# Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards for Single Package Vertical Air Conditioners and Single Package Vertical Heat Pumps > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2014-29865 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** December 30, 2014 - **Citation:** 79 FR 78614 ## Text DEPARTMENT OF ENERGY 10 CFR Part 431 [Docket Number EERE-2012-BT-STD-0041] RIN 1904-AC85 Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards for Single Package Vertical Air Conditioners and Single Package Vertical Heat Pumps AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking (NOPR) and announcement of 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 single package vertical air conditioners and single package vertical heat pumps. EPCA also requires that each time the American Society of Heating, Refrigerating, and Air-conditioning Engineers (ASHRAE) Standard 90.1 is amended with respect to the standard levels or design requirements applicable to that equipment, the U.S. Department of Energy (DOE) must adopt amended uniform national standards for this equipment equivalent to those in ASHRAE Standard 90.1, unless DOE determines that there is clear and convincing evidence showing that more-stringent, amended standards would be technologically feasible and economically justified, and would save a significant additional amount of energy. DOE has tentatively concluded that there is sufficient record evidence to support more-stringent standards for two classes of this equipment. However, for four equipment classes, DOE is proposing to adopt the revised ASHRAE levels, due to the absence of any models on the market in two classes, and absence of any models above the revised ASHRAE level in the remaining two classes. Accordingly, DOE is proposing amended energy conservation standards for all classes of single package vertical air conditioners and single package vertical heat pumps. DOE also announces a public meeting to receive comment on these proposed standards and associated analyses and results. DATES: Comments: DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than March 2, 2015. See section VII, “Public Participation,” for details. Meeting: DOE will hold a public meeting on Friday, February 6, 2014, from 8:30 a.m. to 12:30 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. ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 8E-089 1000 Independence Avenue SW., Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at (202) 586-2945. Persons may also attend the public meeting via webinar. For more information, refer to section VII, “Public Participation,” near the end of the preamble. Due to the REAL ID Act implemented by the Department of Homeland Security (DHS), there have been recent changes regarding identification (ID) requirements for individuals wishing to enter Federal buildings from specific States and U.S. territories. As a result, driver's licenses from the following States or territory will not be accepted for building entry, and instead, one of the alternate forms of ID listed below will be required. DHS has determined that regular driver's licenses (and ID cards) from the following jurisdictions are not acceptable for entry into DOE facilities: Alaska, American Samoa, Arizona, Louisiana, Maine, Massachusetts, Minnesota, New York, Oklahoma, and Washington. Acceptable alternate forms of Photo-ID include: U.S. Passport or Passport Card; an Enhanced Driver's License or Enhanced ID-Card issued by the States of Minnesota, New York or Washington (Enhanced licenses issued by these States are clearly marked Enhanced or Enhanced Driver's License); a military ID or other Federal government-issued Photo-ID card. Instructions: Any comments submitted must identify the NOPR for Energy Conservation Standards for Single Package Vertical Air Conditioners and Single Package Vertical Heat Pumps, and provide docket number EERE-2012-BT-STD-0041 and/or regulatory information number (RIN) number 1904-AC85. Comments may be submitted using any of the following methods: 1. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments. 2. Email: SPVU2012STD0041@ee.doe.gov. Include the docket number and/or RIN in the subject line of the message. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form of encryption. 3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies. 4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies. Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to the Office of Energy Efficiency and Renewable Energy through the methods listed above and by email to Chad_S._Whiteman@omb.eop.gov. No telefacsimilies (faxes) will be accepted. 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 www.regulations.gov. All documents in the docket are listed in the www.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://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=107. This Web page contains a link to the docket for this NOPR on the www.regulations.gov site. The www.regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. See section VII, “Public Participation,” 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. Ron Majette, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-7935. Email: Ronald.Majette@ee.doe.gov. Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-9507. Email: Eric.Stas@hq.doe.gov. For information on how to submit or review public comments, contact Ms. Brenda Edwards at (202) 586-2945 or by email: Brenda.Edwards@ee.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Summary of the Proposed Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits II. Introduction A. Authority B. Background 1. Current Standards 2. History of Standards Rulemaking for Single Package Vertical Air Conditioners and Single Package Vertical Heat Pumps III. General Discussion A. Compliance Dates B. Equipment Classes and Scope of Coverage 1. Consideration of a Space Constrained SPVU Equipment Class C. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels D. Energy Savings 1. Determination of Savings 2. Significance of Savings E. Economic Justification 1. Specific Criteria 2. Rebuttable Presumption IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Definitions of a SPVAC and a SPVHP 2. Equipment Classes 3. Review of the Current Market for SPVUs 4. Technology Assessment B. Screening Analysis C. Engineering Analysis 1. Efficiency Levels for Analysis 2. Teardown Analysis 3. Cost Model 4. Manufacturing Production Costs 5. Cost-Efficiency Relationship 6. Manufacturer Markup 7. Shipping Costs 8. Manufacturer Interviews D. Markups Analysis E. Energy Use Analysis F. Life-Cycle Cost and Payback Period Analysis 1. Approach 2. Life-Cycle Cost Inputs 3. Payback Period G. National Impact Analysis 1. Approach a. National Energy Savings b. Net Present Value 2. Shipments Analysis 3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies H. Consumer Subgroup Analysis I. Manufacturer Impact Analysis 1. Overview 2. GRIM Analysis 3. Manufacturer Interviews J. Emissions Analysis K. Monetizing Carbon Dioxide and Other Emissions Impacts 1. Social Cost of Carbon 2. Valuation of Other Emissions Reductions L. Utility Impact Analysis M. Employment Impact Analysis V. Analytical Results and Conclusions A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Commercial Consumers 2. Economic Impact on Manufacturers 3. National Impact Analysis 4. Impact on Utility or Performance of Equipment 5. Impact of Any Lessening of Competition 6. Need of the Nation to Conserve Energy 7. Other Factors C. Proposed Standards 1. Benefits and Burdens of Trial Standard Levels Considered for SPVUs 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 C. Review Under the Paperwork Reduction Act of 1995 D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review VII. Public Participation A. Attendance at the Public Meeting B. Procedure for Submitting Requests to Speak and 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 C 1 of the Energy Policy and Conservation Act of 1975 (“EPCA” or “the Act”), Pub. L. 94-163 (42 U.S.C. 6311-6317, as codified), added by Public Law 95-619, Title IV, § 441(a), established the Energy Conservation Program for Certain Industrial Equipment, which includes the single package vertical air conditioners (SPVACs) and single package vertical heat pumps (SPVHPs) that are the subject of this rulemaking (collectively referred to as single package vertical units or SPVUs). Pursuant to EPCA, not later than 3 years after the date of enactment of the Energy Independence and Security Act of 2007 (EISA 2007), DOE must review the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 90.1 (ASHRAE Standard 90.1), “ Energy Standard for Buildings Except Low-Rise Residential Buildings, ” with respect to single package vertical air conditioners and single package vertical heat pumps in accordance with the procedures established in 42 U.S.C. 6313(a)(6). (42 U.S.C. 6313(a)(10)(B)) 1 For editorial reasons, upon codification in the U.S. Code, Part C was redesignated Part A-1. At the time DOE commenced this rulemaking, the Department had not considered adoption of the then-current ASHRAE Standard 90.1-2010 levels as part of its analytical baseline (as is typically the case under 42 U.S.C. 6313(a)(6)), because the current energy conservation standards for SPVUs were already set at those levels by EPCA. However, on October 9, 2013, ASHRAE adopted ASHRAE Standard 90.1-2013, and this revision did contain amended standard levels for SPVUs, thereby triggering DOE's statutory obligation to promulgate an amended uniform national standard at those levels, unless DOE determines that there is clear and convincing evidence supporting the adoption of more-stringent energy conservation standards than the ASHRAE levels. The test for adoption of more-stringent standards is whether such standards would result in significant additional conservation of energy and would be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(I) and (II)) Once complete, this rulemaking will satisfy DOE's statutory obligations under both 42 U.S.C. 6313(a)(6) and (10)(B). In accordance with these and other statutory provisions discussed in this preamble, DOE has tentatively concluded that there is sufficient evidence to support more-stringent standards for two classes of SPVUs. For the remaining four equipment classes, DOE has tentatively decided to adopt the levels in ASHRAE Standard 90.1-2013. Accordingly, DOE is proposing amended energy conservation standards for all classes of single package vertical air conditioners and single package vertical heat pumps. As shown in Table I.1, the proposed standards are expressed in terms of: (1) Energy efficiency ratio (EER), which is the ratio of the produced cooling effect of an air conditioner or heat pump to its total work input; and (2) coefficient of performance (COP), which is the ratio of produced heating effect to total work input (applicable only to heat pump units). If adopted, the proposed standards listed in Table I.1 that are more stringent than those contained in ASHRAE Standard 90.1-2013 would apply to such equipment manufactured in, or imported into, the United States, excluding equipment that is manufactured for export, on and after a date four years after publication of an energy conservation standards final rule. If adopted, the proposed standards listed in Table I.1 that are set at the levels contained in ASHRAE Standard 90.1-2013 would apply to such equipment manufactured in, or imported into, the United States, excluding equipment that is manufactured for export, on and after a date two or three years after the effective date of the requirements in ASHRAE Standard 90.1-2013, depending on equipment size ( i.e., October 9, 2015 or 2016). Table I.1—Proposed Energy Conservation Standards for SPVUs Equipment class Cooling capacity Btu/h Efficiency level Standard level Anticipated compliance date Single Package Vertical Air Conditioner <65,000 Btu/h EER =11.0 More Stringent than ASHRAE 2019. [4 years after publication of final rule]. Single Package Vertical Air Conditioner ≥65,000 Btu/h and <135,000 Btu/h EER = 10.0 ASHRAE October 9, 2015. Single Package Vertical Air Conditioner ≥135,000 Btu/h and <240,000 Btu/h EER = 10.0 ASHRAE October 9, 2016. Single Package Vertical Heat Pump <65,000 Btu/h EER = 11.0 COP = 3.3 More Stringent than ASHRAE 2019. [4 years after publication of final rule]. Single Package Vertical Heat Pump ≥65,000 Btu/h and <135,000 Btu/h EER = 10.0 COP = 3.0 ASHRAE October 9, 2015. Single Package Vertical Heat Pump ≥135,000 Btu/h and <240,000 Btu/h EER = 10.0 COP = 3.0 ASHRAE October 9, 2016. A. Benefits and Costs to Consumers Table I.2 presents DOE's evaluation of the economic impacts of the proposed energy conservation standards on consumers of SPVACs and SPVHPs, as measured by the average life-cycle cost (LCC) savings and the median payback period (PBP). In order to adopt levels above the levels specified in ASHRAE Standard 90.1, DOE must determine that such more-stringent standards would result in significant additional conservation of energy (relative to the efficiency levels specified in ASHRAE Standard 90.1) and that it would be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) In compliance with this statutory requirement, DOE based its determination to adopt more stringent standards on an analysis comparing these proposed standards with ASHRAE 90.1-2013 (Table I.2). Thus, economic impacts of this determination are calculated as compared to the ASHRAE 90.1-2013 level because DOE is required by statute to, at a minimum, adopt that standard. 2 2 See 42 U.S.C. 6313(a)(6)(A)(ii)(I): In general.—Except as provided in subclause (II), not later than 18 months after the date of publication of the amendment to the ASHRAE/IES Standard 90.1 for a product described in clause (i), the Secretary shall establish an amended uniform national standard for the product at the minimum level specified in the amended ASHRAE/IES Standard 90.1. The Office of Management and Budget's Circular A-4 3 provides guidance on establishing the baseline for regulatory impact analyses as follows: 3 U.S. Office of Management and Budget “Circular A-4: Regulatory Analysis” (Sept. 17, 2003) contains guidelines regarding development of a baseline, including that “This baseline should be the best assessment of the way the world would look absent the proposed action.” (Available at: http://www.whitehouse.gov/omb/circulars_a004_a-4/ ). In some cases, substantial portions of a rule may simply restate statutory requirements that would be self-implementing, even in the absence of the regulatory action. In these cases, you should use a pre-statute baseline. If you are able to separate out those areas where the agency has discretion, you may also use a post-statute baseline to evaluate the discretionary elements of the action. Accordingly, DOE presents consumer, manufacturer, and economic costs and benefits for the proposed SPVU standards as compared to the current Federal (EPCA) minimum that are currently in effect (pre-statute baseline). In addition, as required by Statute in this case when proposing a standard more stringent than ASHRAE 90.1, and recommended by Circular A-4, DOE also provides these same analyses relative to the post-statute (ASHRAE 90.1-2013) baseline. As noted above, it is these latter analyses that DOE has used as the basis for its determination to adopt more stringent standards. The same analytic methodologies are used in both baselines. Key analyses (using both baselines) are summarized in this Executive Summary in Tables I-2: Impacts of Proposed Energy Conservation Standards on Consumers of SPVUs; I-3: Summary of National Economic Benefits and Costs of Proposed SPVU Energy Conservation Standards; and I-4 and I-5: Annualized Benefits and Costs of Proposed Energy Conservation Standards for SPVUs. Additional analyses are presented in section V.C of this preamble, and in the NOPR TSD. Note that not all analyses were conducted using both baselines; rather DOE used the baseline(s) most appropriate to the purpose of the analysis (showing economic impacts relative to the pre-statute status quo and/or determining whether to adopt standards more stringent than ASHRAE 2013). In all cases, the baseline(s) used are indicated in the analyses. In overview, the average LCC savings are positive for the equipment classes for which standards higher than the levels in ASHRAE 90.1-2013 are being proposed. DOE did not evaluate economic impacts to the consumers of SPVACs ≥65,000 Btu/h and <135,000 Btu/h for the ASHRAE baseline, as the ASHRAE level is equal to max-tech. However the economic impacts for this equipment class using the EPCA baseline can be found in Table I.2 and in appendix 8B of the NOPR TSD. DOE also presents results for the parallel class of SPVHPs ≥65,000 Btu/h and <135,000 Btu/h using the EPCA baseline. 4 DOE did not evaluate economic impacts for the large equipment classes because there are no models on the market, and, therefore, no consumers. 5 4 However, there are no models available on the market for this class, and therefore these results are not carried into the national impact analysis or other downstream analyses. 5 Equipment classes for these cooling capacities exist in ASHRAE Standard 90.1 and were established in DOE regulation through EISA 2007. Despite the lack of models and consumers, for these equipment classes DOE is proposing to adopt as federal standards the efficiency levels in ASHRAE 90.1-2013 as required under 42 U.S.C. 6313(a)(6)(A)(ii)(I). Table I.2—Impacts of Proposed Energy Conservation Standards on Consumers of SPVUs for ASHRAE and EPCA Baseline Equipment class Cooling capacity Btu/h Average LCC savings 2013$ ASHRAE baseline EPCA baseline Median payback period years ASHRAE baseline EPCA baseline Single Package Vertical Air Conditioner <65,000 Btu/h $179 $261 8.4 10.4 Single Package Vertical Air Conditioner ≥65,000 Btu/h and <135,000 Btu/h Adopt ASHRAE 737 Adopt ASHRAE 7.0 Single Package Vertical Air Conditioner ≥135,000 Btu/h and <240,000 Btu/h Adopt ASHRAE N/A Adopt ASHRAE N/A Single Package Vertical Heat Pump <65,000 Btu/h $424 382 4.8 9.3 Single Package Vertical Heat Pump ≥65,000 Btu/h and <135,000 Btu/h Adopt ASHRAE 241 Adopt ASHRAE 10.9 Single Package Vertical Heat Pump ≥135,000 Btu/h and <240,000 Btu/h Adopt ASHRAE N/A Adopt ASHRAE N/A Note: Expected life of SPVUs is on average 15 years. 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 through the end of the analysis period (2014 to 2048). Using a real discount rate of 10.4 percent, 6 DOE estimates that the INPV for manufacturers of SPVUs is $36.5 million in 2013$ using ASHRAE 2013 as a baseline. The INPV of SPVUs from the EPCA baseline can be found in chapter 12 of the NOPR TSD. Under the proposed standards, DOE expects that manufacturers may lose up to 9.0 percent of their INPV, which is approximately $3.3 million. 6 DOE estimated draft financial metrics, including the industry discount rate, based on data in Securities and Exchange Commission (SEC) filings and on industry-reviewed values published in prior HVAC final rules. DOE presented the draft financial metrics to manufacturer in MIA interviews. DOE adjusted those values based on feedback from manufacturers. The complete set of financial metrics and more detail about the methodology can be found in section 12.4.3 of TSD chapter 12. C. National Benefits 7 7 All monetary values in this section are expressed in 2013 dollars and are discounted to 2014. National benefits apply only to DOE's proposed standard levels that are higher than the ASHRAE levels, and impacts are presented as compared to the ASHRAE 90.1-2013 level as baseline. For equipment classes where DOE is proposing the ASHRAE levels, national benefits do not accrue. DOE's analyses indicate that the proposed energy conservation standards for SPVUs would save a significant amount of energy. The cumulative energy savings for SPVUs purchased in the 30-year period that begins in the year of compliance with amended standards (2019-2048) amount to 0.23 quadrillion Btus (quads) using ASHRAE as a baseline. This is a savings of 6 percent relative to the energy use of this equipment. 8 Energy savings using EPCA as a baseline can be found in chapter 10 of the NOPR TSD. 8 The base case assumptions are described in section IV.G. The cumulative net present value (NPV) of total customer costs and savings of the proposed SPVU standards ranges from $0.11 billion (at a 7-percent discount rate) to $0.44 billion (at a 3-percent discount rate) using ASHRAE as a baseline. NPV results using EPCA as a baseline can be found in chapter 10 of the NOPR TSD. This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for SPVUs purchased in 2019-2048. In addition, the proposed standards would have significant environmental benefits. The energy savings described above using the ASHRAE baseline would result in cumulative emission reductions (over the same period as for energy savings) of 20 million metric tons (Mt) 9 of carbon dioxide (CO 2 ), 59 thousand tons of methane, 53 thousand tons of sulfur dioxide (SO 2 ), 18 thousand tons of nitrogen oxides (NO X ), and 0.06 tons of mercury (Hg). 10 The cumulative reduction in CO 2 emissions through 2030 amounts to 2.2 Mt. Emissions results using the EPCA baseline can be found in chapter 13 of the NOPR TSD, and cumulative reduction in CO 2 emissions through 2030 amounts to 4.7 Mt relative to the EPCA baseline. 9 A metric ton is equivalent to 1.1 short tons. Results for NO X and Hg are presented in short tons. 10 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 and most other pollutants 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 CO 2 is expected to decrease by 33% from DOE's current estimate 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. The value of the CO 2 reductions is calculated using a range of values per metric ton of CO 2 (otherwise known as the Social Cost of Carbon, or SCC) developed by a recent Federal interagency process. 11 The derivation of the SCC values is discussed in section IV.K. DOE estimates that the present monetary value of the CO 2 emissions reduction described above is between $0.12 and $1.9 billion using the ASHRAE baseline. DOE also estimates the present monetary value of the NO X emissions reduction using the ASHRAE baseline is $7.3 million at a 7-percent discount rate and $21 million at a 3-percent discount rate. 12 Results using the EPCA baseline can be found in chapter 14 of the NOPR TSD. 11 Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866, Interagency Working Group on Social Cost of Carbon, United States Government (May 2013; revised November 2013) (Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf ). 12 DOE is currently investigating valuation of avoided Hg and SO 2 emissions. Table I.3 summarizes the national economic costs and benefits expected to result from the proposed standards for SPVUs using both the ASHRAE and EPCA baselines. Table I.3—Summary of National Economic Benefits and Costs of Proposed SPVU Energy Conservation Standards using ASHRAE and EPCA Baselines* Category Present value Billion 2013$ ASHRAE baseline EPCA baseline Discount rate % Benefits Consumer Operating Cost Savings 0.49 1.0 7 1.2 2.6 3 CO 2 Reduction Monetized Value ($12.0/t case)** 0.12 0.26 5 CO 2 Reduction Monetized Value ($40.5/t case)** 0.60 1.2 3 CO 2 Reduction Monetized Value ($62.4/t case)** 1.0 2.0 2.5 CO 2 Reduction Monetized Value ($119/t case)** 1.9 3.8 3 NO X Reduction Monetized Value (at $2,684/ton)** 0.0073 0.015 7 0.021 0.042 3 Total Benefits† 1.1 2.3 7 1.9 3.8 3 Costs Consumer Incremental Installed Costs 0.38 0.77 7 0.79 1.5 3 Net Benefits Including CO 2 and NO X Reduction Monetized Value 0.72 1.5 7 1.1 2.3 3 * This table presents the costs and benefits associated with SPVU shipped in 2019-2048. These results include benefits to customers which accrue after 2044 from the equipment purchased in 2019-2048. The results account for the incremental variable and fixed costs incurred by manufacturers due to the amended standard, some of which may be incurred in preparation for this final rule. ** The CO 2 values represent global monetized values of the SCC, in 2013$, 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 used by DOE incorporates an escalation factor. 13 † Total Benefits for both the 3% and 7% cases are derived using the series corresponding to SCC value of $40.5/t in 2015. The benefits and costs of these proposed standards, for equipment 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 customer operation of equipment 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 emission reductions, including CO 2 emission reductions. 14 13 The CO 2 and NO X 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 2 , estimated at 33%, and an increase in NO X , estimated at 13%. 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. 14 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 2014, the year used for discounting the NPV of total consumer costs and savings, for the time-series of costs and benefits using discount rates of three and seven percent for all costs and benefits except for the value of CO 2 reductions. For the latter, DOE used a range of discount rates, as shown in Table I.3. From the present value, DOE then calculated the fixed annual payment over a 30-year period (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 2 emission reductions provides a useful perspective, two issues should be considered. First, the national operating savings are domestic U.S. customer monetary savings that occur as a result of market transactions, whereas the value of CO 2 reductions is based on a global value. Second, the assessments of operating cost savings and CO 2 savings are performed with different methods that use different time frames for analysis. The national operating cost savings is measured for the lifetime of equipment shipped in 2019-2048. Because carbon dioxide emissions have a very long residence time in the atmosphere, 15 the SCC values reflect future climate-related impacts resulting from the emission of one ton of carbon dioxide that continue well beyond 2100. 15 The atmospheric lifetime of CO 2 is estimated of the order of 30-95 years. Jacobson, MZ (2005). “Correction to “Control of fossil-fuel particulate black carbon and organic matter, possibly the most effective method of slowing global warming.” ” J. Geophys. Res. 110. pp. D14105. Estimates of annualized benefits and costs of the proposed standards (over a 30-year period) are shown in Table I.4. The results under the primary estimate using the ASHRAE baseline are as follows. Using a 7-percent discount rate for benefits and costs other than CO 2 reduction, for which DOE used a 3-percent discount rate along with the average SCC series that has a value of $40.5/t in 2015, the cost of the proposed standards is $29 million per year in increased equipment costs, while the benefits are $38 million per year in reduced equipment operating costs, $29 million from CO 2 reductions, and $0.57 million from reduced NO X emissions. In this case, the annualized net benefit amounts to $38 million per year. Using a 3-percent discount rate for all benefits and costs and the average SCC series that has a value of $40.5/t in 2015, the cost of the standards proposed in today's rule is $37 million per year in increased equipment costs, while the benefits are $58 million per year in reduced operating costs, $29 million from CO 2 reductions, and $0.97 million in reduced NO X emissions. In this case, the net benefit amounts to $51 million per year. 16 Results using the EPCA baseline are shown in Table I.5. 16 All CO 2 and NO X results shown in this paragraph are based on emissions factors in AEO 2013, the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO 2 , estimated at 33%, and an increase in NO X , estimated at 13%. In the next phase of this rulemaking, DOE plans to use emissions factors based on the most recent AEO available, which may or may not be AEO 2014, depending on the timing of the issuance of the next rulemaking document. 17 The CO 2 and NO X results are based on emissions factors in AEO 2013, the most recent version available at the time of this analysis. Use of emissions factors in AEO 2014 would result in a significant decrease in cumulative emissions reductions for CO 2 , estimated at 33%, and an increase in NO X , estimated at 13%. In the next phase of this rulemaking, DOE plans to use emissions factors based on the most recent AEO available, which may or may not be AEO 2014, depending on the timing of the issuance of the next rulemaking document. Table I.4—Annualized Benefits and Costs of Proposed Energy Conservation Standards for SPVUs [ASHRAE baseline] Discount rate Primary estimate* Low net benefits estimate* High net benefits estimate* million 2013$/year Benefits Operating Cost Savings 7% 38 36 39. 3% 58 55 61. CO 2 Reduction Monetized Value ($12.0/t case)** 5% 7.7 7.6 7.7. CO 2 Reduction Monetized Value ($40.5/t case)** 3% 29 28 29. CO 2 Reduction Monetized Value ($62.4/t case)** 2.5% 43 42 43. CO 2 Reduction Monetized Value ($119/t case)** 3% 89 88 89. NO X Reduction Monetized Value (at $2,684/ton)** 7% 3% 0.57 0.97 0.56 0.97 0.57. 0.98. Total Benefits† 7% plus CO 2 range 46 to 127 44 to 125 48 to 129. 7% 67 65 69. 3% plus CO 2 range 67 to 148 63 to 144 70 to 151. 3% 88 84 91. Costs Incremental Equipment Costs 7% 29 40 28. 3% 37 53 36. Net Benefits/Costs Total† 7% plus CO 2 range 17 to 98 4 to 85 19 to 101. 7% 38 25 40. 3% plus CO 2 range 30 to 111 11 to 91 34 to 115. 3% 51 31 55. * This table presents the annualized costs and benefits associated with SPVUs shipped in 2019-2048. These results include benefits to customers which accrue after 2048 from the products purchased in 2019-2048. Costs incurred by manufacturers, some of which may be incurred in preparation for the rule, are not directly included, but are indirectly included as part of incremental equipment costs. The Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices and building growth (leading to higher shipments) from the AEO 2013 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect constant real prices for the Primary Estimate, an increase in projected equipment price trends for the Low Benefits Estimate, and a decline rate in projected equipment price trends for the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.2.a. ** The CO 2 values represent global monetized SCC values, in 2013$, in 2015 under several scenarios. 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 incorporates an escalation factor. The value for NO X (in 2013$) is an average value. 17 † Total benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with a 3% discount rate ($40.5/t case). In the rows labeled “7% plus CO 2 range” and “3% plus CO 2 range,” the operating cost and NO X benefits are calculated using the labeled discount rate, and those values are added to the full range of CO 2 values. Table I.5—Annualized Benefits and Costs of Proposed Energy Conservation Standards for SPVUs [EPCA baseline] Discount rate Primary estimate* Low net benefits estimate* High net benefits estimate* million 2013$/year Benefits Operating Cost Savings 7% 80 76 83. 3% 121 114 126. CO 2 Reduction Monetized Value ($12.0/t case)** 5% 16 16 16. CO 2 Reduction Monetized Value ($40.5/t case)** 3% 58 58 59. CO 2 Reduction Monetized Value ($62.4/t case)** 2.5% 87 87 88. CO 2 Reduction Monetized Value ($119/t case)** 3% 181 181 182. NO X Reduction Monetized Value (at $2,684/ton)** 7% 1.2 1.2 1.2. 3% 2.0 2.0 2.0. Total Benefits† 7% plus CO 2 range 97 to 262 93 to 257 100 to 266. 7% 139 135 143. 3% plus CO 2 range 139 to 305 132 to 297 144 to 311. 3% 182 174 187. Costs Incremental Equipment Costs 7% 60 79 58. 3% 70 97 68. Net Benefits/Costs Total† 7% plus CO 2 range 37 to 203 14 to 179 42 to 208. 7% 80 56 85. 3% plus CO 2 range 68 to 234 35 to 199 76 to 243. 3% 111 77 119. * This table presents the annualized costs and benefits associated with SPVUs shipped in 2019-2048. These results include benefits to customers which accrue after 2048 from the products purchased in 2019-2048. Costs incurred by manufacturers, some of which may be incurred in preparation for the rule, are not directly included, but are indirectly included as part of incremental equipment costs. The Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices and building growth (leading to higher shipments) from the AEO 2013 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect constant real prices for the Primary Estimate, an increase in projected equipment price trends for the Low Benefits Estimate, and a decline rate in projected equipment price trends for the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.2.a. ** The CO 2 values represent global monetized SCC values, in 2013$, in 2015 under several scenarios. 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 incorporates an escalation factor. The value for NO X (in 2013$) is an average value. 18 † Total benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with a 3% discount rate ($40.5/t case). In the rows labeled “7% plus CO 2 range” and “3% plus CO 2 range,” the operating cost and NO X benefits are calculated using the labeled discount rate, and those values are added to the full range of CO 2 values. DOE has tentatively concluded that, based upon clear and convincing evidence, the proposed standards for the equipment classes with levels more stringent than those presented in ASHRAE Standard 90.1-2013 represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. 19 DOE further notes that products achieving these standard levels are already commercially available for all equipment classes covered by this proposal. 20 Based on the analyses described above, DOE has tentatively concluded that the benefits of the proposed standards to the Nation (energy savings, positive NPV of customer benefits, customer LCC savings, and emission reductions) would outweigh the burdens (loss of INPV for manufacturers). DOE also considered higher energy efficiency levels as trial standard levels, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the higher energy efficiency levels would outweigh the projected benefits. 18 The CO 2 and NO X 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 2 , estimated at 33%, and an increase in NO X , estimated at 13%. 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. 19 DOE based this decision to set more stringent levels by using 2013 ASHRAE as the base case. 20 As shown in section 3.8, chapter 3 of the Technical Support Document, for equipment less than 65,000 Btu/h, there are 42 SPVAC models and 69 SPVHP models available at 11 EER or higher. For the four equipment classes for which no models are available on the market at all, or for which there are no models with efficiency above those levels presented in ASHRAE 90.1-2013, DOE is proposing to adopt the levels in ASHRAE Standard 90.1-2013, per the statutory directive. Based on consideration of the public comments DOE receives in response to this NOPR 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. As noted previously, in compliance with EPCA, DOE based its determination to adopt more stringent standards on an analysis comparing these proposed standards with ASHRAE 2013 as the base case. DOE presents Table I.5 as requested in OMB Circular A-4. 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 single package vertical air conditioners and single package vertical heat pumps. A. Authority Title III, Part C 21 of the Energy Policy and Conservation Act of 1975 (“EPCA” or “the Act”), Pub. L. 94-163 (42 U.S.C. 6311-6317, as codified), added by Pub. L. 95-619, Title IV, § 441(a), established the Energy Conservation Program for Certain Industrial Equipment, which includes the single package vertical air conditioners and single package vertical heat pumps that are the subjects of this rulemaking. 22 In general, this program addresses the energy efficiency of certain types of commercial and industrial equipment. Relevant provisions of the Act specifically 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). 21 For editorial reasons, upon codification in the U.S. Code, Part C was redesignated Part A-1. 22 All references to EPCA in this document refer to the statute as amended through the American Energy Manufacturing Technical Corrections Act, Pub. L. 112-210 (enacted December 18, 2012). EPCA contains mandatory energy conservation standards for commercial heating, air-conditioning, and water-heating equipment. (42 U.S.C. 6313(a)) Specifically, the statute sets standards for small, large, and very large commercial package air-conditioning and heating equipment, packaged terminal air conditioners (PTACs) and packaged terminal heat pumps (PTHPs), warm-air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks. Id. In doing so, EPCA established Federal energy conservation standards that generally correspond to the levels in ASHRAE Standard 90.1, as in effect on October 24, 1992 ( i.e., ASHRAE Standard 90.1-1989), for each type of covered equipment listed in 42 U.S.C. 6313(a). The Energy Independence and Security Act of 2007 (EISA 2007), Pub. L. 110-240, amended EPCA by adding definitions and setting minimum energy conservation standards for single package vertical air conditioners (SPVACs) and single package vertical heat pumps (SPVHPs). (42 U.S.C. 6313(a)(10)(A)) The efficiency standards for SPVACs and SPVHPs established by EISA 2007 correspond to the levels contained in ASHRAE Standard 90.1-2004, which originated as addendum “d” to ASHRAE Standard 90.1-2001. EPCA requires that DOE must conduct a rulemaking to consider amended energy conservation standards for a variety of enumerated types of commercial heating, ventilating, and air-conditioning equipment (of which SPVACs and SPVHPs are a subset) each time ASHRAE Standard 90.1 is updated with respect to such equipment. (42 U.S.C. 6313(a)(6)(A)) Such review is to be conducted in accordance with the procedures established for ASHRAE equipment under 42 U.S.C. 6313(a)(6). According to 42 U.S.C. 6313(a)(6)(A), for each type of equipment, EPCA directs that if ASHRAE Standard 90.1 is amended, DOE must publish in the Federal Register an analysis of the energy savings potential of amended energy efficiency standards within 180 days of the amendment of ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(A)(i)) EPCA further directs that DOE must adopt amended standards at the new efficiency level in ASHRAE Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more-stringent level would produce significant additional energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) In addition, DOE notes that pursuant to the EISA 2007 amendments to EPCA, under 42 U.S.C. 6313(a)(6)(C), the agency must periodically review its already-established energy conservation standards for ASHRAE equipment. In December 2012, this provision was further amended by the American Energy Manufacturing Technical Corrections Act (AEMTCA) to clarify that DOE's periodic review of ASHRAE equipment must occur “[e]very six years.” (42 U.S.C. 6313(a)(6)(C)(i)) AEMTCA also modified EPCA to specify that any amendment to the design requirements with respect to the ASHRAE equipment, would trigger DOE review of the potential energy savings under U.S.C. 6313(a)(6)(A)(i). Additionally, AEMTCA amended EPCA to require that if DOE proposes an amended standard for ASHRAE equipment at levels more stringent than those in ASHRAE Standard 90.1, DOE, in deciding whether a standard is economically justified, must determine, after receiving comments on the proposed standard, whether the benefits of the standard exceed its burdens by considering, to the maximum extent practicable, the following seven factors: (1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard; (2) The savings in operating costs throughout the estimated average life of the product in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses of the products likely to result from the standard; (3) The total projected amount of energy savings likely to result directly from the standard; (4) Any lessening of the utility or the performance of the products likely to result from the standard; (5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; (6) The need for national energy conservation; and (7) Other factors the Secretary considers relevant. (42 U.S.C. 6313(a)(6)(B)(ii)) EISA 2007 amended EPCA to provide an independent basis for a one-time review regarding SPVUs that is not tied to the conditions for initiating review specified by 42 U.S.C. 6313(a)(6)(A) or 42 U.S.C. 6313(a)(6)(C) described previously. Specifically, pursuant to 42 U.S.C. 6313(a)(10)(B), DOE must commence review of the most recently published version of ASHRAE Standard 90.1 with respect to SPVU standards in accordance with the procedures established under 42 U.S.C. 6313(a)(6) no later than 3 years after the enactment of EISA 2007. DOE notes that this provision was not tied to the trigger of ASHRAE publication of an updated version of Standard 90.1 or to a 6-year period from the issuance of the last final rule, which occurred on March 7, 2009 (74 FR 12058). DOE was simply obligated to commence its review by a specified date. Because ASHRAE did not update its efficiency levels for SPVACs and SPVHPs in ASHRAE Standard 90.1-2010, DOE began this rulemaking by analyzing amended standards consistent with the procedures defined under 42 U.S.C. 6313(a)(6)(C). Specifically, pursuant to 42 U.S.C. 6313(a)(6)(C)(i)(II), DOE, must use the procedures established under subparagraph (B) when issuing a NOPR. The statutory provision at 42 U.S.C. 6313(a)(6)(B)(ii), recently amended by AEMTCA, states that in deciding whether a standard is economically justified, DOE must determine, after receiving comments on the proposed standard, whether the benefits of the standard exceed its burdens by considering, to the maximum extent practicable, the following seven factors, as stated previously. However, before DOE could finalize this NOPR, ASHRAE acted on October 9, 2013 to adopt ASHRAE Standard 90.1-2013, and this revision did contain amended standard levels for SPVUs, thereby triggering DOE's statutory obligation under 42 U.S.C. 6313(a)(6)(A) to promulgate an amended uniform national standard at those levels unless DOE determines that there is clear and convincing evidence supporting the adoption of more-stringent energy conservation standards than the ASHRAE levels. Consequently, DOE prepared an analysis of the energy savings potential of amended standards at the ASHRAE Standard 90.1 levels (as required by 42 U.S.C. 6313(a)(6)(A)(i)) and updated this NOPR and accompanying analyses to reflect appropriate statutory provision, timelines, and compliance dates. DOE has tentatively concluded that following this rulemaking process will provide “clear and convincing evidence” that for two equipment classes for which the proposed standards are more stringent than those set forth in ASHRAE Standard 90.1-2013 would result in significant additional conservation of energy and would be technologically feasible and economically justified, as mandated by 42 U.S.C. 6313(a)(6). For the other four equipment classes, DOE has tentatively concluded to adopt the levels set forth in ASHRAE Standard 90.1-2013. 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 a covered product. (42 U.S.C. 6313(a)(6)(B)(iii)(I)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States of any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6313(a)(6)(B)(iii)(II)) Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the customer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy (and, as applicable, water) savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. Additionally, when a type or class of covered equipment such as ASHRAE equipment, has two or more subcategories, DOE often specifies more than one standard level. DOE generally will adopt a different standard level than that which applies generally to such type or class of products for any group of covered products that have the same function or intended use if DOE determines that products within such group: (A) Consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and which justifies a higher or lower standard. In determining whether a performance-related feature justifies a different standard for a group of products, DOE generally considers such factors as the utility to the customer of the feature and other factors DOE deems appropriate. In a rule prescribing such a standard, DOE includes an explanation of the basis on which such higher or lower level was established. DOE followed a similar process in the context of this rulemaking. B. Background Single package vertical units primarily serve modular classroom buildings in educational facilities; telecommonunications and electronics enclosures; and offices and other miscellaneous commercial buildings. In almost all of these commercial building applications, the buildings served are expected to be of modular construction, because SPVUs, as packaged air conditioners installed on external building walls, do not impact site preparation costs for modular buildings, which may be relocated multiple times over the building's life. The vertically-oriented configuration of SPVUs allows the building mounting to be unobtrusive and minimizes impacts on modular building transportation requirements. These advantages do not apply to a significant extent in site-constructed buildings. 1. Current Standards As noted above, EISA 2007 amended EPCA to establish separate equipment classes and minimum energy conservation standards for SPVACs and SPVHPs. (42 U.S.C. 6313(a)(10)(A)) DOE published a final rule technical amendment in the Federal Register on March 23, 2009, which codified into DOE's regulations the new SPVAC and SPVHP pump equipment classes and energy conservation standards for this equipment as prescribed by EISA 2007. 74 FR 12058. These standards apply to all SPVUs manufactured on or after January 1, 2010. The current standards are set forth in Table II.1. Table II.1—Current Federal Energy Conservation Standards for Single Package Vertical Air Conditioners and Heat Pumps Equipment type Cooling capacity Btu/h Efficiency level Single Package Vertical Air Conditioner <65,000 Btu/h EER = 9.0. Single Package Vertical Air Conditioner ≥65,000 Btu/h and <135,000 Btu/h EER = 8.9. Single Package Vertical Air Conditioner ≥135,000 Btu/h and <240,000 Btu/h* EER = 8.6. Single Package Vertical Heat Pump <65,000 Btu/h EER = 9.0. COP = 3.0. Single Package Vertical Heat Pump ≥65,000 Btu/h and <135,000 Btu/h EER = 8.9. COP = 3.0. Single Package Vertical Heat Pump ≥135,000 Btu/h and <240,000 Btu/h* EER = 8.6. COP = 2.9. * There are no models on the market at these cooling capacities. 2. History of Standards Rulemaking for Single Package Vertical Air Conditioners and Single Package Vertical Heat Pumps Single package vertical units were established as a separate equipment class in ASHRAE Standard 90.1 by addendum “d” to ASHRAE Standard 90.1-2001. DOE subsequently evaluated the possibility of creating separate equipment classes for SPVUs but determined that the Energy Policy Act of 2005 (EPACT 2005) had revised the language in 42 U.S.C. 6313(a)(6)(A)(i) 23 to limit DOE's authority to adopt ASHRAE amendments for small, large, and very large commercial package air-conditioning and heating equipment until after January 1, 2010, and thus, DOE could not adopt equipment classes and standards for SPVUs at that time. As explained in a March 2007 energy conservation standards final rule for various ASHRAE products, DOE determined that SPVUs fall under the definition of “commercial package air conditioning and heating equipment” (42 U.S.C. 6311(8)(A)), and that any SPVU with cooling capacities less than 760,000 Btu/h would fit within the commercial package air conditioning and heating equipment categories listed in EPCA and be subjected to their respective energy efficiency standards. 72 FR 10038, 10046-10047 (March 7, 2007). 23 The relevant language in 42 U.S.C. 6313(a)(6)(A)(i) was subsequently revised by EISA 2007 to remove the reference to January 1, 2010. Subsequently, EISA 2007 amended EPCA to: (1) Create separate equipment classes for SPVACs and SPVHPs; (2) set minimum energy conservation standards for these equipment classes; (3) eliminate the restriction on amendments for small, large, and very large commercial package air-conditioning and heating equipment until after January 1, 2010; and (4) instruct DOE to review the most recently published ASHRAE Standard 90.1 with respect to SPVUs no later than 3 years after the enactment of EISA 2007. As noted previously, DOE published a final rule technical amendment in the Federal Register which codified into DOE regulations the standards for SPVUs that were established by EISA 2007. 74 FR 12058 (March 23, 2009). On October 29, 2010, ASHRAE officially released ASHRAE Standard 90.1-2010 to the public. As an initial step in reviewing SPVUs under EPCA, DOE published a Notice of Data Availability (NODA) on May 5, 2011, which contained potential energy savings estimates for certain industrial and commercial equipment, including SPVUs. 76 FR 25622. Although ASHRAE Standard 90.1-2010 did not update the efficiency levels for SPVUs, DOE was obligated to review the potential energy savings for these equipment classes under 42 U.S.C. 6313(a)(10)(B), as noted above. On January 17, 2012, DOE published a notice of proposed rulemaking (January 2012 NOPR) in which it proposed to incorporate by reference the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) Standard 390-2003, “ Performance Rating of Single Package Vertical Air-Conditioners and Heat Pumps, ” into the DOE test procedure for SPVUs and proposed an optional equipment break-in period of no more than 16 hours. 77 FR 2356. DOE also decided to conduct additional analysis for SPVUs to consider more-stringent standards. Id. at 2359. On May 16, 2012, DOE published a final rule which incorporated by reference AHRI Standard 390-2003 into the DOE test procedure for SPVUs and increased the maximum duration of the optional break-in period to 20 hours. 77 FR 28928. That final rule (as with the NOPR) did not contain amended standards for SPVUs, as DOE decided to consider more-stringent standards for such equipment on a separate timeline. However, as noted before, during the course of the present rulemaking, ASHRAE acted on October 9, 2013, to adopt ASHRAE Standard 90.1-2013, and this revision did contain amended standard levels for SPVUs, thereby triggering DOE's statutory obligation to promulgate an amended uniform national standard at those levels, unless DOE determines that there is clear and convincing evidence supporting the adoption of more-stringent energy conservation standards than the ASHRAE levels. Once triggered by ASHRAE action, DOE became subject to certain new statutory requirements and deadlines. For example, the statute required DOE to publish in the Federal Register for comment an analysis of the energy savings potential of amended energy conservation standards at the ASHRAE Standard 90.1-2013 levels, not later than 180 days after amendment of the ASHRAE standard. DOE published this energy savings analysis as a Notice of Data Availability (NODA) in the Federal Register on April 11, 2014. 79 FR 20114. Once triggered by ASHRAE action, the applicable legal deadline for completion of this standards rulemaking also shifted. When DOE first commenced this rulemaking pursuant to 42 U.S.C. 6313(a)(10)(B), that provision directed DOE to follow the procedures established under 42 U.S.C. 6313(a)(6). Because DOE had not been triggered by ASHRAE action at the time (as would necessitate use of the procedures under 42 U.S.C. 6313(a)(6)(A)), DOE proceeded as a 6-year-lookback amendment of the standard under 42 U.S.C. 6313(a)(6)(C), which called for a NOPR followed by a final rule not more than two years later. DOE was close to issuing a NOPR at the time it was triggered by ASHRAE action on Standard 90.1-2013. Once triggered, DOE was then required to either adopt the levels in ASHRAE Standard 90.1-2013 not later than 18 months after the publication of the amended ASHRAE standard ( i.e., by April 9, 2015), or to adopt more-stringent standards not later than 30 months after publication of the amended ASHRAE standard ( i.e., by April 9, 2016). However, given the advanced stage of the NOPR and DOE's rulemaking process (including analysis of the levels ultimately adopted by ASHRAE in Standard 90.1-2013), the Department plans to move as expeditiously as possible and in advance of the statutory deadlines associated with the ASHRAE trigger. With that said, this NOPR is the next step for DOE's analysis of amended energy conservation standards for SPVUs. In developing this NOPR, DOE reviewed the 11 comments it received in response to the April 2014 NODA. Commenters included: First Co.; Lennox International Inc.; National Comfort Products (NCP); Earthjustice; Goodman Global, Inc.; California Investor-Owned Utilities (CA IOUs); GE Appliances; Appliance Standards Awareness Project (ASAP), the American Council for an Energy-Efficient Economy (ACEEE), the National Resources Defense Council (NRDC), and the Northwest Energy Efficiency Alliance (jointly referred to as the Advocates); Daikin Applied; Edison Electric Institute (EEI); and Air-Conditioning, Heating & Refrigeration Institute (AHRI). All comments relevant to SPVU (as opposed to the other products discussed in the April 2014 NODA) are discussed in this NOPR. In general, AHRI, Lennox International, Goodman Global, Daikin Applied, and EEI recommended that DOE should adopt the ASHRAE 90.1-2013 values as minimum standards for all considered equipment, including SPVUs. (AHRI, No. 24 at p. 1, Lennox International Inc., No. 15 at p. 2; Goodman Global, Inc., No. 18 at p. 4; Daikin Applied, No. 22 at p. 1; EEI, No. 23 at p. 2) In contrast, the CA IOUs, as well as the Advocates stated that the DOE should adopt more-stringent levels for certain equipment types, including SPVU, because of the potential energy savings. (CA IOUs, No. 19 at pp. 2-3; The Advocates, No. 21 at p. 1) After careful consideration of the public comments and the available information, DOE has tentatively decided to propose energy conservation standards more stringent than those set forth in ASHRAE Standard 90.1-2013 for two SPVU equipment classes and to propose adoption of the levels set forth in ASHRAE Standard 90.1-2013 for the remaining four SPVU equipment classes. Comments specific to individual issues or analyses are discussed in the relevant sections that follow. III. General Discussion A. Compliance Dates As noted above, this rulemaking was initiated pursuant to an EISA 2007 amendment to EPCA that requires DOE to conduct a one-time review of the standard levels for SPVUs under the procedures established in paragraph (6) of 42 U.S.C. 6313(a). (42 U.S.C. 6313(a)(10)(B)) Paragraph (6) contains a number of possible compliance dates for any resulting amended standards, which vary depending on the type of equipment, the triggering mechanism for DOE review ( i.e., whether DOE is triggered by a revision to ASHRAE Standard 90.1 or by the “6-year look back” requirement), and the action taken ( i.e., whether DOE is adopting ASHRAE Standard 90.1 levels or more-stringent levels). The discussion below explains the potential compliance dates as they pertain to the present rulemaking. Under the first relevant provision, EPCA requires that when ASHRAE Standard 90.1 is amended with respect to certain commercial equipment, DOE must amend its minimum standards to either adopt levels equivalent to the ASHRAE Standard 90.1 levels, or to adopt more-stringent levels. (42 U.S.C. 6313(a)(6)(A)(ii)) If DOE adopts the ASHRAE Standard 90.1 levels as Federal standard levels, compliance with the amended Federal standards is required either two or three years from the effective date of the ASHRAE Standard 90.1 level, depending on the equipment type. (42 U.S.C. 6313(a)(6)(D)) For small commercial package air-conditioning and heating equipment, PTACs, PTHPs, warm-air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks, compliance is required two years after the effective date of the applicable minimum energy efficiency requirement in the amended ASHRAE Standard 90.1. For large and very large commercial package air-conditioning and heating equipment, compliance is required three years after the effective date of the applicable minimum energy efficiency requirement in the amended ASHRAE Standard 90.1. If DOE adopts more-stringent standard levels than the levels contained in the amended ASHRAE Standard 90.1 for any type of equipment, compliance is required four years after the date such final rule is published in the Federal Register. Id. Under the second relevant provision, EPCA requires that at least once every 6 years, DOE must review standards for covered equipment and publish either a notice of determination that standards do not need to be amended or a NOPR proposing new standards. (42 U.S.C 6313(a)(6)(C)) For any NOPR published pursuant to 42 U.S.C. 6313(a)(6)(C), the final rule would apply on the date that is the later of either 3 years after publication of the final rule establishing a new standard, or 6 years after the effective date of the current standard for a covered product. (42 U.S.C. 6313(a)(6)(C)(iv)). In the context of the current rulemaking, when DOE first commenced the rulemaking process, ASHRAE had not released a full revision of ASHRAE Standard 90.1 that revises the minimum energy efficiency requirements for SPVUs. Thus, DOE initially determined the procedural requirements of 42 U.S.C. 6313(a)(6)(C) to be applicable, and accordingly, DOE anticipated a compliance date of 2017, or 3 years after the expected publication of the final rule in 2014. 24 24 2017 is the later date compared to the alternative of 6 years after the effective date of the current standard, which would be 2016 (as the current SPVU standards became effective in 2010). However, as DOE expected might happen, ASHRAE released a revision of ASHRAE Standard 90.1 on October 9, 2013, consistent with its recent practice of releasing a full revision of ASHRAE Standard 90.1 every 3 years. Because this revision increased the energy efficiency requirements for SPVUs in ASHRAE Standard 90.1, DOE was triggered to act on the ASHRAE Standard 90.1 levels for SPVUs pursuant to 42 U.S.C. 6313(a)(6)(A), and consequently, this rulemaking will simultaneously satisfy the requirements of 42 U.S.C. 6313(a)(6)(A), 42 U.S.C. 6313(a)(6)(C), and 42 U.S.C. 6313(a)(10)(B). However, in this case, DOE believes that the statutory lead time for compliance under such circumstances must ultimately be dictated by the requirements of 42 U.S.C. 6313(a)(6)(A), given that there is now an “ASHRAE trigger” upon which DOE is acting. Thus, DOE will use the compliance dates specified under 42 U.S.C. 6313(a)(6)(D) for analyzing amended standards in the final rule. More specifically, if DOE adopts the ASHRAE Standard 90.1-2013 levels for certain SPVU equipment classes, as proposed, the applicable compliance date would be two or three years after the effective date of the applicable ASHRAE standard, depending on equipment size ( i.e., by October 9, 2015 or October 9, 2016). 25 If DOE adopts more-stringent standards for certain other SPVU equipment classes, as proposed, the applicable compliance date would be four years after publication of the final rule in the Federal Register. 25 Under 42 U.S.C. 6313(a)(6)(D)(i), the applicable compliance date when DOE adopts the ASHRAE standard levels for small commercial package air conditioning and heating equipment (including SPVACs and SPVHPs under 135,000 Btu/h) is two years after the effective date of the minimum energy efficiency requirements in the amended ASHRAE Standard 90.1. Under 42 U.S.C. 6313(a)(6)(D)(ii), the applicable compliance date when DOE adopts the ASHRAE standard levels for large and very large commercial package air conditioning and heating equipment (including SPVACs and SPVHPs ≥ 135,000 Btu/h and < 240,000 Btu/h) is three years after the effective date of the minimum energy efficiency requirement in the amended ASHRAE Standard 90.1. B. Equipment Classes and Scope of Coverage When evaluating and establishing energy conservation standards, DOE divides covered products into equipment classes by the type of energy used or by capacity or other performance-related features that justifies a different standard. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE determines are appropriate. Existing energy conservation standards group SPVUs into the following six equipment classes based on the cooling capacity and whether the equipment is an air conditioner or a heat pump: Table III.1—Equipment Classes for Single Package Vertical Units Equipment type Cooling capacity Btu/h Single Package Vertical Air Conditioners <65,000. ≥65,000 and <135,000. ≥135,000 and <240,000. Single Package Vertical Heat Pumps <65,000. ≥65,000 and <135,000. ≥135,000 and <240,000. 10 Code of Federal Regulations (CFR) 431.97(d). 1. Consideration of a Space Constrained SPVU Equipment Class In the April 2014 NODA, DOE noted that ASHRAE Standard 90.1-2013 created a new equipment class for SPVACs and SPVHPs used in space-constrained applications, with a definition for “nonweatherized space constrained single-package vertical unit” and efficiency standards for the associated equipment class. In the NODA, DOE tentatively concluded that there was no need to establish a separate space-constrained class for SPVUs, given that certain models currently listed by manufacturers as SPVUs, most of which would meet the ASHRAE space-constrained definition, are being misclassified and should be classified as central air conditioners (in most cases, space-constrained central air conditioners). 79 FR 20114, 20123 (April 11, 2014). In response to the April 2014 NODA, AHRI and NCP requested that DOE adopt the new ASHRAE 90.1-2013 space-constrained SPVU product class. (AHRI, No. 24 at pp. 1-2; NCP, No. 16 at p. 3) First Co. disagreed with DOE's conclusion that space-constrained SPVUs should be regulated as consumer products rather than commercial equipment and stated that increasing energy conservation standards for SPVU should be done by changing EER/COP, as ASHRAE has done, not by reclassifying them as consumer products. (First Co. No. 14 at p. 1) DOE does not agree with these commenters and has provided responses to specific concerns below. Lennox and NCP stated that multi-family structures above 3 stories are considered commercial buildings by both EPCA and ASHRAE Standard 90.1. (Lennox International, No. 15 at p. 4; NCP, No. 16 at pp. 7-8) AHRI added that hotels, apartments, and dormitories are all commercial applications in building types falling within the scope of ASHRAE Standard 90.1. (AHRI, No. 24 at p. 4) NCP argued that SPVUs are distributed to a significant extent for commercial applications, including commercial lodging such as student housing and dormitories, nursing homes, assisted care facilities, hotels, and high-rise apartment buildings. (NCP, No. 16 at p. 10) GE, Lennox, and AHRI analogized that many SPVU are distributed in the same market segments as PTAC/PTHP, which is a type of commercial equipment. (GE Appliances, No. 20 at p. 2; Lennox International, No. 15 at p. 4; AHRI, No. 24 at p. 4) GE, Lennox, and AHRI stated that SPVU are sold to commercial entities and that consumers are never involved in those sale transactions. (GE Appliances, No. 20 at p. 2; Lennox International, No. 15 at p. 5; AHRI, No. 24 at p. 5) Lennox added that SPVUs (including space-constrained models) involve a much higher degree of design integration than residential split system central air conditioners. (Lennox International, No. 15 at p. 5) NCP argued that while SPVUs may be used temporarily by individual occupants, over their life, they are owned and maintained by the commercial entities that own the buildings. (NCP, No. 16 at p. 7) NCP also added that characterizing SPVUs used in lodging as consumer products is going overbroad, because it overlooks the energy use constraints of various multi-family building configurations. (NCP, No. 16 at p. 3) DOE notes that the definitions for “consumer product” and “industrial equipment” in EPCA are not dependent on the definition of residential or commercial buildings found elsewhere in EPCA or in ASHRAE Standard 90.1. As discussed in the April 2014 ASHRAE NODA, EPCA defines “industrial equipment” as any article of equipment of certain specified types that consumes, or is designed to consume, energy, which is distributed to any significant extent for industrial and commercial use, and which is not a covered product as defined in 42 U.S.C. 6291(2), 26 without regard to whether such article is in fact distributed in commerce for industrial or commercial use. (42 U.S.C. 6311(2)(A)) EPCA defines “consumer product” as any article: (1) Of a type that consumes or is designed to consume energy, and, to any significant extent, is distributed in commerce for personal use or consumption by individuals, (2) without regard to whether such article of such type is in fact distributed in commerce for personal use or consumption by an individual. (42 U.S.C. 6291(1)) Consistent with the NODA and these relevant statutory provisions, DOE maintains that products serving individual rooms in multi-family and lodging applications is for personal use or consumption by individuals, regardless of who designed the system, was involved in the sale transaction, or maintains the equipment. In addition, DOE found similarities between units designed for multi-family applications and those intended for commercial lodging applications, indicating that those products should be treated the same under DOE's regulatory scheme. 26 The term “covered product” means a consumer product of a type specified in section 6292 of this title. (42 U.S.C. 6291(2)) Central air conditioners and central air conditioning heat pumps are listed as a covered product in section 6292. (42 U.S.C. 6292(a)(3)) Furthermore, the definitions of “industrial equipment” and “consumer product” are mutually exclusive. A product can only be considered commercial/industrial equipment under EPCA if it does not fit the definition of consumer product. PTACs, referenced by stakeholders as commercial equipment with applications similar to space-constrained SPVUs, are not relevant to this argument because the definition for “central air conditioner” explicitly excludes PTACs ( see 42 U.S.C. 6291(21)). Therefore, DOE differentiates these situations, because while many of the products that would meet the ASHRAE definition for a space-constrained SPVU would also meet the EPCA definition for central air conditioner, PTACs cannot meet the latter definition because they are explicitly excluded. Lennox and AHRI stated that in the November 4, 2013 proposed rule, “Energy Conservation Program for Consumer Products and Certain Commercial and Industrial Equipment: Test Procedures for Residential and Commercial Water Heaters,” (78 FR 66202), DOE recognized that there are commercial water heaters that “could have residential applications,” yet DOE specifically chose not to treat that equipment as a consumer covered product because it would be distributed to a (more) significant extent as a commercial product. (Lennox International, No. 15 at p. 5; AHRI, No. 24 at p. 5) NCP agreed that DOE should regulate SPVU in the same manner as DOE recently proposed for light commercial water heaters. (NCP, No. 16 at p. 10) Lennox International, AHRI, and NCP all maintain that SPVUs are used to a significant extent in commercial applications and more rarely in residential applications. (Lennox International, No. 15 at p. 5; AHRI, No. 24 at p. 5; NCP, No. 16 at p. 10) To clarify this issue, DOE provides the following excerpt from the November 2013 NOPR, along with additional information. The specific reference from the November 2013 NOPR is as follows: “Although light commercial water heaters could have residential applications, DOE notes that the new `light commercial water heater' definition represents a type of water heater that, to a significant extent, is distributed in commerce for industrial or commercial use. These water heaters were and continue to be covered industrial equipment, and, if these proposals are finalized, will continue to be subject to the regulations in part 431 and the certification requirements for commercial and industrial equipment in part 429.” 78 FR 66202, 66207 (Nov. 4, 2013). One must keep in mind that EPCA's definition addressing various types of “water heater[s]” contains specific limitations on the input capacities for such models to be considered consumer products. (42 U.S.C. 6291(27); codified at 10 CFR 430.2) DOE further notes that the proposed definition for “light commercial water heater” makes the equipment a subtype of commercial water heater. 78 FR 66202, 66207 (Nov. 4, 2013). Commercial storage and instantaneous water heaters are specifically listed in EPCA as a type of industrial equipment at 42 U.S.C. 6313(1)(K) and defined at 42 U.S.C. 6311(12), and there are a number of related definitions in DOE's regulations ( see 10 CFR 431.102). Therefore, under the statutory scheme, equipment can only be classified as a “light commercial water heater” if it does not meet the definition of a “water heater” under 10 CFR 430.2. In the same way, space-constrained SPVUs can only be classified as industrial equipment if they do not meet the definition of “central air conditioner” or any other covered consumer product. Lennox, NCP, and AHRI also referred to the history of SPVUs, stating that all SPVUs were previously classified as central air conditioners; the product class was not introduced in ASHRAE Standard 90.1 until the 2004 version and not established in EPCA until EISA 2007, which explicitly separated out SPVUs as type of covered equipment. (NCP, No. 16 at p. 9; Lennox International, No. 15 at p. 3; AHRI, No. 24 at pp. 3-4) NCP and Lennox added that EISA 2007 specified that SPVACs include equipment that is mounted “through an outside wall,” expressly contemplating space-constrained units. (NCP, No. 16 at p. 9; Lennox International, No. 15 at pp. 2-3) NCP commented that in an October 2000 NOPR (65 FR 59590, 59610 (Oct. 5, 2000)), DOE proposed creating standards for SPVUs as a niche product, noting that SPVUs “are not distributed for personal use or consumption by individuals, and therefore believes that at present they are commercial products. . . .” NCP added that the NOPR ( Id. ) acknowledged that “the difficult air flow configuration . . . combined with the attempt to minimize the size constrains the ability of these units to attain higher SEERs.” (NCP, No. 16 at p. 9) DOE disagrees that all SPVUs were classified as residential central air conditioners prior to EISA 2007. Traditional (non-space constrained) SPVU units and three-phase units would have been classified either as commercial air conditioners or not covered. Furthermore, in the April 2014 NODA, DOE was referring to products classified as through-the-wall (TTW) until January 23, 2010 (when TTW was removed as a product class and TTW products had to meet the regulatory requirements for other central air conditioner product classes). 79 FR 20114, 20121-23 (April 11, 2014). In regards to the intent of EISA 2007 and the October 2000 NOPR, DOE notes that before ASHRAE released Addendum “i” to Standard 90.1-2010 in March 2011, there was no such thing as a space-constrained SPVU equipment class. Prior to that time, any references to SPVUs were in regards to traditional units that were not limited in size. Consistent with DOE's position in the October 2000 NOPR, EISA 2007 added SPVUs as a type of commercial equipment, but Congress declined to distinguish a separate equipment class for space-constrained SPVUs. DOE notes that the October 2000 NOPR also considered niche products called “through-the-wall condensers,” which were proposed for a separate residential product class. 27 65 FR 59590, 59610 (Oct. 5, 2000). It is in this product class that DOE expressly contemplated residential space-constrained units, including those models previously classified as TTW that manufacturers are now attempting to classify as SPVUs. DOE does not believe the design, market, and application for these space-constrained units has changed substantially over the past 10 years. In fact, DOE believes the space-constrained products are properly classified, as they were once certified, as central air conditioners, a practice which changed only when the TTW product class was combined with the space-constrained product class and compliance with amended standards for these product classes was required. Based upon the above reasoning, DOE does not see a basis or a need for the space-constrained SPVU equipment class, as these basic models are already covered products as space-constrained central air conditioners. Any product that meets the definition of a “consumer product” (42 U.S.C. 6291(1)) is classified as a consumer product and must meet any applicable energy conservation standard, regardless of whether it is used in a commercial application or marketed as commercial equipment. 27 A TTW product class was created in a May 2002 final rule (67 FR 36368 (May 23, 2002)) and was replaced by the residential space-constrained product class in a June 2011 Direct Final Rule (76 FR 37408, (June 27, 2011)). Lennox and AHRI asserted that the existing base of SPVU products in commercial buildings with fixed physical-dimension requirements limits the ability of manufacturers to increase efficiency; this was the reason for ASHRAE's development of the space-constrained SPVU equipment class. (Lennox International No. 15 at p. 5; AHRI No. 24 at p. 5) NCP stated that lodging and commercial SPVACs are configured for ease of access and maintenance, which impacts efficiency. (NCP, No. 16 at pp. 7-8) NCP added that the presence of multiple units venting to the outside also would affect an individual unit's ultimate performance. (NCP, No. 16 at p. 7) Lennox commented that space-constrained SPVU cannot meet the efficiency levels of residential units. (Lennox International, No. 15 at pp. 5-6) DOE notes that while equipment meeting the ASHRAE Standard 90.1 definition of a space-constrained SPVU may in fact be constrained in efficiency, the presence of the space-constrained central air conditioner (CAC) equipment class already provides respite for these products. The SEER requirement for space-constrained CAC is 12 SEER, one point below the current standards for CAC and two points below the standard for some CACs (split system CACs in the South and all single package CACs) beginning January 1, 2015. (10 CFR 430.32(c)(1)-(3)) Furthermore, DOE notes that there are currently space-constrained units on the market that meet the 12 SEER requirement. NCP argued that if DOE excludes equipment used in high-rise multi-family or other commercial lodging applications from the SPVAC class, DOE must establish a new equipment class because such equipment does not qualify as CAC or otherwise fall within any other existing category. (NCP, No. 16 at p. 10) Specifically, NCP stated that their Comfort Pack products cannot be classified as CAC because they always include gas or electric resistance heat. (NCP, No. 16 at pp. 5-6) In response to NCP, EPCA defines “central air conditioner” as a product, other than a packaged terminal air conditioner, which: (1) Is powered by single phase electric current; (2) is air-cooled; (3) is rated below 65,000 Btu per hour; (4) is not contained within the same cabinet as a furnace with a rated capacity above 225,000 Btu per hour; and (5) is a heat pump or a cooling only unit. (42 U.S.C. 6291(21); 10 CFR 430.2) DOE notes that criteria number 5 refers to coverage of both a type of air conditioner unit that can only perform cooling ( i.e., a “cooling only unit”) as well as a type of air conditioner unit that can perform both cooling and heating ( i.e., a “heat pump”). Criteria number 5 does not refer to other components such as a furnace or electric heater. The only heating component that excludes equipment from coverage under this definition is a furnace with a rated capacity above 225,000 Btu/hour, as set forth in criteria number 4. DOE notes that for units meeting the definition of “central air conditioner” and also containing a furnace in the package (with a rated capacity under 225,000 Btu/hour), the air conditioner is subject to one set of energy conservation standards, while the furnace may be subject to separate standards. First Co. stated that its commercially-designed SPVHPs cannot be tested under the HSPF test procedure because they cannot be operated at temperatures required for testing Frost Accumulation or Low Temperature. (First Co., No. 14 at p. 2) In response to First Co., DOE notes that whether a product can be tested in accordance with the test procedure is not typically determinative of whether it meets the product's definition. Instead, the characteristics of the product (as outlined above for central air conditioning) determine whether it meets the definition. If a product that meets the definition cannot be tested in accordance with the test procedure, a manufacturer may apply to DOE for a waiver of the test procedure.. AHRI and GE Appliances stated that all models of SPVUs listed in the AHRI Directory meet the requirement of having components arranged vertically and current models of space-constrained SPVU meet the EPCA definition of “SPVU.” (AHRI, No. 24 at pp. 3-4; GE Appliances, No. 20 at pp. 1-2) NCP reasoned that by “arranged vertically,” DOE intends to address products that operate in a vertical manner, with a bottom “return air” opening and a top “supply air” opening. This configuration is commonly referred to within the industry as an “Upflow” unit. In addition, for NCP Comfort Pack units, the gas furnace or electrical heating component is positioned vertically above the cooling component and along the vertically moving air flow. Accordingly, NCP's products are vertically arranged as contemplated by the EPCA. (NCP, No. 16 at pp. 4-5) In response, the EPCA definition for “SPVU” requires that the major components be arranged vertically. (42 U.S.C. 6311(22)(A)(i); 10 CFR 431.92) In the April 2014 NODA, when stating that some models do not have their components arranged vertically, DOE was referring to units in which all components were on the same horizontal plane within the cabinet. 79 FR 20114, 20122 (April 11, 2014). DOE acknowledges that most of the products in the AHRI database do have their components arranged vertically. However, even if the units in the AHRI database have their components arranged vertically and otherwise meet the definition of “SPVU,” they may also meet the definition of an applicable consumer product, which takes precedence, as discussed previously. For all of the reasons discussed in this section, DOE is maintaining the position on space-constrained units that it outlined in the April 2014 NODA. Specifically, DOE has not identified a need to establish a separate space-constrained class for SPVUs, given that certain units currently listed by manufacturers as SPVUs, most of which would meet the ASHRAE space-constrained definition, are being misclassified and are appropriately classified as central air conditioners (in most cases, space-constrained central air conditioners). Lennox and AHRI stated that DOE should expand the applications considered in the analysis; AHRI specified that in addition to office, education, and telecom, DOE should consider lodging, multi-family, and assisted-living applications. (Lennox International No. 15 at p. 7; AHRI No. 24 at p. 6) DOE notes that the applications used in the analysis apply to traditional (non-space constrained) SPVUs. DOE believes that the additional applications suggested by Lennox and AHRI are primarily related to space-constrained applications. Given that DOE is not considering the space-constrained units to be SPVUs, DOE has not included the additional applications in its analysis. Issue 1: DOE seeks comment on its tentative conclusion that the creation of a space-constrained equipment class for SPVUs is not warranted. C. 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 products 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 product utility or availability; and (3) adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-(iv). Section IV.B of this preamble discusses the results of the screening analysis for SPVUs, particularly the designs DOE considered, those it screened out, and those that are the basis for the trial standard levels (TSLs) in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR Technical Support Document (TSD). After screening out or otherwise removing from consideration most of the technologies, the following technologies were identified for consideration in the engineering analysis: (1) Increased frontal coil area; (2) increased depth of coil; (3) improved fan motor efficiency; (4) improved fan blade efficiency; and (5) improved compressor efficiency, and (6) dual condensing heat exchangers. To adopt standards for SPVUs that are more stringent than the efficiency levels in ASHRAE Standard 90.1 as amended, DOE must determine, supported by clear and convincing evidence, that such standards are technologically feasible. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) Since these six design options are commercially available, have been used in SPVU equipment, and are the most common ways by which manufacturers improve the energy efficiency of their SPVUs, DOE has tentatively determined that clear and convincing evidence supports the conclusion that all of the efficiency levels evaluated in this NOPR are technologically feasible. Additionally, DOE notes that the four screening criteria do not directly address the propriety status of design options. DOE only considers efficiency levels achieved through the use of proprietary designs in the engineering analysis if they are not part of a unique path to achieve that efficiency level ( i.e., if there are other non-proprietary technologies capable of achieving the same efficiency). DOE believes the proposed standards for the equipment covered in this rulemaking would not mandate the use of any proprietary technologies, and that all manufacturers would be able to achieve the proposed levels through the use of non-proprietary designs. DOE seeks comment on this tentative conclusion and requests additional information regarding proprietary designs and patented technologies. 2. Maximum Technologically Feasible Levels When DOE proposes to adopt an amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for SPVUs, using the design parameters for the most efficient products 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.1 of this proposed rule. D. 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 (2015-2044 for the ASHRAE level, and 2019-2048 for higher efficiency levels). The savings are measured over the entire lifetime of products purchased in the 30-year analysis period. 28 DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and both base cases. The base case represents a projection of energy consumption in the absence of amended mandatory energy conservation standards, and it considers market forces and policies that affect demand for more-efficient products. 28 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.G of this preamble) 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 derived annual conversion factors from the model used to prepare the Energy Information Administration's (EIA) Annual Energy Outlook 2013 ( AEO 2013 ). 29 29 Conversion factors based on the Annual Energy Outlook 2014 ( AEO 2014 ), which became available too late for incorporation into this analysis, show very little change compared to the AEO 2013 -based factors. DOE plans to use convresion 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. 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, and, thus, presents a more complete picture of the impacts of energy efficiency standards. DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered equipment. See section IV.G.1.a for further discussion. 2. Significance of Savings Among the criteria that govern DOE's adoption of more-stringent standards for SPVUs than the amended levels in ASHRAE Standard 90.1, clear and convincing evidence must support a determination that the standards would result in “significant” additional energy savings. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals, in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended “significant” energy savings in this context to be savings that were not “genuinely trivial.” DOE's estimates of the energy savings for each of the TSLs considered for the proposed rule for SPVUs <65,000 Btu/h (presented in section V.B.3.a) provide evidence that the additional energy savings each would achieve by exceeding the corresponding efficiency levels in ASHRAE Standard 90.1-2013 are nontrivial. Therefore, DOE considers these savings to be “significant” as required by 42 U.S.C. 6313(a)(6)(A)(ii)(II). E. Economic Justification 1. Specific Criteria As discussed beforehand, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII)) 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.I. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step incorporates both a short-term impacts—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 impacts over a 30-year period. 30 The industry-wide impacts analyzed include: (1) Industry net present value (INPV), which values the industry on the basis of expected future cash flows; (2) cash flows by year; (3) changes in revenue and income; and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on sub-groups manufacturers, such as 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, as discussed in section IV.M. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers. 30 DOE also presents a sensitivity analysis that considers impacts for products shipped in a 9-year period. 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 (Life-Cycle Costs) 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. 6313(a)(6)(B)(ii)(II)) DOE conducts this comparison in its LCC and PBP analysis. The LCC is the sum of the purchase price of a piece of equipment (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the equipment. To account for uncertainty and variability in specific inputs, such as equipment lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value. For its analysis, DOE assumes that consumers will purchase the covered equipment 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 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.G, 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 potential 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 proposed standards 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 any lessening of competition that is likely to result from energy conservation standards. It also directs the Attorney General of the United States (Attorney General) to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6313(a)(6)(B)(ii)(V)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide its determination on this issue. DOE will publish and 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. (42 U.S.C. 6313(a)(6)(B)(ii)(VII)) Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the nation's needed power generation capacity, as discussed in section IV.L. 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 IV.J of this preamble. DOE also reports estimates of the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.K. 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 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 customers. 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 customers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6313(a)(6)(B)(ii). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section V.B.1.c of this proposed rule. IV. Methodology and Discussion of Related Comments This section addresses the analyses DOE has performed for this rulemaking with regards to SPVACs and SPVHPs. A separate subsection addresses each component of the analysis. A. Market and Technology Assessment To start the rulemaking analysis for SPVACs and SPVHPs, DOE researched information that provided an overall picture of the market for this equipment, including the purpose of the equipment, the industry structure, manufacturers, market characteristics, and technologies used in the equipment. This activity included both quantitative and qualitative assessments based primarily on publically-available information. The topics addressed in this market and technology assessment for the rulemaking include definitions, equipment classes, manufacturers, quantities, and types of equipment sold and offered for sale. The key findings of DOE's market assessment are summarized below. For additional detail, see chapter 3 of the NOPR TSD. 1. Definitions of a SPVAC and a SPVHP EPCA defines “single package vertical air conditioner” and “single package vertical heat pump” in 42 U.S.C. 6311(23) and (24). In particular, these units can be single or three-phase; must have major components arranged vertically; must be an encased combination of components; and must be intended for exterior mountain on, adjacent interior to, or through an outside wall. DOE codified these definitions into its regulations at 10 CFR 431.92. Certain of these equipment types are sometimes referred to as “wall-mount” units and are commonly installed on the exterior wall of classrooms, modular office buildings, and telecom shelters. Certain others of these units are also sometimes found installed in the interior wall of classrooms, such as in a utility closet. These units are beneficial because they provide each room with individual temperature control, and because in the event of a failure of the system, only one room would be affected as opposed to the whole space. 2. Equipment Classes In evaluating and establishing energy conservation standards, DOE divides covered equipment into equipment classes based on the type of energy used or by capacity or other performance-related feature that justifies having a higher or lower standard from that which applies to other equipment classes. EPCA currently divides both SPVACs and SPVHPs into 3 size categories and sets a Federal minimum energy efficiency standard for each equipment class. During its research for the market and technology assessment, DOE did not find any performance-related features that would justify creating a new equipment class for SPVUs. Accordingly, for this rulemaking, DOE is proposing to maintain the same equipment classes, as shown in Table IV.1. Table IV.1—Current Federal Equipment Classes for SPVUs Equipment class Size category (Btu/h) SPVAC <65,000. ≥65,000 and <135,000. ≥135,000 and <240,000. SPVHP <65,000. ≥65,000 and <135,000. ≥135,000 and <240,000. 3. Refrigerants Since January 1st, 2010, all newly manufactured SPVUs in the United States have no longer been allowed to use the previously-prevalent R-22 refrigerant per the Montreal Protocol. As result, the vast majority of SPVUs began using R410A refrigerant instead. DOE is aware of one alternative refrigerant, R407C, which can be used as a replacement for R410A in SPVUs. DOE is aware of some SPVUs which utilize R407C; however, these units are not offered for sale in the United States and therefore are not included among the products potentially regulated by this rule. 4. Review of the Current Market for SPVUs In order to gather information needed for the market assessment for SPVUs, DOE consulted a variety of sources, including manufacturer literature, manufacturer Web sites, and the AHRI Directory of Certified Product Performance. This information served as resource material throughout the rulemaking. The sections below provide an overview of the SPVU market. For more detail on the SPVU market, see chapter 3 of the NOPR TSD. a. Trade Association Information The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) is the trade association representing SPVU manufacturers. AHRI develops and publishes technical standards for residential and commercial air-conditioning, heating, and refrigeration equipment using rating criteria and procedures for measuring and certifying equipment performance. The current Federal test procedure for SPVUs incorporates by reference an AHRI standard—AHRI 390-2003, “Performance Rating of Single Package Vertical Air-Conditioners and Heat Pumps.” AHRI also maintains the Directory of Certified Product Performance, which is a database of equipment ratings for all manufacturers who elect to participate in the program. AHRI has two subsections for SPVUs: (1) Single Package Vertical Systems—AC; and (2) Single Package Vertical Systems—HP. DOE used the data in this certification directory in its market assessment. b. Manufacturer Information For SPVUs, DOE identified seven manufacturers: (1) Bard Manufacturing Company; (2) Change'Air; (3) Johnson Controls, Inc.; (4) Marvair; (5) Modine Manufacturing Company; (6) National Coil Company; and (7) Temspec, Inc. DOE also identified certain other companies that list their products in the AHRI Directory, but DOE believes that these models are residential products and not commercial equipment. Therefore, DOE did not include those manufacturers in this list. Issue 2: DOE seeks comment on whether there are additional companies not named which manufacture this type of equipment. DOE also takes into consideration the impact of amended energy conservation standards on small businesses. At this time, DOE has identified one small business (Bard Manufacturing Company) in the SPVU market that fall under the Small Business Administration (SBA)'s threshold as having 750 employees or fewer. DOE studies the potential impacts on these small businesses in detail during the manufacturer impact analysis (MIA). A summary of these impacts is contained in section IV.I and VI.B of this NOPR and described in further detail in chapter 12 of the NOPR TSD. c. Market Data From the AHRI Directory and manufacturers' Web sites, DOE compiled a database of 319 SPVACs and 270 SPVHPs. Of the 589 total SPVUs, DOE was able to gather efficiency data on 497 units (about 86 percent of DOE's database). DOE was not able to find any units on the market for SPVAC or SPVHP equipment with a cooling capacity greater than or equal to 135,000 Btu/h and less than 240,000 Btu/h and for SPVHP with a cooling capacity greater than or equal to 65,000 Btu/h and less than 135,000 Btu/h. For more information on the SPVU equipment currently available on the market, including a full breakdown of these units into their equipment classes and graphs showing performance data, see chapter 3 of the NOPR TSD. 5. Technology Assessment In the technology assessment, DOE identifies technology options that appear to be feasible mechanisms for improving equipment efficiency. This assessment provides the technical background and structure on which DOE bases its screening and engineering analyses. DOE began its technology assessment by examining SPVUs that are currently on the market at both the baselines and higher efficiency levels. This allowed DOE to identify technologies that are commonly incorporated into equipment to achieve higher efficiencies, as well as the impact of certain components and improvements on SPVU efficiency. DOE also researched technology options that are utilized in other air-conditioning and refrigeration equipment to determine their potential applicability to SPVUs. Lastly, DOE explored the market and technical information to identify technologies that have not yet come to market but that are under development and to determine whether those technologies have the potential to improve SPVU efficiency. Although DOE does consider technologies that are proprietary, it does not consider efficiency levels that can only be reached through the use of proprietary technologies, which could allow a single manufacturer to monopolize the market (any such technologies are eliminated during the engineering analysis). Through these methods, DOE identified numerous technologies that could improve the energy efficiency of SPVUs. Generally, these technologies involve improvements to either the heat exchangers or to the other system components that will improve the overall energy efficiency of the system. First, DOE identified technologies that improve the heat exchanger effectiveness, which included: (1) Increased frontal coil area; (2) increased depth of coil (additional tube rows); (3) increased fin density; (4) improved fin design; (5) improved tube design; (6) hydrophilic film coating on fins; (7) changing to microchannel heat exchangers; and (8) dual condensing heat exchangers. Second, DOE identified technologies that improve the efficiency of other components that make up the rest of the system, including: (1) Improved indoor and outdoor fan motor efficiency; (2) improved fan blade efficiency; (3) improved compressor efficiency (including multi-speed compressors); (4) thermostatic or electronic expansion valves; and (5) thermostatic cyclic controls. All of these technology options are presented in Table IV.2. Table IV.2—Potential Technology Options for Improved Energy Efficiency of SPVUs Technology Options Heat Exchanger Improvements Increased frontal coil area. Increased depth of coil. Increased fin density. Improved fin design. Improved tube design. Hydrophilic film coating on fins. Microchannel heat exchangers. Dual condensing heat exchangers. Indoor Blower and Outdoor Fan Improvements Improved fan motor efficiency. Improved fan blades. Compressor Improvements Improved compressor efficiency. Multi-speed Compressors. Other Improvements Thermostatic expansion valves. Electronic expansion valves. Thermostatic cyclic controls. Chapter 3 of the NOPR TSD provides additional detail and descriptions of the basic construction and operation of SPVUs, followed by a detailed discussion of each of the technology options discussed in the preceding paragraph. After identifying technology options that will improve the efficiency of SPVUs, DOE passed each of those technology options to the screening analysis for further evaluation. B. Screening Analysis DOE uses the following four screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking: 1. Technological feasibility. DOE will consider technologies incorporated in commercial products or in working prototypes to be technologically feasible. 2. Practicability to manufacture, install, and service. If mass production and reliable installation and servicing of a technology in commercial products could be achieved on the scale necessary to serve the relevant market at the time the standard comes into effect, then DOE will consider that technology practicable to manufacture, install, and service. 3. Adverse impacts on product utility or product availability. If DOE determines a technology would have a significant adverse impact on the utility of the product to significant subgroups of consumers, or would result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not consider this technology further. 4. Adverse impacts on health or safety. If DOE determines that a technology will have significant adverse impacts on health or safety, it will not consider this technology further. (10 CFR part 430, subpart C, appendix A, 4(a)(4) and 5(b)) These four screening criteria do not include the propriety status of design options. As noted previously, DOE will only consider efficiency levels achieved through the use of proprietary designs in the engineering analysis if they are not part of a unique path to achieve that efficiency level. DOE does not believe that any of the technologies identified in the technology assessment are proprietary, and thus, did not eliminate any technologies for that reason. Through a review of each technology, DOE found that the technologies identified met all four screening criteria to be examined further in the analysis. Typically, technologies that pass the screening analysis are subsequently passed through to the engineering analysis for consideration in DOE's downstream cost-benefit analysis. However, DOE did not analyze some of the technologies identified in the technology assessment because either: (1) Data are not available to evaluate the energy efficiency characteristics of the technology; (2) available data suggest that the efficiency benefits of the technology are negligible; or (3) the test procedure and EER or COP metric would not measure the energy impact of these technologies. Accordingly, DOE eliminated the following technologies from further consideration based upon these three additional considerations: (1) Increased fin density (2) Improved fin design; (3) Improved tube design; (4) Hydrophilic film coating on fins; (5) Thermostatic or electronic expansion valves; (6) Thermostatic cyclic controls; (7) Microchannel heat exchangers; and (8) Multi-speed compressors. Of these technologies, numbers 1 through 4 are used in baseline products, so no additional energy savings would be expected. Any potential energy savings of technologies 5, [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2014-29865. Public record. Not legal advice.