For this NOPR, DOE analyzed the impacts of the considered standard 
levels on small businesses. For this subgroup, DOE applied discount 
rates specific to small businesses to the same consumer sample that was 
used in the standard LCC analysis. DOE used the LCC and PBP model to 
estimate the impacts of the considered efficiency levels on this 
subgroup. For details on the subgroup analysis, see chapter 11 of the 
NOPR TSD.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of new and 
amended energy conservation standards on manufacturers of CRE and to 
estimate the potential impacts of such standards on employment and 
manufacturing capacity. The MIA has both quantitative and qualitative 
aspects and includes analyses of projected industry cash flows, the 
INPV, investments in research and development (``R&D'') and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how new and amended energy 
conservation standards might affect manufacturing employment, capacity, 
and competition, as well as how standards contribute to overall 
regulatory burden. Finally, the MIA serves to identify any 
disproportionate impacts on manufacturer subgroups, including small 
business manufacturers.
    The quantitative part of the MIA primarily relies on the GRIM, an 
industry cash flow model with inputs specific to this rulemaking. The 
key GRIM inputs include data on the industry cost structure, unit 
production costs, equipment shipments, manufacturer markups, and 
investments in R&D and manufacturing capital required to produce 
compliant equipment. The key GRIM outputs are the INPV, which is the 
sum of industry annual cash flows over the analysis period, discounted 
using the industry-weighted average cost of capital, and the impact to 
domestic manufacturing employment. The model uses standard accounting 
principles to estimate the impacts of more stringent energy 
conservation standards on a given industry by comparing changes in INPV 
and domestic manufacturing employment between a no-new-standards case 
and the various standards cases (i.e., TSLs). To capture the 
uncertainty relating to manufacturer pricing strategies following 
amended standards, the GRIM estimates a range of possible impacts under 
different scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the NOPR TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the CRE manufacturing industry 
based on the market and technology assessment and publicly available 
information. This included a top-down analysis of CRE manufacturers 
that DOE used to derive preliminary financial inputs for the GRIM 
(e.g., revenues; materials, labor, overhead, and depreciation expenses; 
selling, general, and administrative expenses (``SG&A''); and R&D 
expenses). DOE also used public sources of information to further 
calibrate its initial characterization of the CRE manufacturing 
industry, including company filings of form 10-K from the SEC,\73\ 
corporate annual reports, the U.S. Census Bureau's ASM,\74\ the U.S. 
Census Bureau's Economic Census,\75\ the U.S. Census Bureau's Quarterly 
Survey of Plant Capacity Utilization,\76\ and reports from Dun & 
Bradstreet.\77\
---------------------------------------------------------------------------

    \73\ U.S. Securities and Exchange Commission. Electronic Data 
Gathering, Analysis, and Retrieval system. Available at www.sec.gov/edgar/searchedgar/companysearch (last accessed April 20, 2022).
    \74\ U.S. Census Bureau. Annual Survey of Manufactures. (2013-
2022). Available at www.census.gov/programs-surveys/asm.html (last 
accessed February 1, 2023).
    \75\ U.S. Census Bureau. Economic Census. (2012 and 2017). 
Available at www.census.gov/programs-surveys/economic-census.html 
(last accessed February 1, 2023).
    \76\ U.S. Census Bureau. Quarterly Survey of Plant Capacity 
Utilization. (2010-2022). Available at www.census.gov/programs-surveys/qpc/data/tables.html (Last accessed December 14, 2022).
    \77\ Dun & Bradstreet Hoovers. Subscription login accessible at 
app.dnbhoovers.com/ (last accessed March 27, 2023).
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of new and amended energy 
conservation standards. The GRIM uses several factors to determine a 
series of annual cash flows starting with the announcement of the 
standard and extending over a 30-year period following the compliance 
date of the standard. These factors include annual expected revenues, 
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. 
In general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of CRE in order to develop other key GRIM 
inputs, including equipment and capital conversion costs, and to gather 
additional information on the anticipated effects of energy 
conservation standards on revenues, direct employment, capital assets, 
industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. See section IV.J.3 of this document for a 
description of the key issues raised by manufacturers

[[Page 70246]]

during the interviews. As part of Phase 3, DOE also evaluated subgroups 
of manufacturers that may be disproportionately impacted by new and 
amended standards or that may not be accurately represented by the 
average cost assumptions used to develop the industry cash flow 
analysis. Such manufacturer subgroups may include small business 
manufacturers, low-volume manufacturers, niche players, and/or 
manufacturers exhibiting a cost structure that largely differs from the 
industry average. DOE identified one subgroup for a separate impact 
analysis: small business manufacturers. The small business subgroup is 
discussed in section VI.B of this document, ``Review under the 
Regulatory Flexibility Act,'' and in chapter 12 of the NOPR TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
or amended standards that result in a higher or lower industry value. 
The GRIM uses a standard, annual discounted cash-flow analysis that 
incorporates manufacturer costs, markups, shipments, and industry 
financial information as inputs. The GRIM models changes in costs, 
distribution of shipments, investments, and manufacturer margins that 
could result from an amended energy conservation standard. The GRIM 
spreadsheet uses the inputs to arrive at a series of annual cash flows, 
beginning in 2023 (the base year of the analysis) and continuing to 
2057. DOE calculated INPVs by summing the stream of annual discounted 
cash flows during this period. For manufacturers of CRE, DOE used a 
real discount rate of 10.0 percent, which was derived from industry 
financials and then modified according to feedback received during 
manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of the new or 
amended energy conservation standard on manufacturers. As discussed 
previously, DOE developed critical GRIM inputs using a number of 
sources, including publicly available data, results of the engineering 
analysis, results of the shipments analysis, and information gathered 
from industry stakeholders during the course of manufacturer 
interviews. The GRIM results are presented in section V.B.2 of this 
document. Additional details about the GRIM, the discount rate, and 
other financial parameters can be found in chapter 12 of the NOPR TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered equipment can affect the revenues, 
gross margins, and cash flow of the industry. For this NOPR, DOE relied 
on a design-option approach, supported with the testing and reverse 
engineering of directly analyzed CRE. The design options were 
incrementally added to the baseline configuration and continued through 
the ``max-tech'' configuration (i.e., implementing the ``best 
available'' combination of available design options). For a complete 
description of the MPCs, see section IV.C of this document and chapter 
5 of the NOPR TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. Changes in sales volumes and efficiency mix over time 
can significantly affect manufacturer finances. For this analysis, the 
GRIM uses the NIA's annual shipment projections derived from the 
shipments analysis from 2023 (the base year) to 2057 (the end year of 
the analysis period). See section IV.J.2.b of this document and chapter 
9 of the NOPR TSD for additional details.
c. Product and Capital Conversion Costs
    New or amended energy conservation standards could cause 
manufacturers to incur conversion costs to bring their production 
facilities and equipment designs into compliance. DOE evaluated the 
level of conversion-related expenditures that would be needed to comply 
with each considered efficiency level in each equipment class. For the 
MIA, DOE classified these conversion costs into two major groups: (1) 
product conversion costs; and (2) capital conversion costs. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make equipment 
designs comply with new or amended energy conservation standards. 
Capital conversion costs are investments in property, plant, and 
equipment necessary to adapt or change existing production facilities 
such that new compliant equipment designs can be fabricated and 
assembled.
    DOE based its estimates of the product conversion costs that would 
be required to meet each efficiency level on information obtained from 
manufacturer interviews; the design pathways analyzed in the 
engineering analysis; the equipment teardown analysis; the shipments 
analysis; and model count information. DOE estimated product 
development effort, including engineer, laboratory technician, and 
marketing resources, associated with design options and scaled the 
costs based on the number of basic models (or product platforms, 
depending on the nature of the design option). Product development 
effort varied by design option. DOE modeled door design changes (i.e., 
moving from a double-pane to triple-pane door, incorporating vacuum-
insulated glass) would require more complex system redesigns and more 
cost, as compared to implementing more efficient components (e.g., 
incorporating a PSC motor or an ECM). DOE also assumed additional 
engineering effort would be required to optimize variable-speed 
compressors to ensure energy efficiency benefits, based on interview 
feedback.
    To estimate industry product conversion costs, DOE multiplied the 
product development cost estimate at each efficiency level for each 
equipment class by the number of industry basic models or product 
platforms that would require redesign. DOE used its CCD \78\ and 
California Energy Commission's MAEDbS \79\ to identify CRE models 
covered by this proposed rulemaking. To identify chef bases and high-
temperature CRE models, DOE further relied on publicly available data 
aggregated from web scraping retail websites. DOE used the no-new-
standards case efficiency distribution from the shipments analysis to 
estimate the model efficiency distribution. DOE also included the 
estimated cost of testing to the DOE test procedure for chef bases and 
high-temperature units using the estimated per-unit testing cost of 
$5,000 detailed in the September 2023 Test Procedure Final Rule. 88 FR 
66152, 66215.
---------------------------------------------------------------------------

    \78\ U.S. Department of Energy's Compliance Certification 
Database is available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed February 21, 2023).
    \79\ California Energy Commission's Modernized Appliance 
Efficiency Database System is available at 
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx 
(last accessed February 21, 2023).
---------------------------------------------------------------------------

    In addition to the sources used to derive product conversion costs, 
DOE relied on additional sources of information such as the Trade

[[Page 70247]]

Associations Survey \80\ to estimate the capital conversion costs 
manufacturers would incur to comply with potential new and amended 
energy conservation standards. During interviews, manufacturers 
provided estimates and descriptions of the required tooling changes 
required by the considered design options. (See Trade Associations 
Survey. No. 50 at pp. 16-18) Based on these inputs, DOE assumed that 
most component swaps, while requiring moderate product conversion 
costs, would not require changes to existing production lines or 
equipment, and, therefore, would not require notable capital 
expenditures because one-for-one component swaps would not require 
changes to existing production equipment (i.e., manufacturers will 
continue to be able to use their existing production equipment and 
production lines to manufacture CREs that achieve higher efficiency 
levels through component swaps, which are typically associated with 
lower ELs). However, based on manufacturer feedback, DOE modeled some 
tooling and capital expenditures when manufacturers implement improved 
door designs and variable-speed compressors. For improved door designs, 
some manufacturers noted that they would need new fixtures. 
Incorporating additional panes of glass for high-volume equipment 
classes could also necessitate heavier duty lifting equipment to 
transport and assemble heavier glass packs. For variable-speed 
compressors, which could be larger than existing single-speed 
compressors, manufacturers may need new tools for the baseplate. To 
estimate industry capital conversion costs, DOE scaled the estimated 
capital expenditures at each efficiency level for each equipment class 
by the number of applicable OEMs.
---------------------------------------------------------------------------

    \80\ www.regulations.gov/document/EERE-2017-BT-STD-0007-0050.
---------------------------------------------------------------------------

    As previously stated, the Trade Associations Survey included 
information about the anticipated capital investments associated with a 
range of design options. (Id. at pp. 16-18) The survey results showed 
high capital investments associated with increasing insulation 
thickness and incorporating vacuum-insulated panels. (Id. at p. 18) As 
discussed in section IV.B.1 of this document, DOE excluded these 
technologies from further consideration in the engineering analysis. 
Other design options potentially requiring notable capital investment 
included microchannel heat exchangers, additional panes of glass, and 
variable-speed compressors. DOE compared the feedback from the Trade 
Associations Survey with information from the equipment teardown 
analysis and manufacturer interviews and incorporated the feedback 
where applicable.
    DOE requests detailed comment and information on the capital 
investments associated with each analyzed design option. In particular, 
DOE requests detailed comment and feedback on the specific changes in 
equipment and tooling required to incorporate microchannel heat 
exchangers, as DOE currently models microchannel heat exchangers as a 
purchased part that can be substituted for tube and fin heat exchangers 
with minor production line changes.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion cost 
figures used in the GRIM can be found in section IV.J.2.c of this 
document. For additional information on the estimated capital and 
product conversion costs, see chapter 12 of the NOPR TSD.
    Regarding the potential investments associated with redesigning CRE 
to use flammable refrigerants in response to refrigerant regulations 
such as the December 2022 EPA NOPR, DOE did not consider these 
investments as conversion costs as they are independent of DOE actions 
related to any new or amended energy conservation standards. Instead, 
the refrigerant transition expenses are modeled as an impact to 
industry cashflow and are incorporated into both the no-new-standards 
case and standards cases. The refrigerant transition expenses includes 
redesigning CRE to use flammable refrigerants and retrofitting 
production facilities to accommodate flammable refrigerants. DOE relied 
on manufacturer feedback in confidential interviews, a report prepared 
for EPA,\81\ results of the engineering analysis, and investment 
estimates submitted by NAMA and AHRI in response to the June 2022 
Preliminary Analysis to estimate the industry refrigerant transition 
costs. Based on feedback, DOE assumed that the transition to low-GWP 
refrigerants would require industry to invest approximately $21.3 
million in R&D and $33.3 million in capital expenditures (e.g., 
investments in new charging equipment, leak detection systems, etc.). 
These costs are included in the no-new-standards case as well as the 
standards cases. See section V.B.2.e of this document or chapter 12 of 
the NOPR TSD for additional information.
---------------------------------------------------------------------------

    \81\ See pp. 5-113 of the ``Global Non-CO2 Greenhouse 
Gas Emission Projections & Marginal Abatement Cost Analysis: 
Methodology Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------

d. Manufacturer Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied non-production cost markups to the 
MPCs estimated in the engineering analysis for each equipment class and 
efficiency level. Modifying these manufacturer markups in the standards 
case yields different sets of impacts on manufacturers. For the MIA, 
DOE modeled two standards-case scenarios to represent uncertainty 
regarding the potential impacts on prices and profitability for 
manufacturers following the implementation of new and amended energy 
conservation standards: (1) a preservation of gross-margin-percentage 
scenario; and (2) a preservation-of-operating-profit scenario. These 
scenarios lead to different manufacturer markup values that, when 
applied to the MPCs, result in varying revenue and cash flow impacts.
    Under the preservation-of-gross-margin-percentage scenario, DOE 
applied a single uniform ``gross-margin-percentage'' markup across all 
efficiency levels, which assumes that manufacturers would be able to 
maintain the same amount of profit as a percentage of revenues at all 
efficiency levels within an equipment class. As manufacturer production 
costs increase with efficiency, this scenario implies that the per-unit 
dollar profit will increase. DOE assumed a gross-margin percentage of 
29 percent for all equipment classes.\82\ Manufacturers tend to believe 
it is optimistic to assume that they would be able to maintain the same 
gross-margin percentage as their production costs increase, 
particularly for minimally efficient equipment. Therefore, this 
scenario represents an upper bound of industry profitability under a 
new and amended energy conservation standard.
---------------------------------------------------------------------------

    \82\ The gross margin percentage of 29 percent is based on a 
manufacturer markup of 1.40.
---------------------------------------------------------------------------

    In the preservation-of-operating-profit scenario, as the cost of 
production goes up under a standards case, manufacturers are generally 
required to reduce their manufacturer markups to a level that maintains 
no-new-standards-case operating profit. DOE implemented

[[Page 70248]]

this scenario in the GRIM by lowering the manufacturer markups at each 
TSL to yield approximately the same earnings before interest and taxes 
in the standards case as in the no-new-standards case in the year after 
the expected compliance date of the new and amended standards. The 
implicit assumption behind this scenario is that the industry can only 
maintain its operating profit in absolute dollars after the standard 
takes effect.
    DOE seeks comment on the use of a 1.40 manufacturer markup for all 
CRE equipment classes analyzed in this proposed rule. DOE also seeks 
comment on the estimated manufacturer markups and incremental MSPs that 
result from the analyzed energy conservation standards.
    A comparison of industry financial impacts under the two 
manufacturer markup scenarios is presented in section V.B.2.a of this 
document.
3. Manufacturer Interviews
    DOE interviewed manufacturers representing approximately 60 percent 
of the domestic CRE shipments. Participants included domestic-based and 
foreign-based OEMs. Participants included manufacturers with a wide 
range of market shares and variety of equipment offerings, including 
four manufacturers who offered equipment under the expanded scope.
    In interviews, DOE asked manufacturers to describe their major 
concerns regarding the potential for more stringent energy conservation 
standards for CRE. The following section highlights manufacturer 
concerns that helped inform the projected potential impacts of an 
amended standard on the industry. Manufacturer interviews are conducted 
under NDAs, so DOE does not document these discussions in the same way 
that it does public comments in the comment summaries and DOE's 
responses throughout the rest of this document.
a. Changes to the Cabinet Structure
    In interviews, manufacturers expressed numerous concerns about 
efficiency levels that would necessitate significant changes to the 
cabinet structure (i.e., increasing insulation thickness or 
implementing VIPs). Regarding thicker insulation, manufacturers noted 
that changing the exterior dimensions of equipment would be extremely 
undesirable for the replacement market because customers expect 
equipment to fit within the same footprint as the equipment being 
replaced. A change in exterior dimensions could cause misalignment 
between existing cases and new cases. As manufacturers typically treat 
exterior dimensions as fixed, increasing insulation thickness would 
necessitate reducing interior volume, which could reduce useable, 
refrigerated volume. Furthermore, manufacturers stated that increasing 
insulation thickness would require significant capital and product 
conversion costs. Manufacturers would need to invest in new foam 
fixtures and tooling. Manufacturers would likely need to update all 
designs and tooling associated with the interior of the equipment.
    Regarding VIPs, manufacturers noted there is very limited industry 
experience with incorporating VIPs into CRE. Manufacturers emphasized 
that commercial environments may not be suitable for VIPs as they could 
be easily punctured, which would erode any efficiency improvements. 
Manufacturers noted that it would be nearly impossible to do in-field 
replacements of ineffectual VIPs, meaning that a puncture could require 
an entirely new CRE unit. Manufacturers also noted that implementing 
VIPs would require significant investment and redesign to the foaming 
station, manufacturing facility, and equipment design. Typically, CRE 
designs require numerous fasteners to secure internal components to the 
cabinet, which would not be feasible with VIPs. Manufacturers also 
noted the need to allocate special warehouse space to ensure the VIPs 
are not jostled or roughly handled in the manufacturing environment.
b. Supply Chain Concerns
    Multiple manufacturers expressed concerns about the ongoing supply 
chain constraints related to sourcing a range of components, such as 
high-efficiency motors, compressors, and control boards and 
electronics. Manufacturers noted that limited component availability, 
increases in raw material prices, and escalating shipping and 
transportation costs all affect manufacturer production costs. In 
addition to higher production costs, these manufacturers stated that 
the evolving nature of these component shortages requires dedicating 
personnel resources to identify and qualify new suppliers, build 
prototypes, conduct testing, and update equipment literature. Some 
manufacturers expressed concern about standard levels that would 
necessitate numerous component changes, as the manufacturers are 
already experiencing delays sourcing parts for prototypes. If these 
supply constraints continue through the end of the conversion period, 
industry could face capacity constraints. DOE discusses potential 
supply constraints in section V.B.2.c of this document.
4. Discussion of MIA Comments
    In response to the June 2022 Preliminary Analysis, NAMA asserted 
that the convenience services industry had suffered greatly over the 
past 3 years due to new DOE energy efficiency regulations, new ENERGY 
STAR levels, regulations on refrigerants (e.g., California Air 
Resources Board), the global pandemic, record inflation, and staffing 
troubles. (NAMA, No. 37 at pp. 2-3) NAMA commented that DOE assumed 
during the previous rulemaking that the industry would be using natural 
refrigerants, but industry had not completed these transitions due in 
part to pandemic shutdowns and the cost of redesigning and 
manufacturing. (Id. at p. 3)
    Furthermore, NAMA commented that the costs associated with setting 
up the production of R-290 machines can easily cost between $0.5 
million and $1.0 million per production line depending on the scale and 
stated that the June 2022 Preliminary TSD does not capture these costs. 
(Id. at pp. 7-8) NAMA commented further that the cost of redesigning 
equipment for lower GWP chemicals and the associated costs for safety 
compliance, improvements to factories, changes to service, and training 
of factory employees and service providers proved a huge burden to 
smaller manufacturers. (Id. at p. 3) NAMA stated that several of its 
member manufacturing companies qualified as small- and medium-
enterprise businesses and requested that DOE pay close attention to the 
economic impacts of a new set of energy regulations on an industry 
already under extreme pressure. (Id.) NAMA recommended that the 
environmental impact analysis include the fact that the CRE industry 
has spent many millions of dollars converting to lower-GWP refrigerant 
blends and hydrocarbon refrigerants such as R-290, which have a direct 
and immediate impact on climate change. (Id. at p. 8)
    AHRI commented similarly on the costs and burdens to transition to 
alternative refrigerants. (AHRI, No. 46 at pp. 12-13, 17-18) AHRI 
commented that the AIM Act requires refrigerant manufacturers to phase 
down the supply of high-GWP HFCs, encouraging CRE manufacturers to 
switch to low-GWP refrigerants, which often have some degree of 
flammability. (Id. at p. 18) AHRI commented that new low-GWP 
refrigerants would significantly impact CRE and that new safety

[[Page 70249]]

standards must address the application of these new flammable 
refrigerants and subsequent leak mitigation. (Id.) AHRI commented that 
flammable refrigerant sensors would likely be employed, with 
significant redesign of equipment needed to achieve required mitigation 
capability, and all equipment would require certification to these new 
standards, which included a number of additional requirements due to 
the combination of multiple standards. (Id.) AHRI added that all 
equipment would also need to eliminate potential ignition sources. 
(Id.) AHRI stated that manufacturers estimate the capital investment 
needed to safely handle and store flammable refrigerants at 
manufacturing facilities at $0.5 to $1.0 million for small facilities 
that only manufacture self-contained equipment and $2.0 to $4.0 million 
for medium and larger facilities. (Id. at pp. 12-13) AHRI noted that 
some companies have made this investment and transitioned products with 
smaller charges (114 grams in areas of egress, such as hallways) and 
150 grams limit in occupied spaces for A3 products (such as propane). 
(Id. at p. 13)
    Regarding the comments about new DOE energy efficiency regulations, 
DOE's cumulative regulatory burden analysis is based on rulemakings 
that go into effect within a 3-year time frame before or after the 
expected compliance date of amended CRE energy conservation standards 
(2028). Section V.B.2.e of this document includes a list of DOE energy 
conservation standards rulemakings that contribute to cumulative 
regulatory burden within the 3-year period before or after the expected 
compliance date of new and amended CRE energy conservation standards, 
should they be finalized.
    Regarding the comments about EPA's new ENERGY STAR levels, DOE 
notes that participating in ENERGY STAR is voluntary and not considered 
in DOE's analysis of cumulative regulatory burden.
    Regarding the comments about the costs associated with redesigning 
equipment to make use of lower-GWP refrigerants, DOE understands that 
manufacturers of CRE using high-GWP refrigerants (e.g., R-404a) will 
likely need to transition to alternative, lower-GWP refrigerants to 
comply with anticipated refrigeration regulations, such as the December 
2022 EPA NOPR, prior to the expected 2028 compliance date of potential 
energy conservation standards. See 87 FR 76738. DOE did incorporate the 
estimated expenses associated with redesigning CRE to make use of 
flammable refrigerants and upgrading production facilities to 
accommodate flammable refrigerants in the GRIM. DOE relied on a range 
of sources to estimate the investment required to transition CRE using 
high-GWP refrigerants to low-GWP refrigerants that satisfy the 
restrictions outlined in the December 2022 EPA NOPR. These sources 
included feedback from confidential manufacturer interviews, a report 
prepared for EPA,\83\ results of the engineering analysis, and 
investment estimates submitted by NAMA and AHRI in response to the June 
2022 Preliminary Analysis. DOE also reviewed other public sources, such 
as retail websites, EPA's ENERGY STAR Product Finder dataset, and 
equipment literature to estimate the portion of the CRE market that 
still needs to transition to low-GWP refrigerants (e.g., R-290). The 
expenses associated with a change in refrigerant are independent on 
DOE's proposal to amend energy conservation standards and are separate 
from DOE's estimates of conversion costs to meet amended standards. See 
section V.B.2.e of this document and chapter 12 of the NOPR TSD for 
additional discussion on cumulative regulatory burden.
---------------------------------------------------------------------------

    \83\ See pp. 5-113 of the ``Global Non-CO2 Greenhouse 
Gas Emission Projections & Marginal Abatement Cost Analysis: 
Methodology Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------

    NAMA commented that DOE should not discount the time and resources 
needed to evaluate and respond to simultaneous proposed test procedures 
and energy conservation standards for multiple equipment over a short 
period of time. (NAMA, No. 37 at p. 17) NAMA stated that when 
rulemakings occur simultaneously, the cumulative burden increases 
dramatically. (Id.) NAMA noted that manufacturers of CRE are in the 
middle of transitioning from HFC refrigerants to lower-GWP refrigerants 
and commented that additional requirements from DOE would increase the 
time necessary for transition. (Id.) NAMA commented that the transition 
to lower-GWP refrigerants is more impactful to the environment than the 
new energy efficiency requirements shown in the June 2022 Preliminary 
Analysis. (Id.) NAMA requested that DOE incorporate the financial 
results of the current cumulative regulatory burden analysis directly 
into the MIA by adding the combined costs of complying with multiple 
regulations into the product conversion costs in the GRIM. (Id. at p. 
18) NAMA requested that DOE complete a consolidated analysis for 
multiple regulations starting from the time of the first regulation. 
(Id.) NAMA stated that DOE has asserted such an analysis would require 
counting the costs/investments and the revenues/profits for both 
equipment, which is correct and represents a feature, not a deficiency. 
(Id.) NAMA further commented that if this is not possible, DOE should 
incorporate a value reduction factor in the first post-regulation year 
of the analysis that subtracts the value lost from the remaining years 
of the previous regulation. (Id.)
    Regarding NAMA's suggestion to account for the financial results of 
the cumulative regulatory burden analysis into the GRIM, DOE 
incorporated the estimated refrigerant transition costs that occur in 
the timeframe of the analysis directly into the GRIM in both the no-
new-standards case and the standards-case to reflect the impact of 
refrigerant regulation on CRE industry cash flow. See section V.B.2.e 
of this document for additional information.
    NAMA requested also that DOE stage its energy efficiency 
regulations at least 3, and preferably 5, years away from other 
significant and overlapping governmental regulations. (Id.) NAMA 
commented that changes to State and local building codes are another 
regulatory burden that should have been factored in the June 2022 
Preliminary Analysis.
    Regarding NAMA's suggestion to promulgate energy efficiency 
regulations at least 3, and preferably 5, years away from other 
significant and overlapping governmental regulations, DOE has statutory 
requirements under EPCA on the timing of rulemakings. For CRE, EPCA 
requires that, not later than 6 years after the issuance of any final 
rule establishing or amending a standard, DOE evaluate the energy 
conservation standards for each type of covered equipment and publish 
either a notification of determination that the standards do not need 
to be amended, or a NOPR that includes new proposed energy conservation 
standards (proceeding to a final rule, as appropriate). (42 U.S.C. 
6316(e)(1)); 42 U.S.C. 6295(m)(1)) The current CRE energy conservation 
standards were implemented by the March 2014 Final Rule. 79 FR 17725. 
Under EPCA, any potential new and amended standards would go into 
effect (1) 3 years after the date on which the final amended standard 
is published or (2) if the Secretary determines, by rule, that 3 years 
is inadequate, not later than 5 years after the date on which the final 
rule is published. (42 U.S.C. 6313(c)(6)(C)). For this NOPR, DOE has 
proposed a 3-year compliance period after the date on which final 
amended standard is published. DOE welcomes stakeholder feedback on 
choice of 3

[[Page 70250]]

years or 5 years between the final rule publication and the compliance 
date.
    NAMA commented that large inaccuracies exist in the tables of 
design options in the June 2022 TSD and that the June 2022 Preliminary 
TSD failed to take into account the substantial capital costs caused by 
these design options, not including recent cost increases due to 
inflation. (NAMA, No. 37 at pp. 9-10) NAMA stated that it sees no sign 
DOE has factored into its estimates the cost of capital-intensive 
design options, such as increased insulation, vacuum panels, heavier 
doors, and microchannel coils, and that these costs, which would be 
accrued on top of the millions of dollars being invested to move from 
high-GWP refrigerants to low-GWP refrigerants, comprise an issue of 
cumulative burden. (Id.)
    With respect to NAMA's comment on design options and capital costs, 
DOE did not estimate capital conversion costs for the June 2022 
Preliminary Analysis as DOE does not conduct a full MIA for rulemaking 
stages prior to the NOPR analysis stage. For this NOPR, DOE accounts 
for the capital investments required to implement the considered design 
options in the MIA. See section IV.J.2.c of this document for 
additional details on conversion costs.
    AHRI commented that its members face significant regulatory burdens 
requiring redesign, retooling, testing, and listing of equipment; new 
regulations related to the inclusion of special/definite-purpose motors 
as regulated; state-mandated refrigerant emissions limits, which 
coincide with a change in the safety standard for CRE; and new 
regulations requiring elimination of the use of phenyl isopropylated 
phosphate (PIP 3:1) in components. (AHRI, No. 46 at p. 16) AHRI 
commented that recent changes to the scope of test procedures for 
electric motors will increase the burden on manufacturers significantly 
if all equipment using special and definite-purpose motors were 
suddenly forced to certify compliance with standards for component 
parts, including the testing, paperwork, and recordkeeping requirements 
that accompany certification. (Id. at pp. 16-17) AHRI stated that 
efficient electric motors incorporated into finished equipment are 
already a major part of the energy equation when OEMs consider what 
design options to apply to meet new standards, as is evidenced by the 
June 2022 Preliminary TSD, and urged DOE to account for these costs. 
(Id. at p. 17) AHRI recommended that DOE should consider the impact of 
new motor designs on CRE and stated that, for equipment yet to be 
produced, the impact could range from retesting/recertification 
aligning with safety standards to a full equipment redesign 
accommodating a new, larger motor. (Id.) AHRI commented that the impact 
could be devastating for equipment already installed in businesses as 
motors could no longer be available as replacement parts, thereby 
forcing consumers to prematurely discard equipment that could have 
otherwise been repaired, imposing significant additional costs on 
consumers, and generating environmental impacts that would likely 
entirely offset any marginal gains from the increased scope. (Id.) AHRI 
recommended that DOE should account for the decrease in useful life 
from this component regulation in the product's LCC calculations. (Id.) 
AHRI stated that the 180-day timeline for motor manufacturers to comply 
with the electric motor test procedure puts the need to consider the 
impact of motor test procedures into this analysis. (Id.) AHRI 
calculated and submitted a detailed cost analysis of changing an 
embedded motor totaling $304,000 for one model of commercial HVAC 
equipment in response to the electric motor rulemaking. (Id.) AHRI 
stated that CRE will likely face similar costs and that the expanded 
definition of ``manufacturer'' would redefine OEMs as electric motor 
manufacturers and they would need to comply with these certification 
requirements, which is a burden that DOE has not accounted for this 
burden in its analysis. (Id.)
    DOE analyzes cumulative regulatory burden pursuant to section 13(g) 
of the Process Rule. Regarding comments related to the electric motors 
test procedure final rule published on October 19, 2022 (``October 2022 
Final Rule''), DOE tentatively expects that the motors used in the CRE 
covered by this rulemaking would not be directly impacted by the 
electric motors rulemaking because the motors used in CRE are typically 
below 0.25 horsepower, and, thus, are outside the scope of the October 
2022 Final Rule. See 87 FR 63588, 63601. Regarding comments related to 
a change in safety standards for CRE, DOE understands that existing 
safety standards will be replaced by UL 60335-2-89 in 2024 after which 
all new equipment and certain modifications to existing CRE will 
require evaluation to the latest edition of UL 60335-2-89. Some 
manufacturers noted that the latest edition of UL 60335-2-89 is more 
onerous than existing safety standards for CRE. DOE understood that the 
product conversion cost feedback from manufacturer interviews reflects 
the additional time investment associated with testing to UL 60335-2-
89.
    Regarding comments related to regulations requiring elimination of 
the use of PIP 3:1 in components, DOE did not consider chemical 
regulations in its NOPR cumulative regulatory burden analysis as EPA's 
final rule is not a CRE-specific Federal regulatory action and the 
required compliance date does not occur within the specified 3-year 
cumulative regulatory burden timeframe analyzed in this NOPR. See 87 FR 
12875.
    AHRI commented that manufacturers of chef bases, griddle stands, 
and other equipment for which there is no test procedure would have to 
spend additional time and funds to determine test efficacy and whether 
it is possible to meet DOE-designated energy conservation standards. 
(AHRI, No. 46 at p. 8)
    DOE is proposing new and amended conservation standards for chef 
bases and high-temperature units (e.g., VCT.SC.H, VCS.SC.H, CB.SC.M, 
CB.SC.L). In its modeling, DOE incorporated the upfront per-unit costs 
associated with testing to the September 2023 Test Procedure Final Rule 
for the classes of equipment for which there was no test procedure. DOE 
incorporated the testing costs into its product conversion cost 
estimates. See section IV.J.2.c of this document and chapter 12 of the 
NOPR TSD for additional details.
    NAMA commented that the CRE industry has suffered shortages in the 
supply chain of critical parts during recent years. (NAMA, No. 37 at p. 
14) Specifically, NAMA commented regarding difficulties in acquiring 
fabricated computer chips and other components in the electronics, 
displays, and electrical area. (Id.) NAMA stated that the economic 
analysis in support of the June 2022 Preliminary Analysis did not 
account for these disruptions. (Id.) NAMA recommended that DOE consider 
the impact of supply chain issues as part of the new energy efficiency 
standards levels. (Id.) NAMA commented that unavailable components had 
increased the complexity of equipment design, and further changes based 
on perceived energy efficiency added additional complexity without 
benefiting the customer. (Id.)
    As detailed in section IV.J.3 of this document, DOE received 
similar comments about the challenges sourcing certain CRE components 
in recent years during confidential manufacturer interviews. DOE notes 
that increased costs associated with recent supply

[[Page 70251]]

chain issues have been implemented in the cost analysis and are 
presented in the MPCs in this NOPR analysis, specifically by way of 5-
year moving averages for materials and the most up-to-date information 
on purchased part prices for this NOPR analysis.
    DOE requests comment on the availability of computer chips and 
other electronic components used in CREs in the timeframe of 2028, and 
specifically how availability would affect industry's ability to 
achieve higher efficiency levels.
    NAFEM commented that DOE was evasive in DOE's response to comments 
regarding negative impacts on a substantial number of small businesses 
in the July 2021 RFI. (NAFEM, No. 40 at p. 4) NAFEM commented that it 
continues to work with the Small Business Administration (``SBA'') 
Office of Advocacy to ensure that small businesses have a direct avenue 
for input and that DOE properly assesses cumulative regulatory burden 
and conducts a fair regulatory flexibility analysis. (Id.)
    DOE notes that there is no regulatory flexibility analysis or 
manufacturer impact analysis in the preliminary analysis stage of 
rulemakings. At this NOPR stage, DOE identified 25 small domestic OEMs 
selling covered CRE in the United States. In support of this NOPR 
analysis, DOE contractors conducted confidential manufacturer 
interviews, which included discussions with small, domestic OEMs. DOE 
incorporated their feedback into the MIA. Additionally, DOE analyzed 
the impact of the proposed amended standards on small business 
manufacturers in section VI.B of this document and in chapter 12 of the 
NOPR TSD.
    NAMA commented that no contact between DOE consultants and its 
manufacturing members was apparent and stated its belief that the 
information in the June 2022 Preliminary TSD would have been more 
accurate and reflective of today's market if NAMA's members had been 
interviewed. (NAMA, No. 37 at p. 6)
    DOE did not conduct preliminary manufacturer interviews in support 
of the June 2022 Preliminary Analysis. However, DOE conducted 
interviews with a range of manufacturers in support of this NOPR 
analysis. DOE conducted manufacturer interviews with eight CRE OEMs, 
representing approximately 60 percent of domestic industry shipments. 
For additional information on manufacturer interviews, see section 
IV.J.3 of this document and chapter 12 of the NOPR TSD.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions to emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions factors intended 
to represent the marginal impacts of the change in electricity 
consumption associated with amended or new standards. The methodology 
is based on results published for the AEO, including a set of side 
cases that implement a variety of efficiency-related policies. The 
methodology is described in appendix 13A in the NOPR TSD. The analysis 
presented in this document uses projections from AEO2023. Power sector 
emissions of CH4 and N2O from fuel combustion are 
estimated using Emission Factors for Greenhouse Gas Inventories 
published by the EPA.\84\
---------------------------------------------------------------------------

    \84\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed March 9, 
2023).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH4 and CO2, are estimated based on the 
methodology described in chapter 15 of the NOPR TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the emissions control programs discussed in the following 
paragraphs the emissions control programs discussed in the following 
paragraphs, and the Inflation Reduction Act.\85\
---------------------------------------------------------------------------

    \85\ For further information, see the Assumptions to AEO2023 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed March 30, 2023).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (D.C.). (42 U.S.C. 7651 et seq.) 
SO2 emissions from numerous States in the eastern half of 
the United States are also limited under the Cross-State Air Pollution 
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these 
States to reduce certain emissions, including annual SO2 
emissions, and went into effect as of January 1, 2015.\86\ The AEO 
incorporates implementation of CSAPR, including the update to the CSAPR 
ozone season program emission budgets and target dates issued in 2016. 
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among 
EGUs and is enforced through the use of tradable emissions allowances. 
Under existing EPA regulations, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------

    \86\ CSAPR requires States to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (PM2.5) pollution, in order to 
address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain States to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five States in the 
CSAPR ozone season program; 76 FR 80760 (December 27, 2011) 
(Supplemental Rule).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants.\87\ 77 FR 9304 (Feb. 16, 2012). In the MATS final rule, 
EPA established a standard for hydrogen chloride as a surrogate for 
acid gas hazardous air pollutants (``HAP''), and also established a 
standard for SO2 (a non-HAP acid gas)

[[Page 70252]]

as an alternative equivalent surrogate standard for acid gas HAP. The 
same controls are used to reduce HAP and non-HAP acid gas; thus, 
SO2 emissions are being reduced as a result of the control 
technologies installed on coal-fired power plants to comply with the 
MATS requirements for acid gas. In order to continue operating, coal 
power plants must have either flue gas desulfurization or dry sorbent 
injection systems installed. Both technologies, which are used to 
reduce acid gas emissions, also reduce SO2 emissions. 
Because of the emissions reductions under the MATS, it is unlikely that 
excess SO2 emissions allowances resulting from the lower 
electricity demand would be needed or used to permit offsetting 
increases in SO2 emissions by another regulated EGU. 
Therefore, energy conservation standards that decrease electricity 
generation would generally reduce SO2 emissions. DOE 
estimated SO2 emissions reduction using emissions factors 
based on AEO2023.
---------------------------------------------------------------------------

    \87\ In order to continue operating, coal power plants must have 
either flue gas desulfurization or dry sorbent injection systems 
installed. Both technologies, which are used to reduce acid gas 
emissions, also reduce SO2 emissions.
---------------------------------------------------------------------------

    CSAPR also established limits on NOX emissions for 
numerous States in the eastern half of the United States. Energy 
conservation standards would have little effect on NOX 
emissions in those States covered by CSAPR emissions limits if excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions from other EGUs. In such cases, NOX 
emissions would remain near the limit even if electricity generation 
goes down. A different case could possibly result, depending on the 
configuration of the power sector in the different regions and the need 
for allowances, such that NOX emissions might not remain at 
the limit in the case of lower electricity demand. In this case, energy 
conservation standards might reduce NOX emissions in covered 
States. Despite this possibility, DOE has chosen to be conservative in 
its analysis and has maintained the assumption that standards will not 
reduce NOX emissions in States covered by CSAPR. Energy 
conservation standards would be expected to reduce NOX 
emissions in the States not covered by CSAPR. DOE used AEO2023 data to 
derive NOX emissions factors for the group of States not 
covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2023, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this proposed rule, for the purpose 
of complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2, CH4, N2O, NOX, and 
SO2 that are expected to result from each of the TSLs 
considered. To make this calculation analogous to the calculation of 
the NPV of consumer benefit, DOE considered the reduced emissions 
expected to result over the lifetime of equipment shipped in the 
projection period for each TSL. This section summarizes the basis for 
the values used for monetizing the emissions benefits and presents the 
values considered in this NOPR.
    To monetize the benefits of reducing GHG emissions, this analysis 
uses the interim estimates presented in the Technical Support Document: 
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates 
Under Executive Order 13990 published in February 2021 by the IWG 
(``February 2021 SC-GHG TSD'').
    In response to the June 2022 Preliminary Analysis, AHRI expressed 
concern that DOE's social cost of carbon (``SCC'') analysis used to 
generate the original 2007 and updated 2020 new interim value for the 
social cost of carbon dioxide extends beyond the statutory authority 
and the scope contemplated by Congress. (AHRI, No. 46 at p. 9) AHRI 
stated its belief that DOE should withdraw the SCC values and refrain 
from using the SCC in any other rulemaking or policymaking until the 
SCC undergoes a more rigorous notice, review and comment process. (Id.) 
AHRI added that while AHRI agrees that the SCC should be estimated, 
presented, and made publicly available for every DOE rule, the SCC has 
not been adequately reviewed before being used as a factor in 
calculating net benefits. (Id.)
    As stated in section III.F.1.f of this document, DOE accounts for 
the environmental and public health benefits associated with the more 
efficient use of energy, including those connected to global climate 
change, and considers them important to take into account when 
considering the need for national energy conservation. (See 42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) In addition, Executive 
Order 13563 states that each agency must, among other things: ``select, 
in choosing among alternative regulatory approaches, those approaches 
that maximize net benefits (including potential economic, 
environmental, public health and safety, and other advantages; 
distributive impacts; and equity).'' 76 FR 3821 (Jan. 21, 2011) For 
these reasons, DOE includes monetized emissions reductions in its 
evaluation of potential standard levels and reporting of net benefits. 
As previously stated, however, DOE would reach the same conclusion 
presented in this proposed rulemaking in the absence of the social cost 
of greenhouse gases.
    AHRI stated that the SCC's time-period for analysis renders its 
applicability suspect. (AHRI, No. 46 at p. 9) AHRI noted that, in 
contrast to the timeframe considered for carbon emissions, DOE 
calculates the present value of the costs to consumers and 
manufacturers over a 30-year period. (Id.) AHRI contends that DOE's 
comparison of 30 years of cost to hundreds of years of presumed future 
benefits is inconsistent and improper. (Id.)
    In response, DOE notes that its analysis considers the costs and 
benefits associated with 30 years of shipments of a covered product. 
Because such products continue to operate beyond 30 years, DOE accounts 
for energy cost savings and reductions in emissions until all products 
shipped within the 30-year period are retired. In the case of 
CO2 emissions, which remain in the atmosphere and contribute 
to climate change for many decades, the benefits of reductions in 
emissions likewise occur over a lengthy period. To not include such 
benefits would be inappropriate. However, because benefits associated 
with a ton of CO2 emissions are discounted to derive the SCC 
value for a given emissions year, and then the benefits from potential 
standards are discounted to the present, the contribution of climate 
change benefits in the far future to the total benefits from 
CO2 reduction is very small.
    AHRI stated that EPCA's focus is exclusively on benefits accruing 
within this nation, and thus SCC figures reported by DOE at the global 
level are beyond the scope and authority of DOE. (Id. at p. 10) As 
previously discussed in this section, many climate impacts that affect 
the welfare of U.S. citizens and residents are better reflected by 
global measures of the SC-GHG. In addition, assessing the benefits of 
U.S. GHG mitigation activities requires consideration of how those 
actions may affect mitigation activities by other countries, as those 
international mitigation actions will provide a benefit to U.S. 
citizens and residents by mitigating climate impacts that affect U.S. 
citizens and residents.
    AHRI stated that DOE wrongly assumes that SCC values will increase 
over time. (Id.) AHRI contended that the

[[Page 70253]]

more economic development that occurs, the more adaptation and 
mitigation efforts are both undertaken by humanity and that a 
population living in a growing economy can afford to undertake. (Id.) 
In response, DOE notes that there are many reasons why the analysis of 
the IWG, along with other rigorous assessments, shows SCC values rising 
over time. Briefly, as concentrations of GHGs increase, so do the 
impacts on climate and sea level. Growing population in many parts of 
the world mean more people who would suffer the effects of heat waves 
and rising sea levels, and continued economic growth means that the 
overall magnitude of economic damage from climate change is likely to 
rise. In its February 2021 TSD, the IWG notes that various limitations 
in the analysis suggest that the range of SC-GHG estimates presented in 
the TSD likely underestimate societal damages from GHG emissions.\88\
---------------------------------------------------------------------------

    \88\ See the February 2021 SC-GHG TSD at p. 4. Available at 
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    AHRI commented that if DOE still chooses to include the SCC, DOE 
should consider the benefits of foam blowing and the refrigerant 
transition in its analysis. (Id. at p. 9) In response, DOE notes that 
the benefits of foam blowing agents and the refrigerant transition is 
independent of DOE actions related to any new and amended energy 
conservation standards, therefore such benefits are not accounted for 
in its monetizing emissions analysis.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the SC of each pollutant (e.g., ``SC-CO2''). 
These estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE exercises its own judgment in presenting monetized climate 
benefits as recommended by applicable Executive orders, and DOE would 
reach the same conclusion presented in this proposed rulemaking in the 
absence of the social cost of greenhouse gases. That is, the social 
costs of greenhouse gases, whether measured using the February 2021 
interim estimates presented by the IWG or by another means, did not 
affect the rule ultimately proposed by DOE.
    DOE estimated the global social benefits of CO2, 
CH4, and N2O emission reductions using SC-GHG 
values that were based on the interim values presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates under Executive Order 13990, published in February 
2021 by the IWG (``February 2021 SC-GHG TSD''). The SC-GHG is the 
monetary value of the net harm to society associated with a marginal 
increase in emissions in a given year, or the benefit of avoiding that 
increase. In principle, the SC-GHG includes the value of all climate 
change impacts, including (but not limited to) changes in net 
agricultural productivity, human health effects, property damage from 
increased flood risk and natural disasters, disruption of energy 
systems, risk of conflict, environmental migration, and the value of 
ecosystem services. Therefore, the SC-GHG reflects the societal value 
of reducing emissions of the gas in question by one metric ton. The SC-
GHG is the theoretically appropriate value to use in conducting 
benefit-cost analyses of policies that affect CO2, 
N2O, and CH4 emissions. As a member of the IWG 
involved in the development of the February 2021 SC-GHG TSD, DOE agrees 
that the interim SC-GHG estimates represent the most appropriate 
estimate of the SC-GHG until revised estimates have been developed 
reflecting the latest peer-reviewed science.
    The SC-GHG estimates presented here were developed over many years, 
using a transparent process, peer-reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. Specifically, in 2009, the IWG, which included DOE and other 
executive branch agencies and offices, was established to ensure that 
agencies were using the best available science and to promote 
consistency in the SC-CO2 values used across agencies. The 
IWG published SC-CO2 estimates in 2010 that were developed 
from an ensemble of three widely cited integrated assessment models 
(``IAMs'') that estimate global climate damages using highly aggregated 
representations of climate processes and the global economy combined 
into a single modeling framework. The three IAMs were run using a 
common set of input assumptions in each model for future population, 
economic, and CO2 emissions growth, as well as equilibrium 
climate sensitivity--a measure of the globally averaged temperature 
response to increased atmospheric CO2 concentrations. These 
estimates were updated in 2013 based on new versions of each IAM. In 
August 2016 the IWG published estimates of the social cost of methane 
(``SC-CH4'') and nitrous oxide (``SC-N2O'') using 
methodologies consistent with the methodology underlying the SC-
CO2 estimates. The modeling approach that extends the IWG 
SC-CO2 methodology to non-CO2 GHGs has undergone 
multiple stages of peer review. The SC-CH4 and SC-
N2O estimates were developed by Marten et al.\89\ and 
underwent a standard double-blind peer-review process prior to journal 
publication. In 2015, as part of the response to public comments 
received to a 2013 solicitation for comments on the SC-CO2 
estimates, the IWG announced a National Academies of Sciences, 
Engineering, and Medicine review of the SC-CO2 estimates to 
offer advice on how to approach future updates to ensure that the 
estimates continue to reflect the best available science and 
methodologies. In January 2017, the National Academies released their 
final report, Valuing Climate Damages: Updating Estimation of the 
Social Cost of Carbon Dioxide,'' and recommended specific criteria for 
future updates to the SC-CO2 estimates, a modeling framework 
to satisfy the specified criteria, and both near-term updates and 
longer-term research needs pertaining to various components of the 
estimation process.\90\ Shortly thereafter, in March 2017, President 
Trump issued Executive Order 13783, which disbanded the IWG, withdrew 
the previous TSDs, and directed agencies to ensure SC-CO2 
estimates used in regulatory analyses are consistent with the guidance 
contained in OMB's Circular A-4, ``including with respect to the 
consideration of domestic versus international impacts and the 
consideration of appropriate discount rates'' (E.O. 13783, Section 
5(c)). Benefit-cost analyses following E.O. 13783 used SC-GHG estimates 
that attempted to focus on the U.S.-specific share of climate change 
damages as estimated by the models and were

[[Page 70254]]

calculated using two discount rates recommended by Circular A-4, 3 
percent and 7 percent. All other methodological decisions and model 
versions used in SC-GHG calculations remained the same as those used by 
the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------

    \89\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, 
and A. Wolverton. Incremental CH4 and N2O 
mitigation benefits consistent with the U.S. Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
    \90\ National Academies of Sciences, Engineering, and Medicine. 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide. 2017. The National Academies Press: Washington, DC. 
nap.nationalacademies.org/catalog/24651/valuing-climate-damages-updating-estimation-of-the-social-cost-of.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations in the National Academies 2017 report. The IWG was 
tasked with first reviewing the SC-GHG estimates currently used in 
Federal analyses and publishing interim estimates within 30 days of the 
E.O. that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021 are used here to estimate the climate benefits for this 
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller 
update of the SC-GHG estimates that takes into consideration the advice 
in the National Academies 2017 report and other recent scientific 
literature. The February 2021 SC-GHG TSD provides a complete discussion 
of the IWG's initial review conducted under E.O. 13990. In particular, 
the IWG found that the SC-GHG estimates used under E.O. 13783 fail to 
reflect the full impact of GHG emissions in multiple ways.
    First, the IWG found that the SC-GHG estimates used under E.O. 
13783 fail to fully capture many climate impacts that affect the 
welfare of U.S. citizens and residents, and those impacts are better 
reflected by global measures of the SC-GHG. Examples of omitted effects 
from the E.O. 13783 estimates include direct effects on U.S. citizens, 
assets, and investments located abroad, supply chains, U.S. military 
assets and interests abroad, tourism, and spillover pathways, such as 
economic and political destabilization and global migration that can 
lead to adverse impacts on U.S. national security, public health, and 
humanitarian concerns. In addition, assessing the benefits of U.S. GHG 
mitigation activities requires consideration of how those actions may 
affect mitigation activities by other countries, as those international 
mitigation actions will provide a benefit to U.S. citizens and 
residents by mitigating climate impacts that affect U.S. citizens and 
residents. A wide range of scientific and economic experts have 
emphasized the issue of reciprocity as support for considering global 
damages of GHG emissions. If the United States does not consider 
impacts on other countries, it is difficult to convince other countries 
to consider the impacts of their emissions on the United States. The 
only way to achieve an efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the United States and its 
citizens--is for all countries to base their policies on global 
estimates of damages. As a member of the IWG involved in the 
development of the February 2021 SC-GHG TSD, DOE agrees with this 
assessment and, therefore, in this proposed rule, DOE centers attention 
on a global measure of SC-GHG. This approach is the same as that taken 
in DOE regulatory analyses from 2012 through 2016. A robust estimate of 
climate damages that accrue only to U.S. citizens and residents does 
not currently exist in the literature. As explained in the February 
2021 SC-GHG TSD, existing estimates are both incomplete and an 
underestimate of total damages that accrue to the citizens and 
residents of the United States because they do not fully capture the 
regional interactions and spillovers discussed above; nor do they 
include all of the important physical, ecological, and economic impacts 
of climate change recognized in the climate change literature. As noted 
in the February 2021 SC-GHG TSD, the IWG will continue to review 
developments in the literature, including more robust methodologies for 
estimating a U.S.-specific SC-GHG value, and explore ways to better 
inform the public of the full range of carbon impacts. As a member of 
the IWG, DOE will continue to follow developments in the literature 
pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies and the economic literature, the IWG continued to conclude 
that the consumption rate of interest is the theoretically appropriate 
discount rate in an intergenerational context,\91\ and recommended that 
discount rate uncertainty and relevant aspects of intergenerational 
ethical considerations be accounted for in selecting future discount 
rates.
---------------------------------------------------------------------------

    \91\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government, available at www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last 
accessed March 9, 2023); Interagency Working Group on Social Cost of 
Carbon. Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. 2013, available at 
www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact (last accessed March 9, 2023); Interagency Working 
Group on Social Cost of Greenhouse Gases, United States Government. 
Technical Support Document: Technical Update on the Social Cost of 
Carbon for Regulatory Impact Analysis-Under Executive Order 12866. 
August 2016, available at www.epa.gov/sites/default/files/201612/documents/sc_co2_tsd_august_2016.pdf (last accessed March 9, 2023); 
Interagency Working Group on Social Cost of Greenhouse Gases, United 
States Government. Addendum to Technical Support Document on Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866: Application of the Methodology to Estimate the Social Cost of 
Methane and the Social Cost of Nitrous Oxide. August 2016, available 
at www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed January 18, 2022).
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes that while OMB Circular A-4, 
as published in 2003, recommends using 3-percent and 7-percent discount 
rates as ``default'' values, Circular A-4 also reminds agencies that 
``different regulations may call for different emphases in the 
analysis, depending on the nature and complexity of the regulatory 
issues and the sensitivity of the benefit and cost estimates to the key 
assumptions.'' On discounting, Circular A-4 recognizes that ``special 
ethical considerations arise when comparing benefits and costs across 
generations,'' and Circular A-4 acknowledges that analyses may 
appropriately ``discount future costs and consumption benefits . . . at 
a lower rate than for intragenerational analysis.'' In the 2015 
Response to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE concludes that a 7-percent discount 
rate is not appropriate to apply to value the social cost of greenhouse 
gases in the analysis presented in this NOPR.
    To calculate the present and annualized values of climate benefits, 
DOE uses the same discount rate as the

[[Page 70255]]

rate used to discount the value of damages from future GHG emissions, 
for internal consistency. That approach to discounting follows the same 
approach that the February 2021 SC-GHG TSD recommends ``to ensure 
internal consistency--i.e., future damages from climate change using 
the SC-GHG at 2.5 percent should be discounted to the base year of the 
analysis using the same 2.5-percent rate.'' DOE has also consulted the 
National Academies' 2017 recommendations on how SC-GHG estimates can 
``be combined in RIAs with other cost and benefits estimates that may 
use different discount rates.'' The National Academies reviewed several 
options, including ``presenting all discount rate combinations of other 
costs and benefits with [SC-GHG] estimates.''
    As a member of the IWG involved in the development of the February 
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue 
to follow developments in the literature pertaining to this issue. 
While the IWG works to assess how best to incorporate the latest peer-
reviewed science to develop an updated set of SC-GHG estimates, it set 
the interim estimates to be the most recent estimates developed by the 
IWG prior to the group being disbanded in 2017. The estimates rely on 
the same models and harmonized inputs and are calculated using a range 
of discount rates. As explained in the February 2021 SC-GHG TSD, the 
IWG has recommended that agencies revert to the same set of four values 
drawn from the SC-GHG distributions based on three discount rates as 
were used in regulatory analyses between 2010 and 2016 and were subject 
to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: an average value 
resulting from the model runs for each of three discount rates (2.5 
percent, 3 percent, and 5 percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3-percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, this update reflects the immediate 
need to have an operational SC-GHG for use in regulatory benefit-cost 
analyses and other applications that was developed using a transparent 
process, peer-reviewed methodologies, and the science available at the 
time of that process, and DOE agrees with this determination. Those 
estimates were subject to public comment in the context of dozens of 
proposed rulemakings as well as in a dedicated public comment period in 
2013.
    There are a number of limitations and uncertainties associated with 
the SC-GHG estimates. First, the current scientific and economic 
understanding of discounting approaches suggests discount rates 
appropriate for intergenerational analysis in the context of climate 
change are likely to be less than 3 percent, near 2 percent or 
lower.\92\ Second, the IAMs used to produce these interim estimates do 
not include all of the important physical, ecological, and economic 
impacts of climate change recognized in the climate change literature 
and the science underlying their ``damage functions''--(i.e., the core 
parts of the IAMs that map global mean temperature changes and other 
physical impacts of climate change into economic (both market and 
nonmarket) damages)--lags behind the most recent research. For example, 
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the model IAMs, their incomplete treatment of 
adaptation and technological change, the incomplete way in which inter-
regional and intersectoral linkages are modeled, uncertainty in the 
extrapolation of damages to high temperatures, and inadequate 
representation of the relationship between the discount rate and 
uncertainty in economic growth over long time horizons. Likewise, the 
socioeconomic and emissions scenarios used as inputs to the models do 
not reflect new information from the last decade of scenario generation 
or the full range of projections. The modeling limitations do not all 
work in the same direction in terms of their influence on the SC-
CO2 estimates. However, as discussed in the February 2021 
SC-GHG TSD, the IWG has recommended that, taken together, the 
limitations suggest that the interim SC-GHG estimates used in this 
proposed rule likely underestimate the damages from GHG emissions. DOE 
concurs with this assessment.
---------------------------------------------------------------------------

    \92\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at 
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf 
(last accessed March 9, 2023).
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO2, SC-N2O, and 
SC-CH4 values used for this NOPR are discussed in the 
following sections, and the results of DOE's analyses estimating the 
benefits of the reductions in emissions of these GHGs are presented in 
section V.B.6 of this document.
a. Social Cost of Carbon
    The SC-CO2 values used for this NOPR were based on the 
values presented for the IWG's February 2021 TSD, which are shown in 
table IV.12 in five-year increments from 2020 to 2050. shows the 
updated sets of SC-CO2 estimates from the IWG's TSD in 5-
year increments from 2020 to 2050. The set of annual values that DOE 
used, which was adapted from estimates published by EPA,\93\ is 
presented in appendix 14-A of the final rule TSD. These estimates are 
based on methods, assumptions, and parameters identical to the 
estimates published by the IWG (which were based on EPA modeling), and 
include values for 2051 to 2070. DOE expects additional climate 
benefits to accrue for products still operating after 2070, but a lack 
of available SC-CO2 estimates for emissions years beyond 
2070 prevents DOE from monetizing these potential benefits in this 
analysis.
---------------------------------------------------------------------------

    \93\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023).

                    Table IV.10--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
                                           [2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                Discount rate and statistic
                                         -----------------------------------------------------------------------
                  Year                                                                              3%  95th
                                             5%  Average       3%  Average      2.5%  Average      percentile
----------------------------------------------------------------------------------------------------------------
2020....................................                14                51                76               152

[[Page 70256]]

 
2025....................................                17                56                83               169
2030....................................                19                62                89               187
2035....................................                22                67                96               206
2040....................................                25                73               103               225
2045....................................                28                79               110               242
2050....................................                32                85               116               260
----------------------------------------------------------------------------------------------------------------

    For 2051 to 2070, DOE used SC-CO2 estimates published by 
EPA, adjusted to 2020$.\94\ These estimates are based on methods, 
assumptions, and parameters identical to the 2020-2050 estimates 
published by the IWG. DOE expects additional climate benefits to accrue 
for any longer-life CRE after 2070, but a lack of available SC-
CO2 estimates for emissions years beyond 2070 prevents DOE 
from monetizing these potential benefits in this analysis.
---------------------------------------------------------------------------

    \94\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at www.federalregister.gov/documents/2021/10/30/2021-27854/revised-2023-and-later-model-year-light-duty-vehicle-greenhouse-gas-emissions-standards (last accessed 
March 9, 2023).
---------------------------------------------------------------------------

    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in each of the 
four cases. DOE adjusted the values to 2020$ using the implicit price 
deflator for gross domestic product (``GDP'') from the Bureau of 
Economic Analysis. To calculate a present value of the stream of 
monetary values, DOE discounted the values in each of the four cases 
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
NOPR were based on the values developed for the February 2021 SC-GHG 
TSD. Table IV.13 shows the updated sets of SC-CH4 and SC-
N2O estimates from the latest interagency update in 5-year 
increments from 2020 to 2050. The full set of annual values used is 
presented in appendix 14-A of the NOPR TSD. To capture the 
uncertainties involved in regulatory impact analysis, DOE has 
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG. 
DOE derived values after 2050 using the approach described above for 
the SC-CO2.

                                  Table IV.13--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
                                                                 [2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               SC-CH4                                                    SC-N2O
                                     -------------------------------------------------------------------------------------------------------------------
                                                     Discount rate and statistic                               Discount rate and statistic
                Year                 -------------------------------------------------------------------------------------------------------------------
                                                                    2.5%          3%  95th                                    2.5%          3%  95th
                                      5%  Average  3%  Average    Average        percentile     5%  Average  3%  Average    Average        percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020................................          670        1,500        2,000              3,900        5,800       18,000       27,000             48,000
2025................................          800        1,700        2,200              4,500        6,800       21,000       30,000             54,000
2030................................          940        2,000        2,500              5,200        7,800       23,000       33,000             60,000
2035................................        1,100        2,200        2,800              6,000        9,000       25,000       36,000             67,000
2040................................        1,300        2,500        3,100              6,700       10,000       28,000       39,000             74,000
2045................................        1,500        2,800        3,500              7,500       10,000       30,000       42,000             81,000
2050................................        1,700        3,100        3,800              8,200       13,000       33,000       45,000             88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE multiplied the CH4 and N2O emissions 
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE 
adjusted the values to 2022$ using the implicit price deflator for GDP 
from the Bureau of Economic Analysis. To calculate a present value of 
the stream of monetary values, DOE discounted the values in each of the 
cases using the specific discount rate that had been used to obtain the 
SC-CH4 and SC-N2O estimates in each case.
2. Monetization of Other Emissions Impacts
    For the NOPR, DOE estimated the monetized value of NOX 
and SO2 emissions reductions from electricity generation 
using the latest benefit per ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\95\ DOE used EPA's values 
for PM2.5-related benefits associated with NOX 
and SO2 and for ozone-related benefits associated with 
NOX for 2025, 2030, and 2040, calculated with discount rates 
of 3 percent and 7 percent. DOE used linear interpolation to define 
values for the years not given in the 2025 to 2040 period; for years 
beyond 2040 the values are held constant. DOE combined the EPA regional 
benefit-per-ton estimates with regional information on electricity 
consumption and emissions from AEO2023 to define weighted-average 
national values for NOX and SO2 (see appendix 14B 
of the NOPR TSD).
---------------------------------------------------------------------------

    \95\ U.S. Environmental Protection Agency. Estimating the 
Benefit per Ton of Reducing Directly-Emitted PM2.5, 
PM2.5 Precursors and Ozone Precursors from 21 Sectors. 
www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------

    DOE also estimated the monetized value of NOX and 
SO2 emissions reductions from site use of natural gas

[[Page 70257]]

in CRE using benefit-per-ton estimates from the EPA's Benefits Mapping 
and Analysis Program. Although none of the sectors covered by EPA 
refers specifically to residential and commercial buildings, the sector 
called ``area sources'' would be a reasonable proxy for residential and 
commercial buildings.\96\ The EPA document provides high and low 
estimates for 2025 and 2030 at 3- and 7-percent discount rates.\97\ DOE 
used the same linear interpolation and extrapolation as it did with the 
values for electricity generation.
---------------------------------------------------------------------------

    \96\ ``Area sources'' represents all emission sources for which 
states do not have exact (point) locations in their emissions 
inventories. Because exact locations would tend to be associated 
with larger sources, ``area sources'' would be fairly representative 
of small dispersed sources like homes and businesses.
    \97\ ``Area sources'' are a category in the 2018 document from 
EPA, but are not used in the 2021 document cited above. Available at 
www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf (last accessed March 9, 2023).
---------------------------------------------------------------------------

    DOE multiplied the site emissions reduction (in tons) in each year 
by the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate.

M. Utility Impact Analysis

    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2023. NEMS produces the AEO Reference case, as well 
as a number of side cases that estimate the economy-wide impacts of 
changes to energy supply and demand. For the current analysis, impacts 
are quantified by comparing the levels of electricity sector 
generation, installed capacity, fuel consumption, and emissions in the 
AEO2023 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
NOPR TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity, and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new and 
amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts from new 
and amended energy conservation standards include both direct and 
indirect impacts. Direct employment impacts are any changes in the 
number of employees of manufacturers of the equipment subject to 
standards, their suppliers, and related service firms. The MIA 
addresses those impacts. Indirect employment impacts are changes in 
national employment that occur due to the shift in expenditures and 
capital investment caused by the purchase and operation of more-
efficient appliances. Indirect employment impacts from standards 
consist of the net jobs created or eliminated in the national economy, 
other than in the manufacturing sector being regulated, caused by (1) 
reduced spending by consumers on energy, (2) reduced spending on new 
energy supply by the utility industry, (3) increased consumer spending 
on the equipment to which the new standards apply and other goods and 
services, and (4) the effects of those three factors throughout the 
economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\98\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, the BLS 
data suggest that net national employment may increase due to shifts in 
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------

    \98\ See U.S. Department of Commerce--Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (RIMS II). 1997. U.S. Government 
Printing Office: Washington, DC. Available at apps.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed March 9, 2023).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this NOPR using an input/output model of the U.S. 
economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\99\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy-saving 
technologies. The ImSET software includes a computer-based I-O model 
having structural coefficients that characterize economic flows among 
187 sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \99\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that there are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may over-estimate actual job 
impacts over the long run for this rulemaking. Therefore, DOE used 
ImSET only to generate results for near-term timeframes (2028-2032), 
where these uncertainties are reduced. For more details on the 
employment impact analysis, see chapter 16 of the NOPR TSD.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for CRE. 
It addresses the TSLs examined by DOE, the projected impacts of each of 
these levels if adopted as energy conservation standards for CRE, and 
the standards levels that DOE is proposing to adopt in this NOPR. 
Additional details regarding DOE's analyses are contained in the NOPR 
TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential new or amended 
standards for equipment by grouping individual efficiency levels for 
each class into TSLs. Use of TSLs allows DOE to identify and consider 
manufacturer cost interactions between the equipment classes, to the 
extent that there are such

[[Page 70258]]

interactions, and price elasticity of consumer purchasing decisions 
that may change when different standard levels are set.
    In the analysis conducted for this NOPR, DOE analyzed the benefits 
and burdens of six TSLs for CRE. DOE developed TSLs that combine 
efficiency levels for each analyzed equipment class. DOE presents the 
results for the TSLs in this document, while the results for all 
efficiency levels that DOE analyzed are in the NOPR TSD.
    Table V.1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential new and amended energy 
conservation standards for CRE. TSL 6 represents the maximum 
technologically feasible (``max-tech'') energy efficiency for all 
equipment classes. TSL 5 represents the highest efficiency level with 
positive LCC savings, including subgroups, for all equipment classes. 
TSL 4 represents the highest efficiency level with maximum LCC savings 
for all equipment classes. TSL 3 represents the highest efficiency 
level with positive LCC savings and single speed compressor for 
equipment classes in which this design option was considered. TSL 2 
represents the highest efficiency level with maximum LCC savings and 
single speed compressor for equipment classes with compressors, which 
also corresponds to the minimum efficiency level between TSL 4 and TSL 
3. TSL 1 represents the minimum efficiency level with positive LCC 
savings.

                           Table V.1--Trial Standard Levels for CRE--Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                Equipment class                   TSL 1      TSL 2      TSL 3      TSL 4      TSL 5      TSL 6
----------------------------------------------------------------------------------------------------------------
VOP.RC.M......................................          1          2          2          2          2          2
VOP.RC.L......................................          1          2          2          2          2          2
VOP.SC.M......................................          1          2          2          4          5          5
VCT.RC.M......................................          1          1          3          1          3          4
VCT.RC.L......................................          1          2          2          2          2          3
VCT.SC.M......................................          1          1          1          3          3          7
VCT.SC.L......................................          1          3          3          5          6          7
VCT.SC.I......................................          1          2          2          2          2          4
VCT.SC.H......................................          0          0          0          0          0          7
VCS.SC.M......................................          1          3          3          3          4          5
VCS.SC.L......................................          1          4          4          5          6          6
VCS.SC.I......................................          1          4          4          5          6          6
VCS.SC.H......................................          1          1          5          1          6          7
SVO.RC.M......................................          1          1          2          1          2          2
SVO.SC.M......................................          1          4          4          6          7          7
SOC.RC.M......................................          1          1          3          1          3          4
SOC.SC.M......................................          1          3          3          5          7          7
HZO.RC.M......................................          1          1          1          1          1          1
HZO.RC.L......................................          1          1          1          1          1          1
HZO.SC.M......................................          1          2          2          3          5          5
HZO.SC.L......................................          1          2          2          3          5          5
HCT.SC.M......................................          0          0          0          0          0          7
HCT.SC.L......................................          0          0          0          0          0          7
HCT.SC.I......................................          1          0          0          1          2          7
HCS.SC.M......................................          1          1          2          1          2          4
HCS.SC.L......................................          1          1          1          1          1          3
CB.SC.M.......................................          1          2          4          2          5          6
CB.SC.L.......................................          1          4          4          5          6          6
----------------------------------------------------------------------------------------------------------------

    Table V.2 presents the TSLs and the corresponding percent reduction 
in energy use below baseline by equipment class. The baseline values 
for the self-contained equipment classes are presented in table IV.6 in 
section IV.C.1.a of this document.

              Table V.2--Trial Standard Levels for CRE--% Energy Reduction Below Analyzed Baseline
----------------------------------------------------------------------------------------------------------------
                Equipment class                 TSL 1 (%)  TSL 2 (%)  TSL 3 (%)  TSL 4 (%)  TSL 5 (%)  TSL 6 (%)
----------------------------------------------------------------------------------------------------------------
VOP.RC.M......................................        4.5       12.2       12.2       12.2       12.2       12.2
VOP.RC.L......................................        1.6        7.1        7.1        7.1        7.1        7.1
VOP.SC.M......................................        2.6       11.0       11.0       21.9       22.6       22.6
VCT.RC.M......................................        9.5        9.5       10.8        9.5       10.8       11.6
VCT.RC.L......................................        3.4        3.8        3.8        3.8        3.8        6.8
VCT.SC.M......................................        3.0        3.0        3.0       24.8       24.8       27.7
VCT.SC.L......................................        2.9        4.6        4.6       16.7       17.0       20.1
VCT.SC.I......................................        0.6        2.6        2.6        2.6        2.6        8.8
VCT.SC.H......................................        0.0        0.0        0.0        0.0        0.0       41.3
VCS.SC.M......................................       26.7       40.4       40.4       40.4       50.1       51.0
VCS.SC.L......................................        6.6       13.8       13.8       22.6       23.2       23.2
VCS.SC.I......................................        4.8       10.0       10.0       22.0       22.1       22.1
VCS.SC.H......................................       53.9       53.9       69.3       53.9       77.6       78.1
SVO.RC.M......................................        5.0        5.0       12.2        5.0       12.2       12.2
SVO.SC.M......................................        3.4       14.9       14.9       22.6       23.7       23.7

[[Page 70259]]

 
SOC.RC.M......................................       10.9       10.9       11.1       10.9       11.1       11.2
SOC.SC.M......................................       13.7       22.9       22.9       38.9       39.8       39.8
HZO.RC.M......................................        2.3        2.3        2.3        2.3        2.3        2.3
HZO.RC.L......................................        1.1        1.1        1.1        1.1        1.1        1.1
HZO.SC.M......................................        3.8        5.2        5.2       14.7       16.9       16.9
HZO.SC.L......................................        2.4        3.1        3.1       17.7       18.4       18.4
HCT.SC.M......................................        0.0        0.0        0.0        0.0        0.0       28.4
HCT.SC.L......................................        0.0        0.0        0.0        0.0        0.0       43.2
HCT.SC.I......................................       30.0        0.0        0.0       30.0       33.4       42.5
HCS.SC.M......................................       36.7       36.7       44.2       36.7       44.2       45.4
HCS.SC.L......................................        7.7        7.7        7.7        7.7        7.7       44.3
CB.SC.M.......................................       22.4       50.3       58.2       50.3       60.9       61.2
CB.SC.L.......................................       15.6       38.4       38.4       54.1       54.4       54.4
----------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on CRE consumers by looking at 
the effects that potential new and amended standards at each TSL would 
have on the LCC and PBP. DOE also examined the impacts of potential 
standards on selected consumer subgroups. These analyses are discussed 
in the following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency equipment affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., equipment price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses equipment lifetime and a discount rate. Chapter 8 of the NOPR TSD 
provides detailed information on the LCC and PBP analyses.
    Table V.3 through table V.58 show the LCC and PBP results for the 
TSLs considered for each equipment class. In the first of each pair of 
tables, the simple payback is measured relative to the baseline 
equipment. In the second table, impacts are measured relative to the 
efficiency distribution in the no-new-standards case in the compliance 
year (see section IV.F.9 of this document). Because some consumers 
purchase equipment with higher efficiency in the no-new-standards case, 
the average savings are less than the difference between the average 
LCC of the baseline equipment and the average LCC at each TSL. The 
savings refer only to consumers who are affected by a standard at a 
given TSL. Those who already purchase an equipment with efficiency at 
or above a given TSL are not affected. Consumers for whom the LCC 
increases at a given TSL experience a net cost.

                                             Table V.3--LCC and PBP Results by Efficiency Level for CB.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average costs (2022F$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        2,413.64          275.08        2,506.40        4,780.95  ..............            14.0
1...............................  1.....................        2,447.35          239.80        2,212.22        4,518.53             1.0            14.0
                                  2.....................        2,480.02          195.85        1,840.56        4,177.65             0.8            14.0
                                  3.....................        2,496.88          192.38        1,814.45        4,167.42             1.0            14.0
2,3.............................  4.....................        2,513.22          188.05        1,780.62        4,148.99             1.1            14.0
4...............................  5.....................        2,654.88          155.98        1,527.83        4,029.69             2.0            14.0
5,6.............................  6.....................        2,675.72          155.68        1,613.81        4,135.31             2.2            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                   Table V.4--Average LCC Savings for CB.SC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          263.09               0.0
                                                                             2          524.57               0.0
                                                                             3          534.80               0.0
2,3...........................................................               4          553.24               0.0
4.............................................................               5          672.54               0.2
5,6...........................................................               6          566.92               1.3
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


[[Page 70260]]


                                             Table V.5--LCC and PBP Results by Efficiency Level for CB.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        1,750.66           86.90          797.20        2,452.05  ..............            13.9
1...............................  1.....................        1,767.51           71.40          669.43        2,340.22             1.1            13.9
2,4.............................  2.....................        1,783.85           52.08          507.74        2,193.97             1.0            13.9
                                  3.....................        1,800.70           49.43          488.95        2,191.11             1.3            13.9
3...............................  4.....................        1,817.04           46.12          464.25        2,181.85             1.6            13.9
5...............................  5.....................        1,958.70           45.03          484.78        2,336.27             5.0            13.9
6...............................  6.....................        1,992.58           44.94          571.95        2,455.47             5.8            13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                   Table V.6--Average LCC Savings for CB.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          111.31               0.0
2,4...........................................................               2          208.70               0.0
                                                                             3          190.07               4.1
3.............................................................               4          199.32               3.3
5.............................................................               5           44.90              45.9
6.............................................................               6         (74.29)              73.7
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                             Table V.7--LCC and PBP Results by Efficiency Level for HCS.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        1,646.86           44.53          428.89        1,984.18  ..............            14.0
1-5.............................  1.....................        1,661.72           41.62          407.13        1,976.45             5.1            14.0
                                  2.....................        1,803.38           28.51          321.35        2,024.44             9.8            14.0
6...............................  3.....................        1,827.70           27.85          404.44        2,130.49            10.8            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                   Table V.8--Average LCC Savings for HCS.SC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1-5...........................................................               1            7.77              22.2
                                                                             2         (41.22)              72.9
6.............................................................               3        (147.27)              96.1
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                             Table V.9--LCC and PBP Results by Efficiency Level for HCS.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Average costs 2022$
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        1,658.31           37.22          382.20        1,953.10  ..............            14.0
1,2,4...........................  1.....................        1,667.94           25.66          279.21        1,859.23             0.8            14.0
3,5.............................  2.....................        1,682.80           23.32          262.46        1,856.56             1.8            14.0
                                  3.....................        1,707.13           23.02          348.86        1,965.99             3.4            14.0

[[Page 70261]]

 
6...............................  4.....................        1,848.81           22.94          379.24        2,130.58            13.3            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.10--Average LCC Savings for HCS.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1,2,4.........................................................               1           94.14               0.0
3,5...........................................................               2           84.89               4.9
                                                                             3         (24.55)              73.5
6.............................................................               4        (189.13)              99.1
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.11--LCC and PBP Results by Efficiency Level for HCT.SC.I
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2,3.............................  Baseline..............        1,532.98          115.03        1,152.21        2,599.07  ..............            14.0
1,4.............................  1.....................        1,674.44           85.83          923.71        2,504.07             4.8            14.0
5...............................  2.....................        1,764.26           82.51          870.76        2,535.89             7.1            14.0
                                  3.....................        1,795.72           81.94          954.60        2,649.42             7.9            14.0
                                  4.....................        1,869.93           75.95          901.32        2,666.17             8.6            14.0
                                  5.....................        1,882.40           74.88          891.73        2,668.35             8.7            14.0
                                  6.....................        1,885.31           74.52          888.53        2,667.90             8.7            14.0
6...............................  7.....................        2,146.62           73.68          881.07        2,907.06            14.8            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.12--Average LCC Savings for HCT.SC.I
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1,4...........................................................               1           93.84              15.0
5.............................................................               2           55.03              32.5
                                                                             3         (58.42)              56.4
                                                                             4         (68.58)              63.7
                                                                             5         (69.11)              65.2
                                                                             6         (68.66)              65.0
6.............................................................               7        (306.51)              85.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.13--LCC and PBP Results by Efficiency Level for HCT.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5.............................  Baseline..............        1,426.49           71.52          740.91        2,089.70  ..............            13.9
                                  1.....................        1,567.94           53.78          614.92        2,097.45             8.0            13.9
                                  2.....................        1,657.75           50.47          562.23        2,129.67            11.0            13.9
                                  3.....................        1,689.21           49.85          645.27        2,242.46            12.1            13.9
                                  4.....................        1,763.42           46.64          616.76        2,284.11            13.5            13.9
                                  5.....................        1,775.89           46.06          611.63        2,290.76            13.7            13.9

[[Page 70262]]

 
                                  6.....................        1,778.80           45.87          609.92        2,291.80            13.7            13.9
6...............................  7.....................        2,040.10           45.42          605.93        2,534.87            23.5            13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.14--Average LCC Savings for HCT.SC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
                                                                             1          (8.05)              42.8
                                                                             2         (39.67)              57.0
                                                                             3        (152.24)              71.5
                                                                             4        (178.19)              81.8
                                                                             5        (180.80)              83.9
                                                                             6        (181.84)              83.8
6.............................................................               7        (421.60)              90.5
----------------------------------------------------------------------------------------------------------------
*The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.15--LCC and PBP Results by Efficiency Level for HCT.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5.............................  Baseline..............        1,310.11           33.30          378.46        1,617.43  ..............            14.0
                                  1.....................        1,451.54           30.61          386.32        1,759.03            52.6            14.0
                                  2.....................        1,541.34           27.30          333.51        1,791.13            38.5            14.0
                                  3.....................        1,572.79           27.05          420.09        1,907.45            42.1            14.0
                                  4.....................        1,646.98           25.79          408.84        1,966.35            44.9            14.0
                                  5.....................        1,659.45           25.56          406.81        1,976.12            45.1            14.0
                                  6.....................        1,662.35           25.48          406.14        1,978.19            45.1            14.0
6...............................  7.....................        1,923.61           25.31          404.56        2,223.67            76.8            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.16--Average LCC Savings for HCT.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
                                                                             1        (141.71)              72.3
                                                                             2        (164.18)              76.8
                                                                             3        (279.83)              77.8
                                                                             4        (307.69)              87.5
                                                                             5        (309.50)              89.8
                                                                             6        (311.58)              89.8
6.............................................................               7        (551.40)              91.4
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.17--LCC and PBP Results by Efficiency Level for HZO.RC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        6,037.15        1,214.59       11,439.53       17,476.68  ..............            13.0

[[Page 70263]]

 
1-6.............................  1.....................        6,180.64        1,203.55       11,249.48       17,430.12            13.0            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.18--Average LCC Savings for HZO.RC.L
----------------------------------------------------------------------------------------------------------------
                                                                                Average LCC      % of consumers
                            TSL                                 Efficiency       savings *      that experience
                                                                  level           (2022$)           net cost
----------------------------------------------------------------------------------------------------------------
1-6........................................................               1            46.57                7.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.19--LCC and PBP Results by Efficiency Level for HZO.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        6,023.23          543.01        5,247.93       11,271.17  ..............            13.0
1-6.............................  1.....................        6,166.77          532.57        5,064.11       11,230.88            13.8            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.20--Average LCC Savings for HZO.RC.M
----------------------------------------------------------------------------------------------------------------
                                                                                Average LCC      % of consumers
                            TSL                                 Efficiency       savings *      that experience
                                                                  level           (2022$)           net cost
----------------------------------------------------------------------------------------------------------------
1-6........................................................               1            40.29               10.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.21--LCC and PBP Results by Efficiency Level for HZO.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        3,086.17        1,070.30        9,605.52       12,578.04  ..............            13.1
1...............................  1.....................        3,102.46        1,048.99        9,428.65       12,416.86             0.8            13.1
2,3.............................  2.....................        3,117.28        1,042.34        9,374.71       12,377.19             1.1            13.1
4...............................  3.....................        3,399.80          911.71        8,295.65       11,570.22             2.0            13.1
                                  4.....................        3,425.87          908.91        8,358.49       11,658.16             2.1            13.1
5,6.............................  5.....................        3,542.47          905.58        8,287.58       11,699.54             2.8            13.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.22--Average LCC Savings for HZO.SC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          160.85               0.0
2,3...........................................................               2          193.59               0.0
4.............................................................               3          971.22               0.2
                                                                             4          883.28               0.5

[[Page 70264]]

 
5,6...........................................................               5          841.89               0.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.23--LCC and PBP Results by Efficiency Level for HZO.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        2,397.43          429.17        3,921.92        6,226.78  ..............            13.1
1...............................  1.....................        2,412.25          415.60        3,812.49        6,131.59             1.1            13.1
2,3.............................  2.....................        2,427.07          410.44        3,771.80        6,105.15             1.6            13.1
4...............................  3.....................        2,568.36          376.54        3,509.56        5,978.72             3.3            13.1
                                  4.....................        2,594.43          371.96        3,556.41        6,050.63             3.4            13.1
5,6.............................  5.....................        2,711.05          368.63        3,398.99        6,005.32             5.2            13.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.24--Average LCC Savings for HZO.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings*      that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1           95.03               0.0
2,3...........................................................               2          117.44               0.2
4.............................................................               3          226.50               6.8
                                                                             4          154.59              19.6
5,6...........................................................               5          199.91              14.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.25--LCC and PBP Results by Efficiency Level for SOC.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............       13,455.98          847.97        8,984.53       22,440.51  ..............            12.9
1,2,4...........................  1.....................       13,653.31          770.99        7,801.16       21,454.47             2.6            12.9
                                  2.....................       13,701.42          769.68        7,789.05       21,490.47             3.1            12.9
3,5.............................  3.....................       13,712.64          769.26        7,785.15       21,497.79             3.3            12.9
6...............................  4.....................       14,720.84          768.26        7,775.94       22,496.78            15.9            12.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.26--Average LCC Savings for SOC.RC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1,2,4.........................................................               1          986.27               0.0
                                                                             2          944.21               0.6
3,5...........................................................               3          929.51               1.4
6.............................................................               4         (70.50)              70.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


[[Page 70265]]


                                            Table V.27--LCC and PBP Results by Efficiency Level for SOC.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............       15,074.90        1,010.13       10,218.96       24,736.27  ..............            13.0
1...............................  1.....................       15,084.50          894.71        9,215.75       23,742.30             0.1            13.0
                                  2.....................       15,216.87          841.08        8,823.37       23,477.38             0.8            13.0
2,3.............................  3.....................       15,292.93          816.47        8,630.16       23,357.41             1.1            13.0
                                  4.....................       15,575.42          761.20        8,212.91       23,212.16             2.0            13.0
4...............................  5.....................       15,772.73          681.78        7,036.90       22,226.13             2.1            13.0
                                  6.....................       15,820.79          676.67        6,992.45       22,227.96             2.2            13.0
5,6.............................  7.....................       16,888.21          673.64        7,052.97       23,316.27             5.4            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.28--Average LCC Savings for SOC.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          994.55               0.0
                                                                             2        1,085.17               0.4
2,3...........................................................               3        1,015.54               0.9
                                                                             4        1,063.82               3.7
4.............................................................               5        1,834.72               0.0
                                                                             6        1,832.85               0.0
5,6...........................................................               7          698.37              25.6
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.29--LCC and PBP Results by Efficiency Level for SVO.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        6,998.28        1,115.54       11,064.57       18,062.84  ..............            13.0
1,2,4...........................  1.....................        7,222.52        1,068.46       10,317.17       17,539.69             4.8            13.0
3,5,6...........................  2.....................        7,833.88        1,001.65        9,696.11       17,529.99             7.3            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.30--Average LCC Savings for SVO.RC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1,2,4.........................................................               1          522.85               0.0
3,5,6.........................................................               2          406.59              18.4
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.31--LCC and PBP Results by Efficiency Level for SVO.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        4,779.96          902.18        8,199.62       12,793.46  ..............            13.0
1...............................  1.....................        4,810.58          876.57        7,995.58       12,618.85             1.2            13.0
                                  2.....................        4,844.20          864.11        7,897.08       12,552.66             1.7            13.0
                                  3.....................        4,876.77          848.60        7,771.84       12,458.72             1.8            13.0
2,3.............................  4.....................        5,080.56          789.90        7,264.50       12,147.21             2.7            13.0
                                  5.....................        5,363.08          746.66        6,953.23       12,107.44             3.8            13.0

[[Page 70266]]

 
4...............................  6.....................        5,479.68          731.65        6,718.66       11,984.91             4.1            13.0
5,6.............................  7.....................        5,550.97          723.43        6,733.74       12,068.50             4.3            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.32--Average LCC Savings for SVO.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          175.56               0.0
                                                                             2          237.26               0.2
                                                                             3          324.02               0.1
2,3...........................................................               4          600.52               0.1
                                                                             5          586.37               8.2
4.............................................................               6          692.32               4.6
5,6...........................................................               7          602.17              11.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.33--LCC and PBP Results by Efficiency Level for VCS.SC.H
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        3,949.97          101.23          969.24        4,701.69  ..............            14.0
1,2,4...........................  1.....................        3,959.60           55.10          558.87        4,300.41             0.2            14.0
                                  2.....................        3,991.29           50.58          535.86        4,307.35             0.8            14.0
                                  3.....................        4,021.01           44.95          501.90        4,301.47             1.3            14.0
                                  4.....................        4,037.86           43.59          494.32        4,309.82             1.5            14.0
3...............................  5.....................        4,054.20           41.89          483.62        4,314.55             1.8            14.0
5...............................  6.....................        4,195.84           34.74          451.10        4,415.86             3.7            14.0
6...............................  7.....................        4,242.12           34.34          536.33        4,544.82             4.4            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.34--Average LCC Savings for VCS.SC.H
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1,2,4.........................................................               1          399.54               0.0
                                                                             2          270.97              17.8
                                                                             3          276.86              15.0
                                                                             4          268.51              17.4
3.............................................................               5          263.78              18.4
5.............................................................               6          162.47              31.6
6.............................................................               7           33.51              52.8
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.35--LCC and PBP Results by Efficiency Level for VCS.SC.I
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        4,529.28          627.67        5,752.96       10,031.71  ..............            14.1
1...............................  1.....................        4,538.91          602.08        5,524.85        9,812.69             0.4            14.1

[[Page 70267]]

 
                                  2.....................        4,568.63          584.86        5,387.74        9,703.65             0.9            14.1
                                  3.....................        4,585.48          580.39        5,352.37        9,684.20             1.2            14.1
2,3.............................  4.....................        4,601.82          574.81        5,307.05        9,654.31             1.4            14.1
4...............................  5.....................        4,885.14          511.08        4,801.64        9,416.52             3.1            14.1
5,6.............................  6.....................        4,931.42          510.61        4,886.41        9,545.00             3.4            14.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.36--Average LCC Savings for VCS.SC.I
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          219.02               0.0
                                                                             2          328.05               0.0
                                                                             3          347.51               0.0
2,3...........................................................               4          377.40               0.0
4.............................................................               5          615.19               3.6
5,6...........................................................               6          486.70               8.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.37--LCC and PBP Results by Efficiency Level for VCS.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        4,195.10          411.78        3,767.90        7,721.94  ..............            14.0
1...............................  1.....................        4,204.73          388.98        3,565.71        7,528.82             0.4            14.0
                                  2.....................        4,234.45          373.64        3,446.25        7,437.36             1.0            14.0
                                  3.....................        4,251.30          369.23        3,411.70        7,418.70             1.3            14.0
2,3.............................  4.....................        4,267.64          363.74        3,367.39        7,389.78             1.5            14.0
4...............................  5.....................        4,409.29          332.97        3,125.76        7,281.65             2.7            14.0
5,6.............................  6.....................        4,455.57          331.05        3,197.27        7,396.77             3.2            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.38--Average LCC Savings for VCS.SC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          193.07               0.0
                                                                             2          265.56               0.1
                                                                             3          284.18               0.2
2,3...........................................................               4          309.04               0.2
4.............................................................               5          375.85               4.3
5,6...........................................................               6          260.73              17.1
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.39--LCC and PBP Results by Efficiency Level for VCS.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        3,956.46          112.72        1,080.77        4,809.78  ..............            14.1
1...............................  1.....................        3,966.08           87.24          854.78        4,592.87             0.4            14.1

[[Page 70268]]

 
                                  2.....................        3,995.80           77.73          786.61        4,552.70             1.1            14.1
2-4.............................  3.....................        4,012.13           74.16          759.47        4,540.95             1.4            14.1
5...............................  4.....................        4,153.76           64.87          709.37        4,624.33             4.1            14.1
6...............................  5.....................        4,200.04           64.02          790.45        4,749.02             5.0            14.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.40--Average LCC Savings for VCS.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          217.33               0.0
                                                                             2          235.40               1.3
2-4...........................................................               3          240.66               1.6
5.............................................................               4          128.81              27.0
6.............................................................               5            0.17              56.2
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.41--LCC and PBP Results by Efficiency Level for VCT.RC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        9,261.69        1,277.59       12,897.96       22,159.65  ..............            14.0
1...............................  1.....................        9,486.23        1,241.24       12,349.78       21,836.00             6.2            14.0
2-5.............................  2.....................        9,525.84        1,236.13       12,299.80       21,825.64             6.4            14.0
6...............................  3.....................       13,084.28        1,204.29       11,988.81       25,073.10            52.2            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.42--Average LCC Savings for VCT.RC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          323.67               0.0
2-5...........................................................               2          331.04               0.4
6.............................................................               3      (2,934.72)              99.7
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.43--LCC and PBP Results by Efficiency Level for VCT.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        9,052.59          433.39        4,761.74       13,814.33  ..............            13.9
1,2,4...........................  1.....................        9,277.06          398.58        4,228.77       13,505.84             6.5            13.9
                                  2.....................        9,446.82          394.88        4,192.70       13,639.51            10.2            13.9
3,5.............................  3.....................        9,486.42          393.69        4,181.07       13,667.49            10.9            13.9
6...............................  4.....................       13,043.92          390.88        4,153.62       17,197.54            93.9            13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


[[Page 70269]]


                                  Table V.44--Average LCC Savings for VCT.RC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of Consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1,2,4.........................................................               1          308.65               0.0
                                                                             2          171.49               8.1
3,5...........................................................               3          133.62              24.0
6.............................................................               4      (3,397.02)             100.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.45--LCC and PBP Results by Efficiency Level for VCT.SC.H
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-5.............................  Baseline..............        4,470.66          126.82        1,370.85        5,586.32  ..............            14.0
                                  1.....................        4,531.98          116.79        1,315.87        5,589.16             6.1            14.0
                                  2.....................        4,565.12          112.31        1,285.13        5,589.67             6.5            14.0
                                  3.....................        4,706.57           97.60        1,186.12        5,624.01             8.1            14.0
                                  4.....................        4,823.32           85.18        1,008.73        5,556.70             8.5            14.0
                                  5.....................        4,907.08           83.82          996.65        5,623.60            10.2            14.0
                                  6.....................        4,953.92           83.25        1,080.12        5,751.23            11.1            14.0
6...............................  7.....................        6,377.25           82.48        1,073.29        7,086.37            43.0            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.46--Average LCC Savings for VCT.SC.H
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of Consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
                                                                             1          (2.49)              30.6
                                                                             2          (2.54)              42.4
                                                                             3         (36.07)              62.7
                                                                             4           33.12              46.7
                                                                             5         (33.78)              63.8
                                                                             6        (161.50)              79.4
6.............................................................               7      (1,496.81)              96.9
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.47--LCC and PBP Results by Efficiency Level for VCT.SC.I
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        6,606.39          717.90        6,723.31       12,967.00  ..............            14.0
1...............................  1.....................        6,622.23          714.41        6,692.45       12,951.12             4.6            14.0
2-5.............................  2.....................        6,738.97          701.99        6,515.27       12,884.25             8.3            14.0
                                  3.....................        7,046.29          690.86        6,505.12       13,164.53            16.3            14.0
6...............................  4.....................        8,469.43          664.72        6,273.60       14,277.88            35.0            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.48--Average LCC Savings for VCT.SC.I
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of Consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1           15.76               1.5
2-5...........................................................               2           77.46               1.1
                                                                             3        (226.28)              85.6

[[Page 70270]]

 
6.............................................................               4      (1,318.52)             100.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.49--LCC and PBP Results by Efficiency Level for VCT.SC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        6,441.77          616.41        5,793.30       11,866.44  ..............            14.0
1...............................  1.....................        6,471.45          601.18        5,674.48       11,775.59             2.0            14.0
                                  2.....................        6,487.76          595.37        5,627.26       11,743.75             2.2            14.0
2,3.............................  3.....................        6,503.61          592.42        5,601.15       11,732.58             2.6            14.0
                                  4.....................        6,786.54          541.91        5,215.01       11,613.15             4.6            14.0
4...............................  5.....................        6,903.32          529.48        5,037.56       11,545.79             5.3            14.0
5...............................  6.....................        6,956.92          527.53        5,108.98       11,667.74             5.8            14.0
6...............................  7.....................        8,380.48          511.74        4,968.73       12,869.46            18.5            14.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.50--Average LCC Savings for VCT.SC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of Consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1           91.06              0.3%
                                                                             2          111.65              0.6%
2,3...........................................................               3          122.78              0.7%
                                                                             4          174.92             22.6%
4.............................................................               5          242.33             18.8%
5.............................................................               6          120.34             37.5%
6.............................................................               7      (1,093.50)             98.2%
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.51--LCC and PBP Results by Efficiency Level for VCT.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        4,523.51          173.05        1,797.38        6,066.11  ..............            13.9
1-3.............................  1.....................        4,539.82          168.71        1,763.44        6,047.55             3.8            13.9
                                  2.....................        4,681.25          149.19        1,623.12        6,040.70             6.6            13.9
4,5.............................  3.....................        4,798.00          136.78        1,446.54        5,974.28             7.6            13.9
                                  4.....................        4,865.91          135.23        1,432.85        6,024.67             9.1            13.9
                                  5.....................        4,881.76          134.73        1,428.43        6,035.20             9.4            13.9
                                  6.....................        4,928.59          133.74        1,507.74        6,158.71            10.3            13.9
6...............................  7.....................        6,351.83          132.58        1,497.52        7,491.48            45.2            13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.52--Average LCC Savings for VCT.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of Consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1-3...........................................................               1           18.80              5.7%
                                                                             2           20.52              29.8
4,5...........................................................               3           82.53              20.1
                                                                             4           30.92              42.4
                                                                             5           20.36              45.9

[[Page 70271]]

 
                                                                             6        (103.42)              64.6
6.............................................................               7      (1,417.22)             100.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.53--LCC and PBP Results by Efficiency Level for VOP.RC.L
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        9,804.18        3,953.75       37,429.46       47,233.63  ..............            13.0
1...............................  1.....................       10,028.41        3,901.88       36,591.13       46,619.55             4.3            13.0
2-6.............................  2.....................       10,639.77        3,719.92       34,905.64       45,545.41             3.6            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.54--Average LCC Savings for VOP.RC.L
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of Consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          615.37               0.0
2-6...........................................................               2        1,524.52               0.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.55--LCC and PBP Results by Efficiency Level for VOP.RC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        8,943.72        1,436.26       14,170.99       23,114.71  ..............            13.0
1...............................  1.....................        9,167.99        1,381.81       13,308.67       22,476.66             4.1            13.0
2-6.............................  2.....................        9,779.42        1,290.04       12,457.83       22,237.25             5.7            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.56--Average LCC Savings for VOP.RC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of Consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          638.01               0.0
2-6...........................................................               2          707.13               8.2
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.


                                            Table V.57--LCC and PBP Results by Efficiency Level for VOP.SC.M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2022$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
               TSL                   Efficiency level                      First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Baseline..............        6,563.78        1,076.62        9,936.29       16,264.24  ..............            13.0
1...............................  1.....................        6,612.64        1,053.03        9,745.17       16,120.22             2.1            13.0
2,3.............................  2.....................        6,816.42          977.96        9,092.80       15,664.28             2.6            13.0
                                  3.....................        7,098.92          897.61        8,457.71       15,301.52             3.0            13.0
4...............................  4.....................        7,242.43          879.28        8,164.31       15,146.45             3.4            13.0

[[Page 70272]]

 
5,6.............................  5.....................        7,303.09          872.97        8,196.09       15,236.71             3.6            13.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each EL represent the average value if all purchasers in the sample use equipment with that efficiency level. The PBP is measured
  relative to the baseline equipment.


                                  Table V.58--Average LCC Savings for VOP.SC.M
----------------------------------------------------------------------------------------------------------------
                                                                                  Average LCC    % of consumers
                              TSL                                 Efficiency       savings *     that experience
                                                                     level          (2022$)         net cost
----------------------------------------------------------------------------------------------------------------
1.............................................................               1          143.30               0.6
2,3...........................................................               2          590.02               0.0
                                                                             3          927.32               1.0
4.............................................................               4        1,082.34               0.4
5,6...........................................................               5          992.17               1.0
----------------------------------------------------------------------------------------------------------------
* The calculation considers only affected consumers. It excludes purchasers whose purchasing decision would not
  change under a standard set at the corresponding EL, i.e., those with zero LCC savings.

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on small businesses. Table V.59 compares the average 
LCC savings and PBP at each efficiency level for small businesses with 
the entire consumer sample for CRE. In most cases, the average LCC 
savings and PBP for small businesses at the considered efficiency 
levels are not substantially different from the average for all 
businesses. Chapter 11 of the NOPR TSD presents the complete LCC and 
PBP results for the subgroup.

                                     Table V.59--Average LCC and PBP Results Comparison for Small Businesses for CRE
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Average LCC savings (2022$)    Simple payback period (years)           Net cost (%)
               Equipment class                     EL    -----------------------------------------------------------------------------------------------
                                                          Small business  All purchasers  Small business  All purchasers  Small business  All purchasers
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L......................................          1           227.9          263.09             1.0             1.0               0               0
                                                       2           455.5          524.57             0.8             0.8               0               0
                                                       3          462.59          534.80             1.0             1.0               0               0
                                                       4          476.95          553.24             1.1             1.1               0               0
                                                       5          565.61          672.54             2.0             2.0               0               0
                                                       6          473.70          566.92             2.2             2.2               2               1
CB.SC.M......................................          1           96.14          111.31             1.1             1.1               0               0
                                                       2          180.72          208.70             1.0             1.0               0               0
                                                       3          162.71          190.07             1.3             1.3               5               4
                                                       4          168.99          199.32             1.6             1.6               4               3
                                                       5           16.80           44.90             5.0             5.0              53              46
                                                       6         (88.63)         (74.29)             5.8             5.8              79              74
HCS.SC.L.....................................          1            5.13            7.77            5.11             5.1              28              22
                                                       2         (54.10)         (41.22)            9.77             9.8              77              73
                                                       3        (146.77)        (147.27)           10.84            10.8              98              96
HCS.SC.M.....................................          1           81.56           94.14            0.83             0.8               0               0
                                                       2           71.87           84.89            1.76             1.8               6               5
                                                       3         (23.76)         (24.55)            3.44             3.4              76              74
                                                       4        (184.84)        (189.13)           13.34            13.3              99              99
HCT.SC.I.....................................          1           66.18           93.84            4.84             4.8              19              15
                                                       2           21.88           55.03            7.11             7.1              40              33
                                                       3         (78.05)         (58.42)            7.94             7.9              60              56
                                                       4         (93.01)         (68.58)            8.62             8.6              69              64
                                                       5         (94.20)         (69.11)            8.70             8.7              70              65
                                                       6         (94.15)         (68.66)            8.70             8.7              70              65
                                                       7        (334.29)        (306.51)           14.84            14.8              89              86
HCT.SC.L.....................................          1         (23.30)          (8.05)            7.97             8.0              49              43
                                                       2         (61.20)         (39.67)           10.99            11.0              61              57
                                                       3        (160.47)        (152.24)           12.13            12.1              75              72
                                                       4        (189.47)        (178.19)           13.54            13.5              85              82
                                                       5        (192.51)        (180.80)           13.72            13.7              87              84
                                                       6        (193.78)        (181.84)           13.73            13.7              87              84
                                                       7        (435.54)        (421.60)           23.51            23.5              91              90

[[Page 70273]]

 
HCT.SC.M.....................................          1        (140.89)        (141.71)           52.63            52.6              72              72
                                                       2        (170.95)        (164.18)           38.53            38.5              77              77
                                                       3        (272.85)        (279.83)           42.07            42.1              78              78
                                                       4        (303.34)        (307.69)           44.85            44.9              87              87
                                                       5        (305.59)        (309.50)           45.14            45.1              90              90
                                                       6        (307.77)        (311.58)           45.07            45.1              90              90
                                                       7        (549.59)        (551.40)           76.76            76.8              91              91
HZO.RC.L.....................................          1           20.91           46.57           12.99            13.0              32               8
HZO.RC.M.....................................          1           15.27           40.29           13.75            13.8              38              11
HZO.SC.L.....................................          1          140.87          160.85            0.76             0.8               0               0
                                                       2          168.35          193.59            1.11             1.1               0               0
                                                       3          826.60          971.22            1.98             2.0               0               0
                                                       4          749.21          883.28            2.10             2.1               1               0
                                                       5          698.01          841.89            2.77             2.8               1               1
HZO.SC.M.....................................          1           82.72           95.03            1.09             1.1               0               0
                                                       2          101.05          117.44            1.58             1.6               0               0
                                                       3          182.80          226.50            3.25             3.3               8               7
                                                       4          119.58          154.59            3.44             3.4              24              20
                                                       5          141.74          199.91            5.18             5.2              22              15
SOC.RC.M.....................................          1          828.50          986.27            2.56             2.6               0               0
                                                       2          785.91          944.21            3.13             3.1               1               1
                                                       3          771.98          929.51            3.26             3.3               1               1
                                                       4        (229.00)         (70.50)           15.87            15.9              82              71
SOC.SC.M.....................................          1          880.09          994.55            0.08             0.1               0               0
                                                       2          947.58         1085.17            0.84             0.8               0               0
                                                       3          880.22         1015.54            1.13             1.1               1               1
                                                       4          894.49         1063.82            2.01             2.0               5               4
                                                       5         1551.11         1834.72            2.13             2.1               0               0
                                                       6         1543.96         1832.85            2.24             2.2               0               0
                                                       7          422.14          698.37            5.39             5.4              32              26
SVO.RC.M.....................................          1          422.15          522.85            4.76             4.8               0               0
                                                       2          253.11          406.59            7.34             7.3              26              18
SVO.SC.M.....................................          1          152.71          175.56            1.20             1.2               0               0
                                                       2          203.94          237.26            1.69             1.7               0               0
                                                       3          277.65          324.02            1.81             1.8               0               0
                                                       4          500.97          600.52            2.68             2.7               0               0
                                                       5          461.06          586.37            3.75             3.8              11               8
                                                       6          540.59          692.32            4.10             4.1               7               5
                                                       7          456.68          602.17            4.31             4.3              16              11
VCS.SC.H.....................................          1          349.72          399.54            0.21             0.2               0               0
                                                       2          233.72          270.97            0.82             0.8              20              18
                                                       3          235.66          276.86            1.26             1.3              17              15
                                                       4          226.40          268.51            1.52             1.5              19              17
                                                       5          220.36          263.78            1.76             1.8              20              18
                                                       6          114.89          162.47            3.70             3.7              36              32
                                                       7          (0.49)           33.51            4.37             4.4              57              53
VCS.SC.I.....................................          1          191.10          219.02            0.38             0.4               0               0
                                                       2          283.57          328.05            0.92             0.9               0               0
                                                       3          298.70          347.51            1.19             1.2               0               0
                                                       4          323.05          377.40            1.37             1.4               0               0
                                                       5          498.66          615.19            3.05             3.1               5               4
                                                       6          383.73          486.70            3.44             3.4              11               9
VCS.SC.L.....................................          1          168.73          193.07            0.42             0.4               0               0
                                                       2          229.45          265.56            1.03             1.0               0               0
                                                       3          243.92          284.18            1.32             1.3               0               0
                                                       4          264.03          309.04            1.51             1.5               0               0
                                                       5          307.51          375.85            2.72             2.7               5               4
                                                       6          204.16          260.73            3.23             3.2              20              17
VCS.SC.M.....................................          1          189.78          217.33            0.38             0.4               0               0
                                                       2          202.56          235.40            1.12             1.1               1               1
                                                       3          205.44          240.66            1.44             1.4               2               2
                                                       4           91.46          128.81            4.12             4.1              31              27
                                                       5         (23.05)            0.17            5.00             5.0              61              56
VCT.RC.L.....................................          1          245.49          323.67            6.18             6.2               0               0
                                                       2          246.83          331.04            6.37             6.4               0               0
                                                       3       (3056.29)       (2934.72)           52.15            52.2             100             100
VCT.RC.M.....................................          1          233.10          308.65            6.45             6.5               0               0
                                                       2           91.96          171.49           10.24            10.2              26               8

[[Page 70274]]

 
                                                       3           57.11          133.62           10.93            10.9              45              24
                                                       4       (3476.87)       (3397.02)           93.89            93.9             100             100
VCT.SC.H.....................................          1          (8.77)          (2.49)            6.12             6.1              34              31
                                                       2         (11.19)          (2.54)            6.51             6.5              47              42
                                                       3         (55.34)         (36.07)            8.07             8.1              67              63
                                                       4          (8.95)           33.12            8.47             8.5              57              47
                                                       5         (77.88)         (33.78)           10.15            10.2              71              64
                                                       6        (192.35)        (161.50)           11.09            11.1              86              79
                                                       7       (1538.28)       (1496.81)           43.00            43.0              97              97
VCT.SC.I.....................................          1           11.97           15.76            4.55             4.6               3               2
                                                       2           51.25           77.46            8.34             8.3               6               1
                                                       3        (244.33)        (226.28)           16.27            16.3              89              86
                                                       4       (1372.20)       (1318.52)           35.04            35.0             100             100
VCT.SC.L.....................................          1           76.90           91.06            1.95             2.0               0               0
                                                       2           93.55          111.65            2.19             2.2               1               1
                                                       3          101.44          122.78            2.58             2.6               1               1
                                                       4          118.16          174.92            4.63             4.6              29              23
                                                       5          161.77          242.33            5.31             5.3              26              19
                                                       6           51.55          120.34            5.80             5.8              46              38
                                                       7       (1182.18)       (1093.50)           18.52            18.5              99              98
VCT.SC.M.....................................          1           14.68           18.80            3.75             3.8               6               6
                                                       2            0.46           20.52            6.61             6.6              36              30
                                                       3           43.04           82.53            7.57             7.6              29              20
                                                       4         (10.13)           30.92            9.05             9.1              52              42
                                                       5         (21.33)           20.36            9.35             9.4              55              46
                                                       6        (132.37)        (103.42)           10.31            10.3              69              65
                                                       7       (1451.68)       (1417.22)           45.18            45.2             100             100
VOP.RC.L.....................................          1          502.94          615.37            4.32             4.3               0               0
                                                       2         1234.55         1524.52            3.57             3.6               0               0
VOP.RC.M.....................................          1          522.36          638.01            4.12             4.1               0               0
                                                       2          516.94          707.13            5.72             5.7              13               8
VOP.SC.M.....................................          1          121.91          143.30            2.07             2.1               1               1
                                                       2          495.13          590.02            2.56             2.6               0               0
                                                       3          764.98          927.32            2.99             3.0               1               1
                                                       4          882.37         1082.34            3.44             3.4               1               0
                                                       5          798.96          992.17            3.63             3.6               2               1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product. The savings represent the average LCC savings for affected consumers.

c. Rebuttable Presumption Payback
    As discussed in section IV.F.10 of this document, EPCA establishes 
a rebuttable presumption that an energy conservation standard is 
economically justified if the increased purchase cost for an equipment 
that meets the standard is less than three times the value of the 
first-year energy savings resulting from the standard. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)) In calculating a rebuttable 
presumption payback period for each of the considered TSLs, DOE used 
discrete values, and, as required by EPCA, based the energy use 
calculation on the DOE test procedure for CRE. In contrast, the PBPs 
presented in section V.B.1.a of this document were calculated using 
distributions that reflect the range of energy use in the field.
    Table V.60 presents the rebuttable-presumption payback periods for 
the considered TSLs for CRE. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels 
considered for the NOPR are economically justified through a more 
detailed analysis of the economic impacts of those levels, pursuant to 
42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(B)(i), that considers the 
full range of impacts to the consumer, manufacturer, Nation, and 
environment. The results of that analysis serve as the basis for DOE to 
definitively evaluate the economic justification for a potential 
standard level, thereby supporting or rebutting the results of any 
preliminary determination of economic justification.

                                                   Table V.60--Rebuttable-Presumption Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Rebuttable payback period (years)
---------------------------------------------------------------------------------------------------------------------------------------------------------
             Equipment class                   EL 1            EL 2            EL 3            EL 4            EL 5            EL 6            EL 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L.................................             0.9             0.7             0.9             1.0             1.8             2.0  ..............
CB.SC.M.................................             1.0             0.8             1.2             1.4             4.4             5.1  ..............
HCS.SC.L................................             4.5             8.7             9.6  ..............  ..............  ..............  ..............

[[Page 70275]]

 
HCS.SC.M................................             0.7             1.6             3.0            11.8  ..............  ..............  ..............
HCT.SC.I................................             4.3             6.3             7.1             7.7             7.7             7.7            13.2
HCT.SC.L................................             7.1             9.7            10.7            12.0            12.1            12.1            20.8
HCT.SC.M................................            46.7            34.2            37.3            39.8            40.0            40.0            68.1
HZO.RC.L................................            11.6  ..............  ..............  ..............  ..............  ..............  ..............
HZO.RC.M................................            12.3  ..............  ..............  ..............  ..............  ..............  ..............
HZO.SC.L................................             0.7             1.0             1.8             1.9             2.5  ..............  ..............
HZO.SC.M................................             1.0             1.4             2.9             3.1             4.6  ..............  ..............
SOC.RC.M................................             2.3             2.8             2.9            14.1  ..............  ..............  ..............
SOC.SC.M................................             0.1             0.8             1.0             1.8             1.9             2.0             4.8
SVO.RC.M................................             4.3             6.6  ..............  ..............  ..............  ..............  ..............
SVO.SC.M................................             1.1             1.5             1.6             2.4             3.3             3.7             3.9
VCS.SC.H................................             0.2             0.7             1.1             1.4             1.6             3.3             3.9
VCS.SC.I................................             0.3             0.8             1.1             1.2             2.7             3.0  ..............
VCS.SC.L................................             0.4             0.9             1.2             1.3             2.4             2.9  ..............
VCS.SC.M................................             0.3             1.0             1.3             3.7             4.5  ..............  ..............
VCT.RC.L................................             5.5             5.7            46.3  ..............  ..............  ..............  ..............
VCT.RC.M................................             5.7             9.1             9.7            83.3  ..............  ..............  ..............
VCT.SC.H................................             5.4             5.8             7.2             7.5             9.0             9.8            38.1
VCT.SC.I................................             4.0             7.4            14.4            31.1  ..............  ..............  ..............
VCT.SC.L................................             1.7             1.9             2.3             4.1             4.7             5.1            16.4
VCT.SC.M................................             3.3             5.9             6.7             8.0             8.3             9.1            40.0
VOP.RC.L................................             3.9             3.2  ..............  ..............  ..............  ..............  ..............
VOP.RC.M................................             3.7             5.1  ..............  ..............  ..............  ..............  ..............
VOP.SC.M................................             1.8             2.3             2.7             3.1             3.2  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new and amended 
energy conservation standards on manufacturers of CRE. The following 
section describes the expected impacts on manufacturers at each 
considered TSL. Chapter 12 of the NOPR TSD explains the analysis in 
further detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from new and amended 
standards. Table V.61 summarizes the estimated financial impacts 
(represented by changes in INPV) of potential new and amended energy 
conservation standards on manufacturers of CRE, as well as the 
conversion costs that DOE estimates manufacturers of CRE would incur at 
each TSL.
    The impact of potential new and amended energy conservation 
standards was analyzed under two scenarios: (1) the preservation of 
gross margin percentage; and (2) the preservation of operating profit, 
as discussed in section IV.J.2.d of this document. The preservation of 
gross margin percentages applies a ``gross margin percentage'' of 29 
percent for all equipment classes across all efficiency levels.\100\ 
This scenario assumes that a manufacturer's per-unit dollar profit 
would increase as MPCs increase in the standards cases and represents 
the upper-bound to industry profitability under potential new and 
amended energy conservation standards.
---------------------------------------------------------------------------

    \100\ The gross margin percentage of 29 percent is based on a 
manufacturer markup of 1.40.
---------------------------------------------------------------------------

    The preservation-of-operating-profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to reach more stringent efficiency levels. In this 
scenario, while manufacturers make the necessary investments required 
to convert their facilities to produce compliant equipment, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue. The preservation-of-operating-profit scenario 
represents the lower (or more severe) bound to industry profitability 
under potential new and amended energy conservation standards.
    Each of the modeled scenarios resulted in a unique set of cash 
flows and corresponding INPV for each TSL. INPV is the sum of the 
discounted cash flows to the industry from the base year through the 
end of the analysis period (2023-2057). The ``change in INPV'' results 
refer to the difference in industry value between the no-new-standards 
case and standards case at each TSL. To provide perspective on the 
short-run cash flow impact, DOE includes a comparison of free cash flow 
between the no-new-standards case and the standards case at each TSL in 
the year before new and amended standards would take effect. This 
figure provides an understanding of the magnitude of the required 
conversion costs relative to the cash flow generated by the industry in 
the no-new-standards case.
    Conversion costs are one-time investments for manufacturers to 
bring their manufacturing facilities and equipment designs into 
compliance with potential new and amended standards. As described in 
section IV.J.2.c of this document, conversion cost investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standards. The conversion costs 
can have a significant impact on the short-term cash flow on the 
industry and generally result in lower free cash flow in the period 
between the publication of the final rule and the compliance date of 
potential new and amended standards. Conversion costs are independent 
of the manufacturer markup scenarios and are not presented as a range 
in this analysis.

[[Page 70276]]



                                                                        Table V.61--Manufacturer Impact Analysis Results
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           No-new-
                                          Unit         standards case         TSL 1                TSL 2                TSL 3                TSL 4               TSL 5               TSL 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................  2022$ Million......         3,286.4  3,274.2 to 3,290.8.  3,241.9 to 3,279.6.  3,224.4 to 3,271.4.  3,182.5 to 3,269.6  3,127.0 to 3,255.5  2,985.9 to
                                                                                                                                                                               3,529.9.
Change in INPV..................  2022$ Million......  ..............  (12.2) to 4.5......  (44.4) to (6.7)....  (61.9) to (15.0)...  (103.8) to (16.7).  (159.3) to (30.9).  (300.4) to 243.6.
                                  %..................  ..............  (0.4) to 0.1.......  (1.4) to (0.2).....  (1.9) to (0.5).....  (3.2) to (0.5)....  (4.8) to (0.9)....  (9.1) to 7.4.
Free Cash Flow (2027)...........  2022$ Million......           291.2  285.7..............  268.0..............  258.3..............  238.7.............  210.8.............  170.9.
Change in Free Cash Flow (2027).  %..................  ..............  (1.9)..............  (8.0)..............  (11.3).............  (18.0)............  (27.6)............  (41.3).
Product Conversion Costs........  2022$ Million......               -  12.6...............  66.1...............  94.0...............  121.5.............  187.5.............  299.9.
Capital Conversion Costs........  2022$ Million......  ..............  2.7................  2.2................  3.1................  26.0..............  38.9..............  43.9.
Total Conversion Costs..........  2022$ Million......  ..............  15.3...............  68.3...............  97.1...............  147.5.............  226.4.............  343.8.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.

    The following cash flow discussion refers to the equipment classes 
as detailed in table IV.1 in section IV.A of this document and the TSLs 
as detailed in section V.A of this document. Table V.62 through table 
V.66 show the design options analyzed in the engineering analysis for 
each directly analyzed equipment class by TSL. See section IV.C of this 
document and chapter 5 of the NOPR TSD for additional information on 
the engineering analysis.

                Table V.62--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Vertical, Open Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Equipment class              TSL 1                 TSL 2                 TSL 3                TSL 4                TSL 5                TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.M...............  Occupancy Sensors...                                      Night Curtains; Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.RC.L...............  Occupancy Sensors...                                      Night Curtains; Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOP.SC.M...............  Electronically            EC Cond. Fan Motor; Night Curtains      EC Cond. Fan Motor;  EC Cond. Fan Motor; Night Curtains; VSC;
                          Commutated (``EC'')                                               Night Curtains;          Occupancy Sensors; Microchannel
                          Cond. Fan Motor.                                                  variable-speed                      Condenser.
                                                                                            compressors
                                                                                            (``VSCs'');
                                                                                            Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------


               Table V.63--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Vertical, Closed Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
     Equipment class               TSL 1                TSL 2                TSL 3                TSL 4                TSL 5                TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.RC.M.................              Occupancy Sensors              Occupancy Sensors;   Occupancy Sensors..  Occupancy Sensors;   Occupancy Sensors;
                                                                       Triple Pane Door--                        Triple Pane Door--   VIG Door.
                                                                       Krypton Fill.                             Krypton Fill.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.RC.L.................  Occupancy Sensors...                  Occupancy Sensors; Triple Pane Door--Krypton Fill.                  Occupancy Sensors;
                                                                                                                                      VIG Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.SC.H.................                                                  Baseline.                                                 EC Evap. Fan Motor;
                                                                                                                                      EC Cond. Fan
                                                                                                                                      Motor; VSC;
                                                                                                                                      Occupancy Sensors;
                                                                                                                                      Microchannel
                                                                                                                                      Condenser; VIG
                                                                                                                                      Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.SC.M.................                        EC Cond. Fan Motor
                               EC Cond. Fan Motor; VSC; Occupancy     EC Cond. Fan Motor;
                                            Sensors.                   VSC; Occupancy
                                                                       Sensors;
                                                                       Microchannel
                                                                       Condenser; VIG
                                                                       Door..
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 70277]]

 
VCT.SC.L.................  EC Evap. Fan Motor..   EC Evap. Fan Motor; EC Cond. Fan Motor;  EC Evap. Fan Motor;  EC Evap. Fan Motor;  EC Evap. Fan Motor;
                                                      Triple Pane Door--Krypton Fill.       EC Cond. Fan         EC Cond. Fan         EC Cond. Fan
                                                                                            Motor; Triple Pane   Motor; Triple Pane   Motor; VSC;
                                                                                            Door--Krypton        Door--Krypton        Occupancy Sensors;
                                                                                            Fill; VSC;           Fill; VSC;           Microchannel
                                                                                            Occupancy Sensors.   Occupancy Sensors;   Condenser; VIG
                                                                                                                 Microchannel         Door.
                                                                                                                 Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCT.SC.I.................  Triple Pane Door--                     Triple Pane Door--Krypton Fill; Occupancy Sensors                  Occupancy Sensors;
                            Krypton Fill.                                                                                             Microchannel
                                                                                                                                      Condenser; VIG
                                                                                                                                      Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCS.SC.H.................              Evap. Fan Control              Evap. Fan Control;   Evap. Fan Control..  Evap. Fan Control;   Evap. Fan Control;
                                                                       EC Evap. Fan                              EC Evap. Fan         EC Evap. Fan
                                                                       Motor; EC Cond.                           Motor; EC Cond.      Motor; EC Cond.
                                                                       Fan Motor.                                Fan Motor; VSC.      Fan Motor; VSC;
                                                                                                                                      Microchannel
                                                                                                                                      Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCS.SC.M.................  Evap. Fan Control...    Evap. Fan Control; EC Evap. Fan Motor; EC Cond. Fan Motor.   Evap. Fan Control;   Evap. Fan Control;
                                                                                                                 EC Evap. Fan         EC Evap. Fan
                                                                                                                 Motor; EC Cond.      Motor; EC Cond.
                                                                                                                 Fan Motor; VSC.      Fan Motor; VSC;
                                                                                                                                      Microchannel
                                                                                                                                      Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VCS.SC.L; VCS.SC.I.......  Evap. Fan Control...   Evap. Fan Control; EC Evap. Fan Motor;   Evap. Fan Control;   Evap. Fan Control;
                                                             EC Cond. Fan Motor             EC Evap. Fan         EC Evap. Fan
                                                                                            Motor; EC Cond.      Motor; EC Cond.
                                                                                            Fan Motor; VSC.      Fan Motor; VSC;
                                                                                                                 Microchannel
                                                                                                                 Condenser..
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table V.64--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Semi-Vertical, Open and Service Over-Counter Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
     Equipment class               TSL 1                TSL 2                TSL 3                TSL 4                TSL 5                TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SVO.RC.M.................              Occupancy Sensors.             Occupancy Sensors;   Occupancy Sensors..     Occupancy Sensors; Night Curtains.
                                                                       Night Curtains.
--------------------------------------------------------------------------------------------------------------------------------------------------------
SVO.SC.M.................  EC Evap. Fan Motor..   EC Evap. Fan Motor; EC Cond. Fan Motor;  EC Evap. Fan Motor;   EC Evap. Fan Motor; EC Cond. Fan Motor;
                                                               Night Curtains               EC Cond. Fan          Night Curtains; SC; Occupancy Sensors;
                                                                                            Motor; Night                 Microchannel Condenser.
                                                                                            Curtains; VSC;
                                                                                            Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
SOC.RC.M.................              Occupancy Sensors              Occupancy Sensors;   Occupancy Sensors..  Occupancy Sensors;   Occupancy Sensors;
                                                                       Triple Pane Door--                        Triple Pane Door--   VIG Door.
                                                                       Krypton Fill.                             Krypton Fill.
--------------------------------------------------------------------------------------------------------------------------------------------------------
SOC.SC.M.................  Evap. Fan Control...   Evap. Fan Control; EC Evap. Fan Motor;   Evap. Fan Control;    Evap. Fan Control; EC Evap. Fan Motor;
                                                             EC Cond. Fan Motor             EC Evap. Fan            EC Cond. Fan Motor; VSC; Occupancy
                                                                                            Motor; EC Cond.        Sensors; Microchannel Condenser; VIG
                                                                                            Fan Motor; VSC;                       Door.
                                                                                            Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 70278]]


                  Table V.65--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Horizontal Equipment Families
--------------------------------------------------------------------------------------------------------------------------------------------------------
     Equipment class               TSL 1                TSL 2                TSL 3                TSL 4                TSL 5                TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
HZO.RC.M; HZO.RC.L.......                                                        Occupancy Sensors.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HZO.SC.M; HZO.SC.L.......  EC Evap. Fan Motor..   EC Evap. Fan Motor; EC Cond. Fan Motor   EC Evap. Fan Motor;  EC Evap. Fan Motor;
                                                                                            EC Cond. Fan         EC Cond. Fan
                                                                                            Motor; VSC.          Motor; VSC;
                                                                                                                 Microchannel
                                                                                                                 Condenser;
                                                                                                                 Occupancy Sensors..
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCT.SC.M.................                                                  Baseline                                                  VSC; Occupancy
                                                                                                                                      Sensors; VIG Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCT.SC.L.................                                                  Baseline                                                  VSC; Occupancy
                                                                                                                                      Sensors;
                                                                                                                                      Microchannel
                                                                                                                                      Condenser; VIG
                                                                                                                                      Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCT.SC.I.................  VSC.................                  Baseline                  VSC................  VSC; Occupancy       VSC; Occupancy
                                                                                                                 Sensors.             Sensors;
                                                                                                                                      Microchannel
                                                                                                                                      Condenser; VIG
                                                                                                                                      Door.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCS.SC.M.................              Evap. Fan Control              Evap. Fan Control;   Evap. Fan Control..  Evap. Fan Control;   Evap. Fan Control;
                                                                       EC Cond. Fan Motor.                       EC Cond. Fan Motor.  EC Cond. Fan
                                                                                                                                      Motor;
                                                                                                                                      Microchannel
                                                                                                                                      Condenser; VSC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
HCS.SC.L.................                                             EC Cond. Fan Motor                                             EC Cond. Fan Motor;
                                                                                                                                      VSC; Microchannel
                                                                                                                                      Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                   Table V.66--Design Options Analyzed as Compared to Baseline by Trial Standard Level for Chef Base Equipment Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Equipment class              TSL 1                 TSL 2                 TSL 3                TSL 4                TSL 5                TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.M................  PSC Evap. Fan Motor.  EC Evap. Fan Motor..  EC Evap. Fan Motor;   EC Evap. Fan Motor.  EC Evap. Fan Motor;  EC Evap. Fan Motor;
                                                                      EC Cond. Fan Motor.                        EC Cond. Fan         EC Cond. Fan
                                                                                                                 Motor; VSC.          Motor; VSC;
                                                                                                                                      Microchannel
                                                                                                                                      Condenser.
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L................  PSC Evap. Fan Motor.    EC Evap. Fan Motor; EC Cond. Fan Motor    EC Evap. Fan Motor;   EC Evap. Fan Motor; EC Cond. Fan Motor;
                                                                                            EC Cond. Fan               VSC; Microchannel Condenser.
                                                                                            Motor; VSC.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    At TSL 6, the standard represents the max-tech efficiencies for all 
equipment classes. The change in INPV is expected to range from -$300.4 
million to $243.6 million, which represents a change in INPV of -9.1 
percent to 7.4 percent, respectively. At this level, free cash flow is 
estimated to decrease by 41.3 percent compared to the no-new-standards 
case value of $291.2 million in the year 2027, the year before 
compliance would be required. In 2027, approximately 2.2 percent of 
covered CRE shipments are expected to meet the efficiencies required at 
TSL 6. See table V.67 for the percent of equipment class shipments that 
would meet or exceed the efficiencies required at each TSL in 2027.
    The design options DOE analyzed at TSL 6 included the max-tech 
technologies for all equipment classes. For all open (i.e., equipment 
classes without doors) and transparent door equipment classes, DOE 
expects manufacturers would likely need to incorporate occupancy 
sensors with dimming capability. Open equipment classes would also 
likely require the use of night curtains. For equipment classes with 
transparent doors, DOE expects manufacturers would likely need to 
incorporate vacuum-insulated glass. For self-contained equipment 
classes, DOE expects manufacturers would need to incorporate EC 
evaporator and

[[Page 70279]]

condenser fan motors, variable-speed compressors, and microchannel 
condensers. For closed, self-contained equipment classes using forced-
air refrigeration systems, DOE expects manufacturers would also need to 
incorporate evaporator fan control. Of the 28 directly analyzed 
equipment classes, 5 equipment classes (VCT.RC.M, VCT.SC.M, VCT.SC.L, 
VCS.SC.M, and VCS.SC.L) account for approximately 81.5 percent of 
industry shipments. For VCT.RC.M, TSL 6 corresponds to EL 4. For 
VCT.SC.M and VCT.SC.L, TSL 6 corresponds to EL 7. For VCS.SC.M, TSL 6 
corresponds to EL 5. For VCS.SC.L, TSL 6 corresponds to EL 6. See 
section of this V.A of this document for more information on the 
efficiency levels analyzed at each TSL.
    At max-tech, DOE expects that nearly all manufacturers would need 
to dedicate notable engineering resources to update equipment designs 
and source, qualify, and test high-efficiency components across their 
CRE portfolio. However, most design options analyzed involve more 
efficient components (e.g., high-efficiency motors) and would not 
necessitate significant capital investment. Self-contained CRE 
equipment classes account for 87.1 percent of industry shipments in 
2027 and DOE estimates 2.5 percent of self-contained CRE shipments 
would meet TSL 6 in 2027. Incorporating variable-speed compressors into 
self-contained CRE designs would likely require additional development 
and testing time to optimize for different CRE applications to realize 
maximum efficiency benefits. Capital conversion costs may be necessary 
for new tooling if additional modifications are required to accommodate 
a larger compressor system.
    CRE equipment classes with transparent doors (i.e., HCT.SC.I, 
HCT.SC.L, HCT.SC.M, SOC.RC.M, SOC.SC.M, VCT.RC.L, VCT.RC.M, VCT.SC.H, 
VCT.SC.I, VCT.SC.L, VCT.SC.M) account for approximately 43.8 percent of 
industry shipments in 2027. For the 71 OEMs that offer directly 
analyzed CRE with transparent doors, implementing vacuum-insulated 
glass would require significant engineering resources and testing time 
to ensure adequate durability of their doors in all commercial 
settings. Capital conversion costs may be necessary for new fixtures. 
In interviews, some manufacturers raised concerns about standards 
requiring a widespread adoption of vacuum-insulated glass as it is 
still a relatively untested technology in the commercial refrigeration 
market. There is very little industry experience with implementing 
vacuum-insulated glass in CRE applications and DOE estimates that 
approximately 1.7 percent of CRE equipment classes with transparent 
doors would meet the max-tech efficiencies in 2027. Manufacturers 
expressed concerns that the 3-year conversion period between the 
publication of the final rule and the compliance date of the new and 
amended energy conservation standards might be insufficient to design 
and test a full portfolio of CRE with vacuum-insulated glass doors that 
meet the max-tech efficiencies and maintain their internal performance 
metrics for durability and safety over the equipment lifetime. DOE 
estimates capital conversion costs of $43.9 million and product 
conversion costs of $299.9 million. Conversion costs total $343.8 
million.
    At TSL 6, the shipment-weighted average MPC for all CRE is expected 
to increase by 25.0 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2028. Given the projected 
increase in production costs, DOE expects an estimated 2.9 percent drop 
in shipments in the year the standard takes effect relative to the no-
new-standards case. In the preservation of gross margin percentage 
scenario, the large increase in cashflow from the higher MSP outweighs 
the $343.8 million in conversion costs, causing an increase in INPV at 
TSL 6 under this scenario. Under the preservation of operating profit 
scenario, manufacturers earn the same per-unit operating profit as 
would be earned in the no-new-standards case, but manufacturers do not 
earn additional profit from their investments. In this scenario, the 
manufacturer markup decreases in 2028, the analyzed compliance year. 
This reduction in the manufacturer markup and the $343.8 million in 
conversion costs incurred by manufacturers cause a negative change in 
INPV at TSL 6 under the preservation of operating profit scenario. See 
section IV.J.2.d of this document for further details on the 
manufacturer markup scenarios.
    At TSL 5, the standard represents the highest efficiency level with 
positive LCC savings for all equipment classes. The change in INPV is 
expected to range from -$159.3 million to -$30.9 million, which 
represents a change in INPV of -4.8 percent to -0.9 percent, 
respectively. At this level, free cash flow is estimated to decrease by 
27.6 percent compared to the no-new-standards case value of $291.2 
million in the year 2027, the year before compliance is required. In 
2027, approximately 10.8 percent of covered CRE shipments are expected 
to meet the efficiencies required at TSL 5.
    The design options DOE analyzed at TSL 5 are similar to the design 
options analyzed at TSL 6 except most equipment classes with 
transparent doors would not need to incorporate vacuum-insulated glass 
doors. All VCT equipment classes would likely need to incorporate 
triple pane glass with krypton fill except for VCT.SC.H and VCT.SC.M 
(together accounting for 26.4 percent of industry shipments), which 
would likely not require improved door designs. DOE expects that HCT 
equipment classes would not need to incorporate additional panes of 
glass to meet TSL 5 levels. At this level, DOE also expects that fewer 
self-contained equipment classes would need to incorporate microchannel 
condensers. Additionally, manufacturers of HCS equipment classes may 
not need to incorporate variable-speed compressors to meet the 
efficiencies required. For the five highest-volume equipment classes, 
TSL 5 corresponds to lower efficiency levels for four equipment 
classes: VCT.RC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.M. For VCT.RC.M and 
VCT.SC.M, TSL 5 corresponds to EL 3. For VCT.SC.M, TSL 5 corresponds to 
EL 5. For VCT.SC.L, TSL 5 corresponds to EL 6. For VCS.SC.M, TSL 5 
corresponds to EL 4. For VCS.SC.M and VCS.SC.L, the efficiencies 
required at TSL 5 are the same as TSL 6. At this level, the VCT.RC.M 
and VCT.SC.L equipment classes would both need to incorporate triple 
pane glass with krypton fill. Out of the four highest volume self-
contained classes, only VCT.SC.L and VCS.SC.L would require the use of 
microchannel condensers.
    Similar to TSL 6, DOE expects manufacturers would spend development 
time updating equipment designs to incorporate high-efficiency 
components. However, at this level, DOE expects that most manufacturers 
of CRE with transparent doors could meet the TSL 5 efficiencies without 
implementing vacuum-insulated glass doors. Of the 11 directly analyzed 
transparent door equipment classes, only SOC.SC.M would likely require 
the use of vacuum-insulated glass doors to meet the efficiencies 
required. SOC.SC.M accounts for approximately 0.4 percent of analyzed 
industry shipments in 2027. DOE estimates capital conversion costs of 
$38.9 million and product conversion costs of $187.5 million. 
Conversion costs total $226.4 million.
    At TSL 5, the shipment-weighted average MPC for all CRE is expected 
to increase by 6.0 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2028. Given the projected 
increase in

[[Page 70280]]

production costs, DOE expects an estimated 0.7 percent drop in 
shipments in the year the standard takes effect relative to the no-new-
standards case. In the preservation of gross margin percentage 
scenario, the increase in cashflow from the higher MSP is outweighed by 
the $226.4 million in conversion costs, causing a slight decrease in 
INPV at TSL 5 under this scenario. Under the preservation of operating 
profit scenario, manufacturers earn the same per-unit operating profit 
as would be earned in the no-new-standards case, but manufacturers do 
not earn additional profit from their investments. In this scenario, 
the manufacturer markup decreases in 2028, the analyzed compliance 
year. This reduction in the manufacturer markup and the $226.4 million 
in conversion costs incurred by manufacturers cause a negative change 
in INPV at TSL 5 under the preservation of operating profit scenario.
    At TSL 4, the standard represents the highest efficiency level with 
maximum LCC savings for all equipment classes. The change in INPV is 
expected to range from -$103.8 million to -$16.7 million, which 
represents a change in INPV of -3.2 percent to -0.5 percent, 
respectively. At this level, free cash flow is estimated to decrease by 
18.0 percent compared to the no-new-standards case value of $291.2 
million in the year 2027, the year before compliance is required. In 
2027, approximately 15.7 percent of covered CRE shipments are expected 
to meet the efficiencies required at TSL 4.
    At TSL 4, the efficiency levels required for most equipment classes 
are lower than the efficiency levels required at TSL 5, including for 
the five highest-volume equipment classes. At this level, no self-
contained equipment classes are expected to require the use of 
microchannel condensers. At TSL 4, none of the highest-volume self-
contained equipment classes (VCT.SC.M, VCT.SC.L, VCS.SC.M, VCS.SC.L) 
would need to incorporate microchannel condensers. Additionally, DOE 
does not expect VCS.SC.M would require the use of variable-speed 
compressors to meet TSL 5 efficiencies. For VCT.RC.M and VCT.SC.M, DOE 
expects manufacturers would not need to implement additional panes of 
glass to meet the efficiencies required. For VCT.RC.M, TSL 4 
corresponds to EL 1. For VCT.SC.M, TSL 4 corresponds to EL 3. For 
VCT.SC.L, TSL 4 corresponds to EL 5. For VCS.SC.M, TSL 4 corresponds to 
EL 3. For VCS.SC.L, TSL 4 corresponds to EL 5. At this level, product 
conversion costs may be necessary to source, qualify, and test high-
efficiency components but to a lesser extent than higher TSLs. Some 
manufacturers of self-contained equipment classes may need to invest in 
new tooling if incorporating variable-speed compressors require 
additional modifications to CRE designs. Some manufacturers of 
transparent door equipment classes may need to invest in new fixtures 
to accommodate additional panes of glass into CRE designs. DOE 
estimates capital conversion costs of $26.0 million and product 
conversion costs of $121.5 million. Conversion costs total $147.5 
million.
    At TSL 4, the shipment-weighted average MPC for all CRE is expected 
to increase by 4.1 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2028. Given the projected 
increase in production costs, DOE expects an estimated 0.4 percent drop 
in shipments in the year the standard takes effect relative to the no-
new-standards case. In the preservation-of-gross-margin-percentage 
scenario, the increase in cashflow from the higher MSP is slightly 
outweighed by the $147.5 million in conversion costs, causing a small 
decrease in INPV at TSL 4 under this scenario. Under the preservation 
of operating profit scenario, manufacturers earn the same per-unit 
operating profit as would be earned in the no-new-standards case, but 
manufacturers do not earn additional profit from their investments. In 
this scenario, the manufacturer markup decreases in 2028, the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$147.5 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 4 under the preservation of operating 
profit scenario.
    At TSL 3, the standard represents the highest efficiency level with 
positive LCC savings and the incorporation of single speed compressors 
for all equipment classes in which this design option was considered. 
The change in INPV is expected to range from -$ 61.9 million to -$15.0 
million, which represents a change in INPV of -1.9 percent to -0.5 
percent, respectively. At this level, free cash flow is estimated to 
decrease by 11.3 percent compared to the no-new-standards case value of 
$291.2 million in the year 2027, the year before compliance is 
required. In 2027, approximately 28.8 percent of covered CRE shipments 
are expected to meet the efficiencies required at TSL 3.
    At TSL 3, the efficiency levels required for many equipment classes 
are lower than the efficiency levels required at TSL 4. However, the 
efficiency levels required for some equipment classes are the same or 
are higher (i.e., more stringent) than the TSL 4 efficiencies. At this 
level, DOE expects that none of the self-contained equipment classes 
would require the use of variable-speed compressor systems. DOE also 
expects that fewer equipment classes with transparent doors would need 
to incorporate additional panes of glass to meet TSL 3. For the five 
highest-volume equipment classes, the efficiency levels required at TSL 
3, as compared to TSL 4, are lower for VCT.SC.M, VCT.SC.L, and 
VCS.SC.L; higher for VCT.RC.M; and the same for VCT.SC.M. For VCT.RC.M, 
TSL 3 corresponds to EL 3. For VCT.SC.M, TSL 3 corresponds to EL 1. For 
VCT.SC.L, TSL 3 corresponds to EL 3. For VCS.SC.L, TSL 3 corresponds to 
EL 4. At this level, DOE expects industry would incur minimal capital 
conversion costs. Product conversion costs may be necessary to source, 
qualify, and test high-efficiency components but to a lesser extent 
than higher TSLs. DOE estimates capital conversion costs of $3.1 
million and product conversion costs of $94.0 million. Conversion costs 
total $97.1 million.
    At TSL 3, the shipment-weighted average MPC for all CRE is expected 
to increase by 2.2 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2028. Given the relatively 
small increase in production costs, DOE does not project a notable drop 
in shipments in the year the standard takes effect. In the 
preservation-of-gross-margin-percentage scenario, the minor increase in 
cashflow from the higher MSP is slightly outweighed by the $97.1 
million in conversion costs, causing a small decrease in INPV at TSL 3 
under this scenario. Under the preservation-of-operating-profit 
scenario, manufacturers earn the same per-unit operating profit as 
would be earned in the no-new-standards case, but manufacturers do not 
earn additional profit from their investments. In this scenario, the 
manufacturer markup decreases in 2028, the analyzed compliance year. 
This reduction in the manufacturer markup and the $97.1 million in 
conversion costs incurred by manufacturers cause a slightly negative 
change in INPV at TSL 3 under the preservation-of-operating-profit 
scenario.
    At TSL 2, the standard represents the highest efficiency level with 
maximum LCC savings and the incorporation of single speed compressors 
for all equipment classes in which this design option was considered. 
The change in INPV is expected to range from -$44.4 million to -$6.7 
million, which represents a change in INPV of -1.4 percent to -0.2 
percent, respectively.

[[Page 70281]]

At this level, free cash flow is estimated to decrease by 8.0 percent 
compared to the no-new-standards case value of $291.2 million in the 
year 2027, the year before compliance is required. In 2027, 
approximately 29.9 percent of covered CRE shipments are expected to 
meet the efficiencies required at TSL 2.
    At this level, the efficiency levels required for most equipment 
classes are the same as TSL 3. For the five highest-volume equipment 
classes, TSL 2 corresponds to lower efficiency levels for one equipment 
class: VCT.RC.M. DOE expects manufacturers would likely need to 
implement occupancy sensors into VCT.RC.M designs. For VCT.SC.M, 
VCT.SC.L, VCS.SC.M, and VCS.SC.L, the efficiencies at TSL 2 are the 
same as TSL 3. At this level, DOE expects industry would incur minimal 
capital conversion costs. The lower efficiency levels required for two 
equipment classes--VCT.RC.M and SOC.RC.M--drive the drop in product 
conversion costs at this level. For VCT.RC.M and SOC.RC.M, DOE expects 
manufacturers could meet TSL 2 efficiencies by incorporating occupancy 
sensors, which requires minimal development effort. DOE estimates 
capital conversion costs of $2.2 million and product conversion costs 
of $66.1 million. Conversion costs total $68.3 million.
    At TSL 2, the shipment-weighted average MPC for all CRE is expected 
to increase by 1.7 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2028. Given the relatively 
small increase in production costs, DOE does not project a notable drop 
in shipments in the year the standard takes effect. In the preservation 
of gross margin percentage scenario, the minor increase in cashflow 
from the higher MSP is slightly outweighed by the $68.3 million in 
conversion costs, causing a minor decrease in INPV at TSL 2 under this 
scenario. Under the preservation of operating profit scenario, 
manufacturers earn the same per-unit operating profit as would be 
earned in the no-new-standards case, but manufacturers do not earn 
additional profit from their investments. In this scenario, the 
manufacturer markup decreases in 2028, the analyzed compliance year. 
This reduction in the manufacturer markup and the $68.3 million in 
conversion costs incurred by manufacturers cause a slightly negative 
change in INPV at TSL 2 under the preservation of operating profit 
scenario.
    At TSL 1, the standard represents the minimum efficiency level with 
positive LCC savings. The change in INPV is expected to range from -
$12.2 million to $4.5 million, which represents a change in INPV of -
0.4 percent to 0.1 percent, respectively. At this level, free cash flow 
is estimated to decrease by 1.9 percent compared to the no-new-
standards case value of $291.2 million in the year 2027, the year 
before compliance is required. In 2027, approximately 35.6 percent of 
covered CRE shipments are expected to meet the efficiencies required at 
TSL 1.
    At this level, the efficiency levels correspond to EL 1 for nearly 
all equipment classes (except for VCT.SC.H, HCT.SC.M, and HCT.SC.L, 
which are set to baseline or EL 0). DOE expects most self-contained 
equipment classes would need to incorporate higher-efficiency fan 
motors (i.e., EC evaporator or condenser fan motors or PSC evaporator 
fan motors for chef bases). Other self-contained equipment classes may 
need to incorporate evaporator fan controls in lieu of higher-
efficiency motors. DOE expects that HCT.SC.L and HCT.SC.I may require 
the use of variable-speed compressors to meet TSL 1 efficiencies. At 
this level, DOE expects that manufacturers of VCT.SC.I may need to 
incorporate an additional pane of glass. Remote-controlled equipment 
classes would likely need to incorporate occupancy sensors. Capital 
conversion costs are driven by tooling costs associated with 
incorporating variable-speed compressors into HCT.SC.L and HCT.SC.I 
designs. Product conversion costs are driven by incorporating high-
efficiency components into CRE designs. DOE estimates capital 
conversion costs of $2.7 million and product conversion costs of $12.6 
million. Conversion costs total $15.3 million.
    At TSL 1, the shipment-weighted average MPC for all CRE is expected 
to increase by 0.8 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2028. Given the relatively 
small increase in production costs, DOE does not project a notable drop 
in shipments in the year the standard takes effect. In the preservation 
of gross margin percentage scenario, the minor increase in cashflow 
from the higher MSP slightly outweighs the $15.3 million in conversion 
costs, causing a minor increase in INPV at TSL 1 under this scenario. 
Under the preservation of operating profit scenario, manufacturers earn 
the same per-unit operating profit as would be earned in the no-new-
standards case, but manufacturers do not earn additional profit from 
their investments. In this scenario, the manufacturer markup decreases 
in 2028, the analyzed compliance year. This reduction in the 
manufacturer markup and the $15.3 million in conversion costs incurred 
by manufacturers cause a slightly negative change in INPV at TSL 1 
under the preservation of operating profit scenario.
    DOE seeks comments, information, and data on the capital conversion 
costs and product conversion costs estimated for each TSL.

                          Table V.67--Percentages of 2027 No-New-Standards Case Shipments That Meet Each TSL by Equipment Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Directly analyzed equipment class                TSL 1 (%)       TSL 2 (%)       TSL 3 (%)       TSL 4 (%)       TSL 5 (%)       TSL 6 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L.................................................            30.0             0.0             0.0             0.0             0.0             0.0
CB.SC.M.................................................            50.0            10.0             0.0            10.0             0.0             0.0
HCS.SC.L................................................            12.4            12.4            12.4            12.4            12.4             0.0
HCS.SC.M................................................            12.4            12.4             0.0            12.4             0.0             0.0
HCT.SC.I................................................            28.3           100.0           100.0            28.3            22.3             8.9
HCT.SC.L................................................           100.0           100.0           100.0           100.0           100.0             8.9
HCT.SC.M................................................           100.0           100.0           100.0           100.0           100.0             8.9
HZO.RC.L................................................             0.0             0.0             0.0             0.0             0.0             0.0
HZO.RC.M................................................             0.0             0.0             0.0             0.0             0.0             0.0
HZO.SC.L................................................            18.9            15.2            15.2             0.0             0.0             0.0
HZO.SC.M................................................            18.9            15.2            15.2             0.0             0.0             0.0
SOC.RC.M................................................             1.6             1.6             0.2             1.6             0.2             0.0
SOC.SC.M................................................            63.7            47.2            47.2            26.7            24.8            24.8
SVO.RC.M................................................            23.8            23.8             0.0            23.8             0.0             0.0

[[Page 70282]]

 
SVO.SC.M................................................            34.0            21.5            21.5            11.4            10.5            10.5
VCS.SC.H................................................            30.0            30.0             0.0            30.0             0.0             0.0
VCS.SC.I................................................             0.0             0.0             0.0             0.0             0.0             0.0
VCS.SC.L................................................            23.0            14.0            14.0             0.0             0.0             0.0
VCS.SC.M................................................            29.0            19.0            19.0            19.0             8.0             5.0
VCT.RC.L................................................             7.0             6.0             6.0             6.0             6.0             0.4
VCT.RC.M................................................             7.0             7.0             0.4             7.0             0.4             0.0
VCT.SC.H................................................           100.0           100.0           100.0           100.0           100.0             3.0
VCT.SC.I................................................            55.8            36.5            36.5            36.5            36.5             0.0
VCT.SC.L................................................            65.0            60.0            60.0            10.0            10.0             0.0
VCT.SC.M................................................            52.0            52.0            52.0            18.0            18.0             0.0
VOP.RC.L................................................            26.9             0.0             0.0             0.0             0.0             0.0
VOP.RC.M................................................            26.9             0.0             0.0             0.0             0.0             0.0
VOP.SC.M................................................            14.0             9.0             9.0             5.0             5.0             5.0
Overall Industry........................................            35.6            29.9            28.8            15.7            10.8             2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of new and amended 
energy conservation standards on direct employment in the CRE industry, 
DOE used the GRIM to estimate the domestic labor expenditures and 
number of direct employees in the no-new-standards case and in each of 
the standards cases during the analysis period. DOE calculated these 
values using statistical data from the 2021 ASM,\101\ BLS employee 
compensation data,\102\ results of the engineering analysis, and 
manufacturer interviews.
---------------------------------------------------------------------------

    \101\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S 
(2021).'' Available at www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed January 20, 2023).
    \102\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation. December 15, 2022. Available at www.bls.gov/news.release/pdf/ecec.pdf (last accessed January 20, 2023).
---------------------------------------------------------------------------

    Labor expenditures related to equipment manufacturing depend on the 
labor intensity of the equipment, the sales volume, and an assumption 
that wages remain fixed in real terms over time. The total labor 
expenditures in each year are calculated by multiplying the total MPCs 
by the labor percentage of MPCs. The total labor expenditures in the 
GRIM were then converted to total production employment levels by 
dividing production labor expenditures by the average fully burdened 
wage multiplied by the average number of hours worked per year per 
production worker. To do this, DOE relied on the ASM inputs: Production 
Workers Annual Wages, Production Workers Annual Hours, Production 
Workers for Pay Period, and Number of Employees. DOE also relied on the 
BLS employee compensation data to determine the fully burdened wage 
ratio. The fully burdened wage ratio factors in paid leave, 
supplemental pay, insurance, retirement and savings, and legally 
required benefits.
    Total production employees was then multiplied by the U.S. labor 
percentage to convert total production employment to total domestic 
production employment. The U.S. labor percentage represents the 
industry fraction of domestic manufacturing production capacity for the 
covered equipment. This value is derived from manufacturer interviews, 
equipment database analysis, DOE's shipments analysis, and publicly 
available information. DOE estimates that approximately 77 percent of 
currently covered CRE are produced domestically.
    The domestic production employees estimate covers production line 
workers, including line supervisors, who are directly involved in 
fabricating and assembling equipment within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor.\103\ DOE's estimates only account for 
production workers who manufacture the specific equipment covered by 
this proposed rule.
---------------------------------------------------------------------------

    \103\ U.S. Census Bureau, ``Definitions and Instructions for the 
Annual Survey of Manufactures, MA-10000.'' Available at 
www2.census.gov/programs-surveys/asm/technical-documentation/questionnaire/2021/instructions/MA_10000_Instructions.pdf (last 
accessed January 25, 2023).
---------------------------------------------------------------------------

    Non-production workers account for the remainder of the direct 
employment figure. The non-production employees category covers 
domestic workers who are not directly involved in the production 
process, such as sales, engineering, human resources, management, 
etc.\104\ Using the number of domestic production workers calculated 
above, non-production domestic employees are extrapolated by 
multiplying the ratio of non-production workers in the industry 
compared to production employees. DOE assumes that this employee 
distribution ratio remains constant between the no-new-standards case 
and standards cases.
---------------------------------------------------------------------------

    \104\ Id.
---------------------------------------------------------------------------

    Using the GRIM, DOE estimates in the absence of new energy 
conservation standards there would be 7,472 domestic workers for CRE in 
2028. Table V.68 shows the range of the impacts of energy conservation 
standards on U.S. manufacturing employment in the CRE industry. The 
discussion below provides a qualitative evaluation of the range of 
potential impacts presented in the table.

                                     Table V.68--Direct Employment Impacts for Domestic CRE Manufacturers in 2028 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               No-new-standards
                                     case              TSL 1             TSL 2             TSL 3            TSL 4            TSL 5            TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2028      7,472...........  7,475...........  7,467...........  7,464...........  7,429..........  7,393..........  7,234.
 (Production Workers + Non-
 Production Workers).

[[Page 70283]]

 
Potential Changes in Direct    ................  (5,484) to 3....  (5,484) to (5)..  (5,484) to (8)..  (5,484) to (43)  (5,484) to (79)  (5,484) to
 Employment in 2028*.                                                                                                                     (238).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employee impacts. Numbers in parentheses indicate negative numbers.

    The direct employment impacts in table V.68 represent the potential 
domestic employment changes that could result following the compliance 
date for CRE in this proposal. The upper bound estimate corresponds to 
a potential change in the number of domestic workers that would result 
from new and amended energy conservation standards if manufacturers 
continue to produce the same scope of covered equipment within the 
United States after compliance takes effect.
    To establish a conservative lower bound, DOE assumes all 
manufacturers would shift production to foreign countries with lower 
labor costs. Most of the design options analyzed in the engineering 
analysis require manufacturers to purchase more-efficient components 
from suppliers. These components do not require significant additional 
labor to assemble or significant production line updates. Incorporating 
vacuum-insulated panels could lead to greater labor requirements, 
however, as discussed in section IV.B.1 of this document, DOE did not 
consider vacuum-insulated panels as a design option in its engineering 
analysis. As a result, DOE believes the likelihood of changes in 
production location due to new and amended standards are relatively 
low.
    Additional detail on the analysis of direct employment can be found 
in chapter 12 of the NOPR TSD. Additionally, the employment impacts 
discussed in this section are independent of the employment impacts 
from the broader U.S. economy, which are documented in chapter 16 of 
the NOPR TSD.
c. Impacts on Manufacturing Capacity
    In interviews, most manufacturers noted potential manufacturing 
capacity concerns relating to widespread adoption of increased 
insulation thickness or VIPs. As discussed in section IV.B.1 of this 
document, DOE excluded these technologies from further consideration in 
the engineering analysis and, thus, DOE does not expect manufacturers 
would need to increase insulation thickness or incorporate VIPs to meet 
any of the efficiency levels analyzed in this NOPR. Therefore, when 
considering potential new and amended energy conservation standards in 
isolation, DOE believes manufacturers would be able to maintain 
manufacturing capacity levels and continue to meet market demand under 
the proposed new and amended energy conservation standards. However, 
multiple manufacturers raised concerns about technical and laboratory 
resource constraints due to overlapping regulations over a short time 
period. Specifically, these manufacturers mentioned the testing and 
redesign required for new safety standards and the various regulations 
necessitating the transition to low-GWP refrigerants. Some 
manufacturers stated that there are already experiencing testing 
laboratory shortages, which would further be exacerbated should EPA 
finalize its proposals in the December 2022 EPA NOPR and DOE set more 
stringent standards that necessitate the redesign of the majority of 
basic models. Manufacturers noted that the ongoing supply chain 
constraints further strain technical and laboratory resources as 
manufacturers are forced to identify and qualify new component 
suppliers due to shortages and long lead times.
    DOE seeks comment on whether manufacturers expect that 
manufacturing capacity constraints, engineering resource constraints, 
or laboratory constraints would limit equipment availability to 
consumers in the timeframe of the new and amended standards compliance 
date (2028).
d. Impacts on Subgroups of Manufacturers
    Small business, low volume, and niche equipment manufacturers, and 
manufacturers exhibiting a cost structure substantially different from 
the industry average could be affected disproportionately. As discussed 
in section IV.J of this document, using average cost assumptions to 
develop an industry cash flow estimate is inadequate to assess 
differential impacts among manufacturer subgroups.
    For CRE, DOE identified and evaluated the impact of new and amended 
conservation standards on one subgroup: small manufacturers. The SBA 
defines a ``small business'' as having 1,250 employees or less for 
NAICS 333415, ``Air-Conditioning and Warm Air Heating Equipment and 
Commercial and Industrial Refrigeration Equipment Manufacturing,'' 
which includes CRE manufacturing. Based on this definition, DOE 
identified 25 domestic OEM in the CRE industry that qualify as a 
``small business.''
    For a discussion of the impacts on the small manufacturer subgroup, 
see the regulatory flexibility analysis in section VI.B of this 
document or chapter 12 of the NOPR TSD.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the equipment/product-
specific regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
product lines or markets with lower expected future returns than 
competing equipment. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency. DOE evaluates equipment/product-specific 
regulations that will take effect approximately three years before or 
after the estimated 2028 compliance date of any new and amended energy 
conservation standards for CRE. This information is presented in table 
V.69.

[[Page 70284]]



Table V.69--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
                                     Commercial Refrigeration Equipment OEMs
----------------------------------------------------------------------------------------------------------------
                                                                                                     Industry
                                              Number of OEMs      Approx.                           conversion
 Federal energy conservation     Number of      affected by      standards         Industry           costs/
          standard                 OEMs*           this         compliance     conversion costs      equipment
                                               rulemaking **       year          (Millions $)      revenue*** (
                                                                                                        %)
----------------------------------------------------------------------------------------------------------------
Consumer Furnaces[dagger] 87              15               2            2029      $150.6 (2020$)             1.4
 FR 40590 (July 7, 2022)....
Consumer Clothes Dryers                   15               3            2027       149.7 (2020$)             1.8
 [dagger] 87 FR 51734
 (August 23, 2022)..........
Consumer Conventional                     34               4            2027       183.4 (2021$)             1.2
 Cooking Products 88 FR 6818
 [dagger] (February 1, 2023)
Refrigerators, Freezers, and              49               8            2027     1,323.6 (2021$)             3.8
 Refrigerator-Freezers
 [dagger] 88 FR 12452.......
(February 27, 2023).........
Residential Clothes Washers               19               3            2027       690.8 (2021$)             5.2
 [dagger] 88 FR 13520 (March
 3, 2023)...................
Room Air Conditioners 88 FR                8               1            2026        24.8 (2021$)             0.4
 34298 (May 26, 2023).......
Miscellaneous Refrigeration               38               6            2029       126.9 (2021$)             3.1
 Products [dagger] 88 FR
 19382 (March 31, 2023).....
Dishwashers[dagger] 88 FR                 22               5            2027               125.6             2.1
 32514 (May 19, 2023).......                                                             (2021$)
Automatic Commercial Ice                  23               7            2027        15.9 (2022$)             0.6
 Makers [dagger] 88 FR 30508
 (May 11, 2023).............
Refrigerated Bottled or                    5               2            2027         1.5 (2022$)             0.7
 Canned Beverage Vending
 Machines [dagger] 88 FR
 33968......................
May 25, 2023)...............
Microwave Ovens 88 FR 39912               18               3            2026        46.1 (2021$)             0.7
 (June 20, 2023)............
Walk-in Coolers and Freezers              79               5            2027        89.0 (2022$)             0.8
 [dagger] 88 FR 60746
 (September 5, 2023)........
----------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule that is
  contributing to cumulative regulatory burden.
** This column presents the number of OEMs producing CRE that are also listed as OEMs in the identified energy
  conservation standard that is contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of equipment revenue during the conversion
  period. Industry conversion costs are the upfront investments manufacturers must make to sell compliant
  products/equipment. The revenue used for this calculation is the revenue from just the covered product/
  equipment associated with each row. The conversion period is the time frame over which conversion costs are
  made and lasts from the publication year of the final rule to the compliance year of the energy conservation
  standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking.
[dagger] These rulemakings are at the NOPR stage, and all values are subject to change until finalized through
  publication of a final rule.

    DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of CRE associated with multiple DOE 
standards or equipment/product-specific regulatory actions of other 
Federal agencies.
Refrigerant Regulations
    The December 2022 EPA NOPR \105\ rulemaking proposes to restrict 
the use of HFCs in specific sectors or subsectors, including use in 
certain CRE covered by this rulemaking. DOE is considering the impacts 
of change in refrigerants in its analysis. DOE understands that 
switching from non-flammable to flammable refrigerants (e.g., R-290) 
requires time and investment to redesign CRE models and upgrade 
production facilities to accommodate the additional structural and 
safety precautions required. As discussed in section IV.C.1 of this 
document, DOE expects CRE manufacturers will transition most models to 
R-290 to comply with anticipated refrigeration regulations, such as the 
December 2022 EPA NOPR, prior to the expected 2028 compliance date of 
any potential energy conservation standards. Therefore, the engineering 
analysis assumes the use of R-290 compressors as a baseline design 
option for select equipment classes. See section IV.C.1 of this 
document for additional information on refrigerant assumptions in the 
engineering analysis.
---------------------------------------------------------------------------

    \105\ The proposed rule was published on December 15, 2022. 87 
FR 76738.
---------------------------------------------------------------------------

    DOE accounted for the costs associated with redesigning CRE to make 
use of flammable refrigerants and retrofitting production facilities to 
accommodate flammable refrigerants in the GRIM. DOE considers the 
expenses associated with the refrigerant transition as independent of 
DOE actions related to any new and amended energy conservation 
standards. Therefore, DOE incorporated the refrigerant transition 
expenses into both the no-new-standards case and standards cases. DOE 
relied on manufacturer feedback in confidential interviews, a report 
prepared for EPA,\106\ results of the engineering analysis, and 
investment estimates submitted by NAMA and AHRI in response to the June 
2022 Preliminary Analysis to estimate the industry refrigerant 
transition costs. Based on feedback, DOE assumed that the transition to 
low-GWP refrigerants would require industry to invest approximately 
$21.3 million in R&D and $33.3 million in capital expenditures (e.g., 
investments in new charging equipment, leak detection systems, etc.).
---------------------------------------------------------------------------

    \106\ See pp. 5-113 of the ``Global Non-CO2 Greenhouse Gas 
Emission Projections & Marginal Abatement Cost Analysis: Methodology 
Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------

    DOE requests comments on the magnitude of costs associated with 
transitioning CRE designs and production facilities to accommodate low-
GWP refrigerants that would be incurred between the publication of this 
NOPR and the proposed compliance date of new and amended standards. 
Quantification and categorization of

[[Page 70285]]

these costs, such as engineering efforts, testing lab time, 
certification costs, and capital investments (e.g., new charging 
equipment), would enable DOE to refine its analysis.
3. National Impact Analysis
    This section presents DOE's estimates of the national energy 
savings and the NPV of consumer benefits that would result from each of 
the TSLs considered as potential new and amended standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential new and 
amended standards for CRE, DOE compared their energy consumption under 
the no-new-standards case to their anticipated energy consumption under 
each TSL. The savings are measured over the entire lifetime of 
equipment purchased in the 30-year period that begins in the year of 
anticipated compliance with new and amended standards (2028-2057). 
Table V.70 presents DOE's projections of the national energy savings 
for each TSL considered for CRE. The savings were calculated using the 
approach described in section IV.E of this document.

                                Table V.70--Cumulative National Energy Savings for CRE; 30 Years of Shipments (2028-2057)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard level
                                                         -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      (quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary energy..........................................            1.00            1.70            1.79            2.70            3.02            3.29
FFC energy..............................................            1.03            1.75            1.83            2.78            3.11            3.38
--------------------------------------------------------------------------------------------------------------------------------------------------------

    OMB Circular A-4 \107\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this rulemaking, 
DOE undertook a sensitivity analysis using 9 years, rather than 30 
years, of equipment shipments. The choice of a 9-year period is a proxy 
for the timeline in EPCA for the review of certain energy conservation 
standards and potential revision of and compliance with such revised 
standards.\108\ The review timeframe established in EPCA is generally 
not synchronized with the equipment lifetime, equipment manufacturing 
cycles, or other factors specific to CRE. Thus, such results are 
presented for informational purposes only and are not indicative of any 
change in DOE's analytical methodology. The NES sensitivity analysis 
results based on a 9-year analytical period are presented in table 
V.71. The impacts are counted over the lifetime of CRE purchased in 
2028-2036.
---------------------------------------------------------------------------

    \107\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed 
February 17, 2023).
    \108\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain products, a 3-year period 
after any new standard is promulgated before compliance is required, 
except that in no case may any new standards be required within 6 
years of the compliance date of the previous standards. (42 U.S.C. 
6316(e)(1)); 42 U.S.C. 6295(m)) While adding a 6-year review to the 
3-year compliance period adds up to 9 years, DOE notes that it may 
undertake reviews at any time within the 6-year period and that the 
3-year compliance date may yield to the 6-year backstop. A 9-year 
analysis period may not be appropriate given the variability that 
occurs in the timing of standards reviews and the fact that for some 
products, the compliance period is 5 years rather than 3 years.

                                Table V.71--Cumulative National Energy Savings for CRE; 9 Years of Shipments (2028-2036)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard level
                                                         -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      (quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary energy..........................................            0.28            0.48            0.51            0.77            0.86            0.93
FFC energy..............................................            0.29            0.50            0.52            0.79            0.88            0.96
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for CRE. In 
accordance with OMB's guidelines on regulatory analysis,\109\ DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.72 shows the consumer NPV results with impacts counted 
over the lifetime of equipment purchased in 2028-2057.
---------------------------------------------------------------------------

    \109\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed 
February 17, 2023).

[[Page 70286]]



                        Table V.72--Cumulative Net Present Value of Consumer Benefits for CRE; 30 Years of Shipments (2028-2057)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard level
                      Discount rate                      -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 (billion [2022$])
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 percent...............................................            4.39            6.01            5.87            8.59            7.10           -16.5
7 percent...............................................            1.80            2.38            2.27            3.24            2.38           -10.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in 2022$ table V.73. The impacts are counted over 
the lifetime of equipment purchased in 2028-2036. As mentioned 
previously, such results are presented for informational purposes only 
and are not indicative of any change in DOE's analytical methodology or 
decision criteria.

                         Tabl--V.73--Cumulative Net Present Value of Consumer Benefits for CRE; 9 Years of Shipments (2028-2036)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard level
                      Discount rate                      -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 (billion [2022$])
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 percent...............................................            1.68            2.30            2.25            3.16            2.50           -6.42
7 percent...............................................            0.92            1.21            1.16            1.58            1.09           -5.21
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The previous results reflect the use of a default trend to estimate 
the change in price for CRE over the analysis period (see section 
IV.F.1 of this document). DOE also conducted a sensitivity analysis 
that considered one scenario with a lower rate of price decline than 
the reference case and one scenario with a higher rate of price decline 
than the reference case. The results of these alternative cases are 
presented in appendix 10C of the NOPR TSD. In the high-price-decline 
case, the NPV of consumer benefits is higher than in the default case. 
In the low-price-decline case, the NPV of consumer benefits is lower 
than in the default case.
c. Indirect Impacts on Employment
    DOE estimates that that new and amended energy conservation 
standards for CRE would reduce energy expenditures for consumers of 
those equipment, with the resulting net savings being redirected to 
other forms of economic activity. These expected shifts in spending and 
economic activity could affect the demand for labor. As described in 
section IV.N of this document, DOE used an input/output model of the 
U.S. economy to estimate indirect employment impacts of the TSLs that 
DOE considered. There are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Therefore, DOE generated results for near-term timeframes 
(2028-2032), where these uncertainties are reduced.
    The results suggest that the proposed standards would be likely to 
have a negligible impact on the net demand for labor in the economy. 
The net change in jobs is so small that it would be imperceptible in 
national labor statistics and might be offset by other, unanticipated 
effects on employment. Chapter 16 of the NOPR TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Equipment
    As discussed in section IV.C.1.b of this document, DOE has 
tentatively concluded that the standards proposed in this NOPR would 
not lessen the utility or performance of the CRE under consideration in 
this rulemaking. Manufacturers of these equipment currently offer units 
that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new and amended standards. As discussed in section III.F.1 
of this document, the Attorney General determines the impact, if any, 
of any lessening of competition likely to result from a proposed 
standard, and transmits such determination in writing to the Secretary, 
together with an analysis of the nature and extent of such impact. To 
assist the Attorney General in making this determination, DOE has 
provided DOJ with copies of this NOPR and the accompanying TSD for 
review. DOE will consider DOJ's comments on the proposed rule in 
determining whether to proceed to a final rule. DOE will publish and 
respond to DOJ's comments in that document. DOE invites comment from 
the public regarding the competitive impacts that are likely to result 
from this proposed rule. In addition, stakeholders may also provide 
comments separately to DOJ regarding these potential impacts. See the 
ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation to Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 in the NOPR TSD 
presents the estimated impacts on electricity generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this proposed rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for CRE is expected to yield

[[Page 70287]]

environmental benefits in the form of reduced emissions of certain air 
pollutants and greenhouse gases. Tabl--V.74 provides DOE's estimate of 
cumulative emissions reductions expected to result from the TSLs 
considered in this rulemaking. The emissions were calculated using the 
multipliers discussed in section IV.L.1 of this document. DOE reports 
annual emissions reductions for each TSL in chapter 13 of the NOPR TSD.

                                         Table V.74--Cumulative Emissions Reduction for CRE Shipped in 2028-2057
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial Standard Level
                                                         -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Power Sector and Site Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................            16.7            28.5            29.9            45.3            50.7            55.1
CH4 (thousand tons).....................................            1.24            2.11            2.21            3.35            3.75            4.08
N2O (thousand tons).....................................            0.17            0.29            0.31            0.47            0.52            0.57
NOX (thousand tons).....................................            7.89            13.4            14.1            21.3            23.9            26.0
SO2 (thousand tons).....................................            5.53            9.43            9.89            15.0            16.8            18.2
Hg (tons)...............................................            0.04            0.07            0.07            0.10            0.12            0.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Upstream Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................            1.70            2.90            3.04            4.61            5.15            5.61
CH4 (thousand tons).....................................             155             263             277             419             468             509
N2O (thousand tons).....................................            0.01            0.01            0.01            0.02            0.02            0.03
NOX (thousand tons).....................................            26.5            45.2            47.4            71.8            80.3            87.4
SO2 (thousand tons).....................................            0.10            0.17            0.18            0.28            0.31            0.34
Hg (tons)...............................................            0.00            0.00            0.00            0.00            0.00            0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      FFC Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................            18.4            31.4            33.0            49.9            55.8            60.7
CH4 (thousand tons).....................................             156             266             279             422             472             514
N2O (thousand tons).....................................            0.18            0.31            0.32            0.49            0.54            0.59
NOX (thousand tons).....................................            34.4            58.6            61.5            93.1             104             113
SO2 (thousand tons).....................................            5.64            9.60            10.1            15.3            17.1            18.6
Hg (tons)...............................................            0.04            0.07            0.07            0.10            0.12            0.13
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As part of the analysis for this rulemaking, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for CRE. Section 
IV.L of this document discusses the SC-CO2 values that DOE 
used. Table V.75 presents the value of CO2 emissions 
reduction at each TSL for each of the SC-CO2 cases. The 
time-series of annual values is presented for the proposed TSL in 
chapter 14 of the NOPR TSD.

                Table V.75--Present Value of CO2 Emissions Reduction for CRE Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
                                                                           SC-CO2 Case
                                               -----------------------------------------------------------------
                                                                  Discount rate and statistics
                      TSL                      -----------------------------------------------------------------
                                                                                                    3%  95th
                                                  5%  Average     3%  Average    2.5%  Average     percentile
----------------------------------------------------------------------------------------------------------------
                                                                         (million 2022$)
                                               -----------------------------------------------------------------
1.............................................             183             788           1,233             2,391
2.............................................             312           1,342           2,101             4,074
3.............................................             327           1,408           2,205             4,276
4.............................................             495           2,132           3,337             6,472
5.............................................             554           2,384           3,733             7,239
6.............................................             602           2,593           4,060             7,872
----------------------------------------------------------------------------------------------------------------

    As discussed in section IV.L.2 of this document, DOE estimated the 
climate benefits likely to result from the reduced emissions of methane 
and N2O that DOE estimated for each of the considered TSLs 
for CRE. Table V.76 presents the value of the CH4 emissions 
reduction at each TSL, and table V.77 presents the value of the 
N2O emissions reduction at each TSL. The time-series of 
annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.
    The time-series of annual values is presented for the proposed TSL 
in chapter 14 of the NOPR TSD.

[[Page 70288]]



              Table V.76--Present Value of Methane Emissions Reduction for CRE Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
                                                                           SC-CH4 Case
                                               -----------------------------------------------------------------
                                                                  Discount rate and statistics
                      TSL                      -----------------------------------------------------------------
                                                                                                    3%  95th
                                                  5%  Average     3%  Average    2.5%  Average     percentile
----------------------------------------------------------------------------------------------------------------
                                                                         (Million 2022$)
                                               -----------------------------------------------------------------
1.............................................            70.7             213             297               562
2.............................................             120             362             506               958
3.............................................             126             380             532              1005
4.............................................             191             576             805              1522
5.............................................             214             644             900              1702
6.............................................             233             700             979              1852
----------------------------------------------------------------------------------------------------------------


           Table V.77--Present Value of Nitrous Oxide Emissions Reduction for CRE Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
                                                                           SC-N2O Case
                                               -----------------------------------------------------------------
                                                                  Discount rate and statistics
                      TSL                      -----------------------------------------------------------------
                                                                                                     3% 95th
                                                  5% Average      3% Average     2.5% Average      percentile
----------------------------------------------------------------------------------------------------------------
                                                                         (Million 2022$)
                                               -----------------------------------------------------------------
1.............................................            0.69            2.74            4.25              7.30
2.............................................            1.17            4.67            7.23              12.4
3.............................................            1.23            4.90            7.59              13.0
4.............................................            1.85            7.42            11.5              19.8
5.............................................            2.07            8.29            12.9              22.1
6.............................................            2.25            9.02            14.0              24.0
----------------------------------------------------------------------------------------------------------------

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
global and U.S. economy continues to evolve rapidly. DOE, together with 
other Federal agencies, will continue to review methodologies for 
estimating the monetary value of reductions in CO2 and other 
GHG emissions. This ongoing review will consider the comments on this 
subject that are part of the public record for this and other 
rulemakings, as well as other methodological assumptions and issues. 
DOE notes that the proposed standards would be economically justified 
even without inclusion of monetized benefits of reduced GHG emissions.
    DOE also estimated the monetary value of the health benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for CRE. The dollar-per-
ton values that DOE used are discussed in section IV.L of this 
document. Table V.78 shows the present value for NOX 
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and table V.79 presents similar results for 
SO2 emissions reductions. The results in these tables 
reflect application of EPA's low dollar-per-ton values, which DOE used 
to be conservative. The time-series of annual values is presented for 
the proposed TSL in chapter 14 of the NOPR TSD.

 Table V.78--Present Value of NOX Emissions Reduction for CRE Shipped in
                                2028-2057
------------------------------------------------------------------------
                TSL                  3% Discount rate   7% Discount rate
------------------------------------------------------------------------
                                               million [2022$]
------------------------------------------------------------------------
1.................................              1,597                623
2.................................              2,721              1,061
3.................................              2,855              1,114
4.................................              4,322              1,686
5.................................              4,834              1,885
6.................................              5,257              2,048
------------------------------------------------------------------------


 Table V.79--Present Value of SO2 Emissions Reduction for CRE Shipped in
                                2028-2057
------------------------------------------------------------------------
                TSL                  3% Discount rate   7% Discount rate
------------------------------------------------------------------------
                                               million [2022$]
                                   -------------------------------------
1.................................                145                366
2.................................                247                624

[[Page 70289]]

 
3.................................                260                655
4.................................                393                992
5.................................                439               1109
6.................................                478               1206
------------------------------------------------------------------------

    Not all the public health and environmental benefits from the 
reduction of greenhouse gases, NOX, and SO2 are 
captured in the values above, and additional unquantified benefits from 
the reductions of those pollutants as well as from the reduction of 
direct PM and other co-pollutants may be significant. DOE has not 
included monetary benefits of the reduction of Hg emissions because the 
amount of reduction is very small.
7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) No other factors were considered in this 
analysis.
8. Summary of Economic Impacts
    Table V.80 presents the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced GHG 
and NOX and SO2 emissions to the NPV of consumer 
benefits calculated for each TSL considered in this rulemaking. The 
consumer benefits are domestic U.S. monetary savings that occur as a 
result of purchasing the covered equipment, and are measured for the 
lifetime of equipment shipped in 2028-2057. The climate benefits 
associated with reduced GHG emissions resulting from the adopted 
standards are global benefits, and are also calculated based on the 
lifetime of CRE shipped in 2028-2057.

                              Table V.80--Consumer NPV Combined with Present Value of Climate Benefits and Health Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Category                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..................................             6.6             9.8             9.8            14.6            13.8            -9.2
3% Average SC-GHG case..................................             7.4            11.1            11.2            16.6            16.1            -6.7
2.5% Average SC-GHG case................................             7.9            12.0            12.1            18.1            17.7            -5.0
3% 95th percentile SC-GHG case..........................             9.3            14.4            14.7            21.9            22.0            -0.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..................................             2.8             4.1             4.1             6.0             5.5            -6.7
3% Average SC-GHG case..................................             3.6             5.4             5.4             8.0             7.7            -4.2
2.5% Average SC-GHG case................................             4.1             6.3             6.4             9.5             9.4            -2.5
3% 95th percentile SC-GHG case..........................             5.5             8.7             8.9            13.3            13.7             2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered equipment 
must be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(A)) In determining whether a standard is economically 
justified, the Secretary must determine whether the benefits of the 
standard exceed its burdens by, to the greatest extent practicable, 
considering the seven statutory factors discussed previously. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)) The new or amended 
standard must also result in significant conservation of energy. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
    For this NOPR, DOE considered the impacts of new and amended 
standards for CRE at each TSL, beginning with the maximum 
technologically feasible level, to determine whether that level was 
economically justified. Where the max-tech level was not justified, DOE 
then considered the next most efficient level and undertook the same 
evaluation until it reached the highest efficiency level that is both 
technologically feasible and economically justified and saves a 
significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary of the results of 
DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements. There is evidence that consumers 
undervalue future energy savings as a result of (1) a lack of 
information; (2) a lack of sufficient salience of the long-term or 
aggregate benefits; (3) a lack of sufficient savings to warrant 
delaying or altering purchases; (4) excessive focus on the short term, 
in the form of inconsistent weighting of future energy cost savings 
relative to available returns on other investments; (5) computational 
or other difficulties associated with the evaluation of relevant 
tradeoffs; and (6) a divergence in incentives (for example, between 
renters and owners, or builders and purchasers). Having less than 
perfect foresight and a high degree of uncertainty about the future, 
consumers may trade off these types of investments at a higher-than-
expected rate between

[[Page 70290]]

current consumption and uncertain future energy cost savings.
1. Benefits and Burdens of TSLs Considered for CRE Standards
    Table V.81 and table V.82 summarize the quantitative impacts 
estimated for each TSL for CRE. The national impacts are measured over 
the lifetime of CRE purchased in the 30-year period that begins in the 
anticipated year of compliance with new and amended standards (2028-
2057). The energy savings, emissions reductions, and value of emissions 
reductions refer to full-fuel-cycle results. The efficiency levels 
contained in each TSL are described in section V.A of this document.

                                        Table V.81--Summary of Analytical Results for CRE TSLs: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Category                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Cumulative FFC National Energy Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quads...................................................            1.03            1.75            1.83            2.78            3.11            3.38
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Cumulative FFC Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............................            18.4            31.4            33.0            49.9            55.8            60.7
CH4 (thousand tons).....................................             156             266             279             422             472             514
N2O (thousand tons).....................................            0.18            0.31            0.32            0.49            0.54            0.59
NOX (thousand tons).....................................            34.4            58.6            61.5            93.1             104             113
SO2 (thousand tons).....................................            5.64            9.60            10.1            15.3            17.1            18.6
Hg (tons)...............................................            0.04            0.07            0.07            0.10            0.12            0.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Present Value of Benefits and Costs (3% discount rate, billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................            5.28            8.03            8.38            12.6            12.8            11.2
Climate Benefits *......................................            1.00            1.71            1.79            2.71            3.04            3.30
Health Benefits **......................................            1.96            3.34            3.51            5.31            5.94            6.46
                                                         -----------------------------------------------------------------------------------------------
    Total Benefits[dagger]..............................            8.25            13.1            13.7            20.7            21.8            21.0
Consumer Incremental Equipment Costs[Dagger]............            0.89            2.02            2.51            4.05            5.74            27.7
                                                         -----------------------------------------------------------------------------------------------
    Consumer Net Benefits...............................            4.39            6.01            5.87            8.59            7.10           -16.5
    Total Net Benefits..................................            7.36            11.1            11.2            16.6            16.1           -6.72
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Present Value of Benefits and Costs (7% discount rate, billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................            2.28            3.47            3.62            5.46            5.55            4.84
Climate Benefits *......................................            1.00            1.71            1.79            2.71            3.04            3.30
Health Benefits **......................................            0.77            1.31            1.37            2.08            2.32            2.53
                                                         -----------------------------------------------------------------------------------------------
    Total Benefits[dagger]..............................            4.05            6.49            6.79            10.3            10.9            10.7
Consumer Incremental Equipment Costs[Dagger]............            0.48            1.08            1.35            2.22            3.17            14.9
                                                         -----------------------------------------------------------------------------------------------
    Consumer Net Benefits...............................            1.80            2.38            2.27            3.24            2.38           -10.1
                                                         -----------------------------------------------------------------------------------------------
    Total Net Benefits..................................            3.58            5.40            5.44            8.03            7.74           -4.24
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE shipped in 2028--2057. These results include benefits to consumers which accrue
  after 2057 from the equipment shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4 and SC-N2O. Together, these represent the global SC-GHG. For
  presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3-percent discount rate are shown; however, DOE
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates. To monetize the benefits of
  reducing GHG emissions, this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and
  Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5 precursor
  health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health
  benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of
  this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent
  and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate.
[Dagger] Costs include incremental equipment costs as well as installation costs.


                                      Table V.82--Summary of Analytical Results: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Category                      TSL 1 *            TSL 2 *            TSL 3 *            TSL 4 *            TSL 5 *            TSL 6 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No-new-          3,274.2 to         3,241.9 to         3,224.4 to         3,182.5 to         3,127.0 to         2,985.9 to
 standards case INPV = 3,286.4).......            3,290.8            3,279.6            3,271.4            3,269.6            3,255.5            3,529.9
Industry NPV (% change)...............       (0.4) to 0.1     (1.4) to (0.2)     (1.9) to (0.5)     (3.2) to (0.5)     (4.8) to (0.9)       (9.1) to 7.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 70291]]

 
                                                          Consumer Average LCC Savings (2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L...............................             $263.1             $263.1             $553.2             $672.5             $566.9             $566.9
CB.SC.M...............................              111.3              111.3              199.3              208.7               44.9              -74.3
HCS.SC.L..............................                7.8                7.8                7.8                7.8                7.8             -147.3
HCS.SC.M..............................               94.1               94.1               84.9               94.1               84.9             -189.1
HCT.SC.I..............................               93.8                 NA                 NA               93.8               55.0             -306.5
HCT.SC.L..............................                 NA                 NA                 NA                 NA                 NA             -421.6
HCT.SC.M..............................                 NA                 NA                 NA                 NA                 NA             -551.4
HZO.RC.L..............................               46.6               46.6               46.6               46.6               46.6               46.6
HZO.RC.M..............................               40.3               40.3               40.3               40.3               40.3               40.3
HZO.SC.L..............................              160.9              193.6              193.6              971.2              841.9              841.9
HZO.SC.M..............................               95.0              117.4              117.4              226.5              199.9              199.9
SOC.RC.M..............................              986.3              986.3              929.5              986.3              929.5              -70.5
SOC.SC.M..............................              994.6            1,015.5            1,015.5            1,834.7              698.4              698.4
SVO.RC.M..............................              522.8              522.8              406.6              522.8              406.6              406.6
SVO.SC.M..............................              175.6              600.5              600.5              692.3              602.2              602.2
VCS.SC.H..............................              399.5              399.5              263.8              399.5              162.5               33.5
VCS.SC.I..............................              219.0              377.4              377.4              615.2              486.7              486.7
VCS.SC.L..............................              193.1              309.0              309.0              375.8              260.7              260.7
VCS.SC.M..............................              217.3              240.7              240.7              240.7              128.8                0.2
VCT.RC.L..............................              323.7              331.0              331.0              331.0              331.0           -2,934.7
VCT.RC.M..............................              308.7              308.7              133.6              308.7              133.6           -3,397.0
VCT.SC.H..............................                 NA                 NA                 NA                 NA                 NA           -1,496.8
VCT.SC.I..............................               15.8               77.5               77.5               77.5               77.5           -1,318.5
VCT.SC.L..............................               91.1              122.8              122.8              242.3              120.3           -1,093.5
VCT.SC.M..............................               18.8               18.8               18.8               82.5               82.5           -1,417.2
VOP.RC.L..............................              615.4            1,524.5            1,524.5            1,524.5            1,524.5            1,524.5
VOP.RC.M..............................              638.0              707.1              707.1              707.1              707.1              707.1
VOP.SC.M..............................              143.3              590.0              590.0            1,082.3              992.2              992.2
Shipment-Wtd Average *................              169.8              169.8              192.3              242.7              165.5             -649.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L...............................                1.0                1.0                1.1                2.0                2.2                2.2
CB.SC.M...............................                1.1                1.1                1.6                1.0                5.0                5.8
HCS.SC.L..............................                5.1                5.1                5.1                5.1                5.1               10.8
HCS.SC.M..............................                0.8                0.8                1.8                0.8                1.8               13.3
HCT.SC.I..............................                4.8                 NA                 NA                4.8                7.1               14.8
HCT.SC.L..............................                 NA                 NA                 NA                 NA                 NA               23.5
HCT.SC.M..............................                 NA                 NA                 NA                 NA                 NA               76.8
HZO.RC.L..............................               13.0               13.0               13.0               13.0               13.0               13.0
HZO.RC.M..............................               13.8               13.8               13.8               13.8               13.8               13.8
HZO.SC.L..............................                0.8                1.1                1.1                2.0                2.8                2.8
HZO.SC.M..............................                1.1                1.6                1.6                3.3                5.2                5.2
SOC.RC.M..............................                2.6                2.6                3.3                2.6                3.3               15.9
SOC.SC.M..............................                0.1                1.1                1.1                2.1                5.4                5.4
SVO.RC.M..............................                4.8                4.8                7.3                4.8                7.3                7.3
SVO.SC.M..............................                1.2                2.7                2.7                4.1                4.3                4.3
VCS.SC.H..............................                0.2                0.2                1.8                0.2                3.7                4.4
VCS.SC.I..............................                0.4                1.4                1.4                3.1                3.4                3.4
VCS.SC.L..............................                0.4                1.5                1.5                2.7                3.2                3.2
VCS.SC.M..............................                0.4                1.4                1.4                1.4                4.1                5.0
VCT.RC.L..............................                6.2                6.4                6.4                6.4                6.4               52.2
VCT.RC.M..............................                6.5                6.5               10.9                6.5               10.9               93.9
VCT.SC.H..............................                 NA                 NA                 NA                 NA                 NA               43.0
VCT.SC.I..............................                4.6                8.3                8.3                8.3                8.3               35.0
VCT.SC.L..............................                2.0                2.6                2.6                5.3                5.8               18.5
VCT.SC.M..............................                3.8                3.8                3.8                7.6                7.6               45.2
VOP.RC.L..............................                4.3                3.6                3.6                3.6                3.6                3.6
VOP.RC.M..............................                4.1                5.7                5.7                5.7                5.7                5.7
VOP.SC.M..............................                2.1                2.6                2.6                3.4                3.6                3.6
Shipment-Wtd Average *................                2.2                2.2                3.1                4.1                5.5               23.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
CB.SC.L...............................                0.0                0.0                0.0                0.2                1.3                1.3
CB.SC.M...............................                0.0                0.0                3.3                0.0               45.9               73.7
HCS.SC.L..............................               22.2               22.2               22.2               22.2               22.2               96.1
HCS.SC.M..............................                0.0                0.0                4.9                0.0                4.9               99.1
HCT.SC.I..............................               15.0                 NA                 NA               15.0               32.5               85.8
HCT.SC.L..............................                 NA                 NA                 NA                 NA                 NA               90.5
HCT.SC.M..............................                 NA                 NA                 NA                 NA                 NA               91.4
HZO.RC.L..............................                7.8                7.8                7.8                7.8                7.8                7.8
HZO.RC.M..............................               10.8               10.8               10.8               10.8               10.8               10.8
HZO.SC.L..............................                0.0                0.0                0.0                0.2                0.9                0.9
HZO.SC.M..............................                0.0                0.2                0.2                6.8               14.8               14.8
SOC.RC.M..............................                0.0                0.0                1.4                0.0                1.4               70.9
SOC.SC.M..............................                0.0                0.9                0.9                0.0               25.6               25.6
SVO.RC.M..............................                0.0                0.0               18.4                0.0               18.4               18.4
SVO.SC.M..............................                0.0                0.1                0.1                4.6               11.0               11.0
VCS.SC.H..............................                0.0                0.0               18.4                0.0               31.6               52.8

[[Page 70292]]

 
VCS.SC.I..............................                0.0                0.0                0.0                3.6                8.9                8.9
VCS.SC.L..............................                0.0                0.2                0.2                4.3               17.1               17.1
VCS.SC.M..............................                0.0                1.6                1.6                1.6               27.0               56.2
VCT.RC.L..............................                0.0                0.4                0.4                0.4                0.4               99.7
VCT.RC.M..............................                0.0                0.0               24.0                0.0               24.0              100.0
VCT.SC.H..............................                 NA                 NA                 NA                 NA                 NA               96.9
VCT.SC.I..............................                1.5                1.1                1.1                1.1                1.1              100.0
VCT.SC.L..............................                0.3                0.7                0.7               18.8               37.5               98.2
VCT.SC.M..............................                5.7                5.7                5.7               20.1               20.1              100.0
VOP.RC.L..............................                0.0                0.0                0.0                0.0                0.0                0.0
VOP.RC.M..............................                0.0                8.2                8.2                8.2                8.2                8.2
VOP.SC.M..............................                0.6                0.0                0.0                0.4                1.0                1.0
Shipment-Wtd Average *................                2.0                2.0                4.2                8.2               21.9               69.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The entry ``NA'' means not applicable because there is no change in the standard at certain TSLs.
* Weighted by shares of each equipment class in total projected shipments in 2022.

    DOE first considered TSL 6, which represents the max-tech 
efficiency levels for all equipment classes. The design options DOE 
analyzed at this level included the max-tech technologies for all 
equipment classes. For all open (i.e., equipment classes without doors) 
and transparent door equipment classes, DOE expects manufacturers would 
likely need to incorporate occupancy sensors with dimming capability. 
Open equipment classes would also likely require the use of night 
curtains. For equipment classes with transparent doors, DOE expects 
manufacturers would likely need to incorporate vacuum-insulated glass 
doors. For self-contained equipment classes, DOE expects manufacturers 
would need to incorporate EC evaporator and condenser fan motors, 
variable-speed compressors, and microchannel condensers. For closed, 
self-contained equipment classes using forced-air refrigeration 
systems, DOE expects manufacturers would also need to incorporate 
evaporator fan control.
    TSL 6 would save an estimated 3.38 quads of FFC energy over 30 
years of shipments (2028-2057), an amount DOE considers significant. 
Under TSL 6, the NPV of consumer benefits would be -$10.1 billion using 
a discount rate of 7 percent, and -$16.5 billion using a discount rate 
of 3 percent for the same 30-year period.
    The cumulative emissions reductions at TSL 6 are 60.7 Mt of 
CO2, 18.6 thousand tons of SO2, 113 thousand tons 
of NOX, 0.13 tons of Hg, 514 thousand tons of 
CH4, and 0.59 thousand tons of N2O for the same 
30-year period. The estimated monetary value of the climate benefits 
from reduced GHG emissions (associated with the average SC-GHG at a 3-
percent discount rate) at TSL 6 is $3.30 billion. The estimated 
monetary value of the health benefits from reduced SO2 and 
NOX emissions at TSL 6 is $2.53 billion using a 7-percent 
discount rate and $6.46 billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 6 is -$4.24 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 6 are -$6.72 billion. The estimated 
total NPV is provided for additional information; however, DOE 
primarily relies upon the NPV of consumer benefits when determining 
whether a proposed standard level is economically justified.
    At TSL 6, affected purchasers of CRE experience an average LCC 
savings ranging from -$3,397.0. to $1,524.5 with a payback period 
ranging from 94 years to 2.1 years. For example, for equipment classes 
VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and VCT.RC.M, which account for 
82% of annual CRE shipments, there is a net LCC savings of $0.171, -
$1,417.24, $260.731, -$1,093.53, and -$3,397.0 and a PBP of 5.04, 4539, 
3.2, 18.5, and 94 years, respectively. Overall, a majority of CRE 
purchasers (69.0 percent) would experience a net cost and the LCC 
savings would be negative for 13 of 28 analyzed equipment classes, 
representing 48% of annual shipments. Furthermore, the shipment-
weighted-average PBP is estimated at 23 years, which is generally 
higher than the average CRE lifetime.
    At TSL 6, the projected change in INPV ranges from a decrease of 
$300.4 million to an increase of $243.6 million, which corresponds to a 
decrease of 9.1 percent and an increase of 7.4 percent, respectively. 
DOE estimates that industry must invest $343.8 million to update 
equipment designs and source, qualify, and test high-efficiency 
components across their entire CRE portfolio. In 2027, a year before 
compliance is required, DOE estimates that approximately 2.2 percent of 
CRE shipments would meet the efficiency levels analyzed at TSL 6.
    At this level, nearly all manufacturers would need to spend notable 
development time incorporating the analyzed max-tech design options 
across their entire CRE portfolio. However, most design options 
analyzed involve more efficient components (e.g., high-efficiency 
motors) and would not necessitate significant capital investment. CRE 
equipment classes with transparent doors (i.e., HCT.SC.I, HCT.SC.L, 
HCT.SC.M, SOC.RC.M, SOC.SC.M, VCT.RC.L, VCT.RC.M, VCT.SC.H, VCT.SC.I, 
VCT.SC.L, and VCT.SC.M) account for approximately 43.8 percent of 
industry shipments in 2027. For the 71 manufacturers that offer CRE 
with transparent doors, implementing vacuum-insulated glass would 
require significant engineering resources and testing time to ensure 
adequate safety and durability of their equipment in all commercial 
settings. In interviews, most manufacturers raised concerns about 
standards requiring a widespread adoption of vacuum-insulated glass as 
it is still a relatively untested technology in the commercial 
refrigeration market. Manufacturers expressed concerns about the 
potential for reduced equipment reliability as vacuum-insulated glass 
can be relatively more fragile than existing glass door designs and 
there is very little industry experience with implementing vacuum-
insulated glass in CRE applications. DOE estimates that less than 2 
percent of shipments of CRE equipment classes with transparent doors 
would meet the max-tech efficiencies in 2027. In interviews, 
manufacturers emphasized that there are currently a limited number of 
suppliers of vacuum-insulated glass for CRE applications.
    Based on this analysis, the Secretary tentatively concludes that at 
TSL 6 for CRE, the benefits of energy savings,

[[Page 70293]]

emission reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the negative NPV of consumer 
benefits, economic burden on many CRE purchasers, and the impacts on 
manufacturers, including the conversion costs that could result in a 
reduction in INPV. For the manufacturers of CRE with transparent doors, 
implementing vacuum-insulated glass would require significant 
engineering resources and testing time to ensure adequate safety and 
durability of their equipment in all commercial settings. There is 
limited industry experience incorporating vacuum-insulated glass into 
CRE designs. And a majority of CRE purchasers (69.0 percent) would 
experience a net cost and the average LCC savings would be negative. 
Consequently, the Secretary has tentatively concluded that TSL 6 is not 
economically justified.
    DOE then considered TSL 5, which represents the highest efficiency 
level with positive LCC savings for each equipment class. For 
approximately half of the classes, this TSL represents efficiency 
levels less than max-tech. For most open (i.e., equipment classes 
without doors) and transparent door equipment classes, DOE expects 
manufacturers would likely need to incorporate occupancy sensors with 
dimming capability. Open equipment classes would also likely require 
the use of night curtains. For most equipment classes with transparent 
doors, DOE expects manufacturers would need to incorporate triple-pane, 
krypton-filled glass doors or vacuum-insulated glass doors. For self-
contained equipment classes, DOE expects manufacturers would need to 
incorporate EC evaporator and condenser fan motors and may require 
microchannel condensers and variable-speed compressors. For closed, 
self-contained equipment classes using forced-air refrigeration 
systems, DOE expects manufacturers would also need to incorporate 
evaporator fan control.
    TSL 5 would save an estimated 3.11 quads of full fuel cycle energy 
over 30 years of shipments (2028 to 2057), an amount DOE considers 
significant. Under TSL 5, the NPV of consumer benefit would be $2.38 
billion using a discount rate of 7 percent, and $7.10 billion using a 
discount rate of 3 percent.
    The cumulative emissions reductions at TSL 5 are 55.8 Mt of 
CO2, 17.1 thousand tons of SO2, 104 thousand tons 
of NOX, 0.12 tons of Hg, 472 thousand tons of 
CH4, and 0.54 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 5 is 3.04 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 5 is $2.32 billion using a 7-percent discount rate and $5.94 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 5 is $7.74 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 5 is $16.1 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 5, affected purchasers for each CRE equipment class 
experience an average LCC savings ranging from $7.77 to $1,524.52 with 
a payback period ranging from 1.765 years to 13.8 years. For example, 
for equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, VCT.SC.L, and 
VCT.RC.M, which account for 82% of annual CRE shipments, there is a net 
LCC savings of $128.91, $82.53, $260.73, $120.34,1 and $133.625 and a 
PBP of 4.1, 7.6, 3.2, 5.8, and 10.9 years, respectively. Overall, 
approximately 78 percent of affected CRE purchasers would experience a 
net benefit or not be affected at TSL 5. Furthermore, the estimated 
shipment-weighted-average LCC savings is $165.52 and PBP is 5.5 years, 
which is lower than the average CRE lifetime.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$159.3 million to a decrease of $30.9 million, which correspond to 
decreases of 4.8 percent and 0.9 percent, respectively. DOE estimates 
that industry must invest $226.4 million to comply with standards set 
at TSL 5. In 2027, the year before compliance is required, DOE 
estimates that approximately 10.8 percent of CRE shipments would meet 
the efficiency levels analyzed at TSL 5. Similar to TSL 6, DOE expects 
manufacturers would spend development time updating equipment designs 
to incorporate high-efficiency components. However, at this level, DOE 
expects that most manufacturers of CRE with transparent doors could 
meet the TSL 5 efficiencies without implementing vacuum-insulated glass 
doors. Of the 11 directly analyzed transparent door equipment classes, 
only the SOC.SC.M equipment class would likely require vacuum-insulated 
glass doors to meet the TSL 5 efficiency levels. SOC.SC.M accounts for 
approximately 0.4 percent of analyzed industry shipments in 2027.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has tentatively concluded that at a standard set 
at TSL 5 for CRE would be economically justified. At this TSL, the 
average LCC savings for all affected purchasers is positive. An 
estimated 67.1 percent of purchasers experience a net benefit, while 
21.9 percent of purchasers experience a net LCC cost. The FFC national 
energy savings are significant and the NPV of consumer benefits is 
positive using both a 3-percent and 7-percent discount rate. Notably, 
the benefits to consumers vastly outweigh the cost to manufacturers. At 
TSL 5, the NPV of consumer benefits, even measured at the more 
conservative discount rate of 7 percent is over 14 times higher than 
the maximum estimated manufacturers' loss in INPV. The standard levels 
at TSL 5 are economically justified even without weighing the estimated 
monetary value of emissions reductions. When those emissions reductions 
are included--representing $3.04 billion in climate benefits 
(associated with the average SC-GHG at a 3-percent discount rate), and 
$5.94 billion (using a 3-percent discount rate) or $2.32 billion (using 
a 7-percent discount rate) in health benefits--the rationale becomes 
stronger still.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to the statute. 86 FR 70892, 70908. 
Although DOE has not conducted a comparative analysis to select the 
proposed energy conservation standards, DOE notes that TSL 5 represents 
the highest efficiency level for each equipment class with positive LCC 
savings for each equipment class, and a considerably lower reduction in 
INPV, and positive consumer NPV compared to TSL 6.
    Although DOE considered proposed new and amended standard levels 
for CRE by grouping the efficiency levels for each equipment class into 
TSLs, DOE evaluates all analyzed efficiency levels in its analysis. For 
all equipment classes, the proposed standard level

[[Page 70294]]

represents the maximum energy savings that does not result in negative 
LCC savings. The ELs at the proposed standard level result in positive 
LCC savings for all equipment classes, significantly reduce the number 
of purchasers experiencing a net cost, and reduce the decrease in INPV 
and conversion costs to the point where DOE has tentatively concluded 
they are economically justified, as discussed for TSL 5 in the 
preceding paragraphs. As previously discussed, setting standards at 
max-tech (TSL 6) would result in negative LCC savings for 13 of the 
analyzed equipment classes, representing 48 percent of the estimated 
CRE shipments.
    Therefore, based on the previous considerations, DOE proposes to 
adopt the energy conservation standards for CRE at TSL 5. The proposed 
new and amended energy conservation standards for CRE, which are 
expressed as kWh/day, are shown in table V.83.

  Table V.83--Proposed New or Amended Energy Conservation Standards for
                                   CRE
------------------------------------------------------------------------
                                               Maximum daily energy
            Equipment class                   consumption (kWh/day)
------------------------------------------------------------------------
VOP.RC.H...............................  0.31 x TDA + 1.99.
VOP.RC.M...............................  0.56 x TDA + 3.57.
VOP.RC.L...............................  2.04 x TDA + 6.36.
VOP.RC.I...............................  2.59 x TDA + 8.08.
SVO.RC.H...............................  0.32 x TDA + 1.55.
SVO.RC.M...............................  0.58 x TDA + 2.79.
SVO.RC.L...............................  2.04 x TDA + 6.36.
SVO.RC.I...............................  2.59 x TDA + 8.08.
HZO.RC.H...............................  0.19 x TDA + 1.56.
HZO.RC.M...............................  0.34 x TDA + 2.81.
HZO.RC.L...............................  0.54 x TDA + 6.81.
HZO.RC.I...............................  0.69 x TDA + 8.64.
VCT.RC.H...............................  0.07 x TDA + 0.97.
VCT.RC.M...............................  0.134 x TDA + 1.74.
VCT.RC.L...............................  0.47 x TDA + 2.51.
VCT.RC.I...............................  0.56 x TDA + 2.97.
HCT.RC.M...............................  0.16 x TDA + 0.13.
HCT.RC.L...............................  0.34 x TDA + 0.26.
HCT.RC.I...............................  0.38 x TDA + 0.29.
VCS.RC.H...............................  0.06 x V + 0.14.
VCS.RC.M...............................  0.1 x V + 0.26.
VCS.RC.L...............................  0.21 x V + 0.54.
VCS.RC.I...............................  0.25 x V + 0.63.
HCS.RC.M...............................  0.1 x V + 0.26.
HCS.RC.L...............................  0.21 x V + 0.54.
HCS.RC.I...............................  0.25 x V + 0.63.
SOC.RC.H...............................  0.22 x TDA + 0.05.
SOC.RC.M...............................  0.39 x TDA + 0.1.
SOC.RC.L...............................  0.83 x TDA + 0.2.
SOC.RC.I...............................  1.04 x TDA + 0.25.
CB.RC.M................................  0.03 x V + 0.39.
CB.RC.L................................  0.13 x V + 1.37.
VOP.SC.H...............................  0.69 x TDA + 1.94.
VOP.SC.M...............................  1.25 x TDA + 3.48.
VOP.SC.L...............................  3.29 x TDA + 9.15.
VOP.SC.I...............................  4.18 x TDA + 11.63.
SVO.SC.H...............................  0.65 x TDA + 1.77.
SVO.SC.M...............................  1.18 x TDA + 3.18.
SVO.SC.L...............................  3.25 x TDA + 8.78.
SVO.SC.I...............................  4.13 x TDA + 11.16.
HZO.SC.H...............................  0.27 x TDA + 2.06.
HZO.SC.M...............................  0.48 x TDA + 3.71.
HZO.SC.L...............................  1.48 x TDA + 5.5.
HZO.SC.I...............................  1.97 x TDA + 7.34.
VCT.SC.H...............................  0.053 x V + 0.85.
VCT.SC.M...............................  0.054 x V + 0.86.
VCT.SC.L...............................  0.234 x V + 2.38.
VCT.SC.I...............................  0.6 x TDA + 3.2.
HCT.SC.M...............................  0.06 x V + 0.37.
HCT.SC.L...............................  0.08 x V + 1.23.
HCT.SC.I...............................  0.34 x TDA + 0.43.
VCS.SC.H...............................  0.0082 x V + 0.21.
VCS.SC.M...............................  0.02 x V + 0.54.
VCS.SC.L...............................  0.155 x V + 0.97.
VCS.SC.I...............................  0.25 x V + 0.88.
HCS.SC.M...............................  0.022 x V + 0.41.
HCS.SC.L...............................  0.043 x V + 0.81.
HCS.SC.I...............................  0.31 x V + 0.81.
SOC.SC.H...............................  0.17 x TDA + 0.33.
SOC.SC.M...............................  0.304 x TDA + 0.59.
SOC.SC.L...............................  1.1 x TDA + 2.1.
SOC.SC.I...............................  1.53 x TDA + 0.36.
CB.SC.M................................  0.049 x V + 0.54.
CB.SC.L................................  0.180 x V + 1.92.
PD.SC.M................................  0.11 x V + 0.81.
VCT.RC.M.PT............................  0.139 x TDA + 1.81.
VCT.SC.M.PT............................  0.056 x V + 0.86.
VCT.SC.L.PT............................  0.243 x V + 2.47.
VCS.SC.M.PT............................  0.02 x V + 0.56.
VCS.SC.L.PT............................  0.161 x V + 1.01.
VCT.RC.M.SD............................  0.143 x TDA + 1.86.
VCT.SC.M.SD............................  0.058 x V + 0.86.
VCT.RC.M.SDPT..........................  0.149 x TDA + 1.93.
VCT.SC.M.SDPT..........................  0.060 x V + 0.86.
VCT.RC.M.RI............................  0.140 x TDA + 1.83.
VCT.SC.M.RI............................  0.057 x V + 0.86.
VCS.SC.M.RI............................  0.02 x V + 0.57.
VCS.SC.L.RI............................  0.162 x V + 1.02.
VCT.RC.M.RT............................  0.146 x TDA + 1.9.
VCT.SC.M.RT............................  0.059 x V + 0.86.
VCS.SC.M.RT............................  0.02 x V + 0.59.
VCS.SC.L.RT............................  0.169 x V + 1.06.
HCS.SC.L.FA............................  0.052 x V + 0.97.
------------------------------------------------------------------------


------------------------------------------------------------------------
      Unique design characteristic                 Abbreviation
------------------------------------------------------------------------
Pass-through Door.......................  PT.
Sliding Door............................  SD.
Sliding and Pass-through Doors..........  SDPT.
Roll-in Door............................  RI.
Roll-through Door.......................  RT.
Forced Air Evaporator...................  FA.
------------------------------------------------------------------------

2. Annualized Benefits and Costs of the Proposed Standards
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022$) of the 
benefits from operating equipment that meet the proposed standards 
(consisting primarily of operating cost savings from using less energy, 
minus increases in equipment purchase costs), and (2) the annualized 
monetary value of the climate and health benefits from emission 
reductions.
    Table V.84 shows the annualized values for CRE under TSL 5, 
expressed in 2022$. The results under the primary estimate are as 
follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for CRE is $335 million per year in increased 
equipment costs, while the estimated annual benefits are $586 million 
from reduced equipment operating costs, $174 million from climate 
benefits, and $246 million from health benefits. In this case, the net 
benefit amounts to $671 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards for CRE is $330 million per 
year in increased equipment costs, while the estimated annual benefits 
are $738 million in reduced operating costs, $174 million from climate 
benefits, and $341 million from health benefits. In this case, the net 
benefit amounts to $923 million per year.

       Table V.84--Annualized Benefits and Costs of Proposed Energy Conservation Standards for CRE (TSL 5)
----------------------------------------------------------------------------------------------------------------
                                                                                Million 2022$/year
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................             738             714             774

[[Page 70295]]

 
Climate Benefits *..............................................             174             173             179
Health Benefits **..............................................             341             340             350
                                                                 -----------------------------------------------
    Total Benefits [dagger].....................................            1253            1227            1302
Consumer Incremental Equipment Costs............................             330             338             328
                                                                 -----------------------------------------------
    Net Benefits................................................             923             890             974
                                                                 -----------------------------------------------
Change in Producer Cashflow (INPV [Dagger][Dagger]).............        (17)-(3)        (17)-(3)        (17)-(3)
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................             586             569             613
Climate Benefits * (3% discount rate)...........................             174             173             179
Health Benefits **..............................................             246             245             251
                                                                 -----------------------------------------------
    Total Benefits [dagger].....................................            1006             987            1043
Consumer Incremental Equipment Costs............................             335             342             334
                                                                 -----------------------------------------------
    Net Benefits................................................             671             646             709
                                                                 -----------------------------------------------
Change in Producer Cashflow (INPV[Dagger][Dagger])..............        (17)-(3)        (17)-(3)        (17)-(3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with CRE shipped in 2028-2057. These include
  consumer, climate, and health benefits that accrue after 2057 from the equipment shipped in 2028-2057. The
  Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
  AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
  incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the
  Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to
  derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the
  Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
  at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate, and it
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
  impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes
  all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the
  manufacturer to manufacture the equipment and ending with the increase in price experienced by the consumer.
  DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J
  of this document. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions
  regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is
  the rule's expected impact on the INPV. The change in INPV is the present value of all changes in industry
  cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. The
  annualized change in INPV is calculated using the industry weighted average cost of capital value of 10.0
  percent that is estimated in the MIA (see chapter 12 of the NOPR TSD for a complete description of the
  industry weighted average cost of capital). For commercial refrigeration equipment, those values are -$16.65
  million to -$3.23 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is
  economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV
  under two manufacturer markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer
  markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation
  of Operating Profit scenario, where DOE assumed manufacturers would not be able to increase per-unit operating
  profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated
  annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J of this
  document, to provide additional context for assessing the estimated impacts of this proposal to society,
  including potential changes in production and consumption, which is consistent with OMB's Circular A-4 and
  E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this proposed
  rule, the annualized net benefits would range from $907 million to $920 million at 3-percent discount rate and
  would range from $655 million to $668 million at 7-percent discount rate. Parentheses () indicate negative
  values.

D. Reporting, Certification, and Sampling Plan

    Manufacturers, including importers, must use equipment-specific 
certification templates to certify compliance to DOE. For CRE, the 
certification template reflects the general certification requirements 
specified at 10 CFR 429.12 and the equipment-specific requirements 
specified at 10 CFR 429.42 DOE is not proposing to amend the equipment-
specific certification requirements for this equipment.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving 
Regulation and Regulatory Review,'' 76 FR 3821 (Jan.

[[Page 70296]]

21, 2011) and amended by E.O. 14094, ``Modernizing Regulatory Review,'' 
88 FR 21879 (April 11, 2023), requires agencies, to the extent 
permitted by law, to (1) propose or adopt a regulation only upon a 
reasoned determination that its benefits justify its costs (recognizing 
that some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. DOE 
emphasizes as well that E.O. 13563 requires agencies to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible. In its guidance, the 
Office of Information and Regulatory Affairs (``OIRA'') in OMB has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
this proposed regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 
12866, DOE has provided to OIRA an assessment, including the underlying 
analysis, of benefits and costs anticipated from the proposed 
regulatory action, together with, to the extent feasible, a 
quantification of those costs; and an assessment, including the 
underlying analysis, of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation, and an 
explanation as to why the planned regulatory action is preferable to 
the identified potential alternatives. These assessments are summarized 
in this preamble and further detail can be found in the technical 
support document for this rulemaking.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
for any rule that by law must be proposed for public comment, unless 
the agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by E.O. 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's website (www.energy.gov/gc/office-general-counsel). DOE has 
prepared the following IRFA for the equipment that are the subject of 
this proposed rulemaking.
    For manufacturers of CRE, the SBA has set a size threshold, which 
defines those entities classified as ``small businesses'' for the 
purposes of the statute. DOE used the SBA's small business size 
standards to determine whether any small entities would be subject to 
the requirements of the rule. (See 13 CFR part 121.) The size standards 
are listed by North American Industry Classification System (``NAICS'') 
code and industry description and are available at www.sba.gov/document/support--table-size-standards. Manufacturing of CRE is 
classified under NAICS 333415, ``Air-Conditioning and Warm Air Heating 
Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' The SBA sets a threshold of 1,250 employees or fewer 
for an entity to be considered as a small business for this category.
1. Description of Reasons Why Action Is Being Considered
    DOE is proposing new and amended energy conservation standards for 
CRE. EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, part 
C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. This equipment 
includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E)) EPCA 
established standards for certain categories of CRE (42 U.S.C. 
6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to 
determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)) 
On March 28, 2014, DOE published a final rule that prescribed the 
current energy conservation standards for CRE manufactured on and after 
March 27, 2017. 79 FR 17725. EPCA provides that, not later than 6 years 
after the issuance of any final rule establishing or amending a 
standard, DOE must publish either a notice of determination that 
standards for the equipment do not need to be amended, or a NOPR 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(m)(1)) This proposed rulemaking is in accordance with DOE's 
obligations under EPCA.
2. Objectives of, and Legal Basis for, Rule
    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, part 
C of EPCA, added by Public Law 95-619, title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. EPCA established 
standards for certain categories of CRE (42 U.S.C. 6313(c)(2)-(4)) and 
directs DOE to conduct future rulemakings to determine whether to amend 
these standards. (42 U.S.C. 6313(c)(6)(B))
    EPCA further provides that, not later than 6 years after the 
issuance of any final rule establishing or amending a standard, DOE 
must publish either a notice of determination that standards for the 
equipment do not need to be amended, or a NOPR including new proposed 
energy conservation standards (proceeding to a final rule, as 
appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1))
    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C.

[[Page 70297]]

6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316; 42 U.S.C. 6296).
3. Description on Estimated Number of Small Entities Regulated
    DOE reviewed this proposed rule under the provisions of the 
Regulatory Flexibility Act and the procedures and policies published on 
February 19, 2003. 68 FR 7990. DOE conducted a market assessment to 
identify potential small manufacturers of CRE. DOE began its assessment 
by compiling an equipment database of CRE models available in the 
United States. To develop a comprehensive equipment database of CRE 
basic models, DOE reviewed its Compliance Certification Database 
(``CCD'') \110\ supplemented by information from California Energy 
Commission's Modernized Appliance Efficiency Database System,\111\ 
individual company websites, and prior CRE rulemakings. To identify 
chef bases, griddle stands, and high-temperature units, DOE reviewed 
publicly available data from web scraping retail websites. DOE then 
reviewed the comprehensive equipment database to identify the OEMs of 
the CRE models identified. DOE consulted publicly available data, such 
as manufacturer websites, manufacturer specifications and equipment 
literature, import/export logs (e.g., bills of lading from Panjiva 
\112\), and basic model numbers, to identify OEMs of CRE. DOE further 
relied on public data and subscription-based market research tools 
(e.g., Dun & Bradstreet reports \113\) to determine company, location, 
headcount, and annual revenue. DOE also asked industry representatives 
if they were aware of any small manufacturers during manufacturer 
interviews. DOE screened out companies that do not offer equipment 
covered by this rulemaking, do not meet the SBA's definition of a 
``small business,'' or are foreign-owned and operated.
---------------------------------------------------------------------------

    \110\ U.S. Department of Energy's Compliance Certification 
Database is available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*. (last accessed April 13, 2023.)
    \111\ California Energy Commission's Modernized Appliance 
Efficiency Database is available at: https://
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx. 
(last accessed February 2, 2022.)
    \112\ S&P Global. Panjiva Market Intelligence. panjiva.com/import-export/United-States. (last accessed April 13, 2023.)
    \113\ D&B Hoover's subscription login is accessible at: 
app.dnbhoovers.com. (last accessed April 13, 2023.)
---------------------------------------------------------------------------

    DOE initially identified 83 OEMs that sell CRE in the United 
States. Of the 83 OEMs identified, DOE tentatively determined that 25 
companies qualify as small businesses and are not foreign-owned and 
operated.
4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    Of the 25 small, domestic CRE OEMs, 24 OEMs manufacture vertical 
equipment classes (i.e., vertical open (``VOP''), vertical closed 
transparent (``VCT''), or vertical closed solid (``VCS'')), 8 OEMs 
manufacture semi-vertical open (``SVO'') equipment classes (i.e., 
medium temperature remote condensing (``RC''; ``SVO.RC.M'') or medium 
temperature self-contained (``SC''; ``SVO.SC.M'')), 7 OEMs manufacture 
service-over-counter (``SOC'') equipment classes (i.e., SOC.RC.M or 
SOC.SC.M), 10 OEMs manufacture horizontal equipment classes (i.e., 
horizontal open (``HZO''), horizontal closed transparent (``HCT''), or 
horizontal closed solid (``HCS'')), and 3 OEMs manufacture chef bases.
    For the purposes of this IRFA, DOE assumed that the industry 
capital conversion costs would be evenly distributed across the OEMs 
that manufacture each equipment class to avoid underestimating the 
potential capital investments small manufacturers may incur as a result 
of the proposed standard. As discussed in section IV.J.2.c of this 
document, DOE scaled the industry capital conversion costs by the 
number of OEMs offering models of the respective equipment class. For 
product conversion costs, DOE assumed all small businesses would choose 
to redesign or replace models that do not meet the proposed TSL 5 
efficiency levels. DOE used basic model counts to scale the industry 
product conversion costs, as discussed in section IV.J.2.c of this 
document. DOE expects manufacturers would have to incorporate various 
high-efficiency components to meet the TSL 5 efficiencies across their 
CRE offerings. For certain transparent door equipment classes, capital 
conversion costs may be necessary to incorporate improved door designs. 
For self-contained equipment classes, many manufacturers would likely 
have to incorporate VSCs into CRE designs. To incorporate VSCs, which 
could be larger than existing single-speed compressors, manufacturers 
may need new tools for the baseplate. Product conversion costs may be 
necessary to qualify, source, and test new high-efficiency components 
(e.g., electronically commutated motors).
    Out of the 24 small OEMs of vertical equipment classes, DOE expects 
23 OEMs would incur some conversion costs to redesign models that do 
not currently the proposed efficiency levels. The remaining small OEM 
would likely not incur conversion costs as a direct result of the 
proposed standard as all of their vertical CRE models currently meet or 
exceed the proposed levels. Vertical equipment classes account for 
approximately 90.1 percent of industry shipments in 2027. All the VOP 
and VCT equipment classes would likely require manufacturers to 
incorporate occupancy sensors to meet TSL 5. DOE further expects VOP 
equipment classes would also need to incorporate night curtains. DOE 
expects manufacturers of VOP.SC.M would likely also need to incorporate 
EC condenser fan motors, VSCs, and microchannel condensers. Some VCT 
equipment classes would likely need to incorporate triple pane glass 
with krypton fill. VCT.SC.M, and VCT.SC.L likely would further need to 
incorporate EC condenser fan motors and VSCs. For most VCS equipment 
classes, manufacturers would likely need to incorporate evaporator fan 
controls, EC evaporator fan motors, EC condenser fan motors, VSCs, and 
microchannel condensers.
    DOE expects all 8 small OEMs of semi-vertical equipment classes 
would incur some conversion costs to redesign models that do not 
currently meet the proposed efficiency levels. Semi-vertical equipment 
classes account for approximately 2.1 percent of industry shipments in 
2027. All semi-vertical equipment classes would likely need to 
incorporate occupancy sensors and night curtains. SVO.SC.M would also 
likely require EC evaporator fan motors, EC condenser fan motors, VSCs, 
and microchannel condensers.
    Out of the 7 small OEMs of service-over-counter equipment classes, 
DOE expects 6 OEMs would incur some conversion costs to redesign models 
that do not currently the proposed efficiency levels. The remaining 
small OEM would likely not incur conversion costs as a direct result of 
the proposed standard as all of their service-over-counter CRE models 
currently meet or exceed the proposed levels. Service-over-counter 
equipment classes account for approximately 0.5 percent of industry 
shipments in 2027. SOC.RC.M and SOC.SC.M would likely incorporate 
occupancy sensors. SOC.RC.M would also likely require triple pane glass 
doors with krypton fill. SOC.SC.M would also likely require VIG doors,

[[Page 70298]]

evaporator fan controls, EC evaporator fan motors, EC condenser fan 
motors, VSCs, and microchannel condensers.
    Out of the 10 small OEMs of horizontal equipment classes, DOE 
expects 9 OEMs would incur some conversion costs to redesign models 
that do not currently the proposed efficiency levels. The remaining 
small OEM would likely not incur conversion costs as a direct result of 
the proposed standard as all of their horizontal CRE models currently 
meet or exceed the proposed levels. Horizontal equipment classes 
account for approximately 5.9 percent of industry shipments in 2027. 
For HZO equipment classes, manufacturers would likely incorporate 
occupancy sensors. For HZO.SC.M and HZO.SC.L equipment classes, 
manufacturers would likely incorporate EC evaporator fan motors, EC 
condenser fan motors, VSCs, and microchannel condensers. DOE expects 
that HCT.SC.I would likely need to incorporate VSCs and occupancy 
sensors to meet TSL 5 levels. For HCS equipment classes, manufacturers 
would likely incorporate EC condenser fan motors. HCS.SC.M would also 
likely require evaporator fan controls and EC condenser fan motors.
    DOE expects all 3 small OEMs offering chef base equipment classes 
to incur some conversion costs to redesign models that do not meet 
efficiency levels at TSL 5. Chef base equipment classes account for 
approximately 1.4 percent of industry shipments in 2027. Manufacturers 
would likely incorporate EC evaporator fan motors, EC condenser fan 
motors, and VSCs for CB.SC.M. None of the small businesses offer 
CB.SC.L.
    Based on annual revenue estimates from market research tools (e.g., 
Dun & Bradstreet reports), the annual revenue of the small, domestic 
OEMs identified range from approximately $2.8 million to $448.6 
million, with an average annual revenue of approximately $112.9 
million. DOE estimates that conversion costs could range from $0.0 
million to $15.3 million, with the average per OEM conversion costs of 
$2.8 million. The estimated total conversion costs as a percent of 
company revenue over the 3-year conversion period range from 
approximately 0.0 percent to 9.6 percent, with an average of 1.7 
percent. See table VI.1 for additional details.

                                                  Table VI.1--Potential Small Business Impacts (TSL 5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Conversion
                                         Est.         Est. annual    costs as a %
              Company                 conversion      revenue ($     of conversion    Vertical        Semi-     Service-over-  Horizontal     Chef base
                                       costs ($        millions)        period                      vertical       counter
                                       millions)                     revenue** (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A.................................            0.25             2.8             3.0            X   ............  ............  ............  ............
B.................................            0.21             4.1             1.7            X   ............  ............  ............  ............
C.................................            1.58             5.5             9.6            X             X             X   ............  ............
D.................................            0.00             6.3             0.0  ............  ............  ............            X   ............
E.................................            2.41            10.8             7.4            X             X             X   ............  ............
F.................................            0.88            13.6             2.2            X   ............  ............            X   ............
G.................................            0.05            25.4             0.1            X   ............  ............  ............  ............
H.................................            0.22            26.9             0.3            X   ............  ............  ............  ............
I.................................            1.42            28.6             1.7            X             X   ............  ............  ............
J.................................            1.78            58.1             1.0            X   ............  ............  ............  ............
K.................................            0.77            71.9             0.4            X   ............  ............            X   ............
L.................................            0.26            74.9             0.1            X   ............  ............  ............  ............
M.................................            5.46            85.3             2.1            X   ............  ............            X   ............
N.................................            2.15            96.8             0.7            X   ............  ............  ............  ............
O.................................            7.35           110.3             2.2            X             X             X             X             X
P.................................           15.31           131.1             3.9            X             X             X             X   ............
Q.................................            5.70           142.3             1.3            X             X             X             X   ............
R.................................            0.24           143.1             0.1            X   ............  ............  ............  ............
S.................................           14.29           156.1             3.1            X   ............  ............            X             X
T.................................            2.35           156.3             0.5            X   ............  ............            X             X
U.................................            0.48           193.7             0.1            X   ............  ............  ............  ............
V.................................            0.63           212.5             0.1            X   ............  ............  ............  ............
W.................................            4.86           269.3             0.6            X             X             X             X   ............
X.................................            0.28           307.9             0.0            X   ............  ............  ............  ............
Y.................................            0.56           488.6             0.0            X             X             X   ............  ............
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The ``X'' indicates that the manufacturer offers CRE models of the respective equipment family.
** This column is calculated by dividing the estimated conversion costs by the revenue during the three year the conversion period: (Est. Conversion
  Costs) / [(Est. Annual Revenue) x 3 years].
*** All models of directly analyzed CRE equipment classes meet or exceed the proposed efficiency levels. Therefore, DOE tentatively does not expect this
  manufacturer would incur conversion costs as direct result of the rule, if the standards were finalized as proposed.

    DOE seeks comments, information, and data on the number of small 
businesses in the industry, the names of those small businesses, and 
their market shares by equipment class. DOE also requests comment on 
the potential impacts of the proposed standards on small manufacturers.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the proposed rule.
6. Significant Alternatives to the Rule
    The discussion in the previous section analyzes impacts on small 
businesses that would result from DOE's proposed rule, represented by 
TSL 5. In reviewing alternatives to the proposed rule, DOE examined 
energy conservation standards set at lower efficiency levels. While TSL 
1, TSL 2, TSL 3, and TSL 4 would reduce the impacts on small business 
manufacturers, it would come at the expense of a reduction in energy 
savings. TSL 1 achieves 67.0 percent lower energy savings compared to 
the energy savings at TSL 5. TSL 2 achieves 43.7 percent lower energy 
savings compared to the energy savings at TSL 5. TSL 3 achieves 41.0 
percent lower energy savings compared to the energy savings at TSL 5. 
TSL 4 achieves 10.6 percent lower energy savings as compared to the 
energy savings at TSL 5.
    Based on the presented discussion, establishing standards at TSL 5 
balances the benefits of the energy savings at TSL 5 with the potential 
burdens placed on

[[Page 70299]]

CRE manufacturers, including small business manufacturers. Accordingly, 
DOE does not propose one of the other TSLs considered in the analysis, 
or the other policy alternatives examined as part of the regulatory 
impact analysis and included in chapter 17 of the NOPR TSD.
    Additional compliance flexibilities may be available through other 
means. Manufacturers subject to DOE's energy efficiency standards may 
apply to DOE's Office of Hearings and Appeals for exception relief 
under certain circumstances. Manufacturers should refer to 10 CFR part 
430, subpart E, and 10 CFR part 1003 for additional details.

C. Review Under the Paperwork Reduction Act

    Manufacturers of CRE must certify to DOE that their equipment 
comply with any applicable energy conservation standards. In certifying 
compliance, manufacturers must test their equipment according to the 
DOE test procedures for CRE, including any amendments adopted for those 
test procedures. DOE has established regulations for the certification 
and recordkeeping requirements for all covered consumer equipment and 
commercial equipment, including CRE. (See generally 10 CFR part 429). 
The collection-of-information requirement for the certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (``PRA''). This requirement has been approved 
by OMB under OMB control number 1910-1400. Public reporting burden for 
the certification is estimated to average 35 hours per response, 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation in accordance with the 
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for rulemakings that establish energy 
conservation standards for consumer products or industrial equipment. 
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this 
proposed rulemaking qualifies for categorical exclusion B5.1 because it 
is a rulemaking that establishes energy conservation standards for 
consumer products or industrial equipment, none of the exceptions 
identified in categorical exclusion B5.1(b) apply, no extraordinary 
circumstances exist that require further environmental analysis, and it 
otherwise meets the requirements for application of a categorical 
exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review 
before issuing the final rule.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. The Executive order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the States and to carefully assess 
the necessity for such actions. The Executive order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that have federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735. DOE has examined this proposed rule and has 
tentatively determined that it would not have a substantial direct 
effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. EPCA governs 
and prescribes Federal preemption of State regulations as to energy 
conservation for the equipment that are the subject of this proposed 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (See 42 U.S.C. 
6316(a) and (b); 42 U.S.C. 6297) Therefore, no further action is 
required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' imposes on Federal agencies the general duty to 
adhere to the following requirements: (1) eliminate drafting errors and 
ambiguity, (2) write regulations to minimize litigation, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to ensure that the regulation: 
(1) clearly specifies the preemptive effect, if any, (2) clearly 
specifies any effect on existing Federal law or regulation, (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction, (4) specifies the retroactive 
effect, if any, (5) adequately defines key terms, and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, this proposed rule meets the 
relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C. 
1531). For a proposed regulatory action likely to result in a rule that 
may cause the expenditure by State, local, and Tribal governments, in 
the aggregate, or by the private sector of $100 million or more in any 
one year (adjusted annually for inflation), section 202 of UMRA 
requires a Federal agency to publish a written statement that estimates 
the resulting costs, benefits, and other effects on the national 
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal 
agency to develop an effective process to permit timely input by 
elected officers of State, local, and Tribal governments on a proposed 
``significant intergovernmental mandate,'' and requires an agency plan 
for giving notice and opportunity for timely input to potentially 
affected small governments before establishing any requirements that 
might significantly or uniquely affect them. On March 18, 1997, DOE 
published a statement of policy on its process for intergovernmental 
consultation under UMRA. 62 FR

[[Page 70300]]

12820. DOE's policy statement is also available at www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    Although this proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more in any one year by the private sector. Such expenditures may 
include: (1) investment in research and development and in capital 
expenditures by CRE manufacturers in the years between the final rule 
and the compliance date for the new standards and (2) incremental 
additional expenditures by consumers to purchase higher-efficiency CRE, 
starting at the compliance date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the proposed rule. (2 U.S.C. 1532(c)) The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of this NOPR and the TSD for this 
proposed rule respond to those requirements.
    Under section 205 of UMRA, DOE is obligated to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. (2 U.S.C. 1535(a)) DOE is required to select from those 
alternatives the most cost effective and least burdensome alternative 
that achieves the objectives of the proposed rule unless DOE publishes 
an explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 
6316(e)(1) and 42 U.S.C. 6295(m), this proposed rule would establish 
new and amended energy conservation standards for CRE that are designed 
to achieve the maximum improvement in energy efficiency that DOE has 
determined to be both technologically feasible and economically 
justified, as required by 42 U.S.C. 6316(e)(1) and 42 U.S.C. 
6295(o)(2)(A) and 6295(o)(3)(B). A full discussion of the alternatives 
considered by DOE is presented in chapter 17 of the TSD for this 
proposed rule.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This proposed rule would not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15, 
1988), DOE has determined that this proposed rule would not result in 
any takings that might require compensation under the Fifth Amendment 
to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this NOPR under the OMB and DOE guidelines and has concluded 
that it is consistent with applicable policies in those guidelines.

K. Review Under Executive Order 13211

    E.O. 13211, ``Actions Concerning Regulations That Significantly 
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22, 
2001), requires Federal agencies to prepare and submit to OIRA at OMB a 
Statement of Energy Effects for any proposed significant energy action. 
A ``significant energy action'' is defined as any action by an agency 
that promulgates or is expected to lead to promulgation of a final 
rule, and that (1) is a significant regulatory action under Executive 
Order 12866, or any successor order; and (2) is likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that this regulatory action, which 
proposes new and amended energy conservation standards for CRE, is not 
a significant energy action because the proposed standards are not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on this proposed rule.

L. Information Quality

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 70 FR 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared a report describing that peer 
review.\114\ Generation of this report involved a rigorous, formal, and 
documented evaluation using objective criteria and qualified and 
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the 
productivity and management effectiveness of programs and/or projects. 
Because available data, models, and technological understanding have 
changed since 2007, DOE has engaged

[[Page 70301]]

with the National Academy of Sciences to review DOE's analytical 
methodologies to ascertain whether modifications are needed to improve 
the Department's analyses. DOE is in the process of evaluating the 
resulting report.\115\
---------------------------------------------------------------------------

    \114\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last 
accessed May 22, 2023).
    \115\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

VII. Public Participation

    In response to the June 2022 Preliminary Analysis, DOE received a 
comment from NAMA requesting the Department to conduct an in person 
public meeting. NAMA commented that it is requesting an in person 
public meeting due to the webinar held on August 8, 2022, feeling 
rushed and to allow time for full dialogue on these important subjects. 
(NAMA, No. 37, p. 4)
    After carefully considering NAMA's request, the Department has 
decided to grant the request for an in-person public meeting. 
Consequently, DOE will be hosting an in-person public meeting in 
addition to the webinar. Please note that attendance will be limited 
for the in-person public meeting due to room size capacity limits.

A. Participation in the Public Meeting and Webinar

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this document. If 
you plan to attend the public meeting, you must notify the Appliance 
and Equipment Standards Program staff no later than November 1, 2023, 
either by phone at (202) 287-1445 or by email: 
[email protected]. Please note advance 
registration is required and capacity in the meeting room will be 
limited.
    Please note that foreign nationals participating in the public 
meeting are subject to advance security screening procedures which 
require advance notice prior to attendance at the public meeting. If a 
foreign national wishes to participate in the public meeting, please 
inform DOE as soon as possible by contacting Ms. Regina Washington at 
(202) 586-1214 or by email: [email protected] so that the 
necessary procedures can be completed.
    DOE requires visitors to have laptops and other devices, such as 
tablets, checked upon entry into the building. Any person wishing to 
bring these devices into the building will be required to obtain a 
property pass. Visitors should avoid bringing these 5 devices, or allow 
an extra 45 minutes to check in. Please report to the visitor's desk to 
have devices checked before proceeding through security.
    Due to the REAL ID Act implemented by the Department of Homeland 
Security (``DHS''), there have been recent changes regarding ID 
requirements for individuals wishing to enter Federal buildings from 
specific States and U.S. territories. DHS maintains an updated website 
identifying the State and territory driver's licenses that currently 
are acceptable for entry into DOE facilities at www.dhs.gov/real-id-enforcement-brief. A driver's licenses from a State or territory 
identified as not compliant by DHS will not be accepted for building 
entry and one of the alternate forms of ID listed below will be 
required. Acceptable alternate forms of Photo-ID include U.S. Passport 
or Passport Card; an Enhanced Driver's License or Enhanced ID-Card 
issued by States and territories as identified on the DHS website 
(Enhanced licenses issued by these States and territories are clearly 
marked Enhanced or Enhanced Driver's License); a military ID or other 
Federal Government-issued Photo-ID card.
    In addition, you can attend the public meeting via webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants will be 
published on DOE's website at www.energy.gov/eere/buildings/public-meetings-and-comment-deadlines. Participants are responsible for 
ensuring their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this document. The request and advance copy of statements must be 
received at least one week before the public meeting and are to be 
emailed. Please include a telephone number to enable DOE staff to make 
follow-up contact, if needed.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. There shall not be discussion of proprietary 
information, costs or prices, market share, or other commercial matters 
regulated by U.S. anti-trust laws. After the public meeting and until 
the end of the comment period, interested parties may submit further 
comments on the proceedings and any aspect of the rulemaking.
    The public meeting will be conducted in an informal, conference 
style. DOE will a general overview of the topics addressed in this 
proposed rulemaking, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this proposed rulemaking. Each participant will be 
allowed to make a general statement (within time limits determined by 
DOE), before the discussion of specific topics. DOE will permit, as 
time permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly. Participants should 
be prepared to answer questions by DOE and by other participants 
concerning these issues. DOE representatives may also ask questions of 
participants concerning other matters relevant to this rulemaking. The 
official conducting the public meeting will accept additional comments 
or questions from those attending, as time permits. The presiding 
official will announce any further procedural rules or modification of 
the above procedures that may be needed for the proper conduct of the 
public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this document. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other

[[Page 70302]]

information using any of the methods described in the ADDRESSES section 
at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If 
you do not want your personal contact information to be publicly 
viewable, do not include it in your comment or any accompanying 
documents. Instead, provide your contact information in a cover letter. 
Include your first and last names, email address, telephone number, and 
optional mailing address. The cover letter will not be publicly 
viewable as long as it does not include any comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible, in which case it is not necessary to submit printed copies. 
No telefacsimiles (``faxes'') will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email two well-marked copies: one copy of the document marked 
``confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``non-confidential'' 
with the information believed to be confidential deleted. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    (1) DOE requests comments on its proposal to require that the 
proposed standards, if adopted, would apply to all CRE listed in table 
I.1 manufactured in, or imported into, the United States on or after 
the date that is 3 years after the date on which the final new and 
amended standards are published. More generally, DOE requests comment 
on whether it would be beneficial to CRE manufacturers to align the 
compliance date of any DOE amended or established standards as closely 
as possible with the refrigerant prohibition dates proposed by the 
December 2022 EPA NOPR.
    (2) DOE requests comment on the impacts to CRE manufacturers and 
consumers from the Inflation Reduction Act (IRA) and the Infrastructure 
Investment and Jobs Act (IIJA).
    (3) DOE requests comment on the proposed definitions for ``cold-
wall evaporator,'' ``forced-air evaporator,'' ``pass-through doors,'' 
``roll-in door,'' ``roll-through doors,'' ``sliding door,'' and 
``rating temperature.''
    (4) DOE requests comment on blast chiller or freezer design 
options, design specifications, and energy consumption data tested per 
the DOE test procedure located in appendix D of 10 CFR 431.64.
    (5) DOE requests comment on refrigerated buffet/preparation table 
design options, design specifications, and energy consumption data 
tested per the DOE test procedure located in appendix C of 10 CFR 
431.64.
    (6) DOE requests comment on publicly available market data on CRE 
manufacturers or identification of any CRE manufacturers with large 
market shares not identified in Chapter 3 of the TSD NOPR.
    (7) DOE requests comment on the decision to screen out increased 
insulation thickness, vacuum-insulated panels, linear compressors, and 
air curtain design as design options for improving the energy 
efficiency of CRE.
    (8) DOE requests comment on its proposal to use baseline levels for 
CRE equipment based upon the anticipated design changes that will be 
made by manufacturers in response to the December 2022 EPA NOPR.
    (9) DOE further requests comment on its estimates of energy-use 
reduction associated with the design changes made by manufacturers in 
response to the December 2022 EPA NOPR.
    (10) DOE requests comment on its proposal to apply an energy use 
multiplier to certain equipment classes that contain CRE with unique 
utility and energy use characteristics. DOE additionally requests 
comment on the proposed multiplier values and equipment classes for 
which these multipliers would be applied.

[[Page 70303]]

    (11) DOE seeks comment on the method for estimating manufacturing 
production costs.
    (12) DOE requests comment on the CRE distribution channels and 
overall on the markups analysis.
    (13) DOE requests comment on its approach for the energy use 
analysis.
    (14) DOE requests comment on its price learning assumptions and 
methodology.
    (15) DOE requests comment and data to inform how any of the 
analyzed design options would require additional installation time, 
training, or other related skills compared to the baseline equipment.
    (16) DOE requests comment and data on its assumptions and approach 
regarding consideration of repair and maintenance costs in the LCC and 
PBP analyses. Specifically, DOE requests data on the expected lifetimes 
and repair and maintenance frequencies of the considered design options 
in this NOPR.
    (17) DOE requests comment and data regarding the CRE lifetime 
assumptions and methodology.
    (18) DOE requests comment and data on the assumed business types 
and the corresponding CRE lifetimes at which refurbishment may occur.
    (19) DOE requests comment on its methodology and data to better 
inform the no-standards-case efficiency distribution for CRE.
    (20) DOE requests comment on the price elasticity assumptions for 
the CRE shipments analysis as they relates to the overall CRE market 
and the market for refurbished CRE.
    (21) DOE requests comment on its assumption of no efficiency trend 
for CRE and seeks historical CRE efficiency data, ideally by equipment 
class or alternatively by equipment family, or overall for the CRE 
market as a whole.
    (22) DOE seeks comment on the use of a 1.40 manufacturer markup for 
all CRE equipment classes analyzed in this proposed rule. DOE also 
seeks comment on the estimated manufacturer markups and incremental 
MSPs that result from the analyzed energy conservation standards.
    (23) DOE requests detailed comment and information on the capital 
investments associated with each analyzed design option. In particular, 
DOE requests detailed comment and feedback on the specific changes in 
equipment and tooling required to incorporate microchannel heat 
exchangers, as DOE currently models microchannel heat exchangers as a 
purchased part that can be substituted for tube and fin heat exchangers 
with minor production line changes.
    (24) DOE requests comment on the availability of computer chips and 
other electrical components used in CREs and specifically if these 
components are used to achieve higher efficiency levels.
    (25) DOE seeks comments, information, and data on the capital 
conversion costs and product conversion costs estimated for each TSL.
    (26) DOE seeks comment on whether manufacturers expect that 
manufacturing capacity constraints, engineering resource constraints, 
or laboratory constraints would limit equipment availability to 
consumers in the timeframe of the new and amended standards compliance 
date (2028).
    (27) DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of CRE associated with multiple DOE 
standards or equipment/product-specific regulatory actions of other 
Federal agencies.
    (28) DOE requests comments on the magnitude of costs associated 
with transitioning CRE designs and production facilities to accommodate 
low-GWP refrigerants that would be incurred between the publication of 
this NOPR and the proposed compliance date of new and amended 
standards. Quantification and categorization of these costs, such as 
engineering efforts, testing lab time, certification costs, and capital 
investments (e.g., new charging equipment), would enable DOE to refine 
its analysis.
    (29) DOE seeks comments, information, and data on the number of 
small businesses in the industry, the names of those small businesses, 
and their market shares by equipment class. DOE also requests comment 
on the potential impacts of the proposed standards on small 
manufacturers.
    (30) Additionally, DOE welcomes comments on other issues relevant 
to the conduct of this rulemaking that may not specifically be 
identified in this document.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking and announcement of public meeting.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation test procedures, and Reporting and 
recordkeeping requirements.

Signing Authority

    This document of the Department of Energy was signed on September 
28, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary 
for Energy Efficiency and Renewable Energy, pursuant to delegated 
authority from the Secretary of Energy. That document with the original 
signature and date is maintained by DOE. For administrative purposes 
only, and in compliance with requirements of the Office of the Federal 
Register, the undersigned DOE Federal Register Liaison Officer has been 
authorized to sign and submit the document in electronic format for 
publication, as an official document of the Department of Energy. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

    Signed in Washington, DC, on September 29, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
part 431 of chapter II of title 10 of the Code of Federal Regulations, 
as set forth below:

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
2. Amend Sec.  431.62 by:
0
a. Adding, in alphabetical order, definitions for ``Cold-wall 
evaporator'', ``Forced-air evaporator'', and ``Pass-through doors'';
0
b. Revising the definition of ``Rating temperature''; and
0
c. Adding, in alphabetical order, definitions for ``Roll-in door'', 
``Roll-through doors'', and ``Sliding door''.
    The additions and revision read as follows:


Sec.  431.62  Definitions concerning commercial refrigerators, freezers 
and refrigerator-freezers.

* * * * *
    Cold-wall evaporator means an evaporator that comprises a portion 
or all of the commercial refrigerator, freezer, and refrigerator 
freezer cabinet's interior surface that transfers heat through means 
other than fan-forced convection.
* * * * *
    Forced-air evaporator means an evaporator that employs the use of 
fan-

[[Page 70304]]

forced convection to transfer heat within the commercial refrigerator, 
freezer, and refrigerator freezer cabinet.
* * * * *
    Pass-through doors means doors located on both the front and rear 
of the commercial refrigerator, freezer, and refrigerator freezer.
* * * * *
    Rating temperature means the integrated average temperature a unit 
must maintain during testing, as determined in accordance with section 
2.1. or section 2.2. of appendix B to subpart C of this part, as 
applicable.
* * * * *
    Roll-in door means a door that includes a door sweep to seal the 
bottom of the door and may include a ramp that allows wheeled racks of 
product to be rolled into the commercial refrigerator, freezer, and 
refrigerator freezer.
    Roll-through doors means doors located on both the front and rear 
of the commercial refrigerator, freezer, and refrigerator freezer, that 
includes a door sweep to seal the bottom of the door and may include a 
ramp that allows wheeled racks of product to be rolled into and through 
the commercial refrigerator, freezer, and refrigerator freezer.
* * * * *
    Sliding door means a door that opens when a portion of the door 
moves in a direction generally parallel to its surface.
* * * * *
0
3. Revise Sec.  431.66 to read as follows:


Sec.  431.66   Energy conservation standards and their effective dates.

    (a) In this section--
    (1) The term ``V'' means the volume of a commercial refrigerator, 
freezer, and refrigerator-freezer, as determined in accordance with 
section 3.1. of appendix B to subpart C of this part.
    (2) The term ``TDA'' means the total display area of a commercial 
refrigerator, freezer, and refrigerator-freezer, as determined in 
accordance with section 3.2. of appendix B to subpart C of this part.
    (b) Each commercial refrigerator, freezer, and refrigerator-
freezer, except as specified in paragraph (d) of this section, 
manufactured on or after March 27, 2017 and before [Date 3 Years after 
publication of the final rule in the Federal Register], shall have a 
daily energy consumption (in kilowatt-hours per day or ``kWh/day''), 
when measured in accordance with the DOE test procedure at Sec.  
431.64, that does not exceed the following:
    (1) For commercial refrigerators, freezers, and refrigerator-
freezers other than commercial hybrids, commercial refrigerator-
freezers, or wedge cases:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Rating         Operating
   Condensing unit  configuration        Equipment family       temperature     temperature       Equipment class       Maximum daily energy consumption
                                                                 ([deg]F)        ([deg]F)          designation *                   (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing (RC)..............  Vertical Open (VOP)...        38.0 (M)          >=32.0  VOP.RC.M...............  0.64 x TDA + 4.07.
                                                                     0.0 (L)           <32.0  VOP.RC.L...............  2.2 x TDA + 6.85.
                                                                   -15.0 (I)          <=-5.0  VOP.RC.I...............  2.79 x TDA + 8.7.
                                      Semivertical Open             38.0 (M)          >=32.0  SVO.RC.M...............  0.66 x TDA + 3.18.
                                       (SVO).                        0.0 (L)           <32.0  SVO.RC.L...............  2.2 x TDA + 6.85.
                                                                   -15.0 (I)          <=-5.0  SVO.RC.I...............  2.79 x TDA + 8.7.
                                      Horizontal Open (HZO).        38.0 (M)          >=32.0  HZO.RC.M...............  0.35 x TDA + 2.88.
                                                                     0.0 (L)           <32.0  HZO.RC.L...............  0.55 x TDA + 6.88.
                                                                   -15.0 (I)          <=-5.0  HZO.RC.I...............  0.7 x TDA + 8.74.
                                      Vertical Closed               38.0 (M)          >=32.0  VCT.RC.M...............  0.15 x TDA + 1.95.
                                       Transparent (VCT).            0.0 (L)           <32.0  VCT.RC.L...............  0.49 x TDA + 2.61.
                                                                   -15.0 (I)          <=-5.0  VCT.RC.I...............  0.58 x TDA + 3.05.
                                      Horizontal Closed             38.0 (M)          >=32.0  HCT.RC.M...............  0.16 x TDA + 0.13.
                                       Transparent (HCT).            0.0 (L)           <32.0  HCT.RC.L...............  0.34 x TDA + 0.26.
                                                                   -15.0 (I)          <=-5.0  HCT.RC.I...............  0.4 x TDA + 0.31.
                                      Vertical Closed Solid         38.0 (M)          >=32.0  VCS.RC.M...............  0.1 x V + 0.26.
                                       (VCS).                        0.0 (L)           <32.0  VCS.RC.L...............  0.21 x V + 0.54.
                                                                   -15.0 (I)          <=-5.0  VCS.RC.I...............  0.25 x V + 0.63.
                                      Horizontal Closed             38.0 (M)          >=32.0  HCS.RC.M...............  0.1 x V + 0.26.
                                       Solid (HCS).                  0.0 (L)           <32.0  HCS.RC.L...............  0.21 x V + 0.54.
                                                                   -15.0 (I)          <=-5.0  HCS.RC.I...............  0.25 x V + 0.63.
                                      Service Over Counter          38.0 (M)          >=32.0  SOC.RC.M...............  0.44 x TDA + 0.11.
                                       (SOC).                        0.0 (L)           <32.0  SOC.RC.L...............  0.93 x TDA + 0.22.
                                                                   -15.0 (I)          <=-5.0  SOC.RC.I...............  1.09 x TDA + 0.26.
Self-Contained (SC).................  Vertical Open (VOP)...        38.0 (M)          >=32.0  VOP.SC.M...............  1.69 x TDA + 4.71.
                                                                     0.0 (L)           <32.0  VOP.SC.L...............  4.25 x TDA + 11.82.
                                                                   -15.0 (I)          <=-5.0  VOP.SC.I...............  5.4 x TDA + 15.02.
                                      Semivertical Open             38.0 (M)          >=32.0  SVO.SC.M...............  1.7 x TDA + 4.59.
                                       (SVO).                        0.0 (L)           <32.0  SVO.SC.L...............  4.26 x TDA + 11.51.
                                                                   -15.0 (I)          <=-5.0  SVO.SC.I...............  5.41 x TDA + 14.63.
                                      Horizontal Open (HZO).        38.0 (M)          >=32.0  HZO.SC.M...............  0.72 x TDA + 5.55.
                                                                     0.0 (L)           <32.0  HZO.SC.L...............  1.9 x TDA + 7.08.
                                                                   -15.0 (I)          <=-5.0  HZO.SC.I...............  2.42 x TDA + 9.
                                      Vertical Closed               38.0 (M)          >=32.0  VCT.SC.M...............  0.1 x V + 0.86.
                                       Transparent (VCT).            0.0 (L)           <32.0  VCT.SC.L...............  0.29 x V + 2.95.
                                                                   -15.0 (I)          <=-5.0  VCT.SC.I...............  0.62 x TDA + 3.29.
                                      Vertical Closed Solid         38.0 (M)          >=32.0  VCS.SC.M...............  0.05 x V + 1.36.
                                       (VCS).                        0.0 (L)           <32.0  VCS.SC.L...............  0.22 x V + 1.38.
                                                                   -15.0 (I)          <=-5.0  VCS.SC.I...............  0.34 x V + 0.88.
                                      Horizontal Closed             38.0 (M)          >=32.0  HCT.SC.M...............  0.06 x V + 0.37.
                                       Transparent (HCT).            0.0 (L)           <32.0  HCT.SC.L...............  0.08 x V + 1.23.
                                                                   -15.0 (I)          <=-5.0  HCT.SC.I...............  0.56 x TDA + 0.43.

[[Page 70305]]

 
                                      Horizontal Closed             38.0 (M)          >=32.0  HCS.SC.M...............  0.05 x V + 0.91.
                                       Solid (HCS).                  0.0 (L)           <32.0  HCS.SC.L...............  0.06 x V + 1.12.
                                                                   -15.0 (I)          <=-5.0  HCS.SC.I...............  0.34 x V + 0.88.
                                      Service Over Counter          38.0 (M)          >=32.0  SOC.SC.M...............  0.52 x TDA + 1.
                                       (SOC).                        0.0 (L)           <32.0  SOC.SC.L...............  1.1 x TDA + 2.1.
                                                                   -15.0 (I)          <=-5.0  SOC.SC.I...............  1.53 x TDA + 0.36.
                                      Pull-Down (PD)........        38.0 (M)          >=32.0  PD.SC.M................  0.11 x V + 0.81.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the columns to the left.

    (2) For commercial hybrids and commercial refrigerator-freezers, 
the maximum daily energy consumption (MDEC) for each model shall be the 
sum of the MDEC values for all of its compartments. For each 
compartment, measure the TDA or volume of that compartment, and 
determine the appropriate equipment class based on that compartment's 
equipment family, condensing unit configuration, and designed operating 
temperature. The MDEC limit for each compartment shall be the 
calculated value obtained by entering that compartment's TDA or volume 
into the standard equation in paragraph (b)(1) of this section for that 
compartment's equipment class. Measure the calculated daily energy 
consumption (CDEC) or total daily energy consumption (TDEC) for the 
model:
    (i) For commercial hybrids and commercial refrigerator-freezers 
where two or more independent remote condensing units are each 
connected to separate, individual compartments, measure the total 
refrigeration load of each compartment separately according to appendix 
B to subpart C of this part. The CDEC for the model shall be the sum of 
the compressor energy consumption (CEC) for each compartment, fan 
energy consumption (FEC), lighting energy consumption (LEC), anti-
condensate energy consumption (AEC), defrost energy consumption (DEC), 
condensate evaporator pan energy consumption (PEC), and other 
applicable energy consumption (OEC).
    (ii) For commercial hybrids and commercial refrigerator-freezers 
where two or more compartments are connected to one remote condensing 
unit, measure the total refrigeration load of the model according to 
appendix B to subpart C of this part.
    (A) Calculate a weighted adjusted dew point temperature for the 
model by:
    (1) Multiplying the adjusted dew point temperature of each 
compartment by the volume of that compartment,
    (2) Summing the resulting values for all compartments; and
    (3) Dividing the resulting total by the total volume of all 
compartments.
    (B) Calculate the CEC for the model using the total refrigeration 
load and the weighted average adjusted dew point temperature. The CDEC 
for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and 
OEC.
    (iii) For commercial hybrids and commercial refrigerator-freezers 
connected to a self-contained condensing unit, measure the TDEC for the 
model according to appendix B to subpart C of this part.
    (3) For wedge cases, measure the CDEC or TDEC according to appendix 
B to subpart C of this part. For wedge cases in equipment classes for 
which a volume metric is used, the MDEC shall be the amount derived 
from the appropriate standards equation in paragraph (b)(1) of this 
section. For wedge cases of equipment classes for which a TDA metric is 
used, the MDEC shall be the amount derived from the appropriate 
standards equation in paragraph (b)(1) of this section incorporating a 
value for the TDA that is the product of:
    (i) The vertical height of the air-curtain (or glass in a 
transparent door) and
    (ii) The largest overall width of the case, when viewed from the 
front.
    (c) Each commercial refrigerator, freezer, and refrigerator-
freezer, except as specified in paragraph (d) of this section, 
manufactured on or after [Date 3 years after publication of the final 
rule in the Federal Register], shall have a daily energy consumption 
(in kilowatt-hours per day or ``kWh/day''), when measured in accordance 
with the DOE test procedure at Sec.  431.64, that does not exceed the 
following:
    (1) For commercial refrigerators, freezers, and refrigerator-
freezers other than commercial hybrids, commercial refrigerator-
freezers, or wedge cases:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Rating       Operating
     Condensing unit configuration             Equipment family        temperature    temperature         Equipment class          Maximum daily energy
                                                                         ([deg]F)      ([deg]F)             designation*          consumption (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing (RC)................  Vertical Open (VOP)..........     55.0 (H)           >40.0  VOP.RC.H                           0.31 x TDA + 1.99
                                                                          38.0 (M)        40.0>= x  VOP.RC.M                           0.56 x TDA + 3.57
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  VOP.RC.L                           2.04 x TDA + 6.36
                                                                         -15.0 (I)         <=-13.0  VOP.RC.I                           2.59 x TDA + 8.08
                                        Semivertical Open (SVO)......     55.0 (H)           >40.0  SVO.RC.H                           0.32 x TDA + 1.55
                                                                          38.0 (M)        40.0>= x  SVO.RC.M                           0.58 x TDA + 2.79
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  SVO.RC.L                           2.04 x TDA + 6.36
                                                                         -15.0 (I)         <=-13.0  SVO.RC.I                           2.59 x TDA + 8.08
                                        Horizontal Open (HZO)........     55.0 (H)           >40.0  HZO.RC.H                           0.19 x TDA + 1.56
                                                                          38.0 (M)        40.0>= x  HZO.RC.M                           0.34 x TDA + 2.81
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  HZO.RC.L                           0.54 x TDA + 6.81
                                                                         -15.0 (I)         <=-13.0  HZO.RC.I                           0.69 x TDA + 8.64
                                        Vertical Closed Transparent       55.0 (H)           >40.0  VCT.RC.H                           0.07 x TDA + 0.97
                                         (VCT).
                                                                          38.0 (M)        40.0>= x  VCT.RC.M                          0.134 x TDA + 1.74
                                                                                            >=32.0
                                                                                                    VCT.RC.M.PT                       0.139 x TDA + 1.81
                                                                                                    VCT.RC.M.SD                       0.143 x TDA + 1.86
                                                                                                    VCT.RC.M.SDPT                     0.149 x TDA + 1.93
                                                                                                    VCT.RC.M.RI                       0.140 x TDA + 1.83

[[Page 70306]]

 
                                                                                                    VCT.RC.M.RT                        0.146 x TDA + 1.9
                                                                           0.0 (L)           <32.0  VCT.RC.L                           0.47 x TDA + 2.51
                                                                         -15.0 (I)         <=-13.0  VCT.RC.I                           0.56 x TDA + 2.97
                                        Horizontal Closed Transparent     38.0 (M)          >=32.0  HCT.RC.M                           0.16 x TDA + 0.13
                                         (HCT).
                                                                           0.0 (L)           <32.0  HCT.RC.L                           0.34 x TDA + 0.26
                                                                         -15.0 (I)         <=-13.0  HCT.RC.I                           0.38 x TDA + 0.29
                                        Vertical Closed Solid (VCS)..     55.0 (H)           >40.0  VCS.RC.H                             0.06 x V + 0.14
                                                                          38.0 (M)        40.0>= x  VCS.RC.M                              0.1 x V + 0.26
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  VCS.RC.L                             0.21 x V + 0.54
                                                                         -15.0 (I)         <=-13.0  VCS.RC.I                             0.25 x V + 0.63
                                        Horizontal Closed Solid (HCS)     38.0 (M)          >=32.0  HCS.RC.M                              0.1 x V + 0.26
                                                                           0.0 (L)           <32.0  HCS.RC.L                             0.21 x V + 0.54
                                                                         -15.0 (I)         <=-13.0  HCS.RC.I                             0.25 x V + 0.63
                                        Service Over Counter (SOC)...     55.0 (H)           >40.0  SOC.RC.H                           0.22 x TDA + 0.05
                                                                          38.0 (M)        40.0>= x  SOC.RC.M                            0.39 x TDA + 0.1
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  SOC.RC.L                            0.83 x TDA + 0.2
                                                                         -15.0 (I)         <=-13.0  SOC.RC.I                           1.04 x TDA + 0.25
                                        Chef Base (CB)...............     38.0 (M)          >=32.0  CB.RC.M                              0.03 x V + 0.39
                                                                           0.0 (L)           <32.0  CB.RC.L                              0.13 x V + 1.37
Self-Contained (SC)...................  Vertical Open (VOP)..........     55.0 (H)           >40.0  VOP.SC.H                           0.69 x TDA + 1.94
                                                                          38.0 (M)        40.0>= x  VOP.SC.M                           1.25 x TDA + 3.48
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  VOP.SC.L                           3.29 x TDA + 9.15
                                                                         -15.0 (I)         <=-13.0  VOP.SC.I                          4.18 x TDA + 11.63
                                        Semivertical Open (SVO)......     55.0 (H)           >40.0  SVO.SC.H                           0.65 x TDA + 1.77
                                                                          38.0 (M)        40.0>= x  SVO.SC.M                           1.18 x TDA + 3.18
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  SVO.SC.L                           3.25 x TDA + 8.78
                                                                         -15.0 (I)         <=-13.0  SVO.SC.I                          4.13 x TDA + 11.16
                                        Horizontal Open (HZO)........     55.0 (H)           >40.0  HZO.SC.H                           0.27 x TDA + 2.06
                                                                          38.0 (M)        40.0>= x  HZO.SC.M                           0.48 x TDA + 3.71
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  HZO.SC.L                            1.48 x TDA + 5.5
                                                                         -15.0 (I)         <=-13.0  HZO.SC.I                           1.97 x TDA + 7.34
                                        Vertical Closed Transparent       55.0 (H)           >40.0  VCT.SC.H                            0.053 x V + 0.85
                                         (VCT).
                                                                          38.0 (M)        40.0>= x  VCT.SC.M                            0.054 x V + 0.86
                                                                                            >=32.0
                                                                                                    VCT.SC.M.PT                         0.056 x V + 0.86
                                                                                                    VCT.SC.M.SD                         0.058 x V + 0.86
                                                                                                    VCT.SC.M.SDPT                       0.060 x V + 0.86
                                                                                                    VCT.SC.M.RI                         0.057 x V + 0.86
                                                                                                    VCT.SC.M.RT                         0.059 x V + 0.86
                                                                           0.0 (L)           <32.0  VCT.SC.L                            0.234 x V + 2.38
                                                                                                    VCT.SC.L.PT                         0.243 x V + 2.47
                                                                         -15.0 (I)         <=-13.0  VCT.SC.I                             0.6 x TDA + 3.2
                                        Vertical Closed Solid (VCS)..     55.0 (H)           >40.0  VCS.SC.H                           0.0082 x V + 0.21
                                                                          38.0 (M)        40.0>= x  VCS.SC.M                             0.02 x V + 0.54
                                                                                            >=32.0
                                                                                                    VCS.SC.M.PT                          0.02 x V + 0.56
                                                                                                    VCS.SC.M.RI                          0.02 x V + 0.57
                                                                                                    VCS.SC.M.RT                          0.02 x V + 0.59
                                                                           0.0 (L)           <32.0  VCS.SC.L                            0.155 x V + 0.97
                                                                                                    VCS.SC.L.PT                         0.161 x V + 1.01
                                                                                                    VCS.SC.L.RI                         0.162 x V + 1.02
                                                                                                    VCS.SC.L.RT                         0.169 x V + 1.06
                                                                         -15.0 (I)         <=-13.0  VCS.SC.I                             0.25 x V + 0.88
                                        Horizontal Closed Transparent     38.0 (M)          >=32.0  HCT.SC.M                             0.06 x V + 0.37
                                         (HCT).
                                                                           0.0 (L)           <32.0  HCT.SC.L                             0.08 x V + 1.23
                                                                         -15.0 (I)         <=-13.0  HCT.SC.I                           0.34 x TDA + 0.43
                                        Horizontal Closed Solid (HCS)     38.0 (M)          >=32.0  HCS.SC.M                            0.022 x V + 0.41
                                                                           0.0 (L)           <32.0  HCS.SC.L                            0.043 x V + 0.81
                                                                                                    HCS.SC.L.FA                         0.052 x V + 0.97
                                                                         -15.0 (I)         <=-13.0  HCS.SC.I                             0.31 x V + 0.81
                                        Service Over Counter (SOC)...     55.0 (H)           >40.0  SOC.SC.H                           0.17 x TDA + 0.33
                                                                          38.0 (M)        40.0>= x  SOC.SC.M                          0.304 x TDA + 0.59
                                                                                            >=32.0
                                                                           0.0 (L)           <32.0  SOC.SC.L                             1.1 x TDA + 2.1
                                                                         -15.0 (I)         <=-13.0  SOC.SC.I                           1.53 x TDA + 0.36
                                        Chef Base (CB)...............     38.0 (M)          >=32.0  CB.SC.M                             0.049 x V + 0.54
                                                                           0.0 (L)           <32.0  CB.SC.L                             0.180 x V + 1.92
                                        Pull-Down (PD)...............     38.0 (M)          >=32.0  PD.SC.M                              0.11 x V + 0.81
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column are indicated in the columns to the left or as follows: ``.PT'' represents pass-through doors; ``.SD''
  represents sliding doors; ``.SDPT'' represents sliding and pass-through doors; ``.RI'' represents roll-in doors; ``.RT'' represents roll-through
  doors; and ``.FA'' represents forced air evaporators.

    (2) For commercial hybrids and commercial refrigerator-freezers, 
the MDEC for each model shall be the sum of the MDEC values for all of 
its compartments. For each compartment, measure the TDA or volume of 
that compartment, and determine the appropriate equipment class based 
on that compartment's equipment family, condensing unit configuration, 
and designed operating temperature. The MDEC limit for each compartment 
shall be the calculated value obtained by entering that compartment's 
TDA or volume into the standard equation in paragraph (c)(1) of this 
section for that compartment's equipment class. Measure the CDEC or 
TDEC for the model:
    (i) For commercial hybrids and commercial refrigerator-freezers 
where two or more independent remote

[[Page 70307]]

condensing units are each connected to separate, individual 
compartments, measure the total refrigeration load of each compartment 
separately according to appendix B to subpart C of this part. The CDEC 
for the model shall be the sum of the CEC for each compartment, FEC, 
LEC, AEC, DEC, PEC, and OEC.
    (ii) For commercial hybrids and commercial refrigerator-freezers 
where two or more compartments are connected to one remote condensing 
unit, measure the total refrigeration load of the model according to 
appendix B to subpart C of this part.
    (A) Calculate a weighted adjusted dew point temperature for the 
model by:
    (1) Multiplying the adjusted dew point temperature of each 
compartment by the volume of that compartment,
    (2) Summing the resulting values for all compartments, and
    (3) Dividing the resulting total by the total volume of all 
compartments.
    (B) Calculate the CEC for the model using the total refrigeration 
load and the weighted average adjusted dew point temperature. The CDEC 
for the model shall be the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and 
OEC.
    (iii) For commercial hybrids and commercial refrigerator-freezers 
connected to a self-contained condensing unit, measure the TDEC for the 
model according to appendix B to subpart C of this part.
    (3) For wedge cases, measure the CDEC or TDEC according to appendix 
B to subpart C of this part. For wedge cases in equipment classes for 
which a volume metric is used, the MDEC shall be the amount derived 
from the appropriate standards equation in paragraph (c)(1) of this 
section. For wedge cases of equipment classes for which a TDA metric is 
used, the MDEC shall be the amount derived from the appropriate 
standards equation in paragraph (c)(1) of this section incorporating a 
value for the TDA that is the product of:
    (i) The vertical height of the air-curtain (or glass in a 
transparent door) and
    (ii) The largest overall width of the case, when viewed from the 
front.
    (d) The energy conservation standards in paragraph (b) of this 
section do not apply to chef bases or griddle stands. The energy 
conservation standards in paragraphs (b) through (c) of this section do 
not apply to buffet tables or preparation tables, blast chillers, blast 
freezers, or mobile refrigerated cabinets.

[FR Doc. 2023-21987 Filed 10-6-23; 8:45 am]
BILLING CODE 6450-01-P

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