# Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test Procedures for Commercial Heating, Air-Conditioning, and Water-Heating Equipment > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2012-10650 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** May 16, 2012 - **Citation:** 77 FR 28928 ## Text DEPARTMENT OF ENERGY 10 CFR Part 431 [Docket No. EERE-2011-BT-STD-0029] RIN 1904-AC47 Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test Procedures for Commercial Heating, Air-Conditioning, and Water-Heating Equipment AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Final rule. SUMMARY: The U.S. Department of Energy (DOE) is amending its energy conservation standards for small, large, and very large water-cooled and evaporatively-cooled commercial package air conditioners, and variable refrigerant flow (VRF) water-source heat pumps less than 17,000 Btu/h. DOE is adopting new energy conservation standards for computer room air conditioners and VRF water-source heat pumps with a cooling capacity at or greater than 135,000 Btu/h and less than 760,000 Btu/h. Pursuant to the Energy Policy and Conservation Act of 1975 (EPCA), as amended, DOE must assess whether the uniform national standards for these covered equipment need to be updated each time the corresponding industry standard—the American National Standards Institute (ANSI)/American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE)/Illuminating Engineering Society of North America (IESNA) Standard 90.1 (ASHRAE Standard 90.1)—is amended, which most recently occurred on October 29, 2010. The levels DOE is adopting are the same as the efficiency levels specified in ASHRAE Standard 90.1-2010. DOE has determined that the ASHRAE Standard 90.1-2010 efficiency levels for the equipment types listed above are more stringent than existing Federal energy conservation standards and will result in economic and energy savings compared existing energy conservation standards. Furthermore, DOE has concluded that clear and convincing evidence does not exist, as would justify more-stringent standard levels than the efficiency levels in ASHRAE Standard 90.1-2010 for any of the equipment classes. DOE is also updating the current Federal test procedures or, for certain equipment, adopting new test procedures to incorporate by reference the most current versions of the relevant industry test procedures specified in ASHRAE Standard 90.1-2010. Furthermore, DOE is adopting additional test procedure provisions to include with modification certain instructions from Air-Conditioning, Heating, and Refrigeration Institute (AHRI) operations manuals in that organization's test procedures that would clarify the application of the DOE test procedures and harmonize DOE testing with the testing performed by industry. DATES: This rule is effective July 16, 2012. Compliance Dates: See Table 1 of section II.C of the SUPPLEMENTARY INFORMATION section of this final rule for the compliance dates associated with the new/amended test procedures, the new/amended energy conservation standards, and the representation requirements by equipment type. The incorporation by reference of certain publications listed in this rule was approved by the Director of the Federal Register on July 16, 2012. ADDRESSES: The docket for this rulemaking is available for review at www.regulations.gov, including Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials. 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. A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;dct=FR%252BPR%252BN%252BO%252BSR%252BPS;rpp=25;po=0;D=EERE-2011-BT-STD-0029. The www.regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. For further information on how to review the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email: Brenda.Edwards@ee.doe.gov. FOR FURTHER INFORMATION CONTACT: Mr. Mohammed Khan, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-7892. Email: Mohammed.Khan@ee.doe.gov. Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-9507. Email: Eric.Stas@hq.doe.gov. SUPPLEMENTARY INFORMATION: This final rule incorporates by reference into part 431 the following standards: • American National Standards Institute Z21.47-2006 (ANSI Z21.47-2006), “ Gas-Fired Central Furnaces, ” approved on July 27, 2006. • American National Standards Institute Z21.10.3-2011, (ANSI Z21.10.3-2011), “ Gas Water Heaters, Volume III, Storage Water Heaters With Input Ratings Above 75,000 Btu Per Hour, Circulating and Instantaneous, ” approved on March 7, 2011. Copies of ANSI Z21.47-2006 and ANSI Z21.10.3-2011 can be obtained from the American National Standards Institute, 25 W. 43rd Street, 4th Floor, New York, NY 10036, (212) 642-4900, or go to http://www.ansi.org. • Air-Conditioning, Heating, and Refrigeration Institute Standard 210/240-2008 (AHRI 210/240-2008), “ Performance Rating of Unitary Air-Conditioning & Air-Source Heat Pump Equipment, ” approved by ANSI on October 27, 2011 and updated by addendum 1 in June 2011 and addendum 2 in March 2012. • Air-Conditioning, Heating, and Refrigeration Institute Standard 340/360-2007 (AHRI 340/360-2007), “ Performance Rating of Commercial and Industrial Unitary Air-Conditioning and Heat Pump Equipment, ” approved by ANSI on October 27, 2011 and updated by addendum 1 in December 2010 and addendum 2 in June 2011. • Air-Conditioning, Heating, and Refrigeration Institute Standard 390-2003 (AHRI 390-2003), dated 2003, “ Performance Rating of Single Package Vertical Air-Conditioners and Heat Pumps. ” • Air-Conditioning, Heating, and Refrigeration Institute Standard 1230-2010 (AHRI 1230-2010), “ Performance Rating of Variable Refrigerant Flow (VRF) Multi-Split Air-Conditioning and Heat Pump Equipment, ” approved by ANSI on August 2, 2010 and updated by addendum 1 in March 2011. Copies of AHRI 210/240-2008, AHRI 340/360-2007, AHRI 390-2003, and AHRI 1230-2010 can be obtained from the Air-Conditioning, Heating, and Refrigeration Institute, 2111 Wilson Blvd., Suite 500, Arlington, VA 22201, (703) 524-8800, or go to http://www.ahrinet.org. • American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 127-2007, (ASHRAE 127-2007), “ Method of Testing for Rating Computer and Data Processing Room Unitary Air Conditioners, ” approved on June 28, 2007 Copies of ASHRAE 127-2007 can be obtained from American Society of Heating, Refrigerating, and Air-Conditioning Engineers, 1791 Tullie Circle, NE., Atlanta, Georgia 30329, (404) 636-8400, or go to http://www.ashrae.org. • Underwriters Laboratories, Inc. Standard 727-2006 (UL 727-2006), “ Standard for Safety for Oil-Fired Central Furnaces, ” approved April 7, 2006. Copies of UL 727-2006 can be obtained from Underwriters Laboratories, Inc., 333 Pfingsten Road, Northbrook, IL 60062, (847) 272-8800, or go to http://www.ul.com. Table of Contents I. Summary of the Final Rule II. Introduction A. Authority B. Background 1. ASHRAE Standard 90.1-2010 2. Previous Rulemaking Documents C. Compliance Dates for Amended/New Federal Test Procedures, Amended/New Federal Energy Conservation Standards, and Representations for Certain ASHRAE Equipment III. General Discussion of Comments Received A. The Definition of “Amendment” With Respect to the Efficiency Levels in ASHRAE Standard 90.1 B. DOE's Review of ASHRAE Equipment Independent of the ASHRAE Standards Process C. General Discussion of the Changes to ASHRAE Standard 90.1-2010 and Determination of Scope D. The Proposed Energy Conservation Standards E. Coverage of Commercial Package Air-Conditioning and Heating Equipment Used Exclusively as Part of Industrial or Manufacturing Processes F. Definitions for Variable Refrigerant Flow Systems IV. Test Procedure Amendments and Discussion of Related Comments A. Commercial Package Air-Conditioning and Heating Equipment B. Commercial Warm-Air Furnaces and Commercial Water Heaters C. Computer Room Air Conditioners D. Variable Refrigerant Flow Air-Conditioning and Heating Equipment E. Single Package Vertical Air Conditioners and Heat Pumps V. Methodology and Discussion of Comments for Computer Room Air Conditioners A. Market Assessment 1. Definition of “Computer Room Air Conditioner” 2. Equipment Classes 3. Review of Current Market for Computer Room Air Conditioners a. Trade Association Information b. Manufacturer Information c. Market Data B. Engineering Analysis 1. Representative Input Capacities for Analysis 2. Baseline Equipment 3. Identification of Efficiency Information and Efficiency Levels for Analysis 4. Pricing Data 5. Equipment Classes for Analysis and Extrapolation to Unanalyzed Equipment Classes 6. Engineering Analysis Results C. Markups To Determine Equipment Price D. Energy Use Characterization E. Life-Cycle Cost and Payback Period Analyses 1. Approach 2. Life-Cycle Cost Inputs a. Equipment Prices b. Installation Costs c. Annual Energy Use d. Electricity Prices e. Maintenance Costs f. Repair Costs g. Equipment Lifetime h. Discount Rate 3. Payback Period F. National Impact Analysis 1. Approach 2. Shipments Analysis 3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies G. Emissions Analysis H. Monetizing Carbon Dioxide and Other Emissions Impacts 1. Social Cost of Carbon a. Monetizing Carbon Dioxide Emissions b. Social Cost of Carbon Values Used in Past Regulatory Analyses c. Current Approach and Key Assumptions 2. Valuation of Other Emissions Reductions I. Other Issues 1. Compliance Dates of the Amended and New Energy Conservation Standards VI. Analytical Results A. Efficiency Levels Analyzed 1. Water-Cooled and Evaporatively-Cooled Commercial Package Air-Conditioning and Heating Equipment 2. VRF Water-Source Heat Pumps 3. Computer Room Air Conditioners B. Energy Savings and Economic Justification 1. Water-Cooled and Evaporatively-Cooled Commercial Package Air-Conditioning and Heating Equipment 2. VRF Water-Source Heat Pumps 3. Computer Room Air Conditioners a. Economic Impacts on Commercial Customers b. National Impact Analysis C. Need of the Nation To Conserve Energy D. Amended and New Energy Conservation Standards 1. Water-Cooled and Evaporatively-Cooled Commercial Package Air-Conditioning and Heating Equipment 2. VRF Water-Source Heat Pumps 3. Computer Room Air Conditioners VII. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 and 13563 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act of 1995 D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under Section 32 of the Federal Energy Administration Act of 1974 M. Review Under the Information Quality Bulletin for Peer Review N. Congressional Notification VIII. Approval of the Office of the Secretary I. Summary of the Final Rule The Energy Policy and Conservation Act (EPCA) (42 U.S.C. 6291 et seq. ), as amended, requires DOE to consider amending the existing Federal energy conservation standard for certain types of listed commercial and industrial equipment (generally, commercial water heaters, commercial packaged boilers, commercial air-conditioning and heating equipment, and packaged terminal air conditioners and heat pumps) each time ASHRAE Standard 90.1, Energy Standard for Buildings Except Low-Rise Residential Buildings, is amended with respect to such equipment. (42 U.S.C. 6313(a)(6)(A)) For each type of equipment, EPCA directs that if ASHRAE Standard 90.1 is amended, 1 DOE must adopt amended energy conservation standards at the new efficiency level in ASHRAE Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more-stringent efficiency level as a national standard would produce significant additional energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) If DOE decides to adopt as a national standard the efficiency levels specified in the amended ASHRAE Standard 90.1, DOE must establish such standard not later than 18 months after publication of the amended industry standard. (42 U.S.C. 6313(a)(6)(A)(ii)(I)) If DOE determines that a more-stringent standard is appropriate under the statutory criteria, DOE must establish such more-stringent standard not later than 30 months after publication of the revised ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(B)) ASHRAE officially released ASHRAE Standard 90.1-2010 on October 29, 2010, thereby triggering DOE's above-referenced obligations pursuant to EPCA to determine for those equipment with efficiency level changes beyond the current Federal standard, whether: (1) The amended industry standard should be adopted; or (2) clear and convincing evidence exists to justify more-stringent standard levels. 1 Although EPCA does not explicitly define the term “amended” in the context of ASHRAE Standard 90.1, DOE provided its interpretation of what would constitute an “amended standard” in a final rule published in the Federal Register on March 7, 2007 (hereafter referred to as the “March 2007 final rule”). 72 FR 10038. In that rule, DOE stated that the statutory trigger requiring DOE to adopt uniform national standards based on ASHRAE action is for ASHRAE to change a standard for any of the equipment listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i)) by increasing the energy efficiency level for that equipment type. Id. at 10042. In other words, if the revised ASHRAE Standard 90.1 leaves the standard level unchanged or lowers the standard, as compared to the level specified by the national standard adopted pursuant to EPCA, DOE does not have the authority to conduct a rulemaking to consider a higher standard for that equipment pursuant to 42 U.S.C. 6313(a)(6)(A). DOE subsequently reiterated this position in a final rule published in the Federal Register on July 22, 2009. 74 FR 36312, 36313. DOE published a notice of proposed rulemaking on January 17, 2012 (January 2012 NOPR), in the Federal Register describing DOE's determination of scope for considering new and amended energy conservation standards with respect to certain heating, ventilating, air-conditioning, and water-heating equipment addressed in ASHRAE Standard 90.1-2010. 77 FR 2356, 2366-79. ASHRAE Standard 90.1-2010 amended its efficiency levels for small, large, and very large water-cooled and evaporatively-cooled air conditioners and variable refrigerant flow water-source heat pumps with a cooling capacity less than 17,000 Btu/h, and adopted new efficiency levels for variable refrigerant flow water-source heat pumps with a cooling capacity equal to or greater than 135,000 Btu/h and less than 760,000 Btu/h,with and without heat recovery. In addition, ASHRAE Standard 90.1-2010 expanded its scope to include certain process cooling equipment, namely “air conditioners and condensing units serving computer rooms” (hereafter referred to as “computer room air conditioners”). ASHRAE Standard 90.1-2010 also updated its referenced test procedures for several equipment types. In determining the scope of the rulemaking, DOE is statutorily required to ascertain whether the revised ASHRAE efficiency levels have become more stringent than the current Federal energy conservation standard, thereby ensuring that any new amended national standard would not result in “backsliding,” which is prohibited under 42 U.S.C. 6295(o)(1). For those equipment classes for which ASHRAE set more-stringent or new efficiency levels ( i.e., small, large, and very large water-cooled and evaporatively-cooled air conditioners; variable refrigerant flow water-source heat pumps with a cooling capacity either less than 17,000 Btu/h or equal to or greater than 135,000 Btu/h and less than 760,000 Btu/h, with and without heat recovery; and computer room air conditioners), DOE analyzed the energy savings potential of amended national energy conservation standards (at both the new ASHRAE Standard 90.1 efficiency levels and more-stringent efficiency levels) in the May 5, 2011 notice of data availability (NODA) (76 FR 25622) and the January 17, 2012 NOPR (77 FR 2356). For equipment where more-stringent standard levels than the ASHRAE efficiency levels would result in significant energy savings ( i.e., computer room air conditioners), DOE analyzed the economic justification for more-stringent levels in the January 2012 NOPR. 77 FR 2356, 2382-98 (Jan. 17, 2012). The energy conservation standards being adopted in today's final rule, which apply to small, large, and very large water-cooled and evaporatively-cooled air conditioners; variable refrigerant flow water-source heat pumps with a cooling capacity either less than 17,000 Btu/h or equal to or greater than 135,000 Btu/h and less than 760,000 Btu/h, with and without heat recovery; and computer room air conditioners, satisfy all applicable requirements of EPCA and will achieve the maximum improvements in energy efficiency that are technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) DOE has concluded that, based on the information presented and its analyses, there is not clear and convincing evidence justifying adoption of more-stringent efficiency levels for this equipment. Thus, in accordance with the criteria discussed in this notice, DOE is amending the energy conservation standards (or for certain equipment adopting new standards) for small, large, and very large water-cooled and evaporatively-cooled air conditioners; variable refrigerant flow water-source heat pumps with a cooling capacity either less than 17,000 Btu/h or equal to or greater than 135,000 Btu/h and less than 760,000 Btu/h, with and without heat recovery; and computer room air conditioners by adopting the efficiency levels specified by ASHRAE Standard 90.1-2010. Pursuant to EPCA, the compliance date for amended energy conservation standards based upon the levels in ASHRAE Standard 90.1 is either two or three years after the effective date of the requirement in the amended ASHRAE standard, depending on the type and size of the equipment. (See 42 U.S.C. 6313(a)(6)(D)) In the present case, the amended standards apply to equipment manufactured on and after the date either 2 or 3 years after the effective date specified in ASHRAE Standard 90.1-2010, depending on the type of equipment. Table I.1 presents the energy conservation standards that DOE is adopting in today's final rule and their respective compliance dates. Table I.1—Current and Amended/New Federal Energy Conservation Standards for Certain ASHRAE Equipment Equipment class Current Federal energy conservation standard Amended or new Federal energy conservation standard Compliance date of amended/new Federal energy conservation standard Commercial Package Air Conditioning and Heating Equipment—Water-Cooled Water-cooled Air Conditioner, ≥65,000 Btu/h and ). The LCC analysis used the estimated annual energy use for selected size units in each CRAC equipment class described in section V.B. The energy use characterization is described in section V.D and in greater detail in Chapter 4 of the final rule TSD. Because energy use of CRAC equipment is sensitive to climate, energy use varies by State. Aside from energy use, other important factors influencing the LCC and PBP analyses are energy prices, installation costs, equipment distribution markups, and sales tax. All of these are assumed to vary by State. At the national level, the LCC spreadsheets explicitly modeled both the uncertainty and the variability in the model's inputs, using probability distributions based on State population, which serves as a proxy for the shipment of CRAC equipment to different States. As mentioned above, DOE generated LCC and PBP results by building type and State and used weighting factors to generate national average LCC savings and PBP for each efficiency level. Because there is a unique LCC and PBP for each calculated value at the building type and State level, the outcomes of the analysis can also be expressed as probability distributions with a range of LCC and PBP results. A distinct advantage of this type of approach is that DOE can identify the percentage of customers achieving LCC savings or attaining certain PBP values due to an increased efficiency level, in addition to the average LCC savings or average PBP for that efficiency level. DOE received no comments on its general LCC and PBP approach and has retained it for the final rule. 2. Life-Cycle Cost Inputs For each efficiency level DOE analyzed, the LCC analysis required input data for the total installed cost of the equipment, its operating cost, and the discount rate. Table V.7 summarizes the inputs and key assumptions DOE used to calculate the customer economic impacts of all energy efficiency levels analyzed in this rulemaking. A more detailed discussion of the inputs follows. Table V.7—Summary of Inputs and Key Assumptions Used in the LCC and PBP Analyses Inputs NOPR Changes for the final rule Affecting Installed Costs Equipment Price Equipment price was derived by multiplying manufacturer sales price or MSP (distributor's or manufacturer's representative's price delivered to a mechanical contractor at the job site, calculated in the engineering analysis) by mechanical contractor markups, as needed, plus sales tax from the markups analysis Sales taxes updates to 2012 rates. No other changes. Installation Cost Installation cost includes installation labor, installer overhead, and any miscellaneous materials and parts, derived from RS Means CostWorks 2011. 21 Updated installation costs and relative regional cost multipliers from 2011 to 2012 conditions using RS Means CostWorks 2012. 22 Affecting Operating Costs Annual Energy Use Annual unit energy consumption for each class of equipment at each efficiency level estimated on a per-State basis using a spreadsheet model and a population-based mapping of climate locations to States No change. Electricity Prices DOE developed average electricity prices based on EIA's Form 861 data for 2010. 23 Price projections based on AEO 2011. 24 Updated from 2010 to 2011 using EIA Form 826 data for 2011. 25 Price projections based on AEO 2011. Maintenance Cost DOE estimated annual maintenance costs based on RS Means CostWorks 2011 for CRAC equipment. Annual maintenance cost did not vary as a function of efficiency Updated maintenance using RS Means CostWorks 2012 and to reflect more frequent maintenance schedules for all CRAC equipment. Repair Cost DOE estimated the annualized repair cost for baseline efficiency CRAC equipment based on cost data from RS Means CostWorks 2011 (2010 data). DOE assumed that the materials components portion of the repair costs would vary in direct proportion with the MSP at higher efficiency levels because it generally costs more to replace components that are more efficient Updated repair costs using RS Means CostWorks 2012. Affecting Present Value of Annual Operating Cost Savings Equipment Lifetime DOE estimated CRAC equipment lifetime ranged between 10 and 25 years, with an average lifespan of 15 years, based on estimates cited in available CRAC literature No change. Discount Rate Mean real discount rates for business types considered range from 2.68 percent for education to 4.51 percent for offices. Health care was 4.10 percent based on a limited sample Updated to early 2012 conditions. Additional business included in office category. Education was 2.98 percent. Office was 4.46 percent. Health care was 4.98 percent, based on an expanded sample. Analysis Start Year Start year for LCC is 2017, which is the earliest compliance date that DOE can set for new standards if it adopts any efficiency level for energy conservation standards higher than that shown in ASHRAE Standard 90.1-2010 No change. Analyzed Efficiency Levels Analyzed Efficiency Levels DOE analyzed the baseline efficiency levels (ASHRAE Standard 90.1-2010) and four higher efficiency levels for all 15 equipment classes. See the engineering analysis for additional details on selections of efficiency levels and cost No change. 21 RS Means Company Inc., RS Means CostWorks 2011 ( 2011) (Available at: ). 22 RS Means Company, Inc., RS Means CostWorks 2012 (2012) (Available at: ). 23 U.S. Energy Information Administration, Electric Sales, Revenue, and Average Price 2009 (Last accessed May 10, 2011) (Available at: ). Inflator—2009 to 2010 dollars from EIA AEO 2011 GDP Price Index. (Last accessed April 27, 2011 at ). 24 U.S. Energy Information Administration, Annual Energy Outlook 2011 (Available at: ). 25 U.S. Energy Information Administration, Sales and Revenue Data by State, Monthly Back to 1990 (Form EIA-826) (Last accessed Jan. 27, 2012) (Available at: ). a. Equipment Prices The price of CRAC equipment reflects the application of distribution channel markups (mechanical contractor markups) and sales tax to the manufacturer sales price (distributor's price, delivered to the job site), which is the cost established in the engineering analysis. As described in section V.C, DOE determined mechanical contractor costs and markup for air-conditioning equipment. For each equipment class, the engineering analysis provided contractor costs for the baseline equipment and up to four higher equipment efficiencies. The markup is the percentage increase in price as the CRAC equipment passes through the distribution channel. As explained in section V.C, all CRAC equipment is assumed to be delivered to the mechanical contractor at the job site for installation without the involvement of a general contractor. This is assumed to happen whether the equipment is being purchased for the new construction market or to replace existing equipment. To project a price trend for the final rule, DOE initially derived an inflation-adjusted index of the Producer Price Index (PPI) for miscellaneous refrigeration and air-conditioning equipment over 1990-2010. 26 These data show a general price index decline from 1990 to 2004, followed by a sharp increase, primarily due to rising prices of copper and steel products that go into this equipment. Given the slowdown in global economic activity in 2011, DOE believes that the extent to which the trends of the past few years will continue is very uncertain and that the observed data do not provide a firm basis for projecting future costs trends for CRAC equipment. Therefore, DOE used a constant price assumption as the default price factor index to project future computer room air conditioner prices in 2017. Thus, prices projected for the LCC and PBP analysis are equal to the 2011 values for each efficiency level in each equipment class. Appendix 8D of the final rule TSD describes the historical data and the derivation of the price projection. 26 Series ID PCU3334153334159; DOE requested comments on the most appropriate trend to use for real (inflation-adjusted) computer room air conditioner prices. DOE received no comments on this issue and has retained the same approach for the final rule. b. Installation Costs For the NOPR, DOE derived national average installation costs for CRAC equipment from data provided in RS Means CostWorks 2011 (RS Means) specifically for CRAC equipment. 27 RS Means provides estimates for installation costs for CRAC units by equipment capacity, as well as city cost indices that reflect the variation in installation costs. DOE uses the RS Means cost indexes for 288 cities in the United States to determine State-level markups. The RS Means data identify several cities in all 50 States and the District of Columbia. DOE incorporated location-based cost indices into the analysis to capture variation in installation cost, depending on the location of the customer. 27 R.S. Means Company, Inc., RS Means CostWorks 2011 (2011) (Available at: ). For more-stringent efficiency levels, DOE recognized that installation costs could potentially be higher with larger units and higher-efficiency CRAC equipment due to larger sizes and more complex setup requirements. DOE utilized RS Means installation cost data from RS Means CostWorks 2011 to derive installation cost curves by size of unit for the base-efficiency unit. These cost curves were updated for the final rule using RS Means CostWorks 2012. 28 DOE did not have data to calibrate the extent to which installation cost might change as efficiency increased. This was identified as Issue 13 under “Issues on Which DOE Seeks Comment” in section X.E of the January 2012 NOPR. 77 FR 2356, 2424 (Jan. 17, 2012). 28 RS Means Company, Inc., RS Means CostWorks 2012 (2012) (Available at: ). DOE received two comments on the NOPR concerning its installation costs for the LCC analysis. Danfoss commented that installation costs in replacement and retrofit applications might be higher than for new applications, because higher-efficiency equipment may be larger and harder to adapt to existing spaces. (Danfoss, Public Meeting Transcript at p. 110) Emerson commented that installation costs in situations where much attention is paid to efficiency may be higher because of the intentions of the designer interested in energy efficiency, not the equipment itself. (Emerson, Public Meeting Transcript at pp. 110-111) DOE acknowledges that either of these comments may be correct under certain circumstances, but it does not have quantitative information that would allow computation of an installation cost curve that is sensitive to efficiency level. Accordingly, DOE is using average installation cost data from RS Means that spans a variety of installation circumstances at a range of capacities. These data indicated that installation costs for replacements overall were slightly less costly than new installations. In this final rule, DOE is maintaining the approach used in the NOPR, specifically that installation costs do not vary with efficiency level. c. Annual Energy Use DOE estimated the annual electricity consumed by each class of CRAC equipment, by efficiency level, based on the energy use characterization described in section V.D and in chapter 4 of the final rule TSD. DOE received no comments on energy use. Accordingly, DOE is maintaining the same approach in the final rule. d. Electricity Prices Electricity prices are used to convert the electric energy savings from higher-efficiency equipment into energy cost savings. Because annual electricity consumption savings and equipment costs vary across the country, it is important to consider regional differences in electricity prices. DOE used average effective commercial electricity prices at the State level from U.S. Energy Information Administration (EIA) data for 2011. 29 This approach captured a wide range of commercial electricity prices across the United States. Furthermore, different kinds of businesses typically use electricity in different amounts at different times of the day, week, and year, and therefore, face different effective prices. To make this adjustment, DOE used EIA's 2003 Commercial Building Energy Consumption Survey (CBECS) 30 data set to identify the average prices the three building types paid and compared them with the average prices paid by all commercial customers. 31 DOE used the ratios of prices paid by the three types of businesses to the national average commercial prices seen in the 2003 CBECS as multipliers to adjust the average commercial 2011 State price data. 29 Not all of the 2011 data had been posted by EIA by the time calculations for the final rule were required. Consequently, prices for the period November 2010 through October 2011 were used. 30 U.S. Energy Information Administration, CBECS Public Use Microdata Files (Last Accessed April 2012) (Available at: ). 31 EIA's 2003 CBECS is the most recent version of the data set. DOE estimated the relative prices each building type paid in each State and the estimated relative sales of CRAC equipment to each building type in each State. The relative prices were compared with a weighted-average national electricity price for 2011. The State/building type weights reflect the probabilities that a given unit of CRAC equipment shipped will operate with a given fuel price. The original State-by-State average commercial prices in the NOPR (adjusted to 2011$) range from $0.066 per kWh to approximately $0.216 per kWh. The commercial electricity prices for each State used in the final rule were updated through October 2011 and range from $0.065 per kWh to $0.312 per kWh (See chapter 6 of the ASHRAE final rule TSD for further details.) The electricity price trends provide the relative change in electricity costs for future years. DOE applied the AEO 2011 reference case as the default scenario and extrapolated the trend in values at the Census Division level from 2025 to 2035 of the projection to establish prices in 2036 to 2060. This method of extrapolation is in line with methods EIA uses to project fuel prices for the Federal Energy Management Program (FEMP). DOE provides a sensitivity analysis of the LCC savings and PBP results to different fuel price scenarios using both the AEO 2011 high-price and low-price projections in the ASHRAE final rule TSD. DOE received no comments concerning either electricity prices or electricity price trends. Accordingly, DOE updated the data used in the NOPR to reflect the latest available prices and price forecasts and retained the same analytical approach for the final rule. e. Maintenance Costs Maintenance costs are the costs to the customer of maintaining equipment operation. Maintenance costs include services such as cleaning heat-exchanger coils and changing air filters. For the NOPR, DOE estimated annual routine maintenance costs for CRAC equipment as $84 per year for capacities up to 288 kBtu per hour and $102 per year for larger capacities, as reported in the RS Means CostWorks 2011 database. For the final rule, these values were increased to account for recommended CRAC quarterly and semi-annual maintenance schedules and for changes in unit costs reflected in RS Means CostWorks 2012. Because data did not indicate how maintenance costs vary with equipment efficiency, DOE used preventive maintenance costs that remain constant as equipment efficiency increases. DOE received no comments on the NOPR concerning the maintenance cost estimates. DOE made no changes to the maintenance cost estimates for this final rule other than those updating the RS Means maintenance schedules and unit costs. f. Repair Costs The repair cost is the cost to the customer of replacing or repairing components that have failed in the CRAC equipment. For the NOPR, DOE estimated the one-time repair cost in RS Means CostWorks 2011 as a percentage of MSP for capacities between 5 tons (T) (60,000 Btu/h) and 15 T (180,000 Btu/h), with the curve flattening at the 15 T percentage thereafter. DOE applied the percentage to the MSP for more-efficient equipment at each capacity for the one-time repair, then annualized the resulting repair costs. For the final rule, DOE updated repair costs using data in RS Means CostWorks 2012. DOE determined that annualized repair costs would increase in direct proportion with increases in equipment prices. Because the price of CRAC equipment increases with efficiency, the cost for component repair will also increase as the efficiency of equipment increases. See chapter 6 of the ASHRAE final rule TSD for details on the development of repair costs. DOE received two comments on the January 2012 NOPR concerning repair cost estimates. The Appliance Standard Awareness Project (ASAP) questioned whether annualizing the present value of a future outlay results in the same value as directly calculating the present value of that outlay. (ASAP, Public Meeting Transcript at pp.114-116) Emerson commented that the time profile of failure rates for compressors, which would represent a significant portion of repair costs, are basically constant over time. Therefore, according to the comment, it makes no difference whether the cost was calculated for a single year or an equivalent annual cost. (Emerson, Public Meeting Transcript at pp. 116-117) For the final rule, DOE calculated annualized repair costs for CRAC equipment by first calculating the present value of a major repair at the mid-point of the average lifetime and then calculating the equivalent annual payment that would yield the same present value. g. Equipment Lifetime DOE defines “equipment lifetime” as the age at which a unit of CRAC equipment is retired from service. DOE reviewed available literature to establish typical equipment lifetimes. The literature offered a wide range of typical equipment lifetimes, ranging from 10 to 25 years. The data did not distinguish between classes of CRAC equipment. Consequently, DOE used a distribution of lifetimes between 10 and 25 years, with an average of 15 years based on review of a range of CRAC lifetime estimates found in published studies and online documents. DOE applied this distribution to all classes of CRAC equipment analyzed. Chapter 6 of the ASHRAE final rule TSD discusses equipment lifetime. DOE received no comments on the January 2012 NOPR regarding the distribution of equipment lifetimes or the average equipment lifespan used in the LCC analysis. Accordingly, no changes were made to this analysis for the final rule. h. Discount Rate The discount rate is the rate at which future expenditures are discounted to establish their present value. DOE determined the discount rate by estimating the cost of capital for purchasers of CRAC equipment. Most purchasers use both debt and equity capital to fund investments. Therefore, for most purchasers, the discount rate is the weighted-average cost of debt and equity financing, or the weighted-average cost of capital (WACC), less the expected inflation. DOE updated the data sources for the final rule. As was done in the NOPR, to estimate the WACC of computer room air conditioner equipment purchasers that are private firms, DOE used a sample of more than 2,000 companies, grouped to represent operators of each of three commercial building types (health care, education, and office). These companies were drawn from a database of 5,891 U.S. companies presented on the Damodaran Online Web site in January 2012. 32 This database includes most of the publicly-traded companies in the United States. For most educational buildings and a portion of the office buildings occupied by public schools, universities, and State and local government agencies, DOE estimated the cost of capital based on a 40-year geometric mean of the Bond Buyer Go 20-Bond Municipal Bond Index. 33 Federal office space was assumed to use the Federal bond rate, derived as the 40-year geometric mean of long-term (>10 years) U.S. government securities. 34 When one or more of the variables needed to estimate the discount rate in the Damodaran dataset were missing or could not be obtained, DOE discarded the firm from the analysis. DOE further reduced the sample to exclude firms that were unlikely to use the computer rooms served by CRAC equipment. The WACC approach for determining discount rates accounts for the current tax status of individual firms on an overall corporate basis. DOE did not evaluate the marginal effects of increased costs, and, thus, depreciation due to more expensive equipment, on the overall tax status. 32 Damodaran financial data used for determining cost of capital is available at http://pages.stern.nyu.edu/~adamodar/ for commercial businesses (Last accessed Jan. 27, 2012). 33 Federal Reserve Bank of St. Louis, State and Local Bonds-Bond Buyer Go 20-Bond Municipal Bond Index (Last accessed April 6, 2012) (Available at: ) . 34 Calculated as a 40-year geometric average of long-term (>10 year) U.S. government securities. Rate calculated with 1972-2011 data. Data source: U.S. Federal Reserve (Last accessed Jan. 23, 2012 at www.federalreserve.gov/releases/h15/data.htm ). DOE received a comment on the January 2012 NOPR concerning the discount rates used in the LCC analysis. Edison Electric Institute (EEI) requested that major retail and internet service companies be added to the businesses that would use computer rooms having CRAC equipment. (EEI, Public Meeting Transcript at p. 120) For the final rule, DOE added several additional types of businesses into the “office” category to broaden that classification. Retail and internet firms were included. DOE used the final sample of companies to represent purchasers of CRAC equipment. For each company in the sample, DOE derived the cost of equity, cost of debt, percent debt financing, and systematic company risk from information on the Damodaran Online Web site. DOE estimated the cost of debt financing as the “risk-free” rate—long-term Federal government bond rate (6.61 percent)—added to a company-specific risk premium based on the standard deviation of its stock price. DOE estimated the cost of equity financing based on the risk-free rate, plus the product of the company-specific risk premium and an expected equity risk premium for firms facing average market risk. DOE then determined WACC for each company and the weighted average WACC for each category of the sample companies. Deducting expected inflation from the cost of capital provided estimates of real discount rate for each company. Based on this database, DOE calculated the weighted average after-tax discount rate for CRAC equipment purchases, adjusted for inflation, in each of the three building types used in the analysis. Chapter 6 of the ASHRAE final rule TSD contains the detailed calculations on the discount rate. 3. Payback Period DOE also determined the economic impact of potential amended energy conservation standards on customers by calculating the PBP of more-stringent efficiency levels relative to a baseline efficiency level. The PBP measures the amount of time it takes the commercial customer to recover the assumed higher purchase expense of more-efficient equipment through lower operating costs. Similar to the LCC, the PBP is based on the total installed cost and the operating expenses for each building type and State, weighted on the probability of shipment to each market. Because the simple PBP does not take into account changes in operating expense over time or the time value of money, DOE considered only the first year's operating expenses to calculate the PBP, unlike the LCC, which is calculated over the lifetime of the equipment. Chapter 6 of the ASHRAE final rule TSD provides additional details about the PBP. DOE received no comments on the January 2012 NOPR concerning the PBP analysis. Accordingly, no changes were made to this analysis for the final rule. F. National Impact Analysis The national impact analysis (NIA) evaluates the effects of a proposed energy conservation standard from a national perspective rather than from the customer perspective represented by the LCC. This analysis assesses the net present value (NPV) (future amounts discounted to the present) and the national energy savings (NES) of total commercial customer costs and savings that are expected to result from amended and new standards at specific efficiency levels. For each efficiency level analyzed, DOE calculated the NPV and NES for adopting more-stringent standards than the efficiency levels specified in ASHRAE Standard 90.1-2010. The NES refers to cumulative energy savings from 2012 through 2041 or 2013 through 2042, depending on the equipment class. DOE calculated energy savings in each year relative to a base case, which reflects DOE adoption of the efficiency levels specified by ASHRAE Standard 90.1-2010. DOE also calculated energy savings from adopting efficiency levels specified by ASHRAE Standard 90.1-2010 compared to the current market base case. The NPV refers to cumulative monetary savings. DOE calculated net monetary savings in each year relative to the base case (ASHRAE Standard 90.1-2010) as the difference between total operating cost savings and increases in total installed cost. Cumulative savings are the sum of the annual NPV over the specified period. DOE accounted for operating cost savings until 2055 or 2056, when the equipment installed in the 30th year after the compliance date of the amended standards should be retired. 1. Approach The NES and NPV are a function of the total number of units in use and their efficiencies. Both the NES and NPV depend on annual shipments and equipment lifetime. Both calculations start by using the shipments estimate and the quantity of units in service derived from the shipments model. With regard to estimating the NES, because more-efficient computer room air conditioners are expected to gradually replace less-efficient ones, the energy per unit of capacity used by the computer room air conditioners in service gradually decreases in the standards case relative to the base case. DOE calculated the NES by subtracting energy use under a standards-case scenario from energy use in the base case. Unit energy savings for each equipment class are taken from the LCC spreadsheet for each efficiency level and weighted based on market efficiency distributions. To estimate the total energy savings for each efficiency level, DOE first calculated the national site energy consumption ( i.e., the energy directly consumed by the units of equipment in operation) for each class of computer room air conditioners for each year of the analysis period. The analysis period begins with the earliest expected compliance date of amended Federal energy conservation standards ( i.e., 2012 or 2013), assuming DOE adoption of the ASHRAE Standard 90.1-2010 efficiency levels. For the analysis of DOE's potential adoption of more-stringent efficiency levels, the earliest compliance date would be 2017, four years after DOE would likely issue a final rule requiring such standards. Second, DOE determined the annual site energy savings, consisting of the difference in site energy consumption between the base case and the standards case for each class of computer room air conditioner. Third, DOE converted the annual site energy savings into the annual amount of energy saved at the source of electricity generation (the source energy), using a site-to-source conversion factor. Finally, DOE summed the annual source energy savings over a 30-year period to calculate the total NES. DOE performed these calculations for each efficiency level considered for computer room air conditioners in this rulemaking. DOE considered whether a rebound effect is applicable in its NES analysis. A rebound effect occurs when an increase in equipment efficiency leads to increased demand for its service. EIA in its National Energy Modeling System (NEMS) model assumes an efficiency rebound to account for an increased demand for service due to the increase in cooling (or heating) efficiency. 35 For the computer room air conditioning equipment market, there are two ways that a rebound effect could occur: (1) Increased use of the air-conditioning equipment within the commercial buildings in which such units are installed; and (2) additional instances of air-conditioning computer rooms that were not being cooled before. 35 An overview of the NEMS model and documentation is found at: http://www.eia.doe.gov/oiaf/aeo/overview/index.html. DOE believes that the first instance does not occ ur often because computer rooms are generally cooled to the level required for safe operation of the servers and other equipment. Persons maintaining the equipment have no reason to deviate from the optimal range of environmental conditions. With regard to the second instance, computer room air conditioners are unlikely to be installed in previously uncooled computer rooms, because servers and other equipment that need to be cooled or otherwise space conditioned to the degree of precision that requires a computer room air conditioner already would be. Given the potential for computer equipment damage or diminished performance, running a computer room without the appropriate environmental controls from the outset is highly unlikely. DOE received no public comments in response to the January 2012 NOPR on the issue of rebound effect. Therefore, DOE did not assume a rebound effect in the analysis. To estimate NPV, DOE calculated the net impact as the difference between total operating cost savings and increases in total installed costs. DOE calculated the NPV of each considered standard level over the life of the equipment using the following three steps. First, DOE determined the difference between the equipment costs under the standard-level case and the base case in order to obtain the net equipment cost increase resulting from the higher standard level. Second, DOE determined the difference between the base-case operating costs and the standard-level operating costs in order to obtain the net operating cost savings from each higher efficiency level. Third, DOE determined the difference between the net operating cost savings and the net equipment cost increase in order to obtain the net savings (or expense) for each year. DOE then discounted the annual net savings (or expenses) to 2012 for computer room air conditioners bought on or after 2012 or 2013, depending on product class, and summed the discounted values to provide the NPV for an efficiency level. An NPV greater than zero shows net savings ( i.e., the efficiency level would reduce customer expenditures relative to the base case in present value terms). An NPV that is less than zero indicates that the efficiency level would result in a net increase in customer expenditures in present value terms. To make the analysis more transparent to all interested parties, DOE used a commercially-available spreadsheet tool to calculate the energy savings and the national economic costs and savings from potential amended standards. Chapter 8 of the final rule TSD explains the models and how to use them. Interested parties can review DOE's analyses by changing various input quantities within the spreadsheet. Unlike the LCC analysis, the NES spreadsheet does not use distributions for inputs or outputs, but relies on national average equipment costs and energy costs developed from the LCC spreadsheet. DOE used the NES spreadsheet to perform calculations of energy savings and NPV using the annual energy consumption and total installed cost data from the LCC analysis. DOE forecasted the energy savings, energy cost savings, equipment costs, and NPV of benefits for equipment sold in each computer room air conditioner class from 2012 through 2041 or 2013 through 2042, depending on the product class. The forecast provided annual and cumulative values for all four output parameters described above. DOE received no public comments on these calculations. Accordingly, DOE maintained the same approach in this final rule. 2. Shipments Analysis DOE developed shipment projections and, in turn, calculated equipment stock by assuming that in each year, each existing computer room air conditioners either age by one year or break down after a 15-year equipment life. DOE used the shipments projection and the equipment stock to determine the NES. The shipments portion of the spreadsheet model forecasts computer room air conditioner shipments from 2012 or 2013 to 2041 or 2042, depending on the product class. Data on computer room air conditioner shipments in the U.S. were not available. To estimate U.S. shipments, DOE obtained historical and projected (2000-2020) computer room air conditioner shipment data from an Australian energy performance standards report. 36 DOE then used the ratio of business establishments in the U.S. compared to Australia to inflate Australian shipments to reflect the U.S. market. The inflator used was 13.2. Table V.8 exhibits the shipment data provided for a selection of years, while the full data set and the complete discussion of energy use indicators can be found in chapter 7 of the ASHRAE final rule TSD. DOE used these shipments data to extend a shipments trend into the future. 36 EnergyConsult Pty Ltd., Equipment Energy Efficiency Committee Regulatory Impact Statement Consultation Draft: Minimum Energy Performance Standards and Alternative Strategies for Close Control Air Conditioners, Report No. 2008/11 (Sept. 2008) (Available at: www.energyrating.gov.au ). Table V.8—Total Shipments of Computer Room Air Conditioners [Units] Year Units shipped (Australian data) Units shipped (U.S. estimate) 2000 850 11,228 2005 985 13,011 2010 1,140 15,058 2015 1,320 17,436 2020 1,526 20,157 DOE allocated overall shipments into product classes using a two-step process. First, DOE used Australian market shares to allocate shipments to six broad product classes. DOE then used the relative fraction of models for each equipment class reflected in DOE's market database to allocate shipments further into the 15 product classes analyzed. The complete discussion of shipment allocation and forecasted shipments for the different equipment classes can be found in chapter 7 of the ASHRAE final rule TSD. As equipment purchase price and repair costs increase with efficiency, DOE recognizes that higher first costs and repair costs can result in a drop in shipments. However, DOE had no basis for estimating the elasticity of shipments for computer room air conditioners as a function of first costs, repair costs, or operating costs. In addition, because computer room air conditioners are necessary for their application, DOE believes shipments would not change as a result of the higher first costs and repair costs considered in this rulemaking. Therefore, DOE assumed that the shipments projection does not change with higher standard levels. DOE received no comments on its shipments analysis in response to the January 2012 NOPR. Accordingly, DOE maintained its approach for this final rule. 3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies DOE reviewed the distribution of efficiency levels for commercially-available models within each equipment class in order to develop base-case efficiency distributions. DOE bundled the efficiency levels into “efficiency ranges” and determined the percentage of models within each range. DOE applied the percentages of models within each efficiency range to the total unit shipments for a given equipment class to estimate the distribution of shipments for the base case. Then, from those market shares and projections of shipments by equipment class, DOE extrapolated future equipment efficiency trends both for a base-case scenario and for standards-case scenarios. For each efficiency level analyzed, DOE used a “roll-up” scenario to establish the market shares by efficiency level for the year that compliance would be required with amended standards ( i.e., 2017 if DOE adopts more-stringent efficiency levels than those in ASHRAE Standard 90.1-2010). DOE collected information that suggests the efficiencies of equipment in the base case that did not meet the standard level under consideration would roll up to meet the standard level. This information also suggests that equipment efficiencies in the base case that were above the standard level under consideration would not be affected. The base-case efficiency distributions for each equipment class are presented in chapter 7 of the ASHRAE final rule TSD. For the base case, DOE had no basis to estimate potential change in efficiency market shares. Therefore, DOE assumed that, absent amended standards, forecasted market shares would remain constant until the end of the forecast period (30 years after the compliance date). This prediction could cause DOE to overestimate the savings associated with the higher efficiency levels discussed in this notice because computer room air conditioner efficiencies or relative efficiency class preferences could change over time. In response to this approach in the January 2012 NOPR, AHRI stated that the analysis of the NES-forecasted base-case distribution of efficiencies and DOE's prediction of how amended energy conservation standards might affect the distribution of efficiencies in the standards case should be redone, with the assumption being that the applicable industry test procedure will be the new edition of ASHRAE Standard 127 (i.e., ASHRAE Standard 127-2012). AHRI stated that the result should be an improved forecast of energy savings. (AHRI, No. 30 at p. 6) In response, DOE notes that as mentioned in section IV.C, it is unable to adopt ASHRAE 127-2012, because there are no test data showing the results of testing to this standard (using the NSenCOP metric) and how they compare to those obtained using ASHRAE 127-2007 (using the SCOP metric, which is also the metric of the standard levels in ASHRAE Standard 90.1-2010), so DOE could not obtain clear and convincing evidence that any new efficiency levels based on ASHRAE 127-2012 would be technologically feasible or economically justified. Therefore, DOE is retaining the approach taken in the NOPR. NEEA asked whether the national energy savings take into account the energy presumably lost due to reduced energy efficiency standards in the markets regulated by the California Energy Commission (CEC). NEEA provided a table comparing the CEC levels to the ASHRAE levels using the rule-of-thumb with a sensible heat ratio of 0.9, which suggested that in contrast to the CEC's EER requirement for several equipment classes, the corresponding SCOP level in ASHRAE Standard 90.1-2010 may be less stringent. (NEEA, No. at p. 2) In response, DOE notes that the rule-of-thumb method is approximate, and no test data are available to provide an accurate comparison between the EER standards required by the CEC and the SCOP levels in ASHRAE Standard 90.1-2010. Commenters provided no data that would help clarify this matter. In addition, DOE has no information on how the markets regulated by the CEC would react to a national standard and, therefore, how the distribution of efficiencies would be expected to change. As a result, DOE was not able to take this issue into account in its analyses. G. Emissions Analysis In the emissions analysis, DOE estimated the reduction in power sector emissions of carbon dioxide (CO 2 ), nitrogen oxides (NO X ), and mercury (Hg) from amended energy conservation standards for ASHRAE equipment. DOE used the NEMS-BT computer model, 37 which is run similarly to the AEO NEMS, except that equipment energy use is reduced by the amount of energy saved (by fuel type) at each efficiency level. The inputs of national energy savings come from the NIA spreadsheet model, while the output is the forecasted physical emissions. The net benefit of each efficiency level in today's final rule is the difference between the forecasted emissions estimated by NEMS-BT at each efficiency level and the AEO 2011 Reference case, which incorporates projected effects of all emissions regulations promulgated as of January 31, 2011. NEMS-BT tracks CO 2 emissions using a detailed module that provides results with broad coverage of all sectors and inclusion of interactive effects. For today's final rule, DOE used the version of NEMS-BT based on AEO 2011. 37 EIA approves the use of the name “NEMS” to describe only an AEO version of the model without any modification to code or data. Because the present analysis entails some minor code modifications and runs the model under various policy scenarios that deviate from AEO assumptions, the name “NEMS-BT” refers to the model as used here. (BT stands for DOE's Building Technologies Program.) SO 2 emissions from affected electric generating units (EGUs) are subject to nationwide and regional emissions cap-and-trade programs, and DOE has preliminarily determined that these programs create uncertainty about the impact of energy conservation standards on SO 2 emissions. Title IV of the Clean Air Act sets an annual emissions cap on SO 2 for affected EGUs in the 48 contiguous States and the District of Columbia (D.C.). SO 2 emissions from 28 eastern States and D.C. are also limited under the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), which created an allowance-based trading program. Although CAIR was remanded to the Environmental Protection Agency (EPA) by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) (see North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008)), it remained in effect temporarily, consistent with the D.C. Circuit's earlier opinion in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2010, EPA issued the Transport Rule proposal, a replacement for CAIR. 75 FR 45210 (August 2, 2010). On July 6, 2011, EPA issued the final Transport Rule, titled the Cross-State Air Pollution Rule. 76 FR 48208 (August 8, 2011). (See http://www.epa.gov/crossstaterule/ ). On December 30, 2011, however, the D.C. Circuit stayed the new rules while a panel of judges reviews them, and told EPA to continue enforcing CAIR (see EME Homer City Generation v. EPA, No. 11-1302, Order at *2 (D.C. Cir. Dec. 30, 2011)). The AEO 2011 NEMS-BT used for today's final rule assumes the implementation of CAIR. 38 38 DOE notes that future iterations of the NEMS-BT model will incorporate any changes necessitated by the Transport Rule, if and when regulatory and judicial review of the rule is complete. The attainment of emissions caps typically is flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. Under existing EPA regulations, any excess SO 2 emissions allowances resulting from the lower electricity demand caused by the imposition of an energy conservation standard could be used to permit offsetting increases in SO 2 emissions by any regulated EGU. However, if the new and amended standards resulted in a permanent increase in the quantity of unused emissions allowances, there would be an overall reduction in SO 2 emissions from the standards. While there remains some uncertainty about the ultimate effects of energy conservation standards on SO 2 emissions covered by the existing cap-and-trade system, the NEMS-BT modeling system that DOE uses to forecast emissions reductions currently indicates that no physical reductions in power sector emissions would occur for SO 2 . DOE acknowledges, however, that even though there is a cap on SO 2 emissions and uncertainty whether efficiency standards would reduce SO 2 emissions, it is possible that standards could reduce the compliance cost by reducing demand for SO 2 allowances. As discussed above, the AEO 2011 NEMS used for today's final rule assumes the implementation of CAIR, which established a cap on NO X emissions in 28 eastern States and the District of Columbia. With CAIR in effect, the energy conservation standards that are the subject of today's final rule are expected to have little or no physical effect on NO X emissions in those States covered by CAIR, for the same reasons that they may have little effect on SO 2 emissions. However, the final standards would be expected to reduce NO X emissions in the 22 States not affected by CAIR. For these 22 States, DOE is using the NEMS-BT to estimate NO X emissions reductions from the standards considered in today's final rule. On February 16, 2012, EPA published national emissions standards for hazardous air pollutants (NESHAPs) for mercury and certain other pollutants emitted from coal and oil-fired EGUs. 77 FR 9304 (Feb. 16, 2012) (Final Rule). The NESHAPs do not include emissions caps and, as such, DOE's energy conservation standards would likely reduce Hg emissions. For the emissions analysis for this rulemaking, DOE estimated mercury emissions reductions using NEMS-BT based on AEO 2011, which does not incorporate the NESHAPs. DOE expects that future versions of the NEMS-BT model will reflect the implementation of the NESHAPs. H. Monetizing Carbon Dioxide and Other Emissions Impacts As part of the development of this final rule, DOE considered the estimated monetary benefits likely to result from the reduced emissions of CO 2 and NO X that are expected to result from each of the considered efficiency levels. In order to make this calculation similar to the calculation of the NPV of customer benefit, DOE considered the reduced emissions expected to result over the lifetime of products shipped in the forecast period for each efficiency level. This section summarizes the basis for the monetary values used for each of these emissions and presents the values considered in this rulemaking. For today's final rule, DOE is relying on a set of values for the social cost of carbon (SCC) that was developed by an interagency process. A summary of the basis for those values is provided below, and a more detailed description of the methodologies used is provided as an appendix to chapter 10 of the final rule TSD. 1. Social Cost of Carbon Under section 1(b)(6) of Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993), agencies must, to the extent permitted by law, assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. The purpose of the SCC estimates presented here is to allow agencies to incorporate the monetized social benefits of reducing CO 2 emissions into cost-benefit analyses of regulatory actions that have small, or “marginal,” impacts on cumulative global emissions. The estimates are presented with an acknowledgement of the many uncertainties involved and with a clear understanding that they should be updated over time to reflect increasing knowledge of the science and economics of climate impacts. As part of the interagency process that developed the SCC estimates, technical experts from numerous agencies met on a regular basis to consider public comments, explore the technical literature in relevant fields, and discuss key model inputs and assumptions. The main objective of this process was to develop a range of SCC values using a defensible set of input assumptions grounded in the existing scientific and economic literatures. In this way, key uncertainties and model differences transparently and consistently inform the range of SCC estimates used in the rulemaking process. a. Monetizing Carbon Dioxide Emissions The SCC is an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services. Estimates of the SCC are provided in dollars per metric ton of carbon dioxide. When attempting to assess the incremental economic impacts of carbon dioxide emissions, the analyst faces a number of serious challenges. A recent report from the National Research Council 39 points out that any assessment will suffer from uncertainty, speculation, and lack of information about: (1) Future emissions of greenhouse gases; (2) the effects of past and future emissions on the climate system; (3) the impact of changes in climate on the physical and biological environment; and (4) the translation of these environmental impacts into economic damages. As a result, any effort to quantify and monetize the harms associated with climate change will raise serious questions of science, economics, and ethics and should be viewed as provisional. 39 National Research Council, “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use,” National Academies Press: Washington, DC (2009). Despite the serious limits of both quantification and monetization, SCC estimates can be useful in estimating the social benefits of reducing carbon dioxide emissions. Consistent with the directive in Executive Order 12866 discussed above, the purpose of the SCC estimates presented here is to make it possible for agencies to incorporate the social benefits from reducing carbon dioxide emissions into cost-benefit analyses of regulatory actions that have small, or “marginal,” impacts on cumulative global emissions. Most Federal regulatory actions can be expected to have marginal impacts on global emissions. For such policies, the agency can estimate the benefits from reduced (or costs from increased) emissions in any future year by multiplying the change in emissions in that year by the SCC value appropriate for that year. The net present value of the benefits can then be calculated by multiplying each of these future benefits by an appropriate discount factor and summing across all affected years. This approach assumes that the marginal damages from increased emissions are constant for small departures from the baseline emissions path, an approximation that is reasonable for policies that have effects on emissions that are small relative to cumulative global carbon dioxide emissions. For policies that have a large (non-marginal) impact on global cumulative emissions, there is a separate question of whether the SCC is an appropriate tool for calculating the benefits of reduced emissions. This concern is not applicable to this notice, and DOE does not attempt to answer that question here. At the time of the preparation of this notice, the most recent interagency estimates of the potential global benefits resulting from reduced CO 2 emissions in 2010, expressed in 2010$, were $4.9, $22.3, $36.5, and $67.6 per metric ton avoided. For emissions reductions that occur in later years, these values grow in real terms over time. Additionally, the interagency group determined that a range of values from 7 percent to 23 percent should be used to adjust the global SCC to calculate domestic effects, 40 although preference is given to consideration of the global benefits of reducing CO 2 emissions. 40 It is recognized that this calculation for domestic values is approximate, provisional, and highly speculative. There is no a priori reason why domestic benefits should be a constant fraction of net global damages over time. It is important to emphasize that the interagency process is committed to updating these estimates as the science and economic understanding of climate change and its impacts on society improves over time. Specifically, the interagency group has set a preliminary goal of revisiting the SCC values within 2 years or at such time as substantially updated models become available, and to continue to support research in this area. In the meantime, the interagency group will continue to explore the issues raised by this analysis and consider public comments as part of the ongoing interagency process. b. Social Cost of Carbon Values Used in Past Regulatory Analyses To date, economic analyses for Federal regulations have used a wide range of values to estimate the benefits associated with reducing carbon dioxide emissions. In the model year 2011 CAFE final rule, the Department of Transportation (DOT) used both a “domestic” SCC value of $2 per ton of CO 2 and a “global” SCC value of $33 per ton of CO 2 for 2007 emission reductions (in 2007$), increasing both values at 2.4 percent per year. It also included a sensitivity analysis at $80 per ton of CO 2 . See Average Fuel Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74 FR 14196 (March 30, 2009) (Final Rule); Final Environmental Impact Statement Corporate Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at: http://www.nhtsa.gov/fuel-economy ). A domestic SCC value is meant to reflect the value of damages in the United States resulting from a unit change in carbon dioxide emissions, while a global SCC value is meant to reflect the value of damages worldwide. A 2008 regulation proposed by DOT assumed a domestic SCC value of $7 per ton of CO 2 (in 2006$) for 2011 emission reductions (with a range of $0 to $14 for sensitivity analysis), also increasing at 2.4 percent per year. See Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) (Proposed Rule); Draft Environmental Impact Statement Corporate Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy ). A regulation for packaged terminal air conditioners and packaged terminal heat pumps finalized by DOE in October of 2008 used a domestic SCC range of $0 to $20 per ton CO 2 for 2007 emission reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008). In addition, EPA's 2008 Advance Notice of Proposed Rulemaking on Regulating Greenhouse Gas Emissions Under the Clean Air Act identified what it described as “very preliminary” SCC estimates subject to revision. 73 FR 44354 (July 30, 2008). EPA's global mean values were $68 and $40 per ton CO 2 for discount rates of approximately 2 percent and 3 percent, respectively (in 2006$ for 2007 emissions). In 2009, an interagency process was initiated to offer a preliminary assessment of how best to quantify the benefits from reducing carbon dioxide emissions. To ensure consistency in how benefits are evaluated across agencies, the Administration sought to develop a transparent and defensible method, specifically designed for the rulemaking process, to quantify avoided climate change damages from reduced CO 2 emissions. The interagency group did not undertake any original analysis. Instead, it combined SCC estimates from the existing literature to use as interim values until a more comprehensive analysis could be conducted. The outcome of the preliminary assessment by the interagency group was a set of five interim values: Global SCC estimates for 2007 (in 2006$) of $55, $33, $19, $10, and $5 per ton of CO 2 . These interim values represent the first sustained interagency effort within the U.S. government to develop an SCC for use in regulatory analysis. The results of this preliminary effort were presented in several proposed and final rules and were offered for public comment in connection with proposed rules, including the joint EPA-DOT fuel economy and CO 2 tailpipe emission proposed rules. c. Current Approach and Key Assumptions Since the release of the interim values, the interagency group reconvened on a regular basis to generate improved SCC estimates, which were considered for this final rule. Specifically, the group considered public comments and further explored the technical literature in relevant fields. The interagency group relied on three integrated assessment models (IAMs) commonly used to estimate the SCC: The FUND, DICE, and PAGE models. 41 These models are frequently cited in the peer-reviewed literature and were used in the last assessment of the Intergovernmental Panel on Climate Change. Each model was given equal weight in the SCC values that were developed. 41 The models are described in appendix 15-A of the final rule TSD. Each model takes a slightly different approach to model how changes in emissions result in changes in economic damages. A key objective of the interagency process was to enable a consistent exploration of the three models while respecting the different approaches to quantifying damages taken by the key modelers in the field. An extensive review of the literature was conducted to select three sets of input parameters for these models: Climate sensitivity, socio-economic and emissions trajectories, and discount rates. A probability distribution for climate sensitivity was specified as an input into all three models. In addition, the interagency group used a range of scenarios for the socio-economic parameters and a range of values for the discount rate. All other model features were left unchanged, relying on the model developers' best estimates and judgments. The interagency group selected four SCC values for use in regulatory analyses. Three values are based on the average SCC from three integrated assessment models, at discount rates of 2.5 percent, 3 percent, and 5 percent. The fourth value, which represents the 95th-percentile SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. For emissions (or emission reductions) that occur in later years, these values grow in real terms over time, as depicted in Table V.9. Table V.9—Social Cost of CO 2 , 2010-2050 [In 2007 dollars per metric ton] Year Discount rate (%) 5 Average 3 Average 2.5 Average 3 95th Percentile 2010 4.7 21.4 35.1 64.9 2015 5.7 23.8 38.4 72.8 2020 6.8 26.3 41.7 80.7 2025 8.2 29.6 45.9 90.4 2030 9.7 32.8 50.0 100.0 2035 11.2 36.0 54.2 109.7 2040 12.7 39.2 58.4 119.3 2045 14.2 42.1 61.7 127.8 2050 15.7 44.9 65.0 136.2 It is important to recognize that a number of key uncertainties remain, and that current SCC estimates should be treated as provisional and revisable since they will evolve with improved scientific and economic understanding. The interagency group also recognizes that the existing models are imperfect and incomplete. The National Research Council report mentioned above points out that there is tension between the goal of producing quantified estimates of the economic damages from an incremental ton of carbon and the limits of existing efforts to model these effects. There are a number of concerns and problems that should be addressed by the research community, including research programs housed in many of the Federal agencies participating in the interagency process to estimate the SCC. DOE recognizes the uncertainties embedded in the estimates of the SCC used for cost-benefit analyses. As such, DOE and others in the U.S. Government intend to periodically review and reconsider those estimates to reflect increasing knowledge of the science and economics of climate impacts, as well as improvements in modeling. In this context, statements recognizing the limitations of the analysis and calling for further research take on exceptional significance. In summary, in considering the potential global benefits resulting from reduced CO 2 emissions, DOE used the most recent values identified by the interagency process, adjusted to 2010$ using the GDP price deflator. For each of the four cases specified, the values used for emissions in 2010 were $4.9, $22.3, $36.5, and $67.6 per metric ton avoided (values expressed in 2010$). 42 To monetize the CO 2 emissions reductions expected to result from new or amended standards for the product classes in today's final rule, DOE used the values identified in Table A1 of the “Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866,” which is reprinted in appendix 10-A of the final rule TSD, appropriately escalated to 2010$. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the four cases using the specific discount rate that had been used to obtain the SCC values in each case. 42 Table A1 presents SCC values through 2050. For DOE's calculation, it derived values after 2050 using the 3-percent per year escalation rate used by the interagency group. 2. Valuation of Other Emissions Reductions DOE investigated the potential monetary benefit of reduced NO X emissions from the efficiency levels it considered. As noted above, DOE has taken into account how new or amended energy conservation standards would reduce NO X emissions in those 22 States not affected by the CAIR. DOE estimated the monetized value of NO X emissions reductions resulting from each of the efficiency levels considered for today's final rule based on environmental damage estimates found in the relevant scientific literature. Available estimates suggest a very wide range of monetary values, ranging from $370 per ton to $3,800 per ton of NO X from stationary sources, measured in 2001$ (equivalent to a range of $450 to $4,623 per ton in 2010$). 43 In accordance with OMB guidance, DOE conducted two calculations of the monetary benefits derived using each of the economic values used for NO X , one using a real discount rate of 3 percent and the other using a real discount rate of 7 percent. 44 43 For additional information, refer to U.S. Office of Management and Budget, Office of Information and Regulatory Affairs, 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, Washington, DC. 44 OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003). DOE is aware of multiple agency efforts to determine the appropriate range of values used in evaluating the potential economic benefits of reduced Hg emissions. DOE has decided to await further guidance regarding consistent valuation and reporting of Hg emissions before it monetizes Hg in its rulemakings. I. Other Issues 1. Compliance Dates of the Amended and New Energy Conservation Standards Generally, covered equipment to which a new or amended energy conservation standard applies must comply with the standard if such equipment is manufactured or imported on or after a specified date. In today's final rule, DOE is evaluating whether more-stringent efficiency levels than those in ASHRAE Standard 90.1-2010 would be technologically feasible, economically justified, and result in a significant amount of energy savings. If DOE were to adopt a rule prescribing energy conservation standards at the efficiency levels contained in ASHRAE Standard 90.1-2010, EPCA states that compliance with any such standards shall be required on or after a date which is two or three years (depending on equipment size) after the compliance date of the applicable minimum energy efficiency requirement in the amended ASHRAE/IES standard. (42 U.S.C. 6313(a)(6)(D)) DOE has applied this two-year or three-year implementation period to determine the compliance date of any energy conservation standard equal to the efficiency levels specified by ASHRAE Standard 90.1-2010 proposed by this rulemaking. Thus, if DOE decides to adopt the efficiency levels in ASHRAE Standard 90.1-2010, the compliance date of the rulemaking would be dependent upon the date specified in ASHRAE Standard 90.1-2010 or its publication date, if none is specified. The rule would apply to equipment X ≤20 0> Y ≤6.1 1 20> X ≤40 6.1> Y ≤12.2 2 40> X ≤60 12.2> Y ≤18.3 3 60> X ≤80 18.3> Y ≤24.4 4 80> X ≤100 24.4> Y ≤30.5 5 100 > X ≤120 30.5> Y ≤36.6 6 (e) Additional provisions for equipment set-up. The only additional specifications that may be used in setting up the basic model for test are those set forth in the installation and operation manual shipped with the unit. Each unit should be set up for test in accordance with the manufacturer installation and operation manuals. Paragraphs (e)(1) through (3) of this section provide specifications for addressing key information typically found in the installation and operation manuals. (1) If a manufacturer specifies a range of superheat, sub-cooling, and/or refrigerant pressure in its installation and operation manual for a given basic model, any value(s) within that range may be used to determine refrigerant charge or mass of refrigerant, unless the manufacturer clearly specifies a rating value in its installation and operation manual, in which case the specified rating value shall be used. (2) The air flow rate used for testing must be that set forth in the installation and operation manuals being shipped to the commercial customer with the basic model and clearly identified as that used to generate the DOE performance ratings. If a rated air flow value for testing is not clearly identified, a value of 400 standard cubic feet per minute (scfm) per ton shall be used. (3) For VRF systems, the test set-up and the fixed compressor speeds ( i.e., the maximum, minimum, and any intermediate speeds used for testing) should be recorded and maintained as part of the test data underlying the certified ratings that is required to be maintained under 10 CFR 429.71. (f) Manufacturer involvement in assessment or enforcement testing for variable refrigerant flow systems. A manufacturer's representative will be allowed to witness assessment and/or enforcement testing for VRF systems. The manufacturer's representative will be allowed to inspect and discuss set-up only with a DOE representative and adjust only the modulating components during testing in the presence of a DOE representative that are necessary to achieve steady-state operation. Only previously documented specifications for set-up as specified under paragraphs (d) and (e) of this section will be used. 8. Section 431.97 is revised to read as follows: § 431.97 Energy efficiency standards and their compliance dates. (a) All basic models of commercial package air-conditioning and heating equipment must be tested for performance using the applicable DOE test procedure in § 431.96, be compliant with the applicable standards set forth in paragraphs (b) through (f) of this section, and be certified to the Department under 10 CFR part 429. (b) Each commercial air conditioner or heat pump (not including single package vertical air conditioners and single package vertical heat pumps, packaged terminal air conditioners and packaged terminal heat pumps, computer room air conditioners, and variable refrigerant flow systems) manufactured on and after the compliance date listed in the corresponding table must meet the applicable minimum energy efficiency standard level(s) set forth in Tables 1, 2, and 3 of this section. Table 1 to § 431.97—Minimum Cooling Efficiency Standards for Air-Conditioning and Heating Equipment [Not including single package vertical air conditioners and single package vertical heat pumps, packaged terminal air conditioners and packaged terminal heat pumps, computer room air conditioners, and variable refrigerant flow multi-split air conditioners and heat pumps] Equipment type Cooling capacity Sub- category Heating type Efficiency level Compliance date: products manufactured on and after . . . Small Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled, 3 Phase) 240,000 Btu/h HP No Heating or Electric Resistance heating EER = 10.6 January 1, 2010. All Other Types of Heating EER = 10.4 January 1, 2010. Very Large Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled) ≥240,000 Btu/h and <760,000 Btu/h AC No Heating or Electric Resistance Heating All Other Types of Heating EER = 10.0 EER = 9.8 January 1, 2010. January 1, 2010. HP No Heating or Electric Resistance Heating EER = 9.5 January 1, 2010. All Other Types of Heating EER = 9.3 January 1, 2010. Small Commercial Packaged Air-Conditioning and Heating Equipment (Water-Cooled, Evaporatively-Cooled, and Water-Source) <17,000 Btu/h ≥17,000 Btu/h and <65,000 Btu/h AC HP AC HP All All All All EER = 12.1 EER = 11.2 EER = 12.1 EER = 12.0 October 29, 2003. October 29, 2003. October 29, 2003. October 29, 2003. ≥65,000 Btu/h and <135,000 Btu/h AC No Heating or Electric Resistance Heating EER = 11.5 October 29, 2003. 1 All Other Types of Heating EER = 11.3 October 29, 2003. 1 HP All EER = 12.0 October 29, 2003. 1 Large Commercial Packaged Air-Conditioning and Heating Equipment (Water-Cooled, Evaporatively-Cooled, and Water-Source) ≥135,000 Btu/h and <240,000 Btu/h AC HP All All EER = 11.0 EER = 11.0 October 29, 2004. 2 October 29, 2004. 2 Very Large Commercial Packaged Air-Conditioning and Heating Equipment (Water-Cooled, Evaporatively-Cooled, and Water-Source) ≥240,000 Btu/h and <760,000 Btu/h AC No Heating or Electric Resistance Heating All Other Types of Heating EER = 11.0 EER = 10.8 January 10, 2011. 2 January 10, 2011. 2 HP No Heating or Electric Resistance Heating EER = 11.0 January 10, 2011. 2 All Other Types of Heating EER = 10.8 January 10, 2011. 2 1 And manufactured before June 1, 2013. See Table 3 of this section for updated efficiency standards. 2 And manufactured before June 1, 2014. See Table 3 of this section for updated efficiency standards. Table 2 to § 431.97—Minimum Heating Efficiency Standards for Air-Conditioning and Heating Equipment [Heat pumps] Equipment type Cooling capacity Efficiency level Compliance date: Products manufactured on and after . . . Small Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled, 3 Phase) <65,000 Btu/h HSPF = 7.7 June 16, 2008. Small Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled) ≥65,000 Btu/h and <135,000 Btu/h COP = 3.3 January 1, 2010. Large Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled) ≥135,000 Btu/h and <240,000 Btu/h COP = 3.2 January 1, 2010. Very Large Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled) ≥240,000 Btu/h and <760,000 Btu/h COP = 3.2 January 1, 2010. Small Commercial Packaged Air-Conditioning and Heating Equipment (Water-Source) <135,000 Btu/h COP = 4.2 October 29, 2003. Table 3 to § 431.97—Updates to the Minimum Cooling Efficiency Standards for Water-Cooled and Evaporatively-Cooled Air-Conditioning and Heating Equipment Equipment type Cooling capacity Heating type Efficiency level Compliance date: Products manufactured on and after . . . Small Commercial Packaged Air-Conditioning and Heating Equipment (Water-Cooled) ≥65,000 Btu/h and <135,000 Btu/h No Heating or Electric Resistance Heating All Other Types of Heating EER = 12.1 EER = 11.9 June 1, 2013. June 1, 2013. Large Commercial Packaged Air-Conditioning and Heating Equipment (Water-Cooled) ≥135,000 Btu/h and <240,000 Btu/h No Heating or Electric Resistance Heating All Other Types of Heating EER = 12.5 EER = 12.3 June 1, 2014. June 1, 2014. Very Large Commercial Packaged Air-Conditioning and Heating Equipment (Water-Cooled) ≥240,000 Btu/h and <760,000 Btu/h No Heating or Electric Resistance Heating All Other Types of Heating EER = 12.4 EER = 12.2 June 1, 2014. June 1, 2014. Small Commercial Packaged Air-Conditioning and Heating Equipment (Evaporatively-Cooled) ≥65,000 Btu/h and <135,000 Btu/h No Heating or Electric Resistance Heating All Other Types of Heating EER = 12.1 EER = 11.9 June 1, 2013. June 1, 2013. Large Commercial Packaged Air-Conditioning and Heating Equipment (Evaporatively-Cooled) ≥135,000 Btu/h and <240,000 Btu/h No Heating or Electric Resistance Heating All Other Types of Heating EER = 12.0 EER = 11.8 June 1, 2014. June 1, 2014. Very Large Commercial Packaged Air-Conditioning and Heating Equipment (Evaporatively-Cooled) ≥240,000 Btu/h and <760,000 Btu/h No Heating or Electric Resistance Heating All Other Types of Heating EER = 11.9 EER = 11.7 June 1, 2014. June 1, 2014. (c) Each packaged terminal air conditioner (PTAC) and packaged terminal heat pump (PTHP) manufactured on or after January 1, 1994, and before October 8, 2012 (for standard size PTACs and PTHPs) and before October 7, 2010 (for non-standard size PTACs and PTHPs) must meet the applicable minimum energy efficiency standard level(s) set forth in Table 4 of this section. Each PTAC and PTHP manufactured on or after October 8, 2012 (for standard size PTACs and PTHPs) and on or after October 7, 2010 (for non-standard size PTACs and PTHPs) must meet the applicable minimum energy efficiency standard level(s) set forth in Table 5 of this section. Table 4 to § 431.97—Minimum Efficiency Standards for PTAC and PTHP Equipment type Cooling capacity Efficiency level Compliance date: products manufactured on and after . . . PTAC <7,000 Btu/h EER = 8.88 January 1, 1994. ≥7,000 Btu/h and <15,000 Btu/h EER = 10.0—(0.16 × Cap 1 ) January 1, 1994. ≥15,000 Btu/h EER = 7.6 January 1, 1994. PTHP <7,000 Btu/h EER = 8.88 COP = 2.72 January 1, 1994. ≥7,000 Btu/h and <15,000 Btu/h EER = 10.0—(0.16 × Cap 1 ) COP = 1.3 + (0.16 × EER 2 ) January 1, 1994. ≥15,000 Btu/h EER = 7.6 COP = 2.52 January 1, 1994. 1 “Cap” means cooling capacity in thousand Btu/h at 95 °F outdoor dry-bulb temperature. 2 The applicable minimum cooling EER prescribed in this table. Table 5 to § 431.97 Updated Minimum Efficiency Standards for PTAC and PTHP Equipment type Cooling capacity Sub-category Efficiency level Compliance date: products manufactured on and after . . . PTAC Standard Size <7,000 Btu/h EER = 11.7 October 8, 2012. ≥7,000 Btu/h and <15,000 Btu/h EER = 13.8−(0.3 × Cap 1 ) October 8, 2012. ≥15,000 Btu/h EER = 9.3 October 8, 2012. Non-Standard Size <7,000 Btu/h EER = 9.4 October 7, 2010. ≥7,000 Btu/h and <15,000 Btu/h EER = 10.9−(0.213 × Cap 1 ) October 7, 2010. ≥15,000 Btu/h EER = 7.7 October 7, 2010. PTHP Standard Size <7,000 Btu/h EER = 11.9 COP = 3.3 October 8, 2012. ≥7,000 Btu/h and <15,000 Btu/h EER = 14.0−(0.3 × Cap 1 ) COP = 3.7—(0.052 × Cap 1 ) October 8, 2012. ≥15,000 Btu/h EER = 9.5 COP = 2.9 October 8, 2012. Non-Standard Size <7,000 Btu/h EER = 9.3 COP = 2.7 October 7, 2010. ≥7,000 Btu/h and <15,000 Btu/h EER = 10.8−(0.213 × Cap 1 ) COP = 2.9−(0.026 × Cap 1 ) October 7, 2010. ≥15,000 Btu/h EER = 7.6 COP = 2.5 October 7, 2010. 1 “Cap” means cooling capacity in thousand Btu/h at 95 °F outdoor dry-bulb temperature. (d) Each single package vertical air conditioner and heat pump manufactured on or after January 1, 2010, must meet the applicable minimum energy efficiency standard level(s) set forth in this section. Table 6 to § 431.97 Minimum Efficiency Standards for Single Package Vertical Air Conditioners and Single Package Vertical Heat Pumps Equipment type Cooling capacity Sub-category Efficiency level Compliance date: Products manufactured on and after . . . Single package vertical air conditioners and single package vertical heat pumps, single-phase and three-phase <65,000 Btu/h AC HP EER = 9.0 EER = 9.0 COP = 3.0 January 1, 2010. January 1, 2010. Single package vertical air conditioners and single package vertical heat pumps ≥65,000 Btu/h and <135,000 Btu/h AC HP EER = 8.9 EER = 8.9 COP = 3.0 January 1, 2010. January 1, 2010. Single package vertical air conditioners and single package vertical heat pumps ≥135,000 Btu/h and <240,000 Btu/h AC HP EER = 8.6 EER = 8.6 COP = 2.9 January 1, 2010. January 1, 2010. (e) Each computer room air conditioner with a net sensible cooling capacity less than 65,000 Btu/h manufactured on or after October 29, 2012, and each computer room air conditioner with a net sensible cooling capacity greater than or equal to 65,000 Btu/h manufactured on or after October 29, 2013, must meet the applicable minimum energy efficiency standard level(s) set forth in this section. Table 7 to § 431.97—Minimum Efficiency Standards for Computer Room Air Conditioners Equipment type Net sensible cooling capacity Minimum SCOP efficiency Downflow unit Upflow unit Compliance date: Products manufactured on and after . . . Computer Room Air Conditioners, Air-Cooled <65,000 Btu/h ≥65,000 Btu/h and <240,000 Btu/h 2.20 2.10 2.09 1.99 October 29, 2012. October 29, 2013. ≥240,000 Btu/h and <760,000 Btu/h 1.90 1.79 October 29, 2013. Computer Room Air Conditioners, Water-Cooled <65,000 Btu/h ≥65,000 Btu/h and <240,000 Btu/h 2.60 2.50 2.49 2.39 October 29, 2012. October 29, 2013. ≥240,000 Btu/h and <760,000 Btu/h 2.40 2.29 October 29, 2013. Computer Room Air Conditioners, Water-Cooled with a Fluid Economizer <65,000 Btu/h ≥65,000 Btu/h and <240,000 Btu/h ≥240,000 Btu/h and <760,000 Btu/h 2.55 2.45 2.35 2.44 2.34 2.24 October 29, 2012. October 29, 2013. October 29, 2013. Computer Room Air Conditioners, Glycol-Cooled <65,000 Btu/h ≥65,000 Btu/h and <240,000 Btu/h 2.50 2.15 2.39 2.04 October 29, 2012. October 29, 2013. ≥240,000 Btu/h and <760,000 Btu/h 2.10 1.99 October 29, 2013. Computer Room Air Conditioner, Glycol-Cooled with a Fluid Economizer <65,000 Btu/h ≥65,000 Btu/h and <240,000 Btu/h ≥240,000 Btu/h and <760,000 Btu/h 2.45 2.10 2.05 2.34 1.99 1.94 October 29, 2012. October 29, 2013. October 29, 2013. (f) Each variable refrigerant flow air conditioner or heat pump manufactured on or after the compliance date listed in this table must meet the applicable minimum energy efficiency standard level(s) set forth in this section. Table 8 to § 431.97—Minimum Efficiency Standards for Variable Refrigerant Flow Multi-Split Air Conditioners and Heat Pumps Equipment type Cooling capacity Heating type 1 Efficiency level Compliance date: Products manufactured on and after . . . VRF Multi-Split Air Conditioners (Air-Cooled) <65,000 Btu/h ≥65,000 Btu/h and <135,000 Btu/h All No Heating or Electric Resistance Heating 13.0 SEER 11.2 EER June 16, 2008. January 1, 2010. All Other Types of Heating 11.0 EER January 1, 2010. ≥135,000 Btu/h and <240,000 Btu/h No Heating or Electric Resistance Heating 11.0 EER January 1, 2010. All Other Types of Heating 10.8 EER January 1, 2010. ≥240,000 Btu/h and <760,000 Btu/h No Heating or Electric Resistance Heating 10.0 EER January 1, 2010. All Other Types of Heating 9.8 EER January 1, 2010. VRF Multi-Split Heat Pumps (Air-Cooled) <65,000 Btu/h All 13.0 SEER 7.7 HSPF June 16, 2008. ≥65,000 Btu/h and <135,000 Btu/h No Heating or Electric Resistance Heating 11.0 EER 3.3 COP January 1, 2010. All Other Types of Heating 10.8 EER 3.3 COP January 1, 2010. ≥135,000 Btu/h and <240,000 Btu/h No Heating or Electric Resistance Heating 10.6 EER 3.2 COP January 1, 2010. All Other Types of Heating 10.4 EER 3.2 COP January 1, 2010. ≥240,000 Btu/h and <760,000 Btu/h No Heating or Electric Resistance Heating 9.5 EER 3.2 COP January 1, 2010. All Other Types of Heating 9.3 EER 3.2 COP January 1, 2010. VRF Multi-Split Heat Pumps (Water-Source)* * * <17,000 Btu/h Without heat recovery 12.0 EER 4.2 COP October 29, 2012. October 29, 2003. With heat recovery 11.8 EER 4.2 COP October 29, 2012. October 29, 2003. ≥17,000 Btu/h and <65,000 Btu/h All 12.0 EER 4.2 COP October 29, 2003. ≥65,000 Btu/h and <135,000 Btu/h All 12.0 EER 4.2 COP October 29, 2003. ≥135,000 Btu/h and <760,000 Btu/h Without heat recovery 10.0 EER 3.9 COP October 29, 2013. With heat recovery 9.8 EER 3.9 COP October 29, 2013 1 VRF Multi-Split Heat Pumps (Air-Cooled) with heat recovery fall under the category of “All Other Types of Heating” unless they also have electric resistance heating, in which case it falls under the category for “No Heating or Electric Resistance Heating.” 9. Add § 431.104 to read as follows: § 431.104 Sources for information and guidance. (a) General. The standards listed in this paragraph are referred to in the DOE test procedures and elsewhere in this part but are not incorporated by reference. These sources are given here for information and guidance. (b) ASTM. American Society for Testing and Materials, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA, 19438-2959, 1-(877) 909-2786, or go to: http://www.astm.org/index.shtml. (1) ASTM Standard Test Method C177-97, “Standard Test Method for Steady-State Heat Flux Measurements and Thermal Transmission Properties by Means of the Guarded-Hot-Plate Apparatus.” (2) ASTM Standard Test Method C518-91, “Standard Test Method for Steady-State Heat Flux Measurements and Thermal Transmission Properties by Means of the Heat Flow Meter Apparatus.” (3) ASTM Standard Test Method D2156-80, “Method for Smoke Density in Flue Gases from Burning Distillate Fuels.” 10. Section 431.105 is revised to read as follows: § 431.105 Materials incorporated by reference. (a) General. DOE incorporates by reference the following test procedures into subpart G of part 431. The materials listed have been approved for incorporation by reference by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Any subsequent amendment to the listed materials by the standard-setting organization will not affect the DOE regulations unless and until such regulations are amended by DOE. Materials are incorporated as they exist on the date of the approval, and a notice of any change in the materials will be published in the Federal Register . All approved materials are available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741-6030, or go to: http://www.archives.gov/federal_register/code_of_federalregulations/ibr_locations.html . Also, this material is available for inspection at U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, 6th Floor, 950 L'Enfant Plaza, SW., Washington, DC 20024, (202) 586-2945, or go to: http://www1.eere.energy.gov/buildings/appliance_standards The referenced test procedure standards are listed below by relevant standard-setting organization, along with information on how to obtain copies from those sources. (b) ANSI. American National Standards Institute, 25 W. 43rd Street, 4th Floor, New York, NY 10036, (212) 642-4900, or go to: http://www.ansi.org . (1) ANSI Z21.10.3-1998 (“ANSI Z21.10.3-1998”), “ Gas Water Heaters, Volume III, Storage Water Heaters With Input Ratings Above 75,000 Btu Per Hour, Circulating and Instantaneous, Z21.10.3-1998, CSA 4.3-M98, and its Addenda, ANSI Z21.10.3a-2000, CSA 4.3a-M00,” approved by ANSI on October 18, 1999, IBR approved for § 431.106. (2) ANSI Z21.10.3-2011 (“ANSI Z21.10.3-2011”), “ Gas Water Heaters, Volume III, Storage Water Heaters With Input Ratings Above 75,000 Btu Per Hour, Circulating and Instantaneous, ” approved on March 7, 2011, IBR approved for § 431.106. (3) [Reserved]. 11. Section 431.106 is revised to read as follows: § 431.106 Uniform test method for the measurement of energy efficiency of commercial water heaters and hot water supply boilers (other than commercial heat pump water heaters). (a) Scope. This section covers the test procedures you must follow if, pursuant to EPCA, you are measuring the thermal efficiency or standby loss, or both, of a storage or instantaneous water heater or hot water supply boiler (other than a commercial heat pump water heater). (b) Testing and Calculations. Determine the energy efficiency of each covered product by conducting the test procedure(s), set forth in the two rightmost columns of the following table, that apply to the energy efficiency descriptor(s) for that product: Table 1 to § 431.106—Test Procedures for Commercial Water Heaters and Hot Water Supply Boilers [Other than commercial heat pump water heaters] Equipment type Energy efficiency descriptor Use test setup, equipment and procedures in subsection labeled “Method of Test” of Test procedure required for compliance until With these additional stipulations Gas-fired Storage and Instantaneous Water Heaters and Hot Water Supply Boilers * Thermal Efficiency Standby Loss ANSI Z21.10.3-1998 **, § 2.9 ANSI Z21.10.3-1998 **, § 2.10 May 13, 2013 May 13, 2013 A. For all products, the duration of the standby loss test shall be until whichever of the following occurs first after you begin to measure the fuel and/or electric consumption: (1) The first cutout after 24 hours or (2) 48 hours, if the water heater is not in the heating mode at that time. B. For oil and gas products, the standby loss in Btu per hour must be calculated as follows: SL (Btu per hour) = S (% per hour) × 8.25 (Btu/gal-F) × Measured Volume (gal) × 70 (degrees F). C. For oil-fired products, apply the following in conducting the thermal efficiency and standby loss tests: (1) Venting Requirements—Connect a vertical length of flue pipe to the flue gas outlet of sufficient height so as to meet the minimum draft specified by the manufacturer. (2) Oil Supply—Adjust the burner rate so that: (a) The hourly Btu input rate lies within ±2 percent of the manufacturer's specified input rate, (b) the CO 2 reading shows the value specified by the manufacturer, (c) smoke in the flue does not exceed No. 1 smoke as measured by the procedure in ASTM-D-2156-80, and (d) fuel pump pressure lies within ±10 percent of manufacturer's specifications. D. For electric products, apply the following in conducting the standby loss test: (1) Assume that the thermal efficiency (Et) of electric water heaters with immersed heating elements is 98 percent. (2) Maintain the electrical supply voltage to within ±5 percent of the center of the voltage range specified on the water heater nameplate. (3) If the set up includes multiple adjustable thermostats, set the highest one first to yield a maximum water temperature in the specified range as measured by the topmost tank thermocouple. Then set the lower thermostat(s) to yield a maximum mean tank temperature within the specified range. E. Install water-tube water heaters as shown in Figure 2, “Arrangement for Testing Water-tube Type Instantaneous and Circulating Water Heaters.” * As to hot water supply boilers with a capacity of less than 10 gallons, these test methods become mandatory on October 21, 2005. Prior to that time, you may use for these products either (1) these test methods if you rate the product for thermal efficiency, or (2) the test methods in Subpart E if you rate the product for combustion efficiency as a commercial packaged boiler. ** Incorporated by reference, see § 431.105. Table 2 to § 431.106—Test Procedures for Commercial Water Heaters and Hot Water Supply Boilers [Other than commercial heat pump water heaters] Equipment type Energy efficiency descriptor Use test setup, equipment and procedures in subsection labeled “Method of Test” of Test procedure required for compliance on and after With these additional stipulations Gas-fired Storage and Instantaneous Water Heaters and Hot Water Supply Boilers * Oil-fired Storage and Instantaneous Water Heaters and Hot Water Supply Boilers * Electric Storage and Instantaneous Water Heaters Thermal Efficiency Standby Loss Thermal Efficiency Standby Loss Standby Loss ANSI Z21.10.3-2011 **, Exhibit G1 ANSI Z21.10.3-2011 **, Exhibit G2 ANSI Z21.10.3-2011 **, Exhibit G1 ANSI Z21.10.3-2011 **, Exhibit G2 ANSI Z21.10.3-2011 **, Exhibit G2 May 13, 2013 May 13, 2013 May 13, 2013 May 13, 2013 May 13, 2013 A. For all products, the duration of the standby loss test shall be until whichever of the following occurs first after you begin to measure the fuel and/or electric consumption: (1) The first cutout after 24 hours or (2) 48 hours, if the water heater is not in the heating mode at that time. B. For oil and gas products, the standby loss in Btu per hour must be calculated as follows: SL (Btu per hour) = S (% per hour) × 8.25 (Btu/gal-F) × Measured Volume (gal) × 70 (degrees F). C. For oil-fired products, apply the following in conducting the thermal efficiency and standby loss tests: (1) Venting Requirements—Connect a vertical length of flue pipe to the flue gas outlet of sufficient height so as to meet the minimum draft specified by the manufacturer. (2) Oil Supply—Adjust the burner rate so that: (a) The hourly Btu input rate lies within ±2 percent of the manufacturer's specified input rate, (b) the CO 2 reading shows the value specified by the manufacturer, (c) smoke in the flue does not exceed No. 1 smoke as measured by the procedure in ASTM-D-2156-80, and (d) fuel pump pressure lies within ±10 percent of manufacturer's specifications. D. For electric products, apply the following in conducting the standby loss test: (1) Assume that the thermal efficiency (Et) of electric water heaters with immersed heating elements is 98 percent. (2) Maintain the electrical supply voltage to within ±5 percent of the center of the voltage range specified on the water heater nameplate. (3) If the set up includes multiple adjustable thermostats, set the highest one first to yield a maximum water temperature in the specified range as measured by the topmost tank thermocouple. Then set the lower thermostat(s) to yield a maximum mean tank temperature within the specified range. E. Install water-tube water heaters as shown in Figure 2, “Arrangement for Testing Water-tube Type Instantaneous and Circulating Water Heaters.” * As to hot water supply boilers with a capacity of less than 10 gallons, these test methods become mandatory on October 21, 2005. Prior to that time, you may use for these products either (1) these test methods if you rate the product for thermal efficiency, or (2) the test methods in Subpart E if you rate the product for combustion efficiency as a commercial packaged boiler. ** Incorporated by reference, see § 431.105. Note: The following will not appear in the Code of Federal Regulations. BILLING CODE 6450-01-P ER16MY12.000 ER16MY12.001 [FR Doc. 2012-10650 Filed 5-15-12; 8:45 am] BILLING CODE 6450-01-C --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2012-10650. Public record. Not legal advice.