Energy Conservation Program: Energy Conservation Standards for Small, Large, and Very Large Air-Cooled Commercial Package Air Conditioning and Heating Equipment

Federal RegisterSep 30, 2014

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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket Number EERE-2013-BT-STD-0007]

RIN 1904-AC95

Energy Conservation Program: Energy Conservation Standards for Small, Large, and Very Large Air-Cooled Commercial Package Air Conditioning and Heating Equipment

AGENCY:

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

ACTION:

Notice of proposed rulemaking (NOPR) and public meeting.

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including small, large, and very large air-cooled commercial package air conditioning and heating equipment. EPCA also requires the U.S. Department of Energy (DOE) to determine whether more-stringent, amended standards would be technologically feasible and economically justified, and would save a significant amount of energy. In this document, DOE proposes to amend the energy conservation standards for small, large, and very large air-cooled commercial package air conditioning and heating equipment. This document also announces a public meeting to receive comment on these proposed standards and associated analyses and results.

DATES:

DOE will hold a public meeting on Thursday, November 6, 2014, from 9 a.m. to 4 p.m., in Washington, DC. The meeting will also be broadcast as a webinar. See section VII Public Participation for webinar registration information, participant instructions, and information about the capabilities available to webinar participants.

DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than December 1, 2014. See section VII Public Participation for details.

ADDRESSES:

The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 4A-104, 1000 Independence Avenue SW., Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at (202) 586-2945. Please note that foreign nationals visiting DOE Headquarters are subject to advance security screening procedures. Any foreign national wishing to participate in the meeting should advise DOE as soon as possible by contacting Ms. Edwards to initiate the necessary procedures. Please also note that those wishing to bring laptops into the Forrestal Building will be required to obtain a property pass. Visitors should avoid bringing laptops, or allow an extra 45 minutes. Persons can attend the public meeting via webinar. For more information, refer to the Public Participation section VII.

Any comments submitted must identify the NOPR for Energy Conservation Standards for small, large, and very large air-cooled commercial package air conditioning and heating equipment, and provide docket number EE-2013-BT-STD-0007 and/or regulatory information number (RIN) number 1904-AC95. Comments may be submitted using any of the following methods:

Federal eRulemaking Portal: www.regulations.gov.

Follow the instructions for submitting comments.

Email: CommPkgACHP2013STD0007@ee.doe.gov.

Include the docket number and/or RIN in the subject line of the message.

Mail:

Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a CD. It is not necessary to include printed copies.

Hand Delivery/Courier:

Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to Office of Energy Efficiency and Renewable Energy through the methods listed above and by email to

Chad_S_Whiteman@omb.eop.gov.

For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII of this document (Public Participation).

Docket: The docket, which includes

Federal Register

notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at regulations.gov. All documents in the docket are listed in the regulations.gov index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available.

A link to the docket Web page can be found at:

http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0007.

This Web page will contain a link to the docket for this notice on the regulations.gov site. The regulations.gov Web page will contain simple instructions on how to access all documents, including public comments, in the docket. See section VII for further information on how to submit comments through

www.regulations.gov.

For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, contact Ms. Brenda Edwards at (202) 586-2945 or by email:

Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT:

Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202)-287-1692. Email:

John.Cymbalsky@ee.doe.gov.

Mr. Michael Kido, U.S. Department of Energy, Office of the General Counsel, Mailstop GC-71, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-8145. Email:

Michael.Kido@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Rule

A. Benefits and Costs to Customers

B. Impact on Manufacturers

C. National Benefits

II. Introduction

A. Authority

B. Background

1. Current Standards

2. History of Standards Rulemaking for Small, Large, and Very Large Air-Cooled Commercial Package Air Conditioning and Heating Equipment

III. General Discussion

A. Energy Efficiency Descriptor

B. Technological Feasibility

1. General

2. Maximum Technologically Feasible Levels

C. Energy Savings

1. Determination of Savings

2. Significance of Savings

D. Economic Justification

1. Specific Criteria

a. Economic Impact on Manufacturers and Consumers

b. Life-Cycle Cost

c. Energy Savings

d. Lessening of Utility or Performance of Products

e. Impact of Any Lessening of Competition

f. Need for National Energy Conservation

g. Other Factors

2. Rebuttable Presumption

IV. Methodology and Discussion of Related Comments

A. Market and Technology Assessment

1. General

2. Scope of Coverage and Equipment Classes

3. Technology Options

B. Screening Analysis

C. Engineering Analysis

1. Methodology

2. Baseline Efficiency Levels

3. Incremental Efficiency Levels

4. Equipment Testing, Reverse Engineering, Energy Modeling, and Cost-Efficiency Results

D. Markups Analysis

E. Energy Use Analysis

1. Energy Use Simulations

2. Generalized Building Sample

F. Life-Cycle Cost and Payback Period Analysis

1. Equipment Costs

2. Installation Costs

3. Unit Energy Consumption

4. Electricity Prices and Electricity Price Trends

5. Maintenance Costs

6. Repair Costs

7. Lifetime

8. Discount Rate

9. Base Case Market Efficiency Distribution

10. Compliance Date

11. Payback Period Inputs

12. Rebuttable-Presumption Payback Period

G. Shipments Analysis

1. Shipments by Market Segment

2. Shipment Market Shares by Efficiency Level

H. National Impact Analysis

1. Efficiency Trends

2. National Energy Savings

3. Net Present Value of Customer Benefit

a. Total Annual Installed Cost

b. Total Annual Operating Cost Savings

I. Customer Subgroup Analysis

J. Manufacturer Impact Analysis

1. Overview

2. Government Regulatory Impact Model

a. Government Regulatory Impact Model Key Inputs

b. Government Regulatory Impact Model Scenarios

c. Manufacturer Interviews

K. Emissions Analysis

L. Monetizing Carbon Dioxide and Other Emissions Impacts

1. Social Cost of Carbon

2. Valuation of Other Emissions Reductions

M. Utility Impact Analysis

N. Employment Impact Analysis

V. Analytical Results

A. Trial Standard Levels

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Customers

a. Life-Cycle Cost and Payback Period

b. Customer Subgroup Analysis

c. Rebuttable Presumption Payback

2. Economic Impacts on Manufacturers

a. Industry Cash-Flow Analysis Results

b. Impacts on Direct Employment

c. Impacts on Manufacturing Capacity

d. Cumulative Regulatory Burden

3. National Impact Analysis

a. Significance of Energy Savings

b. Net Present Value of Customer Costs and Benefits

c. Indirect Impacts on Employment

4. Impact on Utility or Performance

5. Impact of Any Lessening of Competition

6. Need of the Nation to Conserve Energy

7. Summary of National Economic Impacts

8. Other Factors

C. Proposed Standards

1. Benefits and Burdens of Trial Standard Levels Considered for Small, Large, and Very Large Air-Cooled Commercial Package Air Conditioning and Heating Equipment

2. Summary of Benefits and Costs (Annualized) of the Proposed Standards

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

B. Review Under the Regulatory Flexibility Act

1. Description and Estimated Number of Small Entities Regulated

2. Description and Estimate of Compliance Requirements

3. Duplication, Overlap, and Conflict with Other Rules and Regulations

4. Significant Alternatives to the Rule

C. Review Under the Paperwork Reduction Act

D. Review Under the National Environmental Policy Act of 1969

E. Review Under Executive Order 13132

F. Review Under Executive Order 12988

G. Review Under the Unfunded Mandates Reform Act of 1995

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

I. Review Under Executive Order 12630

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

K. Review Under Executive Order 13211

L. Review Under the Information Quality Bulletin for Peer Review

VII. Public Participation

A. Attendance at the Public Meeting

B. Procedure for Submitting Prepared General Statements For Distribution

C. Conduct of the Public Meeting

D. Submission of Comments

E. Issues on Which DOE Seeks Comment

VIII. Approval of the Office of the Secretary

I. Summary of the Proposed Rule

Title III, Part B

of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles. Pursuant to EPCA, any new or amended energy conservation standard that DOE prescribes for certain equipment, such as small, large, and very large air-cooled commercial package air conditioning and heating equipment (also known as commercial unitary air conditioners and heat pumps), shall be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II)). Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6313(a)(6)(A)(ii)(II)). In accordance with these and other statutory provisions discussed in this notice, including EPCA's requirement that DOE review its standards for this equipment every six years, DOE proposes amended energy conservation standards for small, large, and very large air-cooled commercial package air conditioning and heating equipment (also referred to in this notice as small, large, and very large air-cooled commercial unitary air conditioners and commercial unitary heat pumps). The proposed standards, which are collectively characterized as Trial Standard Level 3 (TSL 3), prescribe the minimum allowable efficiency level based on an integrated energy efficiency ratio (IEER) and, for air-cooled commercial unitary heat pumps, coefficient of performance (COP). These proposed levels are shown in Table I.1. These proposed standards, if adopted, would apply to all equipment listed in Table I.1 and manufactured in and intended for distribution and sale in the U.S., or imported into, the U.S. on or after the date three years after the publication of the final rule for this equipment.

For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A.

Table I.1—Proposed Energy Conservation Standards for Small, Large, and Very Large Commercial Package Air Conditioning and Heating Equipment

Equipment type

Heating type

Proposed energy conservation standard

Small Commercial Packaged Air Conditioners (AC) and Heat Pump (HP) (Air-Cooled)—≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity

Electric Resistance Heating or No Heating

All Other Types of Heating

14.8 IEER.

14.6 IEER.

Electric Resistance Heating or No Heating

All Other Types of Heating

14.1 IEER, 3.5 COP.

13.9 IEER, 3.4 COP.

Large Commercial Packaged AC and HP (Air-Cooled)—≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity

Electric Resistance Heating or No Heating

All Other Types of Heating

14.2 IEER.

14.0 IEER.

Electric Resistance Heating or No Heating

All Other Types of Heating

13.4 IEER, 3.3 COP.

13.2 IEER, 3.3 COP.

Very Large Commercial Packaged AC and HP (Air-Cooled)—≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity

Electric Resistance Heating or No Heating

All Other Types of Heating

13.5 IEER.

13.3 IEER.

Electric Resistance Heating or No Heating

All Other Types of Heating

12.5 IEER, 3.2 COP.

12.3 IEER, 3.2 COP.

A. Benefits and Costs to Customers

Table I.2 presents DOE's evaluation of the economic impacts of the proposed standards on customers of small, large, and very large air-cooled commercial unitary air conditioners (CUAC), as measured by the average life-cycle cost (LCC) savings and the median payback period.

The average LCC savings are positive for all CUAC equipment classes, and the PBP is less than the average lifetime of the equipment, which is estimated to be 18.4 years. These classes account for approximately 90 percent of total shipments of small, large, and very large air-cooled CUAC and commercial unitary heat pumps (CUHP).

The payback period measures the amount of time it takes for savings in operating costs to equal the incremental cost increase.

DOE did not analyze LCC impacts for small, large, and very large air-cooled CUHP because energy modeling was performed only for CUAC equipment. The reasons for this approach are discussed in section IV.C.4.

Table I.2—Impacts of Proposed Standards on Customers of Small, Large, and Very Large Commercial Package Air Conditioning and Heating Equipment

Equipment class

Average LCC savings

(2013$)

Median

payback

period

(years)

Small Commercial Packaged Air Conditioners—≥65,000 Btu/h and <135,000 Btu/h Cooling Capacity

4,779

3.9

Large Commercial Packaged Air Conditioners—≥135,000 Btu/h and <240,000 Btu/h Cooling Capacity

3,469

6.6

Very Large Commercial Packaged Air Conditioners—≥240,000 Btu/h and <760,000 Btu/h Cooling Capacity

16,477

2.5

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

B. Impact on Manufacturers

The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the base year (2014) through the end of the analysis period (2048). Using a real discount rate of 6.2 percent, DOE estimates that the industry net present value for manufacturers is $1,261 million.

Under the proposed standards, DOE expects that INPV will be reduced by 7.02 to 24.71 percent, which is a reduction of approximately $88.55 to $311.58 million. Based on comments from manufacturers of covered equipment, the industry is currently going through an extended period of consolidation. It is possible that the proposed standards would contribute to continued consolidation.

All monetary values in this document are expressed in 2013 dollars and, where appropriate, are discounted to 2014 unless explicitly stated otherwise.

DOE's analysis of the impacts of the proposed standards on manufacturers is described in section IV.J of this proposed rulemaking.

C. National Benefits and Costs

DOE's analyses indicate that the proposed standards would save a significant amount of energy. The lifetime savings for small, large, and very large air-cooled CUAC and CUHP purchased in the 30-year period that begins in the year of compliance with amended standards (2019-2048), in comparison to the base case without amended standards, amount to 11.7 quadrillion Btu of energy (quads).

This is a savings of 29 percent relative to the energy use of this equipment in the base case.

A quad is equal to 10

British thermal units (Btu).

The base case assumptions are described in section IV.H.

The cumulative net present value (NPV) of total customer costs and savings of the proposed standards for small, large, and very large air-cooled CUAC and CUHP ranges from $16.5 billion to $50.8 billion for 7-percent and 3-percent discount rates, respectively. This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for products purchased in 2019-2048.

In addition, the proposed standards would have significant environmental benefits.

The energy savings described

above are estimated to result in cumulative emission reductions of 1,085 million metric tons (Mt)

of carbon dioxide (CO

), 3,072 thousand tons of methane (CH

), 15.5 thousand tons of nitrous oxide (N

O), 2,934 thousand tons of sulfur dioxide (SO

), 1,021 thousand tons of nitrogen oxides (NO

) and 3.57 tons of mercury (Hg).

The estimated CO

emissions reductions through 2030 amount to 64 Mt.

These projections are expected to change in light of recently available data from the estimated from the Annual Energy Outlook (AEO) 2014 data, which suggest a drop in potential emissions reductions over a similar period of time.

DOE calculated emissions reductions relative to the

Annual Energy Outlook 2013

(

AEO 2013

) Reference case, which generally represents current legislation and environmental regulations for which implementing regulations were available as of

December 31, 2012. Emissions factors based on the Annual Energy Outlook 2014 (AEO 2014), which became available too late for incorporation into this analysis, indicate that a significant decrease in the cumulative emission reductions of carbon dioxide, methane, nitrous oxide, sulfur dioxide, nitrogen oxides and mercury from the proposed standards can be expected if the projections of power plant utilization assumed in AEO 2014 are realized. For example, the estimated amount of cumulative emission reductions of CO2 are expected to decrease by 36% from DOE's current estimate (from 1,085 Mt to 697Mt) based on the projections in AEO 2014 relative to AEO 2013. The monetized benefits from GHG reductions would likely decrease by a comparable amount. DOE plans to use emissions factors based on the most recent AEO available for the next phase of this rulemaking, which may or may not be AEO 2014, depending on the timing of the issuance of the next rulemaking document.

A metric ton is equivalent to 1.1 short tons. Results for NO

and Hg are presented in short tons.

The reductions are measured over the period in which equipment purchased in 2019-2048 continue to operate.

These results are based on emissions factors in

AEO 2013,

the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a 36% decrease in cumulative emissions reductions for CO

thus decreasing the estimate of 64 Mt of CO2 reductions through the year 2030 to 41 Mt. In the next phase of this rulemaking, DOE plans to use emissions factors based on the most recent

AEO

available, which may or may not be

AEO 2014,

depending on the timing of the issuance of the next rulemaking document.

The value of the CO

reductions is calculated using a range of values per metric ton of CO

(otherwise known as the Social Cost of Carbon, or SCC) developed by an interagency process.

The derivation of the SCC values is discussed in section IV.L. Using discount rates appropriate for each set of SCC values (see Table I.3), DOE estimates the present monetary value of the CO

emissions reduction to be between $6.1 billion and $95.9 billion, with a value of $30.9 billion using the central SCC case represented by $40.5/t in 2015. Additionally, DOE estimates the present monetary value of the NO

emissions reduction to be $343 million and $1,060 million at 7-percent and 3-percent discount rates, respectively.

Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866.

Interagency Working Group on Social Cost of Carbon, United States Government. May 2013; revised November 2013.

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.

Table I.3 summarizes the national economic costs and benefits expected to result from the proposed standards for small, large, and very large air-cooled CUAC and CUHP.

Table I.3—Summary of National Economic Benefits and Costs of Proposed Energy Conservation Standards for Small, Large, and Very Large Commercial Package Air Conditioning and Heating Equipment *

Category

Present value

billion 2013$

Discount rate

(%)

Benefits

Operating Cost Savings

20.6

59.7

Reduction Monetized Value ($12.0/t case) **

6.1

Reduction Monetized Value ($40.5/t case) **

30.9

Reduction Monetized Value ($62.4/t case) **

49.9

2.5

Reduction Monetized Value ($119/t case) **

95.9

Reduction Monetized Value (at $2,684/ton) **

0.3

1.1

Total Benefits †

51.9

91.6

Costs

Incremental Installed Costs

4.1

8.8

Total Net Benefits

Including Emissions Reduction Monetized Value †

47.8

82.8

* This table presents the costs and benefits associated with small, large, and very large air-cooled CUAC and CUHP shipped in 2019-2048. These results include benefits to customers which accrue after 2048 from the products purchased in 2019-2048. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule.

** The CO

percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The value for NO

is the average of the low and high values found in the literature.

† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate.

The benefits and costs of today's proposed standards, for products sold in 2019-2048, can also be expressed in terms of annualized values. The annualized monetary values are the sum of (1) the annualized national economic

value of the benefits from consumer operation of products that meet the proposed standards; consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase and installation costs, which is another way of representing customer NPV, and (2) the annualized monetary value of the benefits of CO

and NO

emission reductions.

These results are based on emissions factors in

AEO 2013,

the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO

, SO

, and Hg. For example, the estimated decrease for CO

emissions reductions is 36%. The monetized benefits from GHG reductions would likely decrease by a comparable amount. In the next phase of this rulemaking, DOE plans to use emissions factors based on the most recent

AEO

available, which may or may not be

AEO 2014,

depending on the timing of the issuance of the next rulemaking document.

DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized values. First, DOE calculated a present value in 2013, the year used for discounting the NPV of total customer costs and savings, for the time-series of costs and benefits using discount rates of three and seven percent for all costs and benefits except for the value of CO

reductions. For the latter, DOE used a range of discount rates, as shown in Table I.4. From the present value, DOE then calculated the fixed annual payment over a 30-year period (2019 through 2048) that yields the same present value. The fixed annual payment is the annualized value. Although DOE calculated annualized values, this does not imply that the time-series of cost and benefits from which the annualized values were determined is a steady stream of payments.

Although combining the values of operating savings and CO

emission reductions provides a useful perspective, two issues should be considered. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions while the value of CO

reductions is based on a global value. Second, the assessments of operating cost savings and CO

savings are performed with different methods that use different time frames for analysis. The national operating cost savings is measured for the lifetime of small, large, and very large air-cooled CUAC and CUHP shipped in 2019-2048. The SCC values, on the other hand, reflect the present value of some future climate-related impacts resulting from the emission of one ton of carbon dioxide in each year. These impacts continue well beyond 2100.

Estimates of annualized benefits and costs of the proposed standards are shown in Table I.4. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO

reduction, for which DOE used a 3-percent discount rate along with the average SCC series that uses a 3-percent discount rate, the cost of the standards proposed in today's rule is $430 million per year in increased equipment costs, while the benefits are $2,177 million per year in reduced equipment operating costs, $1,774 million in CO

reductions,

and $36 million in reduced NO

emissions. In this case, the net benefit amounts to $3,558 million per year.

Using a 3-percent discount rate for all benefits and costs and the average SCC series, the cost of the standards proposed in today's rule is $507 million per year in increased equipment costs, while the benefits are $3,426 million per year in reduced operating costs, $1,774 million in CO

reductions,

and $61 million in reduced NO

emissions. In this case, the net benefit amounts to $4,755 million per year.

These results are based on emissions factors in

AEO 2013,

the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO

, SO

, and Hg. For example, the estimated decrease for CO

AEO

available, which may or may not be

AEO 2014,

depending on the timing of the issuance of the next rulemaking document.

These results are based on emissions factors in

AEO 2013,

the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO

, SO

, and Hg. For example, the estimated decrease for CO

emissions reductions is 36%. In the next phase of this rulemaking, DOE plans to use emissions factors based on the most recent

AEO

available, which may or may not be

AEO 2014,

depending on the timing of the issuance of the next rulemaking document.

These results are based on emissions factors in

AEO 2013,

the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO

, SO

, and Hg. For example, the estimated decrease for CO

emissions reductions is 36%. In the next phase of this rulemaking, DOE plans to use emissions factors based on the most recent

AEO

available, which may or may not be

AEO 2014,

depending on the timing of the issuance of the next rulemaking document.

These results are based on emissions factors in

AEO 2013,

the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO

, SO

, and Hg. For example, the estimated decrease for CO

emissions reductions is 36%. In the next phase of this rulemaking, DOE plans to use emissions factors based on the most recent

AEO

available, which may or may not be

AEO 2014,

depending on the timing of the issuance of the next rulemaking document.

Table I.4—Annualized Benefits and Costs of Proposed Energy Conservation Standards for Small, Large, and Very Large Commercial Package Air Conditioning and Heating Equipment *

Discount rate

Primary estimate

Low net benefits

estimate

High net benefits

estimate

million 2013$/year

Benefits

Operating Cost Savings

2,177

1,984

2,407

3,426

3,127

3,781

Reduction Monetized Value ($12.0/t case) **

484

467

505

Reduction Monetized Value ($40.5/t case) **

1,774

1,714

1,846

Reduction Monetized Value ($62.4/t case) **

2.5%

2,632

2,543

2,737

Reduction Monetized Value ($119/t case) **

5,504

5,317

5,727

Reduction Monetized Value (at $2,684/ton) **

36.18

60.89

34.75

58.85

37.90

63.40

Total Benefits †

7% plus CO

range

2,698 to 7,718

2,486 to 7,336

2,950 to 8,172

3,988

3,733

4,291

3% plus CO

range

3,972 to 8,991

3,653 to 8,503

4,349 to 9,572

5,262

4,900

5,691

Costs

Incremental Product Costs

430

350

485

507

433

550

Net Benefits

Total †

7% plus CO

range

2,268 to 7,288

2,135 to 6,986

2,465 to 7,687

3,558

3,383

3,806

4,755

4,468

5,140

3% plus CO

range

3,465 to 8,484

3,220 to 8,071

3,799 to 9,021

* This table presents the annualized costs and benefits associated with small, large, and very large air-cooled CUAC and CUHP shipped in 2019−2048. These results include benefits to customers which accrue after 2048 from the products purchased in 2019-2048. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices from the

AEO2013

Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental product costs reflect no change for projected product price trends in the Primary Estimate, an increasing trend for projected product prices in the Low Benefits Estimate, and a decreasing trend for projected product prices in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.

** The CO

values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series incorporate an escalation factor. The value for NO

is the average of the low and high values used in DOE's analysis.

† Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount rate. In the rows labeled “7% plus CO

range” and “3% plus CO

range,” the operating cost and NO

benefits are calculated using the labeled discount rate, and those values are added to the full range of CO

values.

DOE's

analysis of the national impacts of the proposed standards is described in sections IV.H, IV.K and IV.L of this proposed rulemaking.

These results are based on emissions factors in

AEO 2013,

the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO

, SO

, and Hg. For example, the estimated decrease for CO

AEO

available, which may or may not be

AEO 2014,

depending on the timing of the issuance of the next rulemaking document.

DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that products achieving these standard levels are already commercially available for most of the equipment classes covered by this proposal. Based on the analyses described above, DOE has concluded that the benefits of the proposed standards to the Nation (energy savings, positive NPV of customer benefits, customer LCC savings, and emission reductions) would outweigh the burdens (loss of INPV for manufacturers and LCC increases for some customers).

DOE also considered more-stringent energy efficiency levels as trial standard levels, and is considering them in this rulemaking. However, DOE has concluded that the potential burdens of the more-stringent energy efficiency levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this notice and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this NOPR that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part.

II. Introduction

The following section briefly discusses the statutory authority underlying this proposal, as well as some of the relevant historical background related to the establishment of standards for small, large, and very large air-cooled CUAC and CUHP.

A. Authority

Title III, Part C

of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6311-6317, as codified), was added by the National Energy Conservation Policy Act (Pub. L. 95-619 (Nov. 9, 1978). That law established the Energy Conservation Program for Certain Industrial Equipment, which includes provisions covering the commercial heating and air-conditioning equipment that is the subject of this notice.

In general, this program addresses the energy efficiency of certain types of commercial and industrial equipment. Relevant provisions of the Act include definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 6314), labelling provisions (42 U.S.C. 6315), and the authority to require information and reports from manufacturers (42 U.S.C. 6316).

For editorial reasons, upon codification in the U.S. Code, Part C was re-designated Part A-1.

All references to EPCA in this document refer to the statute as amended through the American Energy Manufacturing Technical Corrections Act of 2012, Public Law 112-210 (Dec. 18, 2012).

Section 342(a) of EPCA concerns energy conservation standards for small, large, and very large, air-cooled CUAC and CUHP. (42 U.S.C. 6313(a)) This category of equipment has a rated capacity between 64,000 Btu/h and 760,000 Btu/h. It is designed to heat and cool commercial buildings and is typically located on the building's rooftop. Section 5(b) of the American Energy Manufacturing Technical Corrections Act of 2012 (Pub. L. No. 112-210 (Dec. 18, 2012) (AEMTCA) amended Section 342(a)(6) of EPCA. Among other things, AEMTCA modified the manner in which DOE must amend the energy efficiency standards for certain types of commercial and industrial equipment. DOE is typically obligated either to adopt those standards developed by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE)—or to adopt levels more stringent than the ASHRAE levels if there is clear and convincing evidence in support of doing so (42 U.S.C. 6313(a)(6)(A)). AEMTCA added to this process a requirement that DOE initiate a rulemaking to consider amending the standards for any covered equipment as to which more than 6 years has elapsed since the issuance of

the most recent final rule establishing or amending a standard for the equipment as of the date of AEMTCA's enactment, December 18, 2012. (42 U.S.C. 6313(a)(6)(C)(vi)) Under this new framework, DOE must issue either a notice of determination that the current standards do not need to be amended or a notice of proposed rulemaking (NOPR) containing proposed standards by December 31, 2013. See 42 U.S.C. 6313(a)(6)(C)(i) and (vi).

Today's NOPR satisfies the mandatory review process imposed by AEMTCA.

Subparagraph (A) and subparagraph (B) refer to 42 U.S.C. 6313(a)(6).

Pursuant to EPCA, DOE's energy conservation program for covered equipment consists essentially of four parts: (1) Testing; (2) labeling; (3) the establishment of Federal energy conservation standards; and (4) certification and enforcement procedures. Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of covered equipment. (42 U.S.C. 6314) Manufacturers of covered equipment must use the prescribed DOE test procedure as the basis for certifying to DOE that their equipment comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those equipment. (42 U.S.C. 6314(d)) Similarly, DOE must use these test procedures to determine whether the equipment comply with standards adopted pursuant to EPCA.

Id.

The DOE test procedures for small, large, and very large air-cooled CUAC and CUHP currently appear at 10 CFR 431.96.

When setting standards for the equipment addressed by this proposed rulemaking, EPCA prescribes specific statutory criteria for DOE to consider. See generally 42 U.S.C. 6313(a)(6)(A)-(C). As indicated above, any amended standard for covered equipment must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. Moreover, DOE may not prescribe a standard for certain equipment, if (1) no test procedure has been established for the equipment, or (2) if DOE determines by rule that the proposed standard is not technologically feasible or economically justified. In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven factors:

1. The economic impact of the standard on manufacturers and consumers of the equipment subject to the standard;

2. The savings in operating costs throughout the estimated average life of the covered equipment in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered equipment that are likely to result from the imposition of the standard;

3. The total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard;

4. Any lessening of the utility or the performance of the covered equipment likely to result from the imposition of the standard;

5. The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;

6. The need for national energy and water conservation; and

7. Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6313(a)(6)(B))

EPCA, as codified, also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of covered equipment. Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States of any covered equipment type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6313(a)(6)(B)(iii))

Further, under EPCA's provisions for consumer products, there is a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing equipment complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. For this rulemaking, DOE considered the criteria for rebuttable presumption as part of its analysis.

Additionally, EPCA specifies requirements when promulgating a standard for a type or class of covered equipment that has two or more subcategories. DOE must specify a different standard level than that which applies generally to such type or class of equipment for any group of covered equipment that have the same function or intended use if DOE determines that equipment within such group (A) consume a different kind of energy from that consumed by other covered equipment within such type (or class); or (B) have a capacity or other performance-related feature which other equipment within such type (or class) do not have and such feature justifies a higher or lower standard. In determining whether a performance-related feature justifies a different standard for a group of equipment, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE deems appropriate. Any rule prescribing such a standard must include an explanation of the basis on which such higher or lower level was established. DOE considered these criteria for this rulemaking.

Federal energy conservation requirements generally preempt State laws or regulations concerning energy conservation testing, labeling, and standards. DOE may, however, grant waivers of Federal preemption for particular State laws or regulations.

DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011. (76 FR 3281, Jan. 21, 2011). EO 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 to: (1) Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than

specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.

DOE emphasizes as well that Executive Order (EO) 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons stated in the preamble, DOE believes that this NOPR is consistent with these principles, including the requirement that, to the extent permitted by law, benefits justify costs and that net benefits are maximized. Consistent with EO 13563, and the range of impacts analyzed in this rulemaking, the energy efficiency standard proposed herein by DOE achieves maximum net benefits.

B. Background

1. Current Standards

DOE most recently issued amended standards for small, large, and very large, air-cooled CUAC and CUHP on October 18, 2005, which codified both the amended standards for small and large equipment and the new standards for very large equipment set by the Energy Policy Act of 2005 (EPAct 2005), Public Law 109-58, 70 FR 60407 (Aug. 8, 2005). The current standards are set forth in Table II.1.

Table II.1—Minimum Cooling and Heating Efficiency Levels for Small, Large, and Very Large Commercial Package Air Conditioning and Heating Equipment

Equipment type

Cooling capacity

Sub-category

Heating type

Efficiency level

Compliance date

Small Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled)

≥65,000 Btu/h and <135,000 Btu/h

Electric Resistance Heating or No Heating

EER = 11.2

1/1/2010

All Other Types of Heating

EER = 11.0

1/1/2010

Electric Resistance Heating or No Heating

EER = 11.0

COP = 3.3

1/1/2010

All Other Types of Heating

EER = 10.8

COP = 3.3

1/1/2010

Large Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled)

≥135,000 Btu/h and <240,000 Btu/h

Electric Resistance Heating or No Heating

EER = 11.0

1/1/2010

All Other Types of Heating

EER = 10.8

1/1/2010

Electric Resistance Heating or No Heating

EER = 10.6

COP = 3.2

1/1/2010

All Other Types of Heating

EER = 10.4

COP = 3.2

1/1/2010

Very Large Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled)

≥240,000 Btu/h and <760,000 Btu/h

Electric Resistance Heating or No Heating

EER = 10.0

1/1/2010

All Other Types of Heating

EER = 9.8

1/1/2010

Electric Resistance Heating or No Heating

EER = 9.5

COP = 3.2

1/1/2010

All Other Types of Heating

EER = 9.3

COP = 3.2

1/1/2010

2. History of Standards Rulemaking for Small, Large, and Very Large Air-Cooled Commercial Package Air Conditioning and Heating Equipment

On October 29, 1999, the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE)/Illuminating Engineering Society of North America (IESNA) adopted Standard 90.1-1999, “Energy Standard for Buildings Except Low-Rise Residential Building”, which included amended efficiency levels for CUAC and CUHP. On June 12, 2001, the Department published a Framework Document that described a series of analytical approaches to evaluate energy conservation standards for air-cooled CUAC and CUHP with rated capacities between 65,000 Btu/h and 240,000 Btu/h, and presented this analytical framework to stakeholders at a public workshop. On July 29, 2004, DOE issued an Advance Notice of Proposed Rulemaking (ANOPR) (hereafter referred to as the 2004 ANOPR) to solicit public comments on its preliminary analyses for this equipment. 69 FR 45460. Subsequently, Congress enacted EPAct 2005, which, among other things, established amended standards for small and large CUAC and CUHP and new standards for very large air-cooled CUAC and CUHP. As a result, EPAct 2005 displaced the rulemaking effort that DOE had already begun. DOE codified these new statutorily-prescribed standards on October 18, 2005. 70 FR 60407.

Section 5(b) of AEMTCA amended Section 342(a)(6) of EPCA by requiring DOE to initiate a rulemaking to consider amending the standards for any covered equipment as to which more than 6 years has elapsed since the issuance of the most recent final rule establishing or amending a standard for the equipment

as of the date of AEMTCA's enactment, December 18, 2012. (42 U.S.C. 6313(a)(6)(C)(vi)) Accordingly, DOE must issue either a notice of determination that the current standards for small, large, and very large, air cooled CUAC and CUHP do not need to be amended or a notice of proposed rulemaking containing proposed standards. DOE has, based on available data, chosen the latter.

On February 1, 2013, DOE published a request for information (RFI) and notice of document availability for small, large, and very large, air cooled CUAC and CUHP. 78 FR 7296. The notice sought to solicit information from the public to help DOE determine whether national standards more stringent than those that are currently in place would result in a significant amount of additional energy savings and whether those national standards would be technologically feasible and economically justified. Separately, DOE also sought information on the merits of adopting integrated energy efficiency ratio (IEER) as the energy efficiency descriptor for small, large, and very large air-cooled CUAC and CUHP (see section III.A for more details).

DOE received a number of comments from interested parties in response to the RFI. These commenters are summarized in Table II.2. DOE considered these comments in the preparation of this NOPR. Relevant comments, and DOE's responses, are provided in the appropriate sections of this proposed rulemaking.

Table II.2—Interested Parties Providing Written Comment on the RFI

Name

Abbreviation

Type

AAON Inc

AAON

Air-Conditioning, Heating and Refrigeration Institute

AHRI

Appliance Standards Awareness Project, American Council for an Energy-Efficient Economy, Natural Resources Defense Council

ASAP, ACEEE, NRDC (Joint Efficiency Advocates)

EBM-Papst Inc

EBM-Papst

Edison Electric Institute

EEI

Ingersoll Rand

Lennox International Inc

Lennox

Lentz Engineering Associates

Lentz

Modine Manufacturing Co

Modine

New Buildings Institute

NBI

Northwest Energy Efficiency Alliance

NEEA

Pacific Gas and Electric Company, Southern California Gas Company, San Diego Gas and Electric, Southern California Edison, Sacramento Municipal Utility District, National Grid

PG&E, SCGC, SDG&E, SCE, SMUD, National Grid (Joint Utilities)

Rheem Manufacturing Co

Rheem

UTC Climate, Controls & Security

Carrier

Whole Building Systems

IR: Industry Representative; M: Manufacturer; EA: Efficiency/Environmental Advocate;

CS: Component Supplier; I: Individual; U: Utility; UR: Utility Representative

III. General Discussion

A. Energy Efficiency Descriptor

The current energy conservation standards for small, large, and very large air-cooled CUAC and CUHP are based on energy efficiency ratio (EER) for cooling efficiency and COP for CUHP heating efficiency. 10 CFR 431.97(b)

Cooling Efficiency Metric

In the RFI, DOE noted that it was considering whether to replace the existing efficiency descriptor, EER, with a new energy-efficiency descriptor, IEER. Unlike the EER metric, which only uses the efficiency of the equipment operating at full load, the IEER metric factors in the efficiency of operating at part-loads of 75 percent, 50 percent, and 25 percent of capacity as well as the efficiency at full load. This is accomplished by weighting the full- and part-load efficiencies with the average amount of time operating at each loading point. The IEER metric incorporates part load efficiencies measured with outside temperatures appropriate for the load levels, i.e. at lower temperatures for lower load levels. 78 FR 7296, 7299 (Feb. 1, 2013). As part of a final rule published on May 16, 2012, DOE amended the test procedure for this equipment to incorporate by reference the Air-Conditioning, Heating and Refrigeration Institute (AHRI) Standard 340/360-2007, “Performance Rating of Commercial and Industrial Unitary Air-Conditioning and Heat Pump Equipment” (AHRI Standard 340/360-2007). 77 FR 28928. DOE notes that AHRI Standard 340/360-2007 already includes methods and procedures for testing and rating equipment with the IEER metric.

ASHRAE, through its Standard 90.1, includes requirements based on the part-load performance metric, IEER. These IEER requirements were first established in

Addenda

from the 2008 Supplement to Standard 90.1-2007, and became effective on January 1, 2010.

ASHRAE. ASHRAE Addenda. 2008 Supplement.

http://www.ashrae.org/File%20Library/docLib/Public/20090317_90_1_2007_supplement.pdf.

DOE may establish “energy conservation standards” that set either a single performance standard or a single design requirement—not both. (42 U.S.C. 6311(18)) As such, DOE may prescribe an energy conservation standard based either on a single performance-based standard or design requirement. In the case of small, large, and very large air-cooled CUAC and CUHP, ASHRAE Standard 90.1-2010 specifies two performance requirements: EER and IEER. In selecting a new performance-based energy conservation standard, the statute prescribes that a single standard be used—in this case, either an improved EER or a new standard using IEER. DOE did not consider altering its energy conservation standard to be based on a single design requirement because performance-based standards will provide manufacturers with more flexibility in developing equipment that meets the standard levels rather than requiring a specific design. DOE notes that a change in metrics (

i.e.,

from EER to IEER) would necessitate an initial DOE determination that the new requirement would not result in backsliding when compared to

the current standards. See 42 U.S.C. 6313(a)(6)(B)(iii)(I).

As part of the RFI, DOE conducted a review of the market to see if part-load performance is currently being used and accepted for rating CUAC and CUHP. On January 2, 2009, the Environmental Protection Agency (EPA) issued a draft ENERGY STAR specification for Light Commercial Air Conditioners and Heat Pumps equipment,

i.e.,

small and large air-cooled CUAC and CUHP, which proposed to adopt IEER as part of the minimum energy efficiency criteria.

The Air-Conditioning, Heating and Refrigeration Institute (AHRI) supported this change. DOE also noted in the RFI that the Consortium for Energy Efficiency (CEE), an organization for energy efficiency advocates, has adopted IEER for its Tier 0, 1, and 2 efficiencies for CUAC and CUHP, i.e., small, large, and very large air-, water-, and evaporatively-cooled air conditioners and air- and water-source heat pumps.

78 FR 7296, 7299 (Feb. 1, 2013).

ENERGY STAR. Re: EPA Proposed Draft Energy Star Specification for Light Commercial HVAC Equipment.

http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/lhvac/AHRI_Comments_D1.pdf.

Consortium for Energy Efficiency. CEE Commercial Unitary AC and HP Specification.

http://www.cee1.org/files/CEE_CommHVAC_UnitarySpec2012.pdf.

DOE also noted in the RFI that IEER has gained support through efforts such as DOE's Commercial Building Energy Alliance (CBEA) technology transfer program, which sponsors the High Performance Rooftop Unit Challenge (RTU Challenge). This program provides a market mechanism that reduces barriers for manufacturers to procure greater than 18-IEER 10-ton

equipment and encourages the private sector to commit to adopt energy-efficient equipment. A number of manufacturers are currently participating in the RTU Challenge, including Lennox, 7AC Technologies, Rheem, Carrier, and McQuay. Of these participants, both Carrier and McQuay have already begun producing AHRI-certified equipment meeting or exceeding 18 IEER. In conjunction with manufacturer support, fourteen CBEA-member private entities,

such as Target Corp., Macy's, Inc., McDonald's Corp., and others, have also signaled their support and indicated their strong interest in potentially purchasing high-efficiency rooftop units, a sign of their confidence in the RTU Challenge and its ability to use IEER to accurately portray the energy use of air-cooled CUAC and CUHP in the field. 78 FR 7296, 7299 (Feb. 1, 2013).

Air conditioning cooling capacity may be denoted in tons. An air conditioning ton is equivalent to 12,000 Btu/h of cooling capacity (or 3.5 kilowatts of cooling capacity).

U.S. Department of Energy. Building Technologies Program. High Performance Rooftop Unit Challenge Fact Sheet.

http://apps1.eere.energy.gov/buildings/publications/pdfs/alliances/techspec_rtus.pdf.

As part of the RFI, DOE conducted a market analysis to compare the two metrics based on publicly available ratings of existing equipment currently available in the market. DOE made a document available for comment that provided the methodology and results of the investigation of the relationship between IEER and EER for air-cooled CUAC and CUHP with cooling capacities between 65,000 Btu/hr and 760,000 Btu/hr (

i.e.,

5 and 63 tons). In addition, DOE looked at the variance of heating efficiency (

i.e.,

COP) with IEER and EER.

In the RFI, DOE noted that if it decides to propose standards using the IEER metric, it would transition the existing Federal energy conservation standards that are based on the EER metric to the new IEER metric to determine baseline energy-efficiency levels to use in the analysis. DOE sought comments and data regarding its consideration of transitioning metrics and the analysis conducted on the currently available models. 78 FR 7296, 7299 (Feb. 1, 2013).

The document is available at:

http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/77.

In response to the RFI, DOE received a number of comments from interested parties concerning which energy efficiency descriptor should be used for this equipment—i.e. EER or IEER. The Edison Electric Institute (EEI), New Buildings Institute (NBI), Northwest Energy Efficiency Alliance (NEEA), the Joint Utilities,

and the Joint Efficiency Advocates

commented that DOE should adopt standards for small, large, and very large air-cooled CUAC and CUHP using both the EER and IEER metrics. (EEI, No. 9 at p. 4; NBI, No. 12 at p. 2; NEEA, No. 15 at p. 1; Joint Utilities, No. 13 at p. 2; Joint Efficiency Advocates, No. 11 at p. 1)

A joint comment was submitted by the Pacific Gas and Electric Company (PG&E), Southern California Gas Company (SCGC), San Diego Gas and Electric (SDG&E), Southern California Edison (SCE), Sacramento Municipal Utility District (SMUD), and National Grid, which are referred to as the Joint Utilities.

A Joint comment was submitted by the Appliance Standards Awareness Project (ASAP), American Council for an Energy-Efficient Economy (ACEEE), and Natural Resources Defense Council (NRDC), which are referred to as the Joint Efficiency Advocates.

EEI, NEEA, and the Joint Utilities expressed concern that if DOE eliminated the EER metric, which measures peak load efficiency, manufacturers would design their equipment to improve their IEER ratings, which could negatively impact peak load efficiency. (EEI, No. 9 at p. 5; NEEA, No. 15 at pp. 1-2; Joint Utilities, No. 13 at p. 3) NEEA commented that using only one metric leads to a bias of energy savings depending on the climate zone, with EER favoring hot-dry climates and IEER favoring milder climates. NEEA stated that maximizing EER tends to involve heat exchanger improvements, while IEER improvement involves staging of compressors, and that shifting costs between these two designs degrades either IEER or EER. NEEA noted that, based on their review of the AHRI certification database, a correlation between high IEER and high EER does not necessarily exist. NEEA noted that equipment with a high EER and high IEER exists, but may just reflect premium equipment available on the market that maximize both metrics. (NEEA, No. 15 at p. 1) EEI and the Joint Utilities commented that both the EER and IEER metrics should be used to prevent higher peak demands on utility grids and higher energy bills for customers in hot-dry climates, and to prevent equipment from being manufactured that is less efficient than the current standards. (EEI, No. 9 at p. 5; Joint Utilities, No. 13 at p. 3) NBI added that because the type of application and its emphasis on full-load versus part-load cannot be known beforehand, the cost-effectiveness of standards can only be assured by including both EER and IEER metrics. (NBI, No. 12 at pp. 1-2)

The Joint Utilities commented that the IEER metric, unlike the EER metric, accounts for potentially significant part-load energy savings from technologies such as inverter duty compressors, variable speed fans, and staged compressors. The Joint Utilities also indicated that continued growth and dependence on demand response programs is expected in California and New England, and that, during demand response events, controls may be used to restrict unit capacities and lower fan speeds. According to the Joint Utilities, if units have comparable EER values, the units with higher IEERs have the capability to use less energy when capacity is restricted and are more likely to have the capability of modifying compressor operation or reducing fan speed. (Joint Utilities, No. 13 at pp. 2-3) (Joint Utilities, No. 13 at p. 3)

The Joint Utilities commented that there is no additional testing burden associated with implementing both the IEER and EER metrics as compared to using only IEER because the EER test is

part of the IEER metric. The Joint Utilities added that manufacturers have been reporting both EER and IEER values for AHRI certification since 2010. The Joint Utilities stated that, based on their review of the AHRI certification database, the nominal difference between the average IEER and EER values for each CUAC equipment class capacity range (

i.e.,

small, large, and very large) varied from 1.38 and 1.87. The Joint Utilities stated that if standards are based only on IEER and the average performance difference in IEER and EER remains the same, then equipment meeting an IEER-only standard could have EERs as low as 8.86 (which is approximately 10 percent to 21 percent lower than the current EER standards for air-cooled CUAC). (Joint Utilities, No. 13 at pp. 3-4, 6)

EEI, the Joint Utilities, and the Joint Efficiency Advocates commented that DOE has the authority to adopt two efficiency metrics. (EEI, No. 9 at p. 4; Joint Utilities, No. 13 at p. 3; Joint Efficiency Advocates, No. 11 at p. 1) EEI stated that if DOE must demonstrate that a standard measured using IEER is no less stringent than a standard measured using EER, then the two standards must have the same stringency. EEI stated that, as a result, using two different metrics does not contravene the requirement that DOE apply a single standard. (EEI, No. 9 at p. 4) EEI added that this two-metric approach is consistent with past precedent set in the direct final rule for residential split system air conditioners and packaged air conditioners (76 FR 37408 (June 27, 2011); 76 FR 67037 (Oct. 31, 2011)), which will require SEER and EER standards for equipment sold in the “Southwest” region of the United States. (EEI, No. 9 at p. 5) The Joint Utilities commented that, based on their understanding, DOE is considering using a multiple metric approach in other rulemakings (

e.g.,

commercial and industrial fans and blowers) and, as such, DOE should be able to do the same for this rulemaking. (Joint Utilities, No. 13 at p. 3)

According to the Joint Utilities, the intent of DOE's requirement to adopt ASHRAE or more stringent standard levels is for the ASHRAE levels to serve as the standards baseline. The Joint Utilities stated that ASHRAE Standard 90.1 has specified both IEER and EER metrics for this equipment since 2010 and that industry supports and recognizes the need for a two metric approach for their standards. The Joint Utilities stated that both metrics should be used to align with the industry standards approach. (Joint Utilities, No. 13 at p. 2)

As discussed above, EPCA requires that DOE establish energy conservation standards using either a single performance standard or a single design requirement—but not both. See 42 U.S.C. 6311(18). Consistent with this restriction, DOE is proposing an approach that would apply a single performance-based standard for manufacturers to follow. Although some commenters have suggested that DOE deviate from this requirement, none has suggested an approach that would sufficiently address the legal constraints that EPCA imposes on DOE's ability to set multiple metrics for the equipment at issue in this proposal. Accordingly, DOE is declining to adopt a multiple-metric approach for CUAC and CUHP equipment.

Modine Manufacturing Company (Modine) supported the use of the IEER metric to allow for the optimization of efficiency at part-load conditions. Modine stated that equipment designed to maximize EER at full-load conditions, which accounts for only 2 percent of cooling time, may be significantly less efficient at part-load conditions. Modine presented data showing that a unit that is optimized around EER had an EER of 12.5, but the overall IEER is only 11.46, whereas a unit optimized around IEER had an EER of 10.3, but an IEER of 12.6. Modine also presented data showing that only a 2-point improvement in IEER for a 15-ton unit and a 20- to 30-ton unit would improve the efficiency by 18 percent and 20 percent, respectively. (Modine, No. 5 at pp. 2, 7-9) The Joint Efficiency Advocates commented that if DOE concludes that they do not have the authority to adopt two metrics, DOE should replace EER with IEER to better reflect annual energy consumption and encourage the adoption of part-load technologies that can achieve significant energy savings in the field. (Joint Efficiency Advocates, No. 11 at pp. 1-2) Whole Building Systems also supported the use of the IEER metric to better reflect annual energy consumption. Whole Building Systems added that design engineers, contactors, and owners need an annual or seasonal part load performance metric to make more informed purchasing and life-cycle cost decisions. (Whole Building Systems, No. 4 at p. 1)

AAON and AHRI both recognized the benefits of using the IEER metric for representation of the equipment's overall cooling energy efficiency. However, AAON, AHRI, Carrier, Lennox and Ingersoll Rand noted the following concerns with relying solely on the IEER metric:

• DOE's definition of basic model will significantly increase the number of models that manufacturers are required to test and, in the collective view of AAON and AHRI, make the DOE test requirements impossible to achieve. (AAON, No. 8 at pp. 1-2; AHRI, No. 14 at p. 4)

• The rulemaking for the Alternative Efficiency Determination Method (AEDM) is still incomplete. The proposed requirement for the overall average of AEDM outputs is, in their view, far more stringent than the uncertainty of the AHRI Standard 340/360-2007 test method and any combined manufacturing or component tolerances. (AAON, No. 8 at p. 2; AHRI, No. 14 at p. 4)

• If the part-load IEER metric is used, then the sequence of operation of each subcomponent of the equipment has a great effect on the listed metric. This would result in many more basic models based on DOE's current definition. (AAON, No. 8 at p. 2; AHRI, No. 14 at p. 4)

• The uncertainty associated with modeling or testing (including assessment, compliance, and enforcement testing) equipment using the IEER metric is significantly greater than for the single EER test. AHRI Standard 340/360 currently has a 10 percent uncertainty allowance on the IEER metric because of the higher variability in results due to the multiple tests required, compared to a 5-percent uncertainty allowance on the single test EER metric. (AAON, No. 8 at p. 2; AHRI, No. 14 at pp. 4-5; Carrier, No. 7 at p. 1; Lennox, No. 6 at p. 1; Ingersoll Rand, No. 10 at p. 1)

AAON, AHRI, and Ingersoll Rand indicated that they would support replacing EER with IEER only if DOE resolves pending issues related to the AEDM, the basic model definition and the uncertainty in measurement testing. AAON and AHRI stated that DOE should implement the testing and rating requirements, including the uncertainty tolerances, referenced in AHRI Standard 340/360 in their entirety. AHRI added that the sampling plan in 10 CFR 429.43 will have to be revised and adjusted accordingly. (AAON, No. 8 at p. 3; AHRI, No. 14 at pp. 1, 4-5; Ingersoll Rand, No. 10 at pp. 1-2) Carrier also commented that DOE should limit the basic model definition to the base refrigeration system to avoid the requirement that equipment be tested with factory options, which may negatively impact cooling or heating rating point efficiency, but provide efficiency benefits when considered from a whole building perspective (

e.g.,

economizers and energy recovery ventilators). (Carrier, No. 7 at p. 1)

Rheem supported the use of one efficiency metric, but not multiple metrics. Rheem stated that if IEER is going to replace EER, a technical review must be conducted to highlight the advantage to the consumer versus the confusion in the market place and burden on the OEM. Rheem stated that other aspects of the energy conservation standards for this equipment are in transition and must be finalized before a constructive evaluation can be made of the benefits of a part-load efficiency metric. (Rheem, No. 17 at pp. 1-2)

Lennox commented that it has captured most of the achievable EER efficiency improvements with currently available technology, and that there are diminishing returns in requiring increasingly stringent EER levels. (Lennox, No. 6 at p. 3) However, Lennox supported the continued use of the EER metric due to the IEER test uncertainty issue discussed above. (Lennox, No. 6 at p. 1) Lennox commented that using the IEER metric now would require resolving the following issues: (1) Setting a baseline IEER for various equipment classes, (2) the ability to use the AEDMs, and (3) implementation and vetting of testing protocols. (Lennox, No. 6 at p. 2)

The Joint Utilities commented that if DOE is not willing to adopt standards using both metrics, DOE should use the current EER metric instead of IEER to provide a better approximation of heating, ventilation, and air-conditioning (HVAC) performance during peak loading conditions. According to the Joint Utilities, in California and New England, commercial air conditioning accounts for a disproportionately high fraction of seasonal peak demand as compared to commercial HVAC energy consumption as a fraction of annual energy consumption. (Joint Utilities, No. 13 at p. 4) The Joint Utilities also commented that a substantial fraction of U.S. cities have peak temperatures above 95 degrees Fahrenheit (°F) in the summer, and summer peak temperature has been increasing over time. The Joint Utilities stated that peak electricity demands have large effects on energy procurement and energy pricing, and that shifts in energy pricing rate structures, such as in California, will further increase electricity prices during peak conditions. The Joint Utilities stated that using an IEER-only metric would under-represent the condition that has the largest effect on peak energy demand and energy pricing. The Joint Utilities stated that an improved IEER metric that is representative of annual energy cost would place a heavier weighting on the 95 °F full-load test point, but absent that change the Joint Utilities would support retaining EER metric. (Joint Utilities, No. 13 at p. 4)

DOE notes that the issues related to the basic model definition and AEDM were addressed separately in DOE's Commercial Certification Working Group. DOE published a final rule on December 31, 2013, which incorporated requirements for the testing and tolerances for validation and verification of an AEDM, and also amended the basic model definition for small, large, and very large air-cooled CUAC and CUHP. 78 FR 79579. EPCA requires that test procedures be reasonably designed to produce test results that measure the energy efficiency of covered equipment during a representative average use cycle or period of use. (42 U.S.C. 6314(a)(2)) As discussed above, the IEER metric weights the efficiency of operating at different partial loads and full load based on usage patterns, which collectively provide a more representative measure of annual energy use than the EER metric. A manufacturer that was involved in the development of the IEER metric indicated that the usage pattern weights for the IEER metric were developed by analyzing equipment usage patterns of several buildings across the 17 ASHRAE Standard 90.1-2010 (appendix B) climate zones. (Docket ID: EERE-2013-BT-STD-0007-0018, Carrier, at p. 1) These usage patterns and climate zones were based on a comprehensive analysis performed by industry in assessing the manner in which CUAC and CUHP equipment operate in the field, both in terms of actual usage and the climatic conditions in which they are used. The weighting factors accounted for the hours of operation where mechanical cooling was active.

Id.

As a result, the IEER metric, as a whole, provides a more accurate representation of the annual energy use for this equipment than the EER metric, which only considers full load energy use. For these reasons, DOE is proposing energy conservation standards in this NOPR based on the IEER metric. DOE recognizes the issues regarding the uncertainty of IEER test measurements and welcomes additional data regarding the measurement uncertainties to develop appropriate sampling plans.

Because the weighting factors for the IEER metric are representative of field use and because DOE is unaware of any data indicating that changes to these weighting factors are warranted, DOE is not considering changing the weighting factors for the loading conditions specified in AHRI Standard 340/360-2007 for the IEER metric, as commented by the Joint Utilities. With regards to the Joint Utilities comment that an improved IEER metric that is representative of annual energy cost would place a heavier weighting on the full-load test point, DOE welcomes comment and data on whether the test procedure for air-cooled CUAC and CUHP should be amended to revise the weightings for the IEER metric to place a higher weighting value on the full-load efficiency.

Issue 2:

DOE requests comment on whether the test procedure for air-cooled CUAC and CUHP should be amended to revise the weightings for the IEER metric to place a higher weighting value on the full-load efficiency. DOE also requests data to determine appropriate weighting factors for the full-load test condition and part-load test conditions (75 percent, 50 percent, and 25 percent of capacity).

With regards to the Joint Utilities comment that DOE should use the current EER metric instead of IEER to provide a better approximation of HVAC performance during peak loading conditions, DOE notes that, as discussed above, EPCA does not include provisions for dual metrics for this equipment. See 42 U.S.C. 6311(18). DOE also notes that because the IEER metric includes measurements at full load capacity, the metric already accounts for EER. Further, ASHRAE Standard 90.1 includes requirements for both EER and IEER. As a result, although DOE is considering energy conservation standards based on the IEER metric, utilities would still be able to evaluate EER ratings of equipment.

In response to the RFI, AHRI commented that the draft of addendum CL

to ASHRAE Standard 90.1-2010 (Draft Addendum CL) would amend the minimum IEER levels, but did not amend the minimum EER levels because the ASHRAE Standard 90.1 committee was unable to justify raising the full load efficiency standard. (AHRI, No. 14 at pp. 1-2) AHRI and Ingersoll Rand commented that full load efficiencies are approaching their thermodynamic limits, and that further improvements will be both very minimal and very costly. (AHRI, No. 14 at p. 2; Ingersoll Rand, No. 10 at p. 1) AHRI added that while energy efficiency gains in the 1970s were achieved at relatively low cost, the efficiency improvements realized recently resulted in significant increase in equipment cost. AHRI stated

that the industry is entering a phase where efficiency of equipment is becoming closer to the Carnot efficiency (i.e., the thermodynamic limit) and full load efficiency gains in the future will be minimal but very costly. (AHRI, No. 14 at p. 2) AHRI noted that the ASHRAE Standard 90.1 committee has recognized the increasing full load minimum efficiency standards for CUAC and CUHP has reached a point of diminishing returns in terms of energy savings, and instead focused efforts on other areas to reduce the energy consumption of this equipment, including the following design requirements:

ASHRAE periodically updates specifications in its Standard 90.1 through a public review process. The latest of these proposed changes is contained in Draft Addendum CL, which was made available for public review in October 2012. “CL” refers to the revision number.

• Mandatory use of economizers on equipment ≥54,000 Btu/h of cooling capacity in all climate zones at the exception of zones 1a and 1b,

• Modulation of economizer outdoor and return air dampers to provide up to 100 percent of the design supply air quantity as outdoor air for cooling,

• More stringent damper leakage requirements

• Additional requirements for supply air temperature reset and static pressure reset on variable air volume systems,

• Integrated economizer control and direct expansion (

i.e.,

the evaporator is in direct contact with the air stream) unit capacity staging requirements which necessitate two speed fans and two stages of mechanical cooling for constant volume systems or three or more stages for variable air volume systems, and

• Fan controls for both constant air volume and variable air volume units including extending the indoor fan part load power requirements down to

1/4

horsepower. (AHRI, No. 14 at pp. 2-3)

AHRI stated that although these requirements significantly reduce the energy consumption of CUAC, most of the energy savings resulting from their implementation is not captured by the test procedure and cannot be translated in an EER improvement. AHRI stated that DOE should consider other factors beyond EER and/or COP when conducting its analysis and that by appropriately modeling this equipment, DOE will conclude that increasing the EER and COP is not a cost-effective way of improving the CUAC/CUHP efficiency. (AHRI, No. 14 at p. 3)

As discussed above, DOE determined that the IEER metric provides a more accurate representation of the annual energy use for this equipment than the EER metric, and is proposing standards based on IEER. DOE recognizes that raising the stringency of EER may not be a cost-effective way of improving the efficiency of this equipment. DOE reached this tentative conclusion based on the preliminary determination by the ASHRAE Standard 90.1 committee for Draft Addendum CL that raising the full load efficiency standard would not be cost-effective. DOE also takes note of the comments from interested parties that manufacturers are already reaching the thermodynamic limits with respect to full load efficiency for CUAC and CUHP equipment, which is limiting the potential for further full load efficiency improvements for these HVAC equipment. For these reasons, DOE is not considering standards based on the EER metric. Based on energy modeling of design changes consistent with equipment available on the market (by analyzing the efficiency at each loading condition, including full-load EER), as discussed in sections IV.A through IV.C, DOE notes that the proposed IEER-based standard levels presented in section I would not result in an EER rating less than the current standard levels. DOE discusses the use of the COP metric in the following section.

Heating Efficiency Metric

The current energy conservation standards for small, large, and very large air-cooled CUHP heating efficiency are based on the COP metric.

10 CFR 431.97(b)

COP is defined as the ratio of the produced heating effect to its net work input.

In response to the RFI, Ingersoll Rand commented that a performance metric does not exist that simulates part load performance in heating. (Ingersoll Rand, No. 6 at p. 4) Modine commented that DOE could consider creating a new metric for CUHP, an integrated COP that is based on heating weather bin data, to provide a more representative measure of energy efficiency during the heating mode. (Modine, No. 5 at p. 2)

DOE is not aware of any test procedures that have been developed that measure part load performance in heating mode for small, large, and very large air-cooled CUHP. In addition, DOE notes that Modine did not provide any data, nor is DOE aware of any data, regarding the annual usage for CUHP under part-load heating conditions to determine whether part-load heating hours are significant and would warrant the development of a part-load heating metric. As discussed in section IV.C.3, one manufacturer noted that CUHPs typically operate in full load heating mode and cycle the auxiliary heat on and off because heat pump capacity alone is inadequate to meet the building load. In addition, DOE is unaware of data regarding usage patterns for CUHP to determine appropriate test conditions under part-load heating conditions. Because DOE is unaware of any test procedures or usage data regarding part-load performance in heating mode for CUHP that shows that part-load heating hours are significant, DOE is not considering amendments to the test procedure to measure part-load heating efficiency at this time. For this NOPR, DOE is proposing standards for the heating efficiency based on the COP metric.

Regional Standards

In response to the RFI, NEEA and NBI stated that DOE should consider regional standards for small, large, and very large air-cooled CUAC and CUHP. (NEEA, No. 15 at p. 2; NBI, No. 12 at p. 2) NEEA commented that AHRI Standard 340/360 tends to favor certain climate zones and exclude or decrease savings by only having one efficiency value to characterize the 8 climate zones in the United States. NEEA also stated that the test procedure tends to under value fan energy as external static pressure values are optimistically low. According to NEEA and NBI, the use of regional efficiency standards would increase energy savings and reflect the equipment selection options for design engineers in selecting equipment for varying climatic zones. NEEA added that regional standards would increase and bolster technological development of air conditioning equipment for varying climate zones. NBI stated that, in particular, DOE should investigate regional standards for “hot-dry” climates to recognize the significant research and field experience that allows packaged air conditioners to cost-effectively achieve higher efficiencies in these climates. NBI stated that DOE has developed regional standards for other residential HVAC equipment (10 CFR 430.32(c)(5). NBI commented that DOE should consider adopting CCE Tier 2 ratings for “hot-dry” regional standards. (NEEA, No. 15 at p. 2; NBI, No. 12 at p. 2)

EPCA requires that any amended standard for small, large, and very large air-cooled CUAC and CUHP must be a uniform national standard. (42 U.S.C. 6313(a)(6)(A)) EPCA does not provide DOE with the authority to set regional standards for CUAC and CUHP equipment. As a result, DOE is not considering regional standards for small, large, and very large air-cooled CUAC and CUHP.

Issue 1:

DOE requests comment on the use of IEER as the cooling efficiency metric and COP as the heating efficiency metric (for CUHP) for the proposed energy conservation standards, including additional data and input

regarding the uncertainty of IEER test measurements.

B. Technological Feasibility

1. General

In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially available equipment or in working prototypes to be technologically feasible. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i).

After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on equipment utility or availability; and (3) adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-(iv). Section IV.B of this proposed rulemaking discusses the results of the screening analysis for small, large, and very large air-cooled CUAC and CUHP, particularly the designs DOE considered, those it screened out, and those that are the basis for the TSLs in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR Technical Support Document (TSD).

2. Maximum Technologically Feasible Levels

When DOE proposes to adopt an amended standard for a type or class of covered equipment, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such equipment. Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for small, large, and very large air-cooled CUAC and CUHP, using the design parameters for the most efficient equipment available on the market or in working prototypes. (See chapter 5 of the NOPR TSD.) The max-tech levels that DOE determined for this rulemaking are described in section IV.C.3 of this proposed rule.

C. Energy Savings

1. Determination of Savings

For each TSL, DOE projected energy savings from the products that are the subject of this rulemaking purchased in the 30-year period that begins in the year of compliance with amended standards (2019-2048). The savings are measured over the entire lifetime of products purchased in the 30-year analysis period.

DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the base case. The base case represents a projection of energy consumption in the absence of amended mandatory efficiency standards, and it considers market forces and policies that affect demand for more efficient products.

In the past DOE presented energy savings results for only the 30-year period that begins in the year of compliance. In the calculation of economic impacts, however, DOE considered operating cost savings measured over the entire lifetime of products purchased in the 30-year period. DOE has chosen to modify its presentation of national energy savings to be consistent with the approach used for its national economic analysis.

DOE used its national impact analysis (NIA) spreadsheet model to estimate energy savings from amended standards for the products that are the subject of this rulemaking. The NIA spreadsheet model (described in section IV.H of this proposed rule) calculates energy savings in site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports national energy savings in terms of the savings in the energy that is used to generate and transmit the site electricity. To calculate this quantity, DOE derives annual conversion factors from the model used to prepare the Energy Information Administration's (EIA) most recent

Annual Energy Outlook

(

AEO

DOE has begun to also estimate full-fuel-cycle energy savings, as discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51281 (August 18, 2011), as amended at 77 FR 49701 (August 17, 2012). The full-fuel-cycle (FFC) metric includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy efficiency standards. DOE's evaluation of FFC savings is driven in part by the National Academy of Science's (NAS) report on FFC measurement approaches for DOE's Appliance Standards Program.

The NAS report discusses that the FFC metric was primarily intended for energy efficiency standards rulemakings where multiple fuels may be used by a particular product. In the case of this rulemaking, only a single fuel—electricity—is consumed by the equipment. DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered equipment. Although the addition of FFC energy savings in the rulemakings is consistent with the recommendations, the methodology for estimating FFC does not project how fuel markets would respond to this particular standard rulemaking. The FFC methodology simply estimates how much additional energy, and in turn how many tons of emissions, may be displaced if the estimated quantity of energy was not consumed by the equipment covered in this rulemaking. It is also important to note that inclusion of FFC savings does not affect DOE's choice of proposed standards.

“Review of Site (Point-of-Use) and Full-Fuel-Cycle Measurement Approaches to DOE/EERE Building Appliance Energy-Efficiency Standards,” (Academy report) was completed in May 2009 and included five recommendations. A copy of the study can be downloaded at:

http://www.nap.edu/catalog.php?record_id=12670.

For more information on FFC energy savings, see section IV.H.2.

2. Significance of Savings

To adopt national standards more stringent than the amended ASHRAE/IES Standard 90.1 for small, large, and very large air-cooled CUAC and CUHP, DOE must determine that such action would result in significant additional conservation of energy. (42 U.S.C. 6313(a)(6)(A)(ii)) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals, in

Natural Resources Defense Council

Herrington,

768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended “significant” energy savings in the context of EPCA to be savings that were not “genuinely trivial.” The energy savings for today's proposed standards (presented in section V.B) are nontrivial, and, therefore, DOE considers them “significant” within the meaning of section 325 of EPCA.

D. Economic Justification

1. Specific Criteria

EPCA provides seven factors to be evaluated in determining whether a more stringent standard for small, large, and very large air-cooled CUAC and CUHP is economically justified. (42 U.S.C. 6313(a)(6)(B)(ii)) The following sections discuss how DOE has

addressed each of those seven factors in this rulemaking.

a. Economic Impact on Manufacturers and Consumers

In determining the impacts of a potential amended standard on manufacturers, DOE conducts a manufacturer impact analysis (MIA), as discussed in section IV.J. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include industry net present value (INPV), which values the industry on the basis of expected future cash flows; cash flows by year; changes in revenue and income; and other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers.

For individual consumers, measures of economic impact include the changes in life-cycle cost (LCC) and payback period (PBP) associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the economic impacts applicable to a particular rulemaking. DOE also evaluates the LCC impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a national standard.

b. Savings in Operating Costs Compared to Increase in Price

EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product compared to any increase in the price of the covered product that are likely to result from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis.

The LCC is the sum of the purchase price of a product (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value. For its analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with amended standards.

The LCC savings and the PBP for the considered efficiency levels are calculated relative to a base case that reflects projected market trends in the absence of amended standards. DOE identifies the percentage of consumers estimated to receive LCC savings or experience an LCC increase, in addition to the average LCC savings associated with a particular standard level. DOE's LCC and PBP analysis is discussed in further detail in section IV.F.

c. Energy Savings

Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6313(a)(6)(B)(ii)(III)) As discussed in section IV.H, DOE uses the NIA spreadsheet to project national energy savings.

d. Lessening of Utility or Performance of Products

In establishing classes of products, and in evaluating design options and the impact of potential standard levels, DOE evaluates standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6313(a)(6)(B)(ii)(IV)) Based on data available to DOE, the standards proposed in this document would not reduce the utility or performance of the products under consideration in this rulemaking.

e. Impact of Any Lessening of Competition

EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. (42 U.S.C. 6313(a)(6)(B)(ii)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2) (B)(ii)) DOE will transmit a copy of today's proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide its determination on this issue. DOE will address the Attorney General's determination in the final rule.

f. Need for National Energy Conservation

In evaluating the need for national energy conservation, DOE expects that the energy savings from the proposed standards are likely to provide improvements to the security and reliability of the nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the nation's needed power generation capacity.

The proposed standards also are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with energy production. DOE reports the emissions impacts from the proposed standards, and from each TSL it considered, in section V.B.6 of this proposed rulemaking. DOE also reports estimates of the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L.

g. Other Factors

EPCA allows the Secretary of Energy, in determining whether a standard is economically justified, to consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6313(a)(6)(B)(ii)(VII))

2. Rebuttable Presumption

As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic

analysis that considers the full range of impacts to consumers, manufacturers, the nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F.12 of this proposed rule.

IV. Methodology and Discussion of Related Comments

DOE used four analytical tools to estimate the impact of today's proposed standards. The first tool is a spreadsheet that calculates LCCs and PBPs of potential new energy conservation standards. The second tool is a model that provides shipments forecasts, and the third tool is a spreadsheet that calculates national energy savings and net present value resulting from potential amended energy conservation standards. The fourth spreadsheet tool, the Government Regulatory Impact Model (GRIM), helped DOE to assess manufacturer impacts.

Additionally, DOE estimated the impacts of energy conservation standards for small, large, and very large air-cooled commercial package air conditioning and heating equipment on utilities and the environment. DOE used a version of EIA's National Energy Modeling System (NEMS) for the utility and environmental analyses. The NEMS model simulates the energy sector of the U.S. economy. EIA uses NEMS to prepare its

Annual Energy Outlook

(

AEO),

a widely known energy forecast for the United States. The version of NEMS used for appliance standards analysis is called NEMS-BT

and is based on the

AEO

version with minor modifications.

The NEMS-BT model offers a sophisticated picture of the effect of standards, because it accounts for the interactions between the various energy supply and demand sectors and the economy as a whole.

BT stands for DOE's Building Technologies Program.

The EIA allows the use of the name “NEMS” to describe only an AEO version of the model without any modification to code or data. Because the present analysis entails some minor code modifications and runs the model under various policy scenarios that deviate from AEO assumptions, the name “NEMS-BT” refers to the model as used here. For more information on NEMS, refer to The National Energy Modeling System: An Overview, DOE/EIA-0581 (98) (Feb.1998), available at:

http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.

As discussed below, specifically in section IV.D on the markups analysis and section IV.E on the energy use analysis, DOE utilized methods developed for the 2004 ANOPR to conduct these analyses. In the case of the markups analysis, DOE utilized the same distribution channels as the 2004 ANOPR to characterize how small, large, and very large air-cooled CUAC equipment is distributed from the manufacturer to the end-user. In the case of the energy use analysis, building simulations performed for the 2004 ANOPR laid the basis for estimating the annual energy consumption of small, large, and very large air-cooled CUAC equipment. However, DOE incorporated several modifications to the simulations themselves as well as detailed performance data from the Engineering Analysis to estimate the energy consumption of equipment at the specific energy efficient levels evaluated in today's NOPR. DOE also notes that inputs to the LCC and PBP analysis, including the installation and maintenance costs, used the same data source as the 2004 ANOPR, but DOE updated the data to reflect the most recent version of the data source.

A. Market and Technology Assessment

1. General

For the market and technology assessment, DOE develops information that provides an overall picture of the market for the equipment concerned, including the purpose of the equipment, the industry structure, and market characteristics. This activity includes both quantitative and qualitative assessments, based primarily on publicly available information. The subjects addressed in the market and technology assessment for this rulemaking include scope of coverage, equipment classes, types of equipment sold and offered for sale, and technology options that could improve the energy efficiency of the equipment under examination. Chapter 3 of the NOPR TSD contains additional discussion of the market and technology assessment.

2. Scope of Coverage and Equipment Classes

The proposed energy conservation standards in today's NOPR cover small, large, and very large, air-cooled CUAC and CUHP under section 342(a) of EPCA. (42 U.S.C. 6313(a)) This category of equipment has a rated capacity between 65,000 Btu/h and 760,000 Btu/h. It is designed to heat and cool commercial buildings. In the case of single-package units, which house all of the components (i.e., compressor, condenser and evaporator coils and fans, and associated operating and control devices) within a single cabinet, these units are typically located on the building's rooftop. In the case of split-system units, the compressor and condenser coil and fan (or in the case of CUHP, the outdoor coil and fan) are housed in a cabinet typically located on the outside of the building, and the evaporator coil and fan (or in the case of CUHP, the indoor coil and fan) are housed in a cabinet typically located inside the building.

When evaluating and establishing energy conservation standards, DOE divides covered equipment into equipment classes by the type of energy used or by capacity or other performance-related features that would justify a different standard. In determining whether a performance-related feature would justify a different standard, DOE considers such factors as the utility to the consumer of the feature and other factors DOE determines are appropriate.

The current equipment classes that EPAct 2005 established for small, large, and very large air-cooled CUAC and CUHP divide this equipment into twelve classes characterized by rated cooling capacity, equipment type (air conditioner versus heat pump), and heating type. Table IV.1 shows the current equipment class structure.

Table IV.1—Proposed Equipment Classes

Equipment class

Equipment type

Cooling capacity

Sub-category

Heating type

Small Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled)

≥65,000 Btu/h and <135,000 Btu/h

Electric Resistance Heating or No Heating.

All Other Types of Heating.

Electric Resistance Heating or No Heating.

All Other Types of Heating.

Large Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled)

≥135,000 Btu/h and <240,000 Btu/h

Electric Resistance Heating or No Heating.

All Other Types of Heating.

Electric Resistance Heating or No Heating.

All Other Types of Heating.

Very Large Commercial Packaged Air-Conditioning and Heating Equipment (Air-Cooled)

≥240,000 Btu/h and <760,000 Btu/h

Electric Resistance Heating or No Heating.

All Other Types of Heating.

Electric Resistance Heating or No Heating.

All Other Types of Heating.

AC = Air conditioner; HP = Heat pump.

In the RFI, DOE stated that it planned to continue using these classes, which are also provided in Table 1 of 10 CFR 431.97. DOE requested feedback on the current equipment classes and sought information regarding other equipment classes it should consider for inclusion in its analysis 78 FR 7296, 7300 (Feb. 1, 2013).

Modine, Carrier, and AAON supported the equipment class structures presented in the RFI. (Modine, No. 5 at p. 1; Carrier, No. 7 at p. 2; AAON, No. 8 at p. 3) AHRI disagreed with DOE's determination that every equipment category for which there is a minimum energy conservation standard is an equipment class. AHRI stated that equipment classes should be delineated based on cooling capacity and on whether the unit is an air conditioner or a heat pump. AHRI commented that the same equipment class could have two different efficiency levels (

e.g.,

one for equipment with electric resistance heat (or none) and the other for equipment with all other types of heating element). (AHRI, No. 14 at p. 5)

As discussed above, EPCA specifies the criteria for separation into different equipment classes: (1) Type of energy used, or (2) capacity or other performance-related features such as those that provide utility to the consumer or others the Secretary determines are appropriate that would justify the establishment of a separate energy conservation standard. DOE notes that considering two different efficiency levels for different equipment types, as asserted by AHRI, would create two separate equipment classes because a performance-related feature (

e.g.,

type of heating) inherently affects the efficiency and warrants establishing a separate energy conservation standard. For these reasons, DOE is proposing energy conservation standards in this NOPR based on the existing equipment class structure provided in Table 1 of 10 CFR 431.97, as shown in Table IV.1.

United CoolAir Corporation (UCA) submitted a request for exemption for a specific type of air conditioning equipment (“double-duct air-cooled air conditioner”). See UCA, EERE-2013-BT-STD-0007-0020. These units are designed for indoor installation in constrained spaces using ducting to an outside wall for the supply and discharge of condenser air to the condensing unit. The sizing of these units is constrained both by the space available in the installation location and the available openings in the building through which the unit's sections must be moved to reach the final installation location. These size constraints, coupled with the higher power required by the condenser fan to provide sufficient pressure to move the condenser air through the supply and return ducts, affect the energy efficiency of these types of systems. More conventional designs that use outdoor units or condenser sections of packaged commercial air conditioners do not require this more complex ductwork and can more easily move condenser air using direct-driven propeller fans.

Currently, double-ducted air conditioners are tested and rated under the same test conditions as single-duct air conditioners, without any ducting connected to, or an external static pressure applied on, the condenser side. This would provide more favorable conditions for testing and rating equipment efficiency in terms of IEER than typically experienced in the field. UCA has asserted that the double-duct design provides customer utility in that it allows interior field installations in existing buildings in circumstances where spacing constraints make an outdoor unit impractical to use. Id. DOE recognizes that the design features associated with the described dual-duct designs may affect energy use while providing justifiable customer utility. However, DOE also questions how much of an efficiency impact, in terms of IEER, the dual-duct design may provide when tested under the current test conditions discussed above compared to single-duct air conditioners and welcomes additional data regarding the impact on the measured IEER.

Issue 3:

DOE requests comments on whether separate equipment classes should be considered for dual-duct air-conditioners. DOE further requests detailed comments regarding the definition of such equipment, and any detailed information, such as test data, test conditions, key component design details, fan power consumption, as well as other relevant information that may help DOE evaluate potential alternative equipment class standard levels.

3. Technology Options

As part of the market and technology assessment, DOE uses information about existing and past technology options and prototype designs to help identify technologies that manufacturers could use to improve energy efficiency. Initially, these technologies encompass all those that DOE believes are technologically feasible. Chapter 3 of the NOPR TSD includes the detailed list and descriptions of all technology options identified for this equipment.

In the RFI, DOE stated that it planned to consider the specific technology options presented in Table IV.2. 78 FR 7296, 7300 (Feb. 1, 2013).

Table IV.2—RFI Technology Options

Heat transfer improvements:

• Electro-hydrodynamic enhancement.

Alternative refrigerants.

Condenser and evaporator fan and fan motor improvements:

• Larger fan diameters.

• More efficient fan blades (e.g., air foil centrifugal evaporator fans, backward-cured centrifugal evaporator fans, high efficiency propeller condenser fans).

• High efficiency motors (e.g., copper rotor motor, high efficiency induction, permanent magnet, electronically commutated).

Larger heat exchangers.

Microchannel heat exchangers.

Reduce air leakage paths within the unit.

Low-pressure-loss filters.

Compressor Improvements:

• High efficiency compressors.

• Multiple compressors.

Thermostatic expansion valves.

Electronic expansion valves.

High-side solenoid valve or discharge line check-valve to minimize pressure equalization.

Heat-pipes (for high latent loads).

Sub-coolers.

Reduced indoor fan belt loss:

• Synchronous (toothed) belts.

• Direct-drive fans.

Demand-control ventilation strategy.

The RFI sought comment from interested parties on these, as well as other options that DOE had not listed. Carrier commented that, in general, many of the technologies presented by DOE in the RFI are already used in equipment. (Carrier, No. 7 at p. 2) DOE agrees that many of the technologies are used in equipment currently available on the market. As a result, DOE continued to consider such technologies for improving the efficiency above the baseline level for this NOPR. DOE also notes that for the majority of the identified technology options, DOE considered designs in its analyses that are generally consistent with existing equipment on the market (

e.g.,

heat exchanger sizes, fan and fan motor types, controls, air flow).

The following sections discuss comments from interested parties on specific technology options.

Heat Exchanger Size

Increasing the heat transfer surface area of the heat exchangers can be achieved by increasing their width, height, or depth. These measures can improve heat transfer effectiveness, which can reduce the condensing temperature and increase the evaporating temperature needed to transfer the cooling (or heating) load. Such temperature adjustments reduce the compressor's compression ratio and hence its required power input. Lennox indicated that evaporator coil area is already near the maximum for optimum efficiency and latent heat removal. Lennox stated that increasing the coil area leads to higher evaporating temperatures, lessening the ability of the coil to remove moisture from the air, which could lead to humidity control problems in hot humid regions. (Lennox, No. 6 at p. 2) Lennox also commented that adding coil rows increases costs proportional to the number of rows, but provides less than proportional efficiency gain. (Lennox, No. 6 at p. 2)

DOE agrees with Lennox that increasing the evaporator size may lead to a decrease in latent heat removal. Based on a review of currently available equipment literature and DOE's energy modeling analyses, DOE determined that, for a given capacity, the heat exchanger sizes varied significantly, with larger coil sizes generally correlating to higher IEER levels (see chapter 5 of the NOPR TSD for additional information).

As part of the engineering analysis, the design options DOE considered for different IEER levels include the variation of evaporator coil size, and DOE's analysis considered evaporator coil sizes consistent with equipment available on the market.

The following are examples of the equipment literature DOE reviewed:

(1) United Technologies Corporation. “Carrier 50TC Cooling Only/Electric Heat, Packaged Rooftop, 3 to 15 Nominal Tons: Product Data.” Available online at:

http://www.docs.hvacpartners.com/idc/groups/public/documents/techlit/50tc-19pd.pdf

(Accessed on Sept. 12, 2013).

(2) Lennox International Inc. “Lennox Packaged Electric/Electric LCH Energence® Rooftop Units: Product Specifications.” Available online at:

http://tech.lennoxintl.com/C03e7o14l/3rEpIb5d/ehb_lch_bbox_1306_210556_020.pdf

(Accessed on Sept. 12, 2013).

(3) Ingersoll Rand. “Trane Product Catalog: Packaged Rooftop Air Conditioners, Voyager

Cooling and Gas/Electric, 12

1/2

-25 Tons, 60Hz” Available online at:

http://www.trane.com/CPS/Uploads/UserFiles/DXUnitarySystems/Light%20Rooftops/RT-PRC028-EN_08022013.pdf

(Accessed on Sept. 12, 2013).

Fans and Fan Motors

As stated above, DOE proposed several improvements to the indoor and outdoor fan motors, including copper rotor motors, higher efficiency motors, and direct-drive fans, and synchronous belts.

Manufacturing more efficient copper rotor motors requires using copper instead of aluminum for critical components of an induction motor's rotor (

e.g.,

conductor bars and end rings). By using copper in these motor components, the efficiency of the motor can improve significantly because the electrical conductivity of this material, relative to other materials commonly used in rotor construction (

e.g.

aluminum) is much higher (

i.e.,

lower electrical resistance). With this higher level of conductivity, the electrical losses that might otherwise present themselves during operation in a given motor are significantly reduced. However, using a copper-cast rotor in an electric motor presents a variety of production challenges. For example, copper melts at higher temperatures than aluminum, so the casting process becomes more difficult (

due to

higher thermal stress on the die mold) and is likely to increase both production time and cost for manufacturing a motor. EBM-Papst Inc. (EBM-Papst) commented that copper rotor motors provide marginally increased efficiency

over aluminum and aluminum alloy rotor motors. EBM-Papst noted that the torque characteristic of copper rotor motors is very stiff, so that copper rotor motors cannot control speed based on voltage and, as a result, variable speed copper rotor motors would require variable frequency drives. EBM-Papst also indicated that casting of copper requires very high temperatures and very specialized tools. (EBM-Papst, No. 16, p. 1)

DOE agrees with EBP-Papst that copper rotor motors are more difficult to manufacture than aluminum rotor motors due to the high temperatures required for casting. However, as part of the previous rulemaking for this equipment, DOE noted that in the case of motor rotors for similar horsepower motors, copper rotors can reduce the electric motor total energy losses by between 15 percent and 23 percent as compared to aluminum rotors.

DOE also notes that, based on a review of equipment literature, equipment is available on the market that offers variable speed indoor fan motors using variable frequency drives. As a result, DOE considered copper rotor motors as a technology option.

See chapter 4 of the TSD for the July 2004 ANOPR, available online at:

http://www.regulations.gov/#!documentDetail;D=EERE-2006-STD-0103-0078.

High-efficiency electric motors that drive evaporator and condenser fans can increase efficiency and reduce overall energy use in air-cooled CUAC and CUHP. EBM-Papst stated that high-efficiency permanent magnet motors are available with ferrite magnets. EBM-Papst indicated that external rotor permanent magnet motors with completely integrated drive electronics are available up to a 6 kilowatt (kW) (8 horsepower) electrical input. EBM-Papst stated that versions with 7.5 kW and 12 kW (10 horsepower and 15 horsepower), which DOE notes may be applicable for very large air-cooled CUAC and CUHP indoor fan motors, will become available in 2013 and 2014, respectively. In light of EBM-Papst's information, DOE decided to consider higher efficiency permanent magnet motors as part of its list of technology options because they may reduce the energy consumption compared to motors currently used by manufacturers for CUAC and CUHP equipment. As discussed above, DOE's analysis considered fan motors consistent with equipment available on the market.

Direct-drive fans connect the fan blade/wheel directly to the motor shaft, thereby eliminating drive belt energy loss. EBM-Papst also commented that direct-drive fans prevent friction power losses that can be found in fans with mechanical transmission components even when these components are perfectly aligned with properly-tightened high-quality belts. (EBM-Papst, No. 16 at p. 2) DOE notes that certain air-cooled CUAC and CUHP currently available on the market already incorporate direct-drive fans in higher efficiency equipment. As a result, DOE proposes to keep direct-drive fans on the list of technologies.

Another option to improve efficiency would be to increase the diameter of the outdoor fan, which reduces the discharge velocity of the air leaving the condenser fan. The energy associated with the discharge velocity is dissipated and cannot be recovered, hence, a lower discharge velocity reduces this loss and reduces fan power input. Regarding increasing the outdoor fan diameter, EBM-Papst commented that fan efficiency varies significantly with the fan's duty point. EBM-Papst noted that many fans are selected with the operating point very far to the right of the point of peak efficiency (

i.e.,

fans are designed for higher flow rates and are sized smaller than is optimal for efficiency) and that such selections yield lower first cost and smaller equipment size. EBM-Papst stated that fan selections that match the duty point closer with the fan's peak efficiency are usually larger. Moreover, EBM-Papst commented that despite the potential increase in operational fan efficiency, a larger fan—while operating at lower rotational speed—can require a slightly higher motor torque, which results in the need for a larger motor frame size. (EBM-Papst, No. 16, p. 2) (Larger frame-sized motors provide higher horsepower and torque levels.) Lennox also commented that fan efficiency increases with fan diameter, but that cabinet size and shipping dimensions constrain the ability of manufacturers to increase fan diameters much beyond the current sizes. (Lennox, No. 6 at p. 2)

With respect to these comments, DOE recognizes that fan efficiency can play a role in improving CUAC/CUHP efficiency. DOE also realizes that fan diameter size is limited by cabinet sizes and shipping dimensions. DOE has incorporated fan diameter and motor sizes consistent with existing equipment available on the market to ensure that components are appropriately sized.

EBM-Papst suggested that DOE consider that company's HyBlade® axial fan and AxiTop diffuser for axial fans as technology options for improving condenser fan efficiency. (EBM-Papst, No. 16 at p. 3) EBM-Papst stated that the HyBlade® axial fan uses a blade with a metal core for structural strength and motor heat dissipation, while using injection molded blade surfaces for advanced geometries that allow for optimized aerodynamic shape, resulting in increased efficiency compared to conventional fan blades. (EBM-Papst, No. 16 Appendix 4 at p. 2) According to EBM-Papst, the Axitop diffuser reduces discharge losses due to stripping and back-flow of air and, as a result, boosts the pressure increase of the fan. This increases the efficiency of the fan and allows the fan speed to be reduced (

i.e.,

fan motors may run at lower power) while producing the same air volume, resulting in a decrease in energy use of the overall system. EBM-Papst noted that in one customer application (at constant air volume), energy consumption was reduced by 27 percent using this technology. (EBM-Papst, No. 16 Appendix 3 at pp. 1-2) DOE notes that both of these technologies are patented by EBM-Papst. DOE does not intend to consider energy conservation standards that would necessitate the use of any proprietary designs or patented technologies, which could allow a single manufacturer to monopolize the market. As a result, DOE is not considering EBM-Papst's HyBlade® axial fan and AxiTop diffuser as technology options in this NOPR. However, DOE notes that the proposed energy conservation standards would not prohibit the use of these technologies.

EBM-Papst made several comments regarding indoor fan energy use and available design options to improve their efficiency—which, by extension, would improve overall CUAC/CUHP efficiency. EBM-Papst commented that unnecessary electrical consumption by indoor fans impacts the energy efficiency doubly, because of the additional heat load on the conditioned space. DOE recognizes that the heat load caused by the indoor motor may result in added energy consumption to cool the air heated by the motor. DOE notes that the energy modeling tool used in the engineering analyses is already designed to account for the heat load caused by the indoor fan motor as part of the overall system performance.

An airfoil centrifugal fan is a type of fan that has blades shaped like air foils that are inclined such that the blade trailing edge is angled away from the rotation direction. The best airfoil fans can operate at efficiencies near 90 percent.

Utilizing this type of fan for

indoor fan applications can improve the efficiency of the CUAC/CUHP system. Regarding specific indoor fan types, EBM-Papst stated that airfoil centrifugal fans are known for low sound. Additionally, EBM-Papst stated that the efficiency benefits of airfoil impellers over backward curved impellers (which have the tips of its blades inclined away from the direction of the airflow, enabling it to move air at higher pressures) should be examined closely. (EBM-Papst, No. 16 at p. 2) Although EBM-Papst did not provide details regarding the low sound feature, DOE recognizes that the airfoil centrifugal fan has less friction losses during operation, which produces less noise, and also results in lower power consumption.

United States Army. December 9, 2005. Maintenance of Mechanical and Electrical Equipment At Command, Control,

Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4isr) Facilities, HQUSACE/OCE Army Technical Manuals [Online Report]. DOE documented this report in the rulemaking docket as docket ID EERE-2013-BT-STD-0007-0019.

DOE acknowledges that manufacturers may offer features that are beneficial to consumers, like low sound fans, but do not impact efficiency. A number of manufacturers indicated that airfoil centrifugal fans and backward curved centrifugal fans (i.e., similar to airfoil fans, but they have simpler blades and cannot attain comparable efficiencies) may improve IEER due to lower fan power consumption. As a result, DOE proposes to include these fan types on the list of technology options. As discussed above, DOE considered technology options and designs that are generally consistent with existing equipment on the market. Additionally, as part of the reverse engineering analysis (see section IV.C.1), DOE considered fan curves and test data to account for the performance of the fans as part of the air-cooled CUAC and CUHP.

EBM-Papst also provided the following comments on other fan and fan motor efficiency improving technologies:

• Lower air-speed results in lower fan energy losses and EBM-Papst recommended imposing an upper limit for air speed inside of the commercial package equipment, referenced to air inlet area, the air outlet area, and/or air filter area. Air-speed of less than 2.5 meters/second would be ideal.

• Optimize the air path in the unit to minimize airflow impedance.

• Optimize the fan selection in terms of fan diameter, and fan type (axial, centrifugal forward curved, centrifugal backward curved, cross flow, mixed flow) so that the fan duty point of its peak efficiency is: (1) Close to the actual fan duty point required by the commercial package equipment, and (2) that the chosen fan type enhances the air path in the unit.

• Fine-tune the fan design (blade angle, number of blades, impeller width) so that the fan's operational efficiency in the unit matches the fan peak efficiency exactly.

• Some electronic motor speed controllers can cause structure-borne noise. A better controller potentially avoids the need for sound attenuation, which in turn, frees up the air path for increased air-side efficiency.

• Improve the combination of fans with motors and speed controllers. A regulation harmonized with EN 13053:2006+A1 would limit the maximum permitted electrical power consumption of the motorized fan. Equation (6) in EN 13053 determines a reference power input based on fan static pressure and on airflow. The resulting product is compared against a table which categorizes the equipment in class P1 (best) through class P7 (worst). (EBM-Papst, No. 16 at p. 3)

DOE agrees that reducing the air speed can reduce fan power consumption and included variable or staged air flow as a technology option. DOE also recognizes that optimizing fan type and fan design may decrease the fan power consumption and thus improve the efficiency of the air-cooled CUAC and CUHP. As a result, DOE is including these designs on the list of technology options. DOE also agrees that appropriately matching the fan with the fan motor improves efficiency. However, DOE proposes to evaluate air-cooled CUAC and CUHP as a whole and does not propose to set separate performance requirements for the fan assembly. With regards to EBM-Papst's comments concerning optimizing air paths and better motor controllers, DOE's analyses considered air flow paths and control systems consistent with existing equipment available on the market.

Electronic Expansion Valves

Expansion valves are refrigerant metering devices that control the amount of refrigerant flowing to the evaporator coil, decreasing the temperature and pressure of the refrigerant, which creates the driving force to move heat out of the conditioned space and into the evaporator. Electronic expansion valves use an electronic control system and sensors that measure suction line temperature and pressure to maintain more precise control of superheat over a wide range of operating conditions and, as a result, may increase energy efficiency under varying load conditions when paired with modulating systems.

Lennox stated that electronic expansion valves are very costly and not economically justified because they provide little full load benefit. (Lennox, No. 6 at p. 2) As explained in section III.A, DOE proposes to transition to IEER, a part load efficiency metric, and electronic expansion valves are beneficial for partial loads because they can precisely control the expansion process which leads to lower power consumption, and therefore, a higher IEER. DOE recognizes that that electronic expansion valves may be more expensive that other expansion devices, like capillary tubes or thermostatic expansion valves, but DOE already considers the costs of design options separately as part of the engineering analyses, which means that these devices may be screened out once costs are factored into the analysis. As a result, DOE is continuing to consider electronic expansion valves as a technology option for purposes of its engineering analysis.

Part-Load Technology Options

Variable-capacity or multiple-tandem compressors provide the ability to modulate the cooling capacity, allowing equipment to better match the cooling load than single speed compressors that can only operate by cycling on and off. The effectiveness of the heat exchangers is greater during operation with reduced mass flow at part load, thus reducing the condensing temperature and increasing the evaporating temperature required to transfer the load—this in turn reduces the compressor's operating pressure ratio and its power input. As a result, using variable capacity or multiple-tandem compressors may improve the overall system efficiency by matching part-load operating conditions (and reducing energy consumption) more closely than units using single speed compressors. Variable speed fans/motors can also improve CUAC and CUHP efficiency by varying fan speed to reduce air flow rate at part load. If the indoor/outdoor heat exchangers of a unit are served by a variable-capacity compressor or by a tandem compressor set, less air flow is needed to transfer the load. Overall system efficiency can be improved by reducing the indoor or outdoor air flow and reducing indoor/outdoor fan power.

DOE's consideration of a shift to an IEER-based standard generated a number of comments. Ingersoll Rand commented that moving to an IEER metric will require manufacturers to optimize around part load performance, likely in the form of improved heat

transfer and airflow. (Ingersoll Rand, No. 10 at p. 3) Whole Building Systems, LLC, commented that DOE should include variable-capacity compressors, along with variable speed condenser and evaporator fans. It noted that these technologies are already being adopted by manufacturers. (Whole Building Systems, No. 4 at p. 1) Carrier added that compressor staging (multiple or variable capacity-compressors) and indoor and outdoor fan speed control would increase IEER efficiency, but would not impact EER. (Carrier, No. 7 at p. 2)

DOE agrees with Whole Building Systems, Carrier, and Ingersoll Rand that variable-capacity compressors, compressor staging, and variable speed fans improve IEER because they provide the ability to modulate the cooling capacity and reduce the overall system power consumption under part-load conditions. Based on DOE's review of manufacturer equipment literature, these design elements are already being used in equipment currently available on the market. Accordingly, DOE included these design elements in the list of technology options considered for this NOPR.

Modine commented that DOE should also consider the intelligent interactive modulation head pressure control, a technology option developed by Airedale International Air Conditioning (Airedale) to improve off peak load efficiencies. (Modine, No. 5 at pp. 1-2) DOE notes that Modine did not provide any details regarding this technology or the associated efficiency improvement. DOE also notes that Airedale was acquired by Modine in 2005. DOE does not consider proprietary technologies as part of its analyses and, as a result, did not consider the intelligent interactive modulation head pressure control developed by Airedale as a separate technology option. However, DOE recognizes that different equipment manufacturers may take different approaches for part-load operation control strategies.

Technology Options That Do Not Impact IEER

DOE laid out a number of technology options for comment that have no impact on IEER but that could have an overall impact on energy usage that would not be fully captured by the use of this proposed metric. Demand-control ventilation strategies monitor the indoor space occupancy and conditions (

e.g.,

using CO

sensors) to deliver the required ventilation as needed (based on building air quality requirements). In contrast, conventional systems that do not employ these strategies may provide fixed amounts of ventilated air based on assumed conditions. By comparison, demand-control ventilation strategies would more accurately control the amount of outdoor air required for ventilation that needs to be conditioned by the equipment.

Lennox and Ingersoll Rand commented that demand-control ventilation strategy does not benefit either EER or IEER ratings. (Lennox, No. 6 at p. 3; Ingersoll Rand, No. 10 at p. 3) Carrier also commented that many units on the market have capabilities for demand management, and with the development of smart meters and the smart grid, there are more effective ways to control peak power for this class of equipment than the technology options identified by DOE. Carrier stated that these features are not captured in EER or IEER metrics. (Carrier, No. 7 at p. 2) Lentz Engineering Associates, Inc. commented that DOE should consider a technology option where the primary function of the air handling systems is to efficiently process or manage ventilation and where the primary heating and cooling plants rely on recovered energy instead of expending new energy assets. Lentz Engineering stated that this can result in energy use reductions in HVAC systems on the order of 85 to 90 percent. (Lentz, No. 3 at p. 1)

DOE also considered the implementation of a high-side solenoid valve. A high-side solenoid valve (

i.e.,

a solenoid valve located in the high-pressure-refrigerant line) and a discharge line check valve (

i.e.,

a check valve located in the compressor discharge line) can be installed in a refrigeration system to minimize pressure equalization between the high-pressure and low-pressure sides. Lennox commented that these valves do not benefit either EER or IEER ratings, but no further details were provided in their comments. (Lennox, No. 6 at p. 3)

Another option could also be used. Heat pipes are used in hot humid climates to increase dehumidification. Refrigerant inside the heat pipe pre-cools incoming supply air by absorbing the heat from it. The evaporator cools the supply air further, and is able to extract more water vapor than a conventional evaporator would. After the refrigerant in the tubes changes into a vapor, it flows to the condensing section at the other end of the system, releasing its heat and flowing back to the evaporator end of the pipe to begin the cycle again. Lennox also commented that heat-pipes for high latent loads do not benefit either EER or IEER ratings. (Lennox, No. 6 at p. 3)

In addition to the items describe above, AAON noted several other technologies that DOE did not initially consider that can improve efficiency. These technologies include capacity modulation (

i.e.,

modulate system capacity output for part load conditions by various means to reduce overall energy consumption), economizers (

i.e.,

an automatic system that enables a cooling system to supply outdoor air to reduce or eliminate the need for mechanical cooling during mild or cold weather), heat recovery (

i.e.,

a process that preconditions outdoor air entering the equipment through direct or indirect thermal and/or moisture exchange with the exhaust air) and energy efficient control sequences (

e.g.,

single zone variable-air-volume) are outside the scope of AHRI Standard 340/360-2007 and beyond the lab facilities capabilities to test. AAON added that although energy can be saved annually by using any one of these options, the full load EER ratings would be decreased due to the higher pressure drop incurred with many of these features. AAON stated that rating system modifications exist to account for the energy savings of some of these technologies, such as those contained in AHRI Guideline V for energy recovery systems. (AAON, No. 8 at p. 3)

DOE recognizes that technologies such as demand-control strategies, economizers, energy recovery, high-side solenoid valves or discharge line check-valves and heat pipes may result in annual building energy savings. However, DOE is not aware of any data showing that these technologies improve IEER based on the current DOE test procedure. As a result, DOE is not proposing to include these technologies in its analyses. However, DOE notes that the IEER metric for this equipment already accounts for both capacity modulation and energy efficient control sequences. In addition, based on a review of equipment literature, DOE notes that both capacity modulation and energy efficient control sequences are used to improve part-load performance for this equipment. As a result, DOE included these technology options as part of the analyses.

Based on manufacturer comments and DOE's review of equipment literature, DOE is declining to include low pressure drop filters and air leakage paths within the unit from the list of technology options. Comments from several manufacturers during manufacturer interviews and public meetings held as part of the Commercial HVAC, Water Heating, and Refrigeration Certification Working Group (Commercial Certification Working

Group), indicated that most manufacturers test their systems without filters installed or use disposable filters that produce minimal pressure drops when used. Additionally, the filter type used in a system is a feature specified by the customer based on the needs of the installation. For example, a unit installed in a hospital will require filters with a high Minimum Efficiency Reporting Value (MERV) rating,

which may cause an increase in pressure drop depending on the density of the filter material and an accompanying increase in fan power and energy use of the unit. DOE proposes to remove air leakage paths from the list of technology options because several manufacturers indicated during interviews that air leakage paths are already eliminated during design of air-cooled CUAC and CUHP.

ASHRAE Standard 52.2-2007, “Method of Testing General Ventilation Air-Cleaning Devices for Removal Efficiency by Particle Size,” establishes the MERV rating, which is the standard comparison of the efficiency of an air filter, ranging from 1 (least efficient) to 16 (most efficient), and measures a filter's ability to remove particles from 0.3 to 10 microns in size.

Based on these assertions and supplemental follow-up work performed, DOE considered the following technology options listed in Table IV.3 in formulating its proposed standards:

Table IV.3—Proposed Technology Options

Heat transfer improvements:

• Electro-hydrodynamic enhancement.

Alternative refrigerants.

Condenser and evaporator fan and fan motor improvements:

• Larger fan diameters.

• More efficient fan blades (e.g., air foil centrifugal evaporator fans, backward-cured centrifugal evaporator fans, high efficiency propeller condenser fans).

• High efficiency motors (e.g., copper rotor motor, high efficiency induction, permanent magnet, electronically commutated).

• Variable speed fans/motors.

Larger heat exchangers.

Microchannel heat exchangers.

Compressor Improvements:

• High efficiency compressors.

• Multiple compressor staging.

• Multiple-tandem or variable-capacity compressors.

Thermostatic expansion valves.

Electronic expansion valves.

Subcoolers.

Reduced indoor fan belt loss:

• Synchronous (toothed) belts.

• Direct-drive fans.

Issue 4:

DOE requests comment and data regarding additional design options or variants of the considered design options that can increase the range of considered efficiency improvements, including design options that may not yet be found on the market.

B. Screening Analysis

After DOE identified the technologies that might improve the energy efficiency of electric motors, DOE conducted a screening analysis. The purpose of the screening analysis is to determine which options to consider further and which to screen out. DOE consulted with industry, technical experts, and other interested parties in developing a list of design options. DOE then applied the following set of screening criteria to determine which design options are unsuitable for further consideration in the rulemaking:

•

Technological Feasibility:

DOE will consider only those technologies incorporated in commercial equipment or in working prototypes to be technologically feasible.

•

Practicability to Manufacture, Install, and Service:

If mass production of a technology in commercial equipment and reliable installation and servicing of the technology could be achieved on the scale necessary to serve the relevant market at the time of the effective date of the standard, then DOE will consider that technology practicable to manufacture, install, and service.

•

Adverse Impacts on Equipment Utility or Equipment Availability:

DOE will not further consider a technology if DOE determines it will have a significant adverse impact on the utility of the equipment to significant subgroups of customers. DOE will also not further consider a technology that will result in the unavailability of any covered equipment type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as equipment generally available in the United States at the time.

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Adverse Impacts on Health or Safety:

DOE will not further consider a technology if DOE determines that the technology will have significant adverse impacts on health or safety.

Technologies that pass through the screening analysis are referred to as “design options” in the engineering analysis. Details of the screening analysis are in chapter 4 of the NOPR TSD. In view of the above factors, DOE screened out the following design options.

Electro-Hydrodynamic Enhanced Heat Transfer

Electro-hydrodynamic enhancement of heat transfer increases the net heat transfer coefficient by applying a high-voltage electrostatic potential field across a heat transfer fluid to destabilize the thermal boundary layer and incite fluid mixing. The improved heat transfer of the evaporator and condenser coils may improve a given system's overall efficiency. DOE notes, however, that this technology is still in the research stage. In response to the RFI, Lennox commented that locating an electrode between each of the hundreds/thousands of heat exchanger fins (which would be the likely method for applying this option) has not been adequately demonstrated for commercial deployment. (Lennox, No. 6 at p. 2)

Although the technique has been shown to improve heat transfer in laboratory testing, DOE is not aware of any commercially available equipment

or working prototypes that use electro-hydrodynamic heat transfer. As a result, DOE does not believe at this time that this option meets the screening criterion of technological feasibility. In addition, DOE agrees with Lennox that this technology has not been adequately demonstrated for commercial deployment and, as a result, does not meet the criterion of practicability to install and service on a scale necessary to serve the relevant market at the time of the compliance date of a new standard. For these reasons, DOE did not consider electro-hydrodynamic heat transfer further in the NOPR analyses.

Alternative Refrigerants

DOE considered ammonia, carbon dioxide, and various hydrocarbons (such as propane and isobutane) as alternative refrigerants to those that are currently in use, such as R-410A. In response to the February 2013 RFI, Lennox stated that virtually all equipment is designed with R-410A as the refrigerant, and that because of the lengthy qualification process to develop a new refrigerant and the components that would need to be redesigned to use it, it is not reasonable to expect a new refrigerant in the timeframe for new energy conservation standards. (Lennox, No. 6 at p. 2) DOE notes that safety concerns need to be taken into consideration when using ammonia and hydrocarbons in air-conditioning systems. EPA created the Significant New Alternatives Policy (SNAP) Program to evaluate alternatives to ozone-depleting substances. Substitutes are reviewed on the basis of ozone depletion potential, global warming potential, toxicity, flammability, and exposure potential. DOE notes that ammonia (in vapor compression cycles), carbon dioxide, and hydrocarbons have been approved or are being considered under SNAP for certain uses, but these or other low GWP alternatives are not yet listed as acceptable substitutes for this equipment.

DOE is also not aware of any other more efficient refrigerant options that are SNAP-approved. Because these alternative refrigerants have not yet been approved for this equipment, DOE did not consider alternate refrigerants for further analysis.

On July 9, 2014, EPA proposed to list certain hydrocarbons and R-32 for residential self-contained A/C appliances as acceptable subject to use conditions to address safety concerns (See 79 FR 38811). EPA is also evaluating new refrigerants for other A/C applications, including commercial A/C. Additional information regarding EPA's SNAP Program is available online at:

http://www.epa.gov/ozone/snap/.

Sub-Coolers

A sub-cooler is a device located between the condenser coil outlet and the expansion device inlet used to further cool the refrigerant exiting the condenser in order to achieve a higher cooling/heating capacity for a unit. In response to the RFI, Lennox added that sub-coolers do not provide a benefit at comfort air conditioning operating conditions. (Lennox, No. 6 at p. 3) DOE notes that air-cooled CUAC and CUHP units typically sub-cool the refrigerant in the condensing coil (by further decreasing the temperature of the refrigerant). DOE also notes that additional mechanical sub-cooling from smaller, secondary vapor-compression circuits has not been incorporated in commercial equipment or in working prototypes. As a result, DOE does not believe sub-cooling meets the criterion of technological feasibility and did not consider it for further analysis.

Based on the screening analysis, DOE considered the design options listed in Table IV.4.

Table IV.4—Design Options Retained for Engineering Analysis

Condenser and evaporator fan and fan motor improvements:

• Larger fan diameters.

• More efficient fan blades (e.g., air foil centrifugal evaporator fans, backward-cured centrifugal evaporator fans, high efficiency propeller condenser fans).

• High efficiency motors (e.g., copper rotor motor, high efficiency induction, permanent magnet, electronically commutated).

• Variable speed fans/motors.

Larger heat exchangers.

Microchannel heat exchangers.

Compressor Improvements:

• High efficiency compressors.

• Multiple compressor staging.

• Multiple- or variable-capacity compressors.

Thermostatic expansion valves.

Electronic expansion valves.

Reduced indoor fan belt loss:

• Synchronous (toothed) belts.

• Direct-drive fans.

C. Engineering Analysis

The engineering analysis estimates the cost-efficiency relationship of equipment at different levels of increased energy efficiency. This relationship serves as the basis for the cost-benefit calculations for commercial customers, manufacturers, and the Nation. In determining the cost-efficiency relationship, DOE estimates the increase in manufacturer cost associated with increasing the efficiency of equipment above the baseline up to the maximum technologically feasible (“max-tech”) efficiency level for each equipment class.

1. Methodology

DOE has identified three basic methods for generating manufacturing costs: (1) The design-option approach, which provides the incremental costs of adding design options to a baseline model that will improve its efficiency (

i.e.,

lower its energy use); (2) the efficiency-level approach, which provides the incremental costs of moving to higher energy efficiency levels, without regard to the particular design option(s) used to achieve such increases; and (3) the reverse-engineering (or cost-assessment) approach, which provides “bottom-up” manufacturing cost assessments for achieving various levels of increased efficiency, based on teardown analyses (or physical teardowns) providing detailed data on costs for parts and material, labor, shipping/packaging, and investment for models that operate at particular efficiency levels. A supplementary method called a catalog

teardown uses published manufacturer catalogs and supplementary component data to estimate the major physical differences between a piece of equipment that has been physically disassembled and another piece of similar equipment for which catalog data are available to determine the cost of the latter equipment.

In the RFI, DOE stated that in order to create the cost-efficiency relationship, it anticipated having to structure its engineering analysis using the reverse-engineering approach, including physical and catalog teardowns. DOE requested comments on using a reverse engineering approach supplemented with catalog teardowns and comments on what the appropriate representative capacities would be for each equipment class. 78 FR 7300.

AAON commented that it is inappropriate and unethical for DOE to use proprietary information and trade secrets provided during manufacturer interviews to reverse engineer equipment supplemented by the catalog teardowns. AAON stated that disclosing trade secrets in a public forum, accessible worldwide, undermines U.S. manufacturing and damages the free enterprise system. (AAON, No. 8 at p. 4) DOE notes that it does not publicly disclose proprietary information obtained from individual manufacturers. Instead, as part of the manufacturer interviews, DOE aggregates all manufacturer responses to prevent disclosing of proprietary information and trade secrets.

AAON commented that DOE's methodology is flawed because all models are weighted equally. AAON indicated that models with higher efficiency and cost are sold in much lower quantities than models with lower efficiency and cost. AAON added that models with higher efficiency and cost may not be economically justified and are only sold to consumers that want the highest efficiency regardless of economic justification. (AAON, No. 8 at p. 3) DOE intends to conduct a full analysis to determine the economic justification of higher efficiency levels, including developing incremental manufacturing costs for higher efficiency equipment based on energy modeling, reverse engineering analyses, and catalog teardowns. Although manufacturers may currently sell higher efficiency models at lower quantities, DOE's analysis considers the incremental manufacturing costs if energy conservation standards are set at a particular efficiency level and assumes that market share will shift to the new standard level.

Carrier commented that reverse engineering of a few selected samples will not provide an accurate picture of manufacturing costs, which depend on volume, tooling approach (dedicated versus flexible) and assembly processes and procedures for which reverse engineering will not provide insight. Carrier recommended that DOE should work with AHRI and industry to obtain costs using a blind survey, with each manufacturer providing estimates for the cost increases related to the proposed standards. (Carrier, No. 7 at p. 3) DOE notes that it supplemented its reverse engineering analyses with manufacturer interviews and solicited feedback on the volume, tooling, and processes used to manufacture equipment and the manufacturing costs required to meet each efficiency level for each equipment class. As a result, DOE believes that the manufacturing cost-efficiency results from the engineering analyses are sufficiently representative of the manufacturing processes used for this equipment.

Ingersoll Rand commented that DOE should analyze the following categories to adequately represent variation in equipment types: (1) 7.5-ton cooling and heat pump, (2) 15-ton cooling and heat pump, (3) 40-ton cooling only. (Ingersoll Rand, No. 10 at p. 3) Lennox added that DOE should select equipment from manufacturers that have equipment with baseline and higher efficiency in the same platform. (Lennox, No. 6 at p. 3)

For this NOPR, DOE conducted the engineering analyses using the reverse-engineering approach and analyzed three specific capacities to represent each of the three cooling capacity categories (

i.e.,

small, large, and very large). Based on a review of manufacturer equipment offerings and information obtained from manufacturer interviews, DOE selected representative capacities of 90,000 Btu/h (7.5 tons) for the ≥65,000 to <135,000 Btu/h capacity range, 180,000 Btu/h (15 tons) for the ≥135,000 to <240,000 Btu/h capacity range, and 360,000 Btu/h (30 tons) for the ≥240,000 to <760,000 Btu/h capacity range. DOE noted in the 2004 ANOPR that 7.5 tons and 15 tons represent volume shipment points in their respective capacity range. 69 FR 45469. These capacities are near the center of their respective equipment class capacity ranges. Additionally, DOE interviewed several equipment manufacturers as part of the current rulemaking and found that the majority of manufacturers interviewed agreed that the 7.5-ton, 15-ton, and 30-ton capacities adequately represent the three equipment class capacity ranges.

Where feasible, DOE selected models for reverse engineering with low and high efficiencies from a given manufacturer that are built on the same platform. DOE also supplemented the teardown analysis by conducting catalog teardowns for equipment spanning the full range of capacities and efficiencies from all manufacturers selling equipment in the United States.

2. Baseline Efficiency Levels

The baseline model is used as a reference point for each equipment class in the engineering analysis and the life-cycle cost and payback-period analyses. Typically, DOE would consider equipment that just meets the minimum energy conservation standard as baseline equipment. However, as discussed in section III.A, DOE is proposing to replace the current cooling performance energy efficiency descriptor, EER, with IEER, and a single EER level can correspond to a range of IEERs. As a result, DOE

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