Energy Conservation Program: Energy Conservation Standards for Commercial Packaged Boilers

Federal RegisterMar 24, 2016

Ask Donna

What actually matters in this document.

Text

DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket Number EERE-2013-BT-STD-0030]

RIN 1904-AD01

Energy Conservation Program: Energy Conservation Standards for Commercial Packaged Boilers

AGENCY:

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

ACTION:

Notice of proposed rulemaking and announcement of public meeting.

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer equipment and certain commercial and industrial equipment, including commercial packaged boilers. EPCA also requires the U.S. Department of Energy (DOE) to periodically determine whether more stringent standards would be technologically feasible and economically justified, and would save a significant amount of energy. DOE has tentatively concluded that more stringent standards are technologically feasible and economically justified, and would result in significant additional conservation of energy. Therefore, DOE proposes amended energy conservation standards for commercial packaged boilers. This document also announces a public meeting to receive comment on the proposed standards and associated analyses and results.

DATES:

Meeting:

DOE will hold a public meeting on Thursday, April 21, 2016, from 9:30 a.m. to 3 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.

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 May 23, 2016. See section VII, Public Participation, for details.

Comments regarding the likely competitive impact of the proposed standard should be sent to the Department of Justice contact listed in the

ADDRESSES

section before April 25, 2016.

ADDRESSES:

The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue SW., Washington, DC 20585. To register for the webinar and receive call-in information, please use this link:

https://attendee.gotowebinar.com/register/6872804566336170753

Instructions:

Any comments submitted must identify the NOPR on Energy Conservation Standards for Commercial Packaged Boilers, and provide docket number EERE-2013-BT-STD-0030 and/or regulatory information number (RIN) number 1904-AD01. Comments may be submitted using any of the following methods:

Federal eRulemaking Portal: www.regulations.gov

. Follow the instructions for submitting comments.

Email: PkgdBoilers2013STD0030@ee.doe.gov

. Include the docket number EERE-2013-BT-STD-0030 and/or RIN 1904-AD01 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.

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 CD, in which case it is not necessary to include printed copies.

Hand Delivery/Courier:

Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Room 6094, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

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

Chad_S_Whiteman@omb.eop.gov

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).

EPCA requires the Attorney General to provide DOE a written determination of whether the proposed standard is likely to lessen competition. The U.S. Department of Justice Antitrust Division invites input from market participants and other interested persons with views on the likely competitive impact of the proposed standard. Interested persons may contact the Division at

energy.standards@usdoj.gov

before April 25, 2016. Please indicate in the “subject” line of your email the title and Docket Number of this proposed rule.

Docket:

The docket, which includes

Federal Register

notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available at

www.regulations.gov

. All documents in the docket are listed in the

www.regulations.gov

index. However, some documents listed in the index may not be publicly available, such as those containing information that is exempted from public disclosure.

A link to the docket Web page can be found at

http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=79

. This Web page contains a link to the docket for this document 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 of this document for further information on how to submit comments through

www.regulations.gov

FOR FURTHER INFORMATION CONTACT:

Mr. James Raba, 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) 586-8654. Email:

Jim.Raba@ee.doe.gov

Mr. Peter Cochran, U.S. Department of Energy, Office of the General Counsel, GC-33 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-9496. Email:

Peter.Cochran@hq.doe.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

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Rule

A. Benefits and Costs to Consumers

B. Impact on Manufacturers

C. National Benefits and Costs

D. Conclusion

II. Introduction

A. Authority

B. Background

1. Current Standards

2. History of Standards Rulemaking for Commercial Packaged Boilers

III. General Discussion

A. Compliance Dates

B. Test Procedure

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

a. Economic Impact on Manufacturers and Consumers

b. Savings in Operating Costs Compared To Increase in Price

c. Energy Savings

d. Lessening of Utility or Performance of Equipment

e. Impact of Any Lessening of Competition

f. Need for National Energy Conservation

g. Other Factors

2. Rebuttable Presumption

IV. Methodology and Discussion of Related Comments

A. Market and Technology Assessment

1. General

2. Scope of Coverage and Equipment Classes

3. Technology Options

B. Screening Analysis

C. Engineering Analysis

1. Methodology

a. Overall Methodology and Extrapolation of Prices

b. Large CPB Analysis and Representative Fuel Input Rate

2. Data Collection and Categorization

3. Baseline Efficiency

4. Intermediate and Max-Tech Efficiency Levels

5. Incremental Price and Price-Efficiency Curves

D. Markups Analysis

E. Energy Use Analysis

1. Energy Use Characterization

2. Building Sample Selection and Sizing Methodology

3. Miscellaneous Energy Use

F. Life-Cycle Cost and Payback Period Analysis

1. Equipment Costs

2. Installation Costs

3. Annual Per-Unit Energy Consumption

4. Energy Prices and Energy Price Trends

5. Maintenance Costs

6. Repair Costs

7. Lifetime

8. Discount Rate

9. No-New-Standards-Case Market Efficiency Distribution

10. Payback Period Inputs

11. Rebuttable-Presumption Payback Period

G. Shipments Analysis

H. National Impact Analysis

1. Equipment Efficiency in the No-New-Standards Case and Standards Cases

2. National Energy Savings

3. Net Present Value of Consumer Benefit

a. Total Annual Installed Cost

b. Total Annual Operating Cost Savings

c. Discount Rate

I. Consumer Subgroup Analysis

J. Manufacturer Impact Analysis

1. Government Regulatory Impact Model

a. Government Regulatory Impact Model Key Inputs

b. Government Regulatory Impact Model Scenarios

2. Manufacturer Interviews

a. Testing Burden

b. Condensing Boilers Not Appropriate for Many Commercial Applications

c. Not Many American Companies Produce Condensing Heat Exchangers

d. Reduced Product Durability and Reliability

3. Discussion of Comments

a. Impacts on Condensing Technology

K. Emissions Analysis

L. Monetizing Carbon Dioxide and Other Emissions Impacts

1. Social Cost of Carbon

a. Monetizing Carbon Dioxide Emissions

b. Development of Social Cost of Carbon Values

c. Current Approaches and Key Assumptions

2. Social Cost of Other Air Pollutants

M. Utility Impact Analysis

N. Employment Impact Analysis

V. Analytical Results

A. Trial Standard Levels

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers

a. Life-Cycle Cost and Payback Period

b. Consumer Subgroup Analysis

c. Rebuttable Presumption Payback

2. Economic Impacts on Manufacturers

a. Industry Cash-Flow Analysis Results

b. Impacts on Direct Employment

c. Impacts on Manufacturing Capacity

d. Impacts on Subgroups of Manufacturers

e. Cumulative Regulatory Burden

3. National Impact Analysis

a. Significance of Energy Savings

b. Net Present Value of Consumer Costs and Benefits

c. Indirect Impacts on Employment

4. Impact on Utility or Performance

5. Impact of Any Lessening of Competition

6. Need of the Nation To Conserve Energy

7. Other Factors

C. Conclusion

1. Benefits and Burdens of Trial Standard Levels Considered for Commercial Packaged Boilers

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

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

B. Review Under the Regulatory Flexibility Act

1. Description on Estimated Number of Small Entities Regulated

2. Description and Estimate of Compliance Requirements

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

4. Significant Alternatives to the Rule

C. Review Under the Paperwork Reduction Act

D. Review Under the National Environmental Policy Act of 1969

E. Review Under Executive Order 13132

F. Review Under Executive Order 12988

G. Review Under the Unfunded Mandates Reform Act of 1995

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

I. Review Under Executive Order 12630

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

K. Review Under Executive Order 13211

L. Review Under the Information Quality Bulletin for Peer Review

VII. Public Participation

A. Attendance at the Public Meeting

B. Procedure for Submitting Prepared General Statements For Distribution

C. Conduct of the Public Meeting

D. Submission of Comments

E. Issues on Which DOE Seeks Comment

VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

Title III, Part C

of the Energy Policy and Conservation Act of 1975 (42 U.S.C. 6291,

et seq.;

“EPCA”), Public Law 94-163 (42 U.S.C. 6311-6317, as codified), added by Public Law 95-619, Title IV, section 441(a), establishes the Energy Conservation Program for Certain Industrial Equipment.

These include commercial packaged boilers (“CPB”), the subject of this document. (42 U.S.C. 6311(1)(J)) Commercial packaged boilers are also covered under 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.”

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

All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act of 2015, Public Law 114-11 (April 30, 2015).

ASHRAE Standard 90.1-2013 (

i.e.,

the most recent version of ASHRAE Standard 90.1) did not amend the efficiency levels for commercial packaged boilers. Thus, DOE is undertaking this rulemaking under the 6-year review requirement in 42 U.S.C. 6313(a)(6)(C), as opposed to the statutory provision regarding ASHRAE equipment (42 U.S.C. 6313(a)(6)(A). For more information on DOE's review of ASHRAE Standard 90.1-2013, see:

http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=108

EPCA requires DOE to conduct an evaluation of its standards for CPB equipment every 6 years and to publish either a notice of determination that such standards do not need to be amended or a NOPR including proposed amended standards. (42 U.S.C. 6313(a)(6)(C)(i)) EPCA further requires that any new or amended energy conservation standards that DOE prescribes for covered equipment shall be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) Furthermore, the new or amended standard must result in a significant additional conservation of energy.

Id.

Under the applicable statutory provisions, DOE must determine that there is clear and convincing evidence supporting the adoption of more stringent energy conservation standards than the ASHRAE level.

Id.

Once complete, this

rulemaking will satisfy DOE's statutory obligation under 42 U.S.C. 6313(a)(6)(C).

Pursuant to these and other statutory requirements discussed in this document, DOE initiated this rulemaking to evaluate CPB energy conservation standards and to determine whether new or amended standards are warranted. DOE has examined the existing CPB standards and has tentatively concluded that modifying and expanding the existing 10 CPB equipment classes to 12 equipment classes is warranted. As discussed in detail in section IV.A.2 of this document, DOE proposes to: (1) Discontinue the use of draft type as a criteria for equipment classes; and (2) establish separate equipment classes for “very large” commercial packaged boilers. Eliminating the use of draft type as a distinguishing feature for equipment classes would consolidate the 4 existing draft-specific equipment classes into 2 non-draft-specific equipment classes. Further, the proposed change to distinguish very large CPB as separate equipment classes would result in an additional 4 equipment classes. As a result, the total number of equipment classes would increase from 10 to 12. DOE has tentatively concluded that there is clear and convincing evidence to support more stringent standards for 8 of the 12 equipment classes proposed in this NOPR, which includes all classes except for the newly proposed very large CPB classes. The proposed standards, which prescribe minimum thermal efficiencies (E

) or combustion efficiencies (E

), are shown in Table I.1. These proposed standards, if adopted, would apply to the applicable equipment classes listed in Table I.1 and manufactured in, or imported into, the United States on and after the date 3 years after the publication of the final rule.

Table I.1—Proposed Energy Conservation Standards for Commercial Packaged Boilers

Equipment

Size category

(input)

Proposed energy conservation standard *

Compliance date †

Small Gas-Fired Hot Water Commercial Packaged Boilers

>300,000 Btu/h and ≤2,500,000 Btu/h

85.0% E

[date 3 years after publication of final rule].

Large Gas-Fired Hot Water Commercial Packaged Boilers

>2,500,000 Btu/h and ≤10,000,000 Btu/h

85.0% E

[date 3 years after publication of final rule].

Very Large Gas-Fired Hot Water Commercial Packaged Boilers

>10,000,000 Btu/h

82.0% E

†

March 2, 2012.

Small Oil-Fired Hot Water Commercial Packaged Boilers

>300,000 Btu/h and ≤2,500,000 Btu/h

87.0% E

[date 3 years after publication of final rule].

Large Oil-Fired Hot Water Commercial Packaged Boilers

>2,500,000 Btu/h and ≤10,000,000 Btu/h

88.0% E

[date 3 years after publication of final rule].

Very Large Oil-Fired Hot Water Commercial Packaged Boilers

>10,000,000 Btu/h

84.0% E

†

March 2, 2012.

Small Gas-Fired Steam Commercial Packaged Boilers

>300,000 Btu/h and ≤2,500,000 Btu/h

81.0% E

[date 3 years after publication of final rule].

Large Gas-Fired Steam Commercial Packaged Boilers

>2,500,000 Btu/h and ≤10,000,000 Btu/h

82.0% E

[date 3 years after publication of final rule].

Very Large Gas-Fired Steam Commercial Packaged Boilers

>10,000,000 Btu/h

79.0% E

†

March 2, 2012.

Small Oil-Fired Steam Commercial Packaged Boilers

>300,000 Btu/h and ≤2,500,000 Btu/h

84.0% E

[date 3 years after publication of final rule].

Large Oil-Fired Steam Commercial Packaged Boilers

>2,500,000 Btu/h and ≤10,000,000 Btu/h

85.0% E

[date 3 years after publication of final rule].

Very Large Oil-Fired Steam Commercial Packaged Boilers

>10,000,000 Btu/h

81.0% E

†

March 2, 2012.

* E

means “thermal efficiency.” E

means “combustion efficiency.”

** Prior to March 2, 2022, for natural draft very large gas-fired steam commercial packaged boilers, a minimum thermal efficiency level of 77% is permitted and meets Federal commercial packaged boiler energy conservation standards.

† For very large CPB equipment classes DOE proposes to retain the existing standards for such equipment, which had a compliance date of March 2, 2012, as shown.

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 commercial packaged boilers, as measured by the average life-cycle cost (LCC) savings and the simple payback period (PBP).

The average LCC savings are positive for all equipment classes, and the PBP is less than the average lifetime of the equipment, which is estimated to be 24.8 years for all equipment classes evaluated in this NOPR.

The average LCC savings are measured relative to the no-new-standards case efficiency distribution, which depicts the CPB market in the compliance year in the absence of amended standard levels (see section IV.F.9 of this document and chapter 8 of the NOPR technical support document (TSD)). The simple PBP, which is designed to compare specific efficiency levels for commercial packaged boilers, is measured relative to the baseline CPB equipment (see section IV.F.10 of this document and chapter 8 of the TSD).

Table I.2—Impacts of Proposed Energy Conservation Standards on Consumers of Commercial Packaged Boilers

Equipment class

Average LCC savings

(2014$)

Simple payback period

(years)

Small Gas-Fired Hot Water

$521

9.6

Large Gas-Fired Hot Water

3,647

11.0

Small Oil-Fired Hot Water

7,799

5.7

Large Oil-Fired Hot Water

30,834

4.7

Small Gas-Fired Steam

2,782

7.4

Large Gas-Fired Steam

16,802

4.7

Small Oil-Fired Steam

4,256

5.3

Large Oil-Fired Steam

36,128

2.8

DOE's analysis of the impacts of the proposed standards on consumers is described in section IV.F of this document and in chapter 8 of the NOPR TSD.

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 9.5 percent, DOE estimates that the INPV for manufacturers of commercial packaged boilers is $180.1 million in 2014$. Under the proposed standards, DOE expects that INPV may reduce by $23.8 to $13.1 million, which is approximately 13.2 to 7.3 percent respectively. Under today's proposed standard, DOE expects the industry to incur $27.5 million in conversion costs.

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

C. National Benefits and Costs

All monetary values in this section are expressed in 2014 dollars and, where appropriate, are discounted to 2015.

DOE's analyses indicate that the proposed standards would save a significant amount of energy. The lifetime energy savings for commercial packaged boilers purchased in the 30-year period that begins in the anticipated first full year of compliance with amended standards (2019-2048), relative to the case without amended standards (referred to as the “no-new-standards case”), amount to 0.39 quadrillion Btu (quads).

This represents a savings of 0.8 percent relative to the energy use of this equipment in the no-new-standards case.

A quad is equal to 10

British thermal units (Btu). The quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy savings include the energy consumed in extracting, processing, and transporting primary fuels (

i.e.,

coal, natural gas, petroleum fuels), and thus present a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.1 of this document.

The no-new-standards case assumptions are described in section IV.F.9 of this document.

The cumulative net present value (NPV) of total consumer costs and savings of the proposed standards for commercial packaged boilers ranges from $0.414 billion (at a 7-percent discount rate) to $1.687 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased equipment and installation costs for commercial packaged boilers purchased in 2019-2048.

In addition, the proposed CPB standards would have significant environmental benefits. The energy savings described in this section are estimated to result in cumulative emission reductions (over the same period as for energy savings) of 22 million metric tons (Mt)

of carbon dioxide (CO

), 233 thousand tons of methane (CH

), 2.1 thousand tons of sulfur dioxide (SO

), 162 thousand tons of nitrogen oxides (NO

), 0.1 thousand tons of nitrous oxide (N

O), and 0.0003 tons of mercury (Hg).

The cumulative reduction in CO

emissions through 2030 amounts to 2.86 Mt, which is equivalent to the emissions resulting from the annual electricity use of 0.393 million homes.

A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO

are presented in short tons (ton).

DOE calculated emissions reductions relative to the no-new-standards case, which reflects key assumptions in the

Annual Energy Outlook 2015

(

AEO2015

) Reference case.

AEO2015

generally represents current legislation and environmental regulations for which implementing regulations were available as of October 31, 2014.

The value of the CO

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

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

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

emissions reduction is between $0.14 billion and $2.0 billion, with a value of $0.66 billion using the central SCC case represented by $40.0 per metric ton in 2015.

DOE also estimates the present monetary value of the NO

emissions reduction is $0.16 billion at a 7-percent discount rate and $0.45 billion at a 3-percent discount rate.

More detailed results can be found in chapter 14 of the NOPR TSD.

Techincal 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 July 2015) (Available at:

www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf

The values only include CO

emissions; CO

equivalent emissions from other greenhouse gases are not included.

DOE estimated the monetized value of NO

emissions reductions using benefits per ton estimates from the Regulatory Impact Analysis titled, “Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants,” published in June 2014 by EPA's Office of Air Quality Planning Standards. (Available at

www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal10602.pdf.

) See section IV.L.2 for further discussion. Note that the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electricity Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski

et al.,

2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele

et al.,

2011), the values would be nearly two-and-a-half times larger. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions by assessing the regional approach taken by EPA's Regulatory Impact Analysis of the Clean Power Plan Final Rule. Note the DOE is currently investigating valuation of avoided SO

and H

emissions.

Table I.3 summarizes the national economic benefits and costs expected to result from the proposed standards for commercial packaged boilers.

Table I.3—Summary of National Economic Benefits and Costs of Proposed Energy Conservation Standards for Commercial Packaged Boilers (TSL 2 *)

Category

Present value

(million 2014$)

Discount rate (%)

Benefits

Operating Cost Savings

925

2,550

Reduction (using mean SCC at 5% discount rate) **

136

Reduction (using mean SCC at 3% discount rate) **

655

Reduction (using mean SCC at 2.5% discount rate) **

1,054

2.5

Reduction (using 95th percentile SCC at 3% discount rate) **

1,998

Reduction †

158

447

Total Benefits ††

1,738

3,653

Costs

Incremental Installed Costs

512

863

Total Net Benefits

Including CO

and NO

Reduction Monetized Value ††

1,227

2,789

* This table presents the costs and benefits associated with commercial packaged boilers shipped in 2019−2048. These results include benefits to consumers that accrue after 2048 from the equipment purchased in 2019−2048. The incremental installed costs include incremental equipment cost as well as installation costs. The CO

reduction benefits are global benefits due to actions that occur nationally.

** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC from the integrated assessment models, at discount rates of 5, 3, and 2.5 percent. For example, for 2015 emissions, these values are $12.2/metric ton, $40.0/metric ton, and $62.3/metric ton, in 2014$, respectively. The fourth set ($117 per metric ton in 2014$ for 2015 emissions), which represents the 95th percentile of the SCC distribution calculated using SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. The SCC values are emission year specific. See section IV.L.1 for more details.

† The $/ton values used for NO

are described in section IV.L. DOE estimated the monetized value of NO

emissions reductions using benefit per ton estimates from the Regulatory Impact Analysis titled, “Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants,” published in June 2014 by EPA's Office of Air Quality Planning and Standards. (Available at

www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf.

) See section IV.L.2 for further discussion. Note that the agency is presenting a national benefit-per-ton estimate for particulate matter emitted from the Electric Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski

et al.,

2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele

et al.,

2011), the values would be nearly two-and-a-half times larger. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions, DOE intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's Regulatory Impact Analysis for the Clean Power Plan Final Rule.

†† Total benefits for both the 3-percent and 7-percent cases are presented using only the average SCC with 3-percent discount rate.

The benefits and costs of this NOPR's proposed energy conservation standards, for covered commercial packaged boilers sold in 2019-2048, can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are the sum of: (1) The annualized national economic value of the benefits from consumer operation of the equipment that meets the proposed standards (consisting primarily of reduced operating costs minus increases in product purchase price and installation costs); and (2) the annualized value of the benefits of CO

and NO

emission reductions.

To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2015, the year used for discounting the NPV of total consumer costs and savings. For the benefits, DOE calculated a present value associated with each year's shipments in the year in which the shipments occur (

e.g.,

2020 or 2030), and then discounted the present value from each year to 2015. The calculation uses discount rates of 3 and 7 percent for all costs and benefits except for the value of CO

reductions, for which DOE used case-specific discount rates, as shown in Table I.4. Using the present value, DOE then calculated the fixed annual payment over a 30-year period starting in the compliance year that yields the same present value.

The national operating savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing these equipment. The national operating cost savings is measured for the lifetime of commercial packaged boilers shipped in 2019-2048.

The CO

reduction is a benefit that accrues globally due to decreased domestic energy consumption that is expected to result from this proposed rule. Because CO

emissions have a very long residence time in the atmosphere,

the SCC values in future years reflect future CO

-emissions impacts that continue beyond 2100 through 2300.

The atmospheric lifetime of CO

is estimated to be on the order of 30-95 years. Jacobson, MZ, “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 (2005).

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

reduction, for which DOE used a 3-percent discount rate along with the average SCC series that has a value of $40.0 per metric ton in 2015, the cost of the standards proposed in this rulemaking is $51 million per year in increased equipment costs, while the benefits are $91 million per year in reduced equipment operating costs, $37 million in CO

reductions, and $16 million in reduced NO

emissions. In

this case, the net benefit amounts to $93 million per year. Using a 3-percent discount rate for all benefits and costs and the average SCC series that has a value of $40.0 per metric ton in 2015, the estimated cost of the CPB standards proposed in this rulemaking is $48 million per year in increased equipment costs, while the benefits are $142 million per year in reduced operating costs, $37 million in CO

reductions, and $25 million in reduced NO

emissions. In this case, the net benefit amounts to $156 million per year.

Table I.4—Annualized Benefits and Costs of Proposed Energy Conservation Standards for Commercial Packaged Boilers

Discount rate

Million 2014$/year

Primary

estimate *

Low net benefits

estimate *

High net benefits

estimate *

Benefits

Consumer Operating Cost Savings *

101.

142

129

160.

Reduction (using mean SCC at 5% discount rate) ***

11.

Reduction (using mean SCC at 3% discount rate) ***

39.

Reduction (using mean SCC at 2.5% discount rate) ***

2.5%

58.

Reduction (using 95th percentile SCC at 3% discount rate) ***

111

104

119.

Reduction †

37.

59.

Total Benefits ††

7% plus CO

range

117 to 218

108 to 203

149 to 258.

143

133

177.

3% plus CO

range

177 to 278

162 to 256

230 to 338.

204

186

258.

Costs

Consumer Incremental Equipment Costs

47.

45.

Net Benefits

Total ††

7% plus CO

range

67 to 168

54 to 149

102 to 210.

130.

3% plus CO

range

129 to 230

110 to 205

185 to 293.

156

135

213.

* This table presents the annualized costs and benefits associated with commercial packaged boilers shipped in 2019−2048. These results include benefits to consumers that accrue after 2048 from the equipment purchased in 2019−2048. The incremental installed costs include incremental equipment cost as well as installation costs. The CO

reduction benefits are global benefits due to actions that occur nationally. The Primary, Low Benefits, and High Benefits Estimates utilize projections of building stock and energy prices from the

AEO2015

Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, DOE used a constant equipment price assumption as the default price projection; the cost to manufacture a given unit of higher efficiency neither increases nor decreases over time. The equipment price projection is described in section IV.F.1 of this document and chapter 8 of the NOPR technical support document (TSD).

† The $/ton values used for NO

are described in section IV.L. DOE estimated the monetized value of NO

www3.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf.

et al.,

2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele

et al.,

2011), the values would be nearly two-and-a-half times larger. Because of the sensitivity of the benefit-per-ton estimate to the geographical considerations of sources and receptors of emissions, DOE intends to investigate refinements to the agency's current approach of one national estimate by assessing the regional approach taken by EPA's Regulatory Impact Analysis for the Clean Power Plan Final Rule.

†† Total benefits for both the 3-percent and 7-percent cases are presented using only the average SCC with a 3-percent discount rate. In the rows labeled “7% plus CO

range” and “3% plus CO

range,” the operating cost and NO

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

values.

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

D. Conclusion

Based on clear and convincing evidence, DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that equipment achieving these standard levels is already commercially available for at least some, if not most, equipment classes covered by this

proposal.

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 consumer benefits, consumer LCC savings, and emission reductions) would outweigh the burdens (loss of INPV for manufacturers and LCC increases for some consumers).

See chapter 3 of the NOPR TSD for information about the efficiency ratings of equipment currently available on the market.

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

II. Introduction

The following section briefly discusses the statutory authority underlying this proposal, as well as some of the relevant historical background related to the establishment of standards for commercial packaged boilers.

A. Authority

Title III, Part C

of the Energy Policy and Conservation Act of 1975 (“EPCA” or “the Act”), Public Law 94-163 (42 U.S.C. 6311-6317, as codified), added by Public Law 95-619, Title IV, section 441(a), sets forth a variety of provisions designed to improve energy efficiency.

It established the “Energy Conservation Program for Certain Industrial Equipment,” which includes commercial packaged boilers that are the subject of this rulemaking. The energy conservation standards for commercial packaged boilers are codified in DOE's regulations under subpart E of Title 10 of the Code of Federal Regulations (CFR), Part 431.

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

All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act of 2015, Public Law 114-11 (April 30, 2015).

The ASHRAE Standard 90.1, “Energy Standard for Buildings Except Low-Rise Residential Buildings,” sets industry energy efficiency levels for small, large, and very large commercial package air-conditioning and heating equipment, packaged terminal air conditioners, packaged terminal heat pumps, warm air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks (collectively “ASHRAE equipment”).

EPCA directs DOE to consider amending the existing Federal energy conservation standard for each type of covered ASHRAE equipment whenever ASHRAE amends the efficiency levels in Standard 90.1. (42 U.S.C. 6313(a)(6)(A)) For each type of listed equipment, EPCA directs that if ASHRAE amends Standard 90.1, DOE must adopt amended standards at the new ASHRAE efficiency level, unless clear and convincing evidence supports a determination that adoption of a more stringent level would produce significant additional energy savings and would be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) If DOE decides to adopt as a national standard the efficiency levels specified in the amended ASHRAE Standard 90.1, DOE must establish such standard not later than 18 months after publication of the amended industry standard. (42 U.S.C. 6313(a)(6)(A)(ii)(I)) However, if DOE determines that a more stringent standard is justified, then it must establish such more stringent standard not later than 30 months after publication of the amended ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(B)(i))

For more information, see

www.ashrae.org

In the event that ASHRAE does not act to amend Standard 90.1, EPCA provides an alternative statutory mechanism for initiating such review. More specifically, EPCA requires that every six years, the Secretary of Energy (Secretary) shall consider amending the energy conservation standards for covered commercial equipment and shall publish either a notice of determination that those standards do not need to be amended, or a notice of proposed rulemaking for more stringent energy efficiency standards. (42 U.S.C. 6313(a)(6)(C))

Pursuant to EPCA, DOE's energy conservation program for covered equipment consists essentially of four parts: (1) Testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) compliance certification and enforcement procedures. Subject to certain criteria and conditions, DOE has authority, as discussed above, to adopt amended energy conservation standards for commercial packaged boilers. In addition, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of covered equipment. (42 U.S.C. 6314(a)(2)) Manufacturers of covered equipment must use the prescribed DOE test procedure as the basis for certifying to DOE that their equipment comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of such equipment. (42 U.S.C. 6314(d)(1)) Similarly, DOE must use these test procedures to determine whether the equipment comply with standards adopted pursuant to EPCA. The DOE test procedures for commercial packaged boilers currently appear at 10 CFR 431.86.

When setting standards for the ASHRAE equipment addressed by this document, EPCA, as amended, prescribes certain statutory criteria for DOE to consider. See generally 42 U.S.C. 6313(a)(6)(A)-(D). Any amended standard for covered equipment more stringent than the level contained in ASHRAE Standard 90.1 must be designed to achieve significant improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II) and (C)(i)) Furthermore, DOE may not adopt a more stringent standard that would not result in the significant additional conservation of energy.

Id.

In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. DOE must make this determination after receiving comments on the proposed standard, and by considering, to the maximum extent practicable, the following seven factors:

(1) The economic impact of the standard on manufacturers and consumers of products subject to the standard;

(2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered equipment which are 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 covered product 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 of Energy considers relevant.

(42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII))

Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of covered equipment. (42 U.S.C. 6314) Specifically, EPCA requires that if a test procedure referenced in ASHRAE Standard 90.1 is updated, DOE must update its test procedure to be consistent with the amended test procedure in ASHRAE Standard 90.1, unless DOE determines that the amended test procedure is not reasonably designed to produce test results that reflect the energy efficiency, energy use, or estimated operating costs of the ASHRAE equipment during a representative average use cycle. In addition, DOE must determine that the amended test procedure is not unduly burdensome to conduct. (42 U.S.C. 6314(a)(2) and (4)) Manufacturers of covered equipment must use the prescribed DOE test procedure as the basis for certifying to DOE that their equipment complies with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of such equipment. (42 U.S.C. 6314(d)) Similarly, DOE must use these test procedures to determine whether the equipment complies with standards adopted pursuant to EPCA. The DOE test procedure for commercial packaged boilers currently appear at 10 CFR 431.86.

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) and (C)(i)) Furthermore, 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 at the time of the Secretary's finding. (42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) and (C)(i))

Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy (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. For this rulemaking, DOE considered the criteria for rebuttable presumption as part of its analysis.

Additionally, when a type or class of covered 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 that 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 consumer 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 considered these criteria for this rulemaking.

Because ASHRAE did not update its efficiency levels for commercial packaged boilers in any of its most recent updates to ASHRAE Standard 90.1 (

i.e.,

ASHRAE Standard 90.1-2010 and ASHRAE Standard 90.1-2013), DOE is 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.

After carefully reviewing all commercial packaged boiler equipment classes, DOE has tentatively concluded that there is clear and convincing evidence that the proposed amended standards for eight of the twelve proposed commercial packaged boiler equipment classes (

i.e.,

all commercial packaged boilers with fuel input rate ≤10,000 kBtu/h) 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 remaining four equipment classes, (

i.e.,

all commercial packaged boilers with fuel input rate >10,000 kBtu/h) DOE proposes to maintain the existing standards because there is not sufficient data to provide clear and convincing evidence that more stringent standards would be technologically feasible and economically justified, and would result in significant additional energy savings.

B. Background

1. Current Standards

DOE amended its energy conservation standards for commercial packaged boilers through a final rule published in the

Federal Register

on July 22, 2009 (July 2009 final rule). 74 FR 36312. More specifically, the July 2009 final rule updated the energy conservation standards for commercial packaged boilers to correspond to the levels in the 2007 revision of ASHRAE Standard 90.1 (

i.e.,

ASHRAE Standard 90.1-2007). Compliance with the amended standards was required beginning on March 2, 2012. These levels are shown in Table II.1. Also in the July 2009 final rule, DOE again followed ASHRAE's approach in Standard 90.1-2007 and adopted a second tier of energy conservation standards for two classes of commercial packaged boilers, which are shown in Table II.2. Compliance with the latter standards will be required beginning on March 2, 2022.

Table II.1—Federal Energy Efficiency Standards for Commercial Packaged Boilers Manufactured on or after March 2, 2012

Equipment type

Subcategory

Size category

(input)

Efficiency level—effective date:

March 2, 2012 *

Hot Water Commercial Packaged Boilers

Gas-fired

≥300,000 Btu/h and ≤2,500,000 Btu/h

80.0% E

Hot Water Commercial Packaged Boilers

Gas-fired

>2,500,000 Btu/h

82.0% E

Hot Water Commercial Packaged Boilers

Oil-fired

≥300,000 Btu/h and ≤2,500,000 Btu/h

82.0% E

Hot Water Commercial Packaged Boilers

Oil-fired

>2,500,000 Btu/h

84.0% E

Steam Commercial Packaged Boilers

Gas-fired—All, Except Natural Draft

≥300,000 Btu/h and ≤2,500,000 Btu/h

79.0% E

Steam Commercial Packaged Boilers

Gas-fired—All, Except Natural Draft

>2,500,000 Btu/h

79.0% E

Steam Commercial Packaged Boilers

Gas-fired—Natural Draft

≥300,000 Btu/h and ≤2,500,000 Btu/h

77.0% E

Steam Commercial Packaged Boilers

Gas-fired—Natural Draft

>2,500,000 Btu/h

77.0% E

Steam Commercial Packaged Boilers

Oil-fired

≥300,000 Btu/h and ≤2,500,000 Btu/h

81.0% E

Steam Commercial Packaged Boilers

Oil-fired

>2,500,000 Btu/h

81.0% E

* E

means “thermal efficiency.” E

means “combustion efficiency.”

Table II.2—Federal Energy Efficiency Standards for Commercial Packaged Boilers Manufactured on or after March 2, 2022

Equipment type

Subcategory

Size category

(input)

Efficiency level—effective date:

March 2, 2022

Steam Commercial Packaged Boilers

Gas-fired—Natural Draft

≥300,000 Btu/h and ≤2,500,000 Btu/h

79.0% E

Steam Commercial Packaged Boilers

Gas-fired—Natural Draft

>2,500,000 Btu/h

79.0% E

2. History of Standards Rulemaking for Commercial Packaged Boilers

DOE is conducting this rulemaking pursuant to 42 U.S.C. 6313(a)(6)(C), which requires that every six years, DOE must publish either: (1) A notice of the determination that standards for the equipment do not need to be amended, or (2) a NOPR including proposed energy conservation standards. As noted above, DOE's last final rule for commercial packaged boilers was published on July 22, 2009, so as a result, DOE is required to act to publish one of the above two documents within 6 years. Once completed, this rulemaking will satisfy DOE's statutory obligation under 42 U.S.C. 6313(a)(6)(C). DOE must publish a final rule not later than two years after this NOPR is issued. (42 U.S.C. 6313(a)(6)(C)(iii)(I))

In initiating this rulemaking, DOE prepared a Framework document, “Energy Conservation Standards Rulemaking Framework Document for Commercial Packaged Boilers,” which describes the procedural and analytical approaches DOE anticipated using to evaluate energy conservation standards for commercial packaged boilers. DOE published a notice that announced both the availability of the Framework document and a public meeting to discuss the proposed analytical framework for the rulemaking. That notice also invited written comments from the public. 78 FR 54197 (Sept. 3, 2013). The Framework document is available at:

http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/79

DOE held a public meeting on October 1, 2013, at which it described the various analyses DOE would conduct as part of the rulemaking, such as the engineering analysis, the life-cycle cost (LCC) and payback period (PBP) analyses, and the national impact analysis (NIA). Representatives of manufacturers, trade associations, environmental and energy efficiency advocates, and other interested parties attended the meeting. The participants discussed the following major topics, among others: (1) The rulemaking scope (2) test procedures for commercial packaged boilers; and (3) various issues related to the planned analyses of amended energy conservation standards. Interested parties also provided comments on the Framework document, which DOE considered and responded to in chapter 2 of the preliminary analysis TSD.

On November 20, 2014, DOE published a second notice, “Energy Conservation Standards for Commercial Packaged Boilers: Public Meeting and Availability of the Preliminary Technical Support Document” in the

Federal Register

to announce the availability of the preliminary analysis technical support document. 79 FR 69066. The preliminary analysis technical support document (TSD) provided preliminary results of the analyses that DOE conducted in support of the energy conservation standards rulemaking. DOE invited interested parties to comment on the preliminary analysis, and requested public comments on specific issues related to the TSD. These issues are listed in the Executive Summary chapter of the preliminary TSD. The preliminary TSD is available at:

http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/79

On December 9, 2014, DOE held a public meeting, at which it described the methodology and preliminary results of the various analyses it conducted as part of the rulemaking, such as the engineering analysis, the LCC and PBP analyses, and the NIA. Representatives of manufacturers, trade associations, environmental and energy efficiency advocates, and other interested parties attended the meeting. The public meeting provided an opportunity for the attendees to provide feedback and comments that would help improve DOE's analysis and results for the NOPR stage. In addition, DOE also received several written comments from interested parties and stakeholders, in response to the preliminary analysis TSD. Parties providing comments are shown in Table II.3. DOE considered the comments and feedback for the updating the analysis in preparation of

this document. Relevant comments and DOE's responses are provided in section III and section IV of this document.

Table II.3—Parties That Provided Comments on the Preliminary Analysis TSD

Name of party

Abbreviation

Source of comments

Type *

Air-Conditioning, Heating and Refrigeration Institute

AHRI

Public Meeting, Written

American Boiler Manufacturers Association

ABMA

Public Meeting, Written

American Council for Energy Efficient Economy, Appliance Standards Awareness Project, National Resource Defense Council

ACEEE, ASAP & NRDC

Written

American Council for Energy Efficient Economy

ACEEE

Public Meeting

Lochinvar, LLC

Lochinvar

Public Meeting, Written

Raypak, Inc

Raypak

Public Meeting, Written

PVI Industries

PVI

Public Meeting

Plumbing, Heating and Cooling Contractors

PHCC

Public Meeting

Appliance Standards Awareness Project

ASAP

Public Meeting

Pacific Gas & Electric, Southern California Edison

PGE & SCE

Written

* TA: Trade Association; EA: Efficiency/Environmental Advocate; M: Manufacturer; C: Contractor; U: Utility.

In parallel to the energy conservation standards rulemaking, DOE published a notice of proposed determination on August 13, 2013 (August 2013 NOPD), which initiated a coverage determination to explicitly clarify DOE's statutory authority under EPCA to cover natural draft commercial packaged boilers. DOE initiated this coverage determination because the existing definition of “packaged boiler” could have allowed for differing interpretations as to whether natural draft commercial packaged boilers are covered equipment. 78 FR 49202. In the August 2013 NOPD, DOE proposed a definition for natural draft commercial packaged boilers that would clarify its statutory authority to cover such equipment. DOE sought public comments in response to its proposed determination and definition for natural draft commercial packaged boilers, and received several written comments from interested parties. In addition, DOE also received several comments in response to the preliminary analysis TSD that are relevant to the issue of coverage determination of natural draft commercial packaged boilers.

After carefully reviewing all of the comments received on the issue of coverage determination of natural draft commercial packaged boilers and determining that the comments indicated a common and long-standing understanding from interested parties that natural draft commercial packaged boilers are and have been covered equipment under part A-1 of Title III of EPCA, DOE decided to withdraw the August 2013 NOPD on August 25, 2015 (August 2015 withdrawal notice). 80 FR 51487.

Comments with regards to the coverage determination of natural draft CPB from both the 2013 NOPD and the preliminary analysis TSD are discussed in detail in the 2015 withdrawal notice (80 FR 51487).

Lastly, DOE is also currently conducting a separate test procedure rulemaking to consider an amended test procedure for commercial packaged boilers. On February 20, 2014, DOE published a request for information (RFI) in the

Federal Register

that sought comments and information from stakeholders on several issues pertaining to the CPB test procedure. 79 FR 9643. On February 22, 2016, DOE issued a NOPR, which proposed to update the test procedure for determining the efficiency of commercial packaged boilers (February 2016 test procedure NOPR).

Through the proposed test procedure, DOE has sought to addresses some of the issues raised by DOE in the RFI and by interested parties in their comments. Section III.B of this document briefly discusses the changes proposed to the current test procedure and the potential impact on the energy conservation standards.

The analyses conducted for this NOPR reflect the changes proposed in the February 2016 test procedure NOPR.

A link to the February 2016 test procedure NOPR issued by DOE can be found at:

http://energy.gov/eere/buildings/downloads/issuance-2016-02-22-energy-conservation-program-certain-commercial-and

For detailed discussion on the test procedure including the comments and DOE's response please see the docket no. EERE-2014-BT-TP-0006. The docket can also be accessed using the following link:

http://www.regulations.gov/#!docketDetail;D=EERE-2014-BT-TP-0006

III. General Discussion

A. Compliance Dates

In 42 U.S.C. 6313(a), EPCA prescribes a number of compliance dates for any resulting amended standards for commercial packaged boilers. These compliance dates vary depending on specific statutory authority under which DOE is conducting its review (

i.e.,

whether DOE is triggered by a revision to ASHRAE Standard 90.1 or whether DOE is undertaking a 6-year review), and the action taken (

i.e.,

whether DOE is adopting ASHRAE Standard 90.1 levels or more stringent levels). The discussion that follows explains the potential compliance dates as they pertain to this rulemaking.

As discussed in section II.A of this document, EPCA requires that at least once every 6 years, DOE must review standards for commercial packaged boilers and publish either a notice of determination that standards for this type of equipment do not need to be amended or a NOPR for any equipment for which more than 6 years has elapsed since the issuance of the most recent final rule. (42 U.S.C. 6313(a)(6)(C)(i)) EPCA requires that an amended standard prescribed under 42 U.S.C. 6313(a)(6)(C) must apply to products manufactured after the date that is the later of: (1) The date 3 years after publication of the final rule establishing a new standard or (2) the date 6 years after the effective date of the current standard for a covered product. (42 U.S.C. 6313(a)(6)(C)(iv)). For commercial packaged boilers, the final rule is scheduled to be published in 2016 and the current standards went into effect in 2012. Thus, the date 3 years after the publication of a final rule (2019) would be later than the date 6 years after the effective date of the current standard (2018) for this round of rulemaking. As a result, compliance with any amended energy conservation standards promulgated in the final rule would be required beginning on the date that is 3 years after the publication of the final rule.

B. Test Procedure

The current test procedure for commercial packaged boilers is found at 10 CFR 431.86, and incorporates by reference the Hydronics Institute (HI) BTS-2000 (Rev 06.07) testing standard,

Method to Determine Efficiency of Commercial Space Heating Boilers.

As stated previously, on February 22, 2016, DOE issued a notice of proposed rulemaking that proposes several amendments to the CPB test procedure. The changes that are proposed in the new test procedure include: (1) Clarify the coverage for field-constructed commercial packaged boilers and the applicability of DOE's test procedure and standards for this category of commercial packaged boilers, (2) provide an optional field test for commercial packaged boilers with fuel input rate greater than 5,000,000 Btu/h, (3) provide a conversion method to calculate thermal efficiency based on combustion efficiency testing for steam commercial packaged boilers with fuel input rate greater than 5,000,000 Btu/h, (4) modify the inlet and outlet water temperatures during tests of hot water commercial packaged boilers, (5) establish limits on the ambient temperature and relative humidity conditions during testing, (6) modify setup and instrumentation requirements to remove ambiguity, and (7) standardize terminology and provisions for “fuel input rate.”

In this notice and the NOPR TSD, DOE uses “fuel input rate,” to refer to the maximum rate at which a commercial packaged boiler uses energy, in order to be consistent with Test Procedure definition and language. The industry also uses terms such as input capacity, input ratings, capacity, and rating, and any such instances should be considered synonymous with fuel input rate.

In the comments received on the preliminary analysis TSD for the energy conservation standards rulemaking, DOE received several comments that are specifically related to the current test procedure for commercial packaged boilers. Comments related to the technical aspects of the test procedure development were considered and addressed in the test procedure NOPR.

In addition, DOE received several comments related to the timing of the test procedure and energy conservation standard. AHRI stated that it appreciates DOE's effort to finalize the test procedure revisions in advance of the standards revisions and that it is critical that the revised test procedures be finalized so that the analysis for the revised standard is based properly on the test procedures that will be applied to products to establish their compliance with the revised efficiency standard. AHRI also stated that there must be sufficient time between the completion of the revised test procedure and the NOPR for the efficiency standard to allow all parties to assess the effect of test procedure revisions on potential increased efficiency standards, and encouraged DOE to continue its efforts to minimize the burden. (AHRI, No. 37 at p. 2)

Raypak stated that it is concerned about the lack of a finalized efficiency test procedure, and argued that this will adversely affect the capability of DOE to properly evaluate potential efficiency standard changes. (Raypak, No. 35 at p. 1) At the preliminary analysis public meeting, AHRI commented regarding the need to finalize both the test procedure and the coverage determination prior to the NOPR for the energy conservation standards rulemaking. (AHRI, Public Meeting Transcript, No. 39 at p. 16 and pp. 209-211) In the meeting, ACEEE acknowledged the challenges in compliance, certification, and enforcement for large commercial packaged boilers and asked whether DOE is likely to have regulation without enforcement or whether the Department is planning ahead now for enforcement of large (

e.g.,

10 million Btu/h) commercial packaged boilers. (ACEEE, Public Meeting Transcript, No. 39 at p. 21)

A notation in this form provides a reference for information that is in the docket of DOE's rulemaking to develop energy conservation standards for commercial packaged boilers (Docket No. EERE-2013-BT-STD-0030, which is maintained at

http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0030

). This particular notation refers to a comment: (1) Submitted by AHRI; (2) appearing in document number 0035; and (3) appearing on page 3 of that document.

As noted previously, the test procedure NOPR for commercial packaged boilers was issued by DOE on February 22, 2016. Although the test procedure has not yet been finalized, DOE believes the proposed test method updates give enough insight as to the changes under consideration that amended standard levels can reasonably be considered in this rulemaking. DOE conducted analyses for this NOPR based on the amended test procedure proposed in the February 2016 test procedure NOPR. However, DOE notes its final rule analyses will be based on DOE's most recently adopted CPB test procedure available at the time of the analyses. EPCA requires that, at least once every 7 years, the Secretary of Energy shall evaluate each type of covered equipment, including packaged boilers, to determine whether amended test procedures would more accurately or fully comply with the requirements for the test procedures to be reasonably designed to produce test results which reflect energy efficiency, energy use, and estimated operating costs during a representative average use cycle; and would not be unduly burdensome to conduct. (42 U.S.C. 6314(a)(1)-(2)) DOE adopted its latest amendments to its CPB test procedure in a final rule published on July 22, 2009. 74 FR 36312. Pursuant to EPCA's provision at 42 U.S.C. 6314(a)(1)-(2), DOE is conducting a concurrent test procedure rulemaking to evaluate its current CPB test procedure.

Regarding the effect of the amended test procedure on efficiency ratings, DOE notes that it tested several commercial packaged boilers with both the previous and the proposed test procedure to observe the variation in efficiency ratings as a result of the amended test procedure. As explained in the February 2016 test procedure NOPR, based on the results of this testing, DOE has tentatively determined that the proposed amendments, in aggregate, would not result in an overall measurable impact on ratings.

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 conducts a market and technology assessment that 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) through (iv). Additionally, DOE notes that these screening criteria do not directly address the proprietary 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. Section IV.B of this document discusses the results of the screening analysis for commercial packaged boilers, particularly the designs DOE considered, those it screened out, and those that are the basis for the TSLs in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR TSD.

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 equipment. Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for commercial packaged boilers, using the design parameters for the most efficient equipment available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.4 of this document and in chapter 5 of the NOPR TSD.

D. Energy Savings

1. Determination of Savings

For each TSL, DOE projected energy savings from the commercial packaged boilers that are the subject of this rulemaking purchased in the 30-year period that begins in the year of compliance with amended standards (2019-2048).

The savings are measured over the entire lifetime of commercial packaged boilers purchased in the 30-year analysis period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the no-new-standards-case. The no-new-standards case represents a projection of energy consumption in the absence of amended efficiency standards, and it considers market forces and policies that may affect future demand for more-efficient equipment.

DOE also presents a sensitivity analysis that considers impacts for products shipped in a 9-year period.

DOE uses its NIA spreadsheet models to estimate energy savings from potential amended standards. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in site energy, which is the energy directly consumed by equipment at the locations where they are used. For electricity, DOE calculates national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. For electricity and natural gas and oil, DOE also calculates full-fuel-cycle (FFC) energy savings. As discussed in DOE's statement of policy and notice of policy amendment, the FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (

i.e.,

coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy efficiency standards. 76 FR 51281 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012).

To calculate primary energy savings, DOE derives annual conversion factors from the model used to prepare the Energy Information Administration's (EIA's) most recent

Annual Energy Outlook.

For FFC energy savings, DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered products or equipment. For more information, see section IV.H.2 of this document.

2. Significance of Savings

To amend standards for commercial packaged boilers, DOE must determine with clear and convincing evidence that the standards would result in “significant” additional energy savings. (42 U.S.C. 6313(a)(6)(A)(ii)(II) and (C)(i)) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals for the District of Columbia Circuit, in

Natural Resources Defense Council

Herrington,

768 F.2d 1355, 1373 (D.C. Cir. 1985), opined that Congress intended “significant” energy savings in the context of EPCA to be savings that were not “genuinely trivial.” DOE has tentatively concluded the energy savings for the proposed standards (presented in section V.B.3.a of this document) are “significant” as required by 42 U.S.C. 6313(a)(6)(A)(ii)(II) and (C)(i).

E. Economic Justification

1. Specific Criteria

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) and (C)(i)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking.

a. Economic Impact on Manufacturers and Consumers

EPCA requires DOE to consider the economic impact of a standard on manufacturers and the commercial consumers of the products subject to the standard. (42 U.S.C. 6313(a)(6)(B)(I) and (C)(i)) In determining the impacts of a potential amended standard on manufacturers, DOE conducts a manufacturer impact analysis (MIA), as discussed in section IV.J of this document. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include: (1) INPV, which values the industry based on expected future cash flows; (2) cash flows by year; (3) changes in revenue and income; and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers.

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

b. Savings in Operating Costs Compared to Increase in Price

EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered equipment in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered equipment that are likely to result from an amended standard. (42 U.S.C. 6313(a)(6)(B)(ii)(II) and (C)(i)) DOE conducts this comparison in its LCC and PBP analysis.

The LCC is the sum of the purchase price of the equipment (including installation cost and sales tax) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the equipment. The LCC analysis requires a variety of inputs, such as equipment prices, equipment energy consumption, energy prices, maintenance and repair costs, equipment lifetime, and consumer discount rates. 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 PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more stringent standard by the change in annual operating cost for the year that standards are assumed to take effect.

The LCC savings for the considered efficiency levels are calculated relative to a no-new-standards-case that reflects projected market trends in the absence of amended standards. DOE identifies the percentage of consumers estimated to receive LCC savings or experience an LCC increase, in addition to the average LCC savings associated with a particular standard level. DOE's LCC and PBP analysis is discussed in further detail in section IV.F of this document.

c. Energy Savings

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 III.D.1 and section IV.E of this document and chapter 10 of the NOPR TSD, DOE uses spreadsheet models to project national energy savings.

d. Lessening of Utility or Performance of Equipment

In determining whether a proposed standard is economically justified, DOE evaluates any lessening of the utilities or performance of the considered equipment. (42 U.S.C. 6313(a)(6)(B)(ii)(IV) and (C)(i)) Based on data available to DOE, the standards proposed in this document would not reduce the utility or performance of the equipment under consideration in this rulemaking.

e. Impact of Any Lessening of Competition

EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General of the United States that is likely to result from a proposed standard. (42 U.S.C. 6313(a)(6)(B)(ii)(V) and (C)(i)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide its determination on this issue. DOE will publish and respond to the Attorney General's determination in the final rule.

f. Need for National Energy Conservation

In considering new or amended energy conservation standards, EPCA also directs DOE to consider the need for the national energy conservation. (42 U.S.C. 6313(a)(6)(B)(ii)(VII) and (C)(i)) The proposed standards are likely to improve the security and reliability of the nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the nation's needed power generation capacity, as discussed in section IV.M of this document.

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 and use. DOE conducts an emissions analysis to estimate how standards may affect these emissions, as discussed in section IV.K of this document. DOE reports the emissions impacts from each TSL it considered in section V.B.6 of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document.

g. Other Factors

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) and (C)(i)) To the extent interested parties submit any relevant information regarding economic justification that does not fit into the other categories described above, DOE could consider such information under “other factors.”

2. Rebuttable Presumption

EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of the equipment that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the PBP for consumers. These analyses include, but are not limited to, the 3-year PBP contemplated under the rebuttable-presumption test.

In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6313(a)(6)(B)(ii) and (C)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F.11 of this document.

IV. Methodology and Discussion of Related Comments

DOE used three analytical tools to estimate the impact of the proposed standards. The first tool is a spreadsheet that calculates LCCs and PBPs of potential new energy conservation standards. The second tool is a spreadsheet that calculates national energy savings and net present value resulting from potential amended energy conservation standards.

The third spreadsheet tool, the Government

Regulatory Impact Model (GRIM), helped DOE to assess manufacturer impacts of potential standards. These tools are available on the DOE Web site for this rulemaking:

http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=79

The shipments model was developed as a Microsoft Excel spreadsheet, which is integrated into the spreadsheet for the NIA. The “shipment forecast” and “historical shipments” worksheets of the NIA model present the scope of the shipment analysis and the total shipments in units for the commercial packaged boilers in scope.

Additionally, DOE estimated the impacts of energy conservation standards for commercial packaged boilers on utilities and the environment. DOE used a version of EIA's National Energy Modeling System (NEMS) for the utility and environmental analyses. The NEMS model simulates the energy sector of the U.S. economy. EIA uses NEMS to prepare its

Annual Energy Outlook (AEO),

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

AEO

version with minor modifications.

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

The EIA allows the use of the name “NEMS” to describe only an

AEO

version of the model without any modification to code or data. Because the present analysis entails some minor code modifications and runs the model under various policy scenarios that deviate from

AEO

assumptions, the name “NEMS-BT” refers to the model as used here. For more information on NEMS, refer to The National Energy Modeling System: An Overview, DOE/EIA-0581 (98) (Feb.1998), available at:

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

A. Market and Technology Assessment

1. General

For the market and technology assessment, DOE develops information that provides an overall snapshot of the market for the equipment considered, including the nature of the equipment, market characteristics, industry structure, and technologies that improve energy efficiency. The analysis carried out under this chapter is broadly divided into two categories: (1) Market assessment and (2) technology assessment. The purpose of the market assessment is to develop a qualitative and quantitative characterization of the CPB industry and market structure, based on information that is publicly available and on data submitted by manufacturers and other interested parties. Issues addressed include CPB characteristics, market share and equipment classes; existing regulatory and non-regulatory efficiency improvement initiatives; overview of historical equipment shipments and lifetimes and trends in the equipment markets. The purpose of the technology assessment is to investigate technologies that will improve the energy efficiency of commercial packaged boilers, and results in a preliminary list of technology options that can improve the thermal and/or combustion efficiency of commercial packaged boilers. Chapter 3 of the NOPR TSD contains all the information related to the market and technology assessment. The chapter also provides additional details on the methodology used, information gathered and results. DOE typically uses the information gathered in this chapter in the various downstream analyses such as engineering analysis, shipment analysis, and manufacturer impact analyses.

In this NOPR, DOE also explored the market to identify manufacturers of commercial packaged boilers. As per the definition set forth in 10 CFR 431.82, a manufacturer of a commercial packaged boiler is any person who: (1) Manufactures, produces, assembles or imports a commercial packaged boiler in its entirety; (2) manufactures, produces, assembles or imports a commercial packaged boiler in part, and specifies or approves the boiler's components, including burners or other components produced by others, as for example by specifying such components in a catalogue by make and model number or parts number; or (3) is any vendor or installer who sells a commercial packaged boiler that consists of a combination of components that is not specified or approved by a person described in the two previous definitions.

Through extensive search of publicly available information, including ABMA's and AHRI's Web sites, DOE identified 45 CPB manufacturers that meet this definition. The complete list of manufacturers can be found in chapter 3 of the NOPR TSD.

DOE requests comment on the number and names of manufacturers that qualify as CPB manufacturers according to the list of manufacturers in chapter 3 of the NOPR TSD.

2. Scope of Coverage and Equipment Classes

EPCA lists “packaged boilers” as a type of covered equipment. (42 U.S.C 6311(1)). EPCA defines the term “packaged boiler” as “a boiler that is shipped complete with heating equipment, mechanical draft equipment, and automatic controls; usually shipped in one or more sections.” (42 U.S.C. 6311(11)(B)) In its regulations, DOE clarifies the term “packaged boiler” to exclude a boiler that is “custom designed and field constructed,” and it further provides that if the boiler is shipped in more than one section, the sections may be produced by more than one manufacturer and may be originated or shipped at different times and from more than one location. 10 CFR 431.82.

DOE's regulations also define the term “commercial packaged boiler” as “a type of packaged low pressure boiler that is industrial equipment with a capacity (rated maximum input) of 300,000 Btu per hour (Btu/h) or more which, to any significant extent, is distributed in commerce (1) for heating or space conditioning applications in buildings; or (2) for service water heating in buildings but does not meet the definition of `hot water supply boiler' in [10 CFR part 431].” A “packaged low pressure boiler” means, “a packaged boiler that is (1) a steam boiler designed to operate below a steam pressure of 15 psig; or (2) a hot water boiler designed to operate at or below a water pressure of 160 psig and a temperature of 250°F or (3) a boiler that is designed to be capable of supplying either steam or hot water, and designed to operate under the conditions in paragraphs (1) and (2) of this definition.” 10 CFR 431.82.

As noted above, the current definition of “packaged boiler” refers to a boiler that is shipped complete with heating equipment, mechanical draft equipment, and automatic controls. The definition does not explicitly include natural draft equipment. However, as discussed in the August 2015 withdrawal notice, DOE interprets the definitions in the statute to include natural draft commercial packaged boilers. After considering written comments on the August 2013 NOPD and comments on the preliminary analysis TSD related to the coverage of natural draft equipment, DOE concluded that natural draft commercial packaged boilers are and have been covered equipment subject to DOE's energy conservation standards. Therefore, DOE concluded it was unnecessary to publish a determination to clarify its statutory authority to cover natural draft commercial packaged boilers. Accordingly, DOE has included natural draft commercial packaged boilers under the scope of the rulemaking.

In the preliminary analysis, DOE specifically sought public comment on its tentative decision not to set an upper limit to the fuel input rate for commercial packaged boilers. This issue was first raised in the Framework document (Item 2-4 at page 12), where DOE requested feedback on whether there were any size related issues that may render energy conservation

standards infeasible for very large commercial packaged boilers. DOE received several comments in response to the Framework document that included suggestions of input capacities at which the scope of the standards rulemaking could be capped. AHRI recommended that the scope of the rulemaking should be capped at 5,000 kBtu/h. (AHRI, No.17 at pp. 1-2) ABMA, Burnham Holdings, and Cleaver Brooks suggested that the scope should be capped at 2,500 kBtu/h, citing high testing costs and practicability concerns. (ABMA, No. 14 at pp. 2-3; Cleaver-Brooks, No. 12 at p. 1; Burnham, No. 15 at p. 2) HTP recommended three commercial packaged boiler classifications: “small,” with fuel input rates ≥300 kBtu/h to <2,500 kBtu/h; “medium,” with fuel input rates ≥2,500 kBtu/h and <5,000 kBtu/h; and “large,” with fuel input rates ≥5,000 kBtu/h. (HTP, No. 18 at pp. 1-2) DOE provided responses to all these comments in chapter 2 of the preliminary analysis TSD. In its response, DOE acknowledged the difficulty of testing and rating very large commercial packaged boilers. However, DOE pointed out that defining a fuel input rate upper limit above which standards will not apply could violate EPCA's anti-backsliding provision. As a result, in the preliminary analysis TSD, DOE analyzed all equipment classes for commercial packaged boilers that fit EPCA's definition and have a fuel input rate of 300 kBtu/h or more with no upper limit. DOE also requested further public comment from interested parties on its tentative decision to not set an upper limit.

Several interested parties and stakeholders commented on this issue in response to the preliminary analysis TSD. Lochinvar commented in support of DOE's decision, stating that the inclusion of commercial packaged boilers with very large fuel input rate is needed to ensure a level playing field and accurate product ratings. Lochinvar further commented that many concerns regarding the test burden are addressed by the revised Alternative Efficiency Determination Methods (AEDM) rules. (Lochinvar, No. 34 at p. 1) ABMA stated that DOE's decision not to set an upper limit on input capacity for commercial packaged boilers is causing significant concern among their member boiler manufacturers. ABMA reported that boilers can approach capacities as high as 80,000 kBtu/h with the testing cost approaching one million dollars, which imposes a prohibitively high financial burden on companies manufacturing large institutional sized space heating boilers. ABMA also argued that their member manufacturers have been offering efficiency guarantees since the late 1970s on the large space heating commercial and institutional packaged boilers and have been capable of meeting current efficiency requirements since 1970. Further, ABMA stated that there exists significant difference between smaller boilers that are built in large quantities to a standard specification and large custom engineered boilers manufactured to specifications for a particular installation. ABMA recommended that DOE cap the efficiency certification requirements for commercial packaged boilers at 2,500 kBtu/h. (ABMA, No. 33 at pp. 1-2) AHRI stated that the commercial boilers that have input rates in the high millions of Btu/h are very different products and that many factors that are considered in DOE's analysis and the associated conclusions cannot be extrapolated up to characterize very large commercial packaged boilers. (AHRI, No. 37 at p. 1) AHRI also stated that when going from 3,000 kBtu/h to tens of millions of Btu/h, a whole different price structure should be employed and there may be an upper limit at which the price structure changes completely. (AHRI, Public Meeting Transcript, No. 39 at p. 45) During the public meeting, ABMA also expressed concern on how DOE would extrapolate prices for an 80 million Btu/h boiler using a 3 million Btu/h boiler as the representative unit. (ABMA, Public Meeting Transcript, No. 39 at pp. 64-65)

DOE considered the comments received from interested parties. Comments regarding testing large commercial packaged boilers were addressed separately in the ongoing test procedure rulemaking (discussed further in section III.B of this document). DOE also acknowledges other issues with regards to the compliance burden of very large commercial packaged boilers, particularly those that are engineered-to-order. Some stakeholders suggested capping the scope of the energy conservation standards as an option to resolve this issue. However, as discussed previously, setting an upper limit to the scope of DOE's energy conservation standards for commercial packaged boilers could violate EPCA's anti-backsliding provision. Therefore, DOE has not set an upper limit for fuel input rate above which the standards will not be applicable. However, as discussed in further detail below, DOE proposes a separate equipment class for “very large” commercial packaged boilers with input capacities greater than 10 million Btu/h.

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

The current regulations for commercial packaged boilers list 10 equipment classes with corresponding energy efficiency levels for each.

10 CFR 431.87. These equipment classes are based on (1) size (fuel input rate), (2) heating media (hot water or steam), and (3) type of fuel used (oil or gas).

The gas-fired steam commercial packaged boilers are further classified according to draft type (thereby creating two additional equipment classes). Table IV.1 shows equipment classes that are set forth in the current regulations at 10 CFR 431.87.

These standard levels were adopted in the July 2009 final rule.

Under subpart E of 10 CFR part 431, commercial packaged boilers are divided into equipment classes based on fuel input rate (

i.e.,

size category). Throughout this document, DOE refers to units with an fuel input rate of ≥300,000 Btu/h and ≤2,500,000 Btu/h as “small” and units with an fuel input rate >2,500,000 Btu/h as “large.”

See

10 CFR 431.87.

Table IV.1—CPB Equipment Classes Set Forth in the Current Regulations at 10 CFR 431.87

Equipment type

Subcategory

Size category

(input)

Equipment class

Energy efficiency metric

Hot Water Commercial Packaged Boilers

Gas-fired

≥300,000 Btu/h and ≤2,500,000 Btu/h

Small Gas Hot Water

Thermal Efficiency.

Hot Water Commercial Packaged Boilers

Gas-fired

>2,500,000 Btu/h

Large Gas Hot Water

Combustion Efficiency.

Hot Water Commercial Packaged Boilers

Oil-fired

≥300,000 Btu/h and ≤2,500,000 Btu/h

Small Oil Hot Water

Thermal Efficiency.

Hot Water Commercial Packaged Boilers

Oil-fired

>2,500,000 Btu/h

Large Oil Hot Water

Combustion Efficiency.

Steam Commercial Packaged Boilers

Gas-fired—all except natural draft

≥300,000 Btu/h and ≤2,500,000 Btu/h

Small Gas Mechanical Draft Steam

Thermal Efficiency.

Steam Commercial Packaged Boilers

Gas-fired—all except natural draft

>2,500,000 Btu/h

Large Gas Mechanical Draft Steam

Thermal Efficiency.

Steam Commercial Packaged Boilers

Gas-fired—natural draft

≥300,000 Btu/h and ≤2,500,000 Btu/h

Small Gas Natural Draft Steam

Thermal Efficiency.

Steam Commercial Packaged Boilers

Gas-fired—natural draft

>2,500,000 Btu/h

Large Gas Natural Draft Steam

Thermal Efficiency.

Steam Commercial Packaged Boilers

Oil-fired

≥300,000 Btu/h and ≤2,500,000 Btu/h

Small Oil Steam

Thermal Efficiency.

Steam Commercial Packaged Boilers

Oil-fired

>2,500,000 Btu/h

Large Oil Steam

Thermal Efficiency.

In the preliminary analysis, DOE divided commercial packaged boilers into 16 equipment classes, based on size, fuel, heating medium, and type of draft. DOE sought public comment on its tentative decision to classify commercial packaged boilers into 16 equipment classes.

In response to the request, ACEEE, ASAP, and NRDC recommended that DOE adopt a single equipment class for natural draft and mechanical draft commercial packaged boilers, citing that natural draft commercial packaged boilers are inherently less efficient and that this will ensure maximum energy efficiency improvement. The commenters also stated that they are unaware of any distinct utility that is offered by natural draft commercial packaged boilers that is different from mechanical draft commercial packaged boilers. (ACEEE, ASAP, and NRDC, No. 36 at p. 2) PG&E and SCE noted that natural draft commercial packaged boilers have much lower part-load efficiency and are rapidly becoming obsolete due to changes in consumer buying behavior. The commenters argued against the separation of the equipment classes, specifically hot water commercial packaged boilers and stated that both mechanical draft and natural draft systems have the same utility and, therefore, should be considered in the same equipment class. (PG&E and SCE, No. 38 at p. 3) Raypak recommended DOE to revert back to the 10 equipment classes that are set forth in the current energy conservation standards at 10 CFR 431.87. (Raypak, No. 35 at p. 2) Raypak noted that non-condensing boilers are still a significant part of the market and offer several advantages such as simple operation and maintenance, higher design water temperature, lower costs, and higher lifetimes, and encouraged DOE to maintain the natural draft boiler equipment classes. Raypak further encouraged DOE not to amend energy conservation standards to a level that would not support natural draft commercial packaged boilers. (Raypak, No. 35 at pp. 6-7) Lochinvar encouraged DOE to maintain the 10 equipment classes that are set forth in the current energy conservation standards at 10 CFR 431.87 and stated that the division of the classes will lead to different minimum ratings for natural draft and mechanical draft boilers and competitive inequality. Lochinvar also cited commercial water heaters as an example, stating that commercial water heaters are available with mechanical and natural draft systems, but the energy conservation standards are applicable to all types of equipment irrespective of the draft type (Lochinvar, No. 34 at p. 1) AHRI argued that natural draft commercial packaged boilers are covered equipment subject to DOE's efficiency standards, but this does not extend to creating separate equipment classes for such products in the efficiency standards. AHRI further stated that the current 10 equipment classes set forth in 10 CFR 431.87 are appropriate. (AHRI, No. 37 at p. 2) AHRI also commented during the preliminary analysis public meeting that the 16 equipment classes used in the preliminary analysis were a good starting point, but that the classes can be squeezed together. (AHRI, Public Meeting Transcript, No. 39 at p. 26) ASAP questioned DOE's rationale for adopting separate equipment classes for mechanical and natural draft commercial packaged boilers. (ASAP, Public Meeting Transcript, No. 39 at p. 39)

DOE agrees with comments stating that both natural draft and mechanical draft commercial packaged boilers provide the same utility. Based on DOE's understanding, there appears to be no distinct performance related utility that is provided by natural draft commercial packaged boilers that justifies a separate equipment class for such equipment. Consequently, there appears to be no justification to maintain separate equipment classes for natural draft commercial packaged boilers. Therefore, in this document, DOE proposes to consolidate CPB equipment classes that are currently divided by draft type.

Specifically, DOE proposes to combine the small (≥300,000 Btu/h and ≤2,500,000 Btu/h), gas fired—all except natural draft, steam and small (≥300,000 Btu/h and ≤2,500,000 Btu/h), gas fired—natural draft, steam classes; and the large (>2,500,000 Btu/h and ≤10,000,000 Btu/h), gas fired—all except natural draft, steam and large (≥2,500,000 Btu/h and ≤10,000,000 Btu/h), gas fired—natural draft, steam classes.

Because DOE has not proposed amended standards for commercial packaged boilers with input ratings above 10,000,000 Btu/h, the standards for equipment in this class will remain unchanged. Thus, although DOE is consolidating this equipment into a single class, an allowance will still be made for natural draft units to have a lower minimum efficiency until March 2, 2022, as is allowed under the current standards.

In addition, based on the concerns expressed by interested parties regarding the complexities of regulating very large commercial packaged boilers discussed earlier in this section, DOE has tentatively decided to propose

separate equipment classes for commercial packaged boilers with fuel input rates above 10,000 kBtu/h. In order to determine the fuel input rate at which to separate the proposed large CPB equipment classes (

i.e.,

equipment classes with a fuel input rate >2,500 kBtu/h) and the proposed new equipment class for “very large” commercial packaged boilers, DOE performed a calculation to estimate the energy savings potential for very large CPB equipment classes at various minimum fuel input rate thresholds. DOE estimated the potential for energy savings for commercial packaged boilers with fuel input rates above 10,000 kBtu/h to be between 0.014 and 0.025 quads based on the range of TSLs considered in the NOPR, by assigning the same efficiency level to the very large equipment classes as was considered for the corresponding large equipment classes. Further, DOE examined the price data collected for the engineering analysis and noticed a smooth linear trend in prices as they vary with fuel input rate, from 300 kBtu/h up to approximately 9,500 kBtu/h. The smooth trend created by the data appears to indicate that commercial packaged boilers below 10,000 kBtu/h do not have a separate price structure; this linear price trend is discussed further in the engineering analysis, section IV.C of this document. Despite extensive efforts, DOE was unable to obtain pricing data for commercial packaged boilers with fuel input rate above 10,000 kBtu/h. Based on these assessments, including the lack of available data, DOE is proposing to classify commercial packaged boiler with fuel input rate above 10,000 kBtu/h as very large equipment classes. As commercial packaged boilers with fuel input rate above 10,000 kBtu/h are currently covered equipment, the existing standards at 10 CFR 431.87 are still applicable. DOE proposes to maintain the existing standards for commercial packaged boilers with fuel input rate above 10,000 kBtu/h (referred to as very large commercial package boilers in this notice) because there is not sufficient data to provide clear and convincing evidence that more stringent standards would be technologically feasible and economically justified, and would result in significant additional energy savings.

DOE requests data on manufacturer selling prices, shipments and conversion costs of very large commercial packaged boilers with fuel input rate above 10,000 kBtu/h that can be used to supplement the analyses of such equipment in this rulemaking.

See section VII.E for a list of issues on which DOE seeks comment.

DOE also believes that creating separate equipment classes for very large commercial packaged boilers would reduce the overall compliance burden of manufacturers.

In summary, DOE proposes the following changes to the equipment classes: (1) Separating the equipment classes for commercial packaged boilers that have a fuel input rate above 10,000 kBtu/h, and (2) consolidating the equipment classes for small and large gas-fired steam boilers that are currently divided based on draft type into equipment classes that are not draft specific. Thus, in total, DOE proposes 12 equipment classes

for this NOPR. These classes are categorized based on three performance parameters: (1) Size; (2) heating medium; and (3) fuel type. Table IV.2 shows all of the proposed CPB equipment classes, including the eight equipment classes for which DOE proposes amended standards and four equipment classes for which DOE did not propose to amend standards. In subsequent sections of this document, DOE uses the designated name of equipment classes given in the first column of Table IV.2 to explain various aspects of the rulemaking analyses.

Consolidating the 4 draft-specific classes into 2 non-draft-specific classes reduces the number of equipment classes from 10 to 8, and creating separate equipment classes for very large CPB equipment adds 4 equipment classes. These changes result in a total of 12 equipment classes.

Table IV.2—Proposed Equipment Classes for Commercial Packaged Boilers

Equipment class

Size

Fuel

Heating medium

Acronym

Propose amended standards

Small Gas-fired Hot Water

≥300kBtu/h to ≤2,500kBtu/h

Gas

Hot Water

SGHW

Yes.

Small Gas-fired Steam

≥300kBtu/h to ≤2,500kBtu/h

Gas

Steam

SGST

Yes.

Small Oil-fired Hot Water

≥300kBtu/h to ≤2,500kBtu/h

Oil

Hot Water

SOHW

Yes.

Small Oil-fired Steam

≥300kBtu/h to ≤2,500kBtu/h

Oil

Steam

SOST

Yes.

Large Gas-fired Hot Water

>2,500kBtu/h to ≤10,000kBtu/h

Gas

Hot Water

LGHW

Yes.

Large Gas-fired Steam

>2,500kBtu/h to ≤10,000kBtu/h

Gas

Steam

LGST

Yes.

Large Oil-fired Hot Water

>2,500kBtu/h to ≤10,000kBtu/h

Oil

Hot Water

LOHW

Yes.

Large Oil-fired Steam

>2,500kBtu/h to ≤10,000kBtu/h

Oil

Steam

LOST

Yes.

Very Large Gas-fired Hot Water

>10,000kBtu/h

Gas

Hot Water

VLGHW

No.

Very Large Gas-fired Steam

>10,000kBtu/h

Gas

Steam

VLGST

No.

Very Large Oil-fired Hot Water

>10,000kBtu/h

Oil

Hot Water

VLOHW

No.

Very Large Oil-fired Steam

>10,000kBtu/h

Oil

Steam

VLOST

* The existing small, gas-fired, steam, natural draft equipment classes and small, gas-fired steam, all except natural draft equipment classes are proposed to be consolidated into a single small gas-fired, steam equipment class. Similarly, the existing large, gas-fired, steam, natural draft equipment classes and large, gas-fired steam, all except natural draft equipment classes are proposed to be consolidated into a single large, gas-fired, steam equipment class.

** DOE proposes to establish separate equipment classes for CPB with fuel input rate above 10,000kBtu/h.

In addition to the two issues discussed previously in this section, DOE received several comments in response to the preliminary analysis related to standby mode and off mode energy consumption. In chapter 2 of the preliminary analysis TSD, DOE reported that standby mode and off mode energy consumption is a negligible proportion of the total energy consumption of the commercial packaged boiler (about 0.02 percent of total energy used). Consequently, DOE decided in the preliminary analysis not to analyze standards for commercial packaged boilers to regulate their standby mode and off mode energy consumption. AHRI, Raypak, and Lochinvar supported DOE's preliminary findings on the standby mode and off mode energy consumption and discouraged DOE from pursuing the development of standards for these modes of operation. (AHRI, No. 37 at p. 2; Raypak, No. 35 at p. 2; Lochinvar, No. 34 at p. 2) Lochinvar stated that the data on standby mode and off mode is very

limited because its measurement is not required and based on measurements conducted on their commercial hot water boilers, the standby mode power consumption was found to be 0.007 percent of the total power consumed by the boiler. (Lochinvar, No. 34 at p. 2) ABMA urged DOE not to consider standby and off cycles or the energy consumed in different operational modes, stating that there are multiple variables related to system design, set-up, and operation for a one-size fits all rule. (ABMA, No. 33 at p. 2) No interested parties commented in support of standby mode and off mode standards, and DOE did not receive any new standby loss or off mode energy consumption data that would cause DOE to reverse its previous tentative conclusion. Therefore, DOE has not conducted any further analysis of potential standby mode and off mode energy conservation standards for commercial packaged boilers.

3. Technology Options

As part of the rulemaking analysis, DOE identifies technology options that are currently used in commercial packaged boilers at different efficiency levels available on the market. This helps DOE to assess the technology changes that would be required to increase the efficiency of a commercial packaged boiler from baseline to other higher efficiency levels. Initially, these technologies encompass all those DOE believes are technologically feasible.

As a starting point, DOE typically uses information relating to existing and past technology options as inputs to determine what technologies manufacturers use to attain higher performance levels. DOE also researches emerging technologies that have been demonstrated in prototype designs. DOE developed its list of technologically feasible design options for the considered equipment through consultation with manufacturers, including manufacturers of components and systems, and from trade publications and technical papers.

In the preliminary analysis, DOE presented a list of technologies for improving the efficiency of commercial packaged boilers. Based on comments received in response to the preliminary analysis (discussed in detail in section IV.B of this document), DOE retained all the technology options that were identified in the preliminary analysis. However, for “pulse combustion burners,” DOE is now considering the technology as a path to achieve condensing operation and categorizing it as a condensing boiler design. Additionally, in research for the NOPR, DOE identified a new technology option: oxygen trim system. The technology options that DOE identified for this NOPR analysis are listed in Table IV.3:

Table IV.3—Technology Options That Improve Combustion Efficiency or Thermal Efficiency That are Considered in the Market and Technology Assessment

Jacket Insulation.

Heat Exchanger Improvements (Including Condensing Heat Exchanger).

Burner Derating.

Improved Burner Technology.

Combustion Air Preheaters.

Economizers.

Blowdown Waste Heat Recovery.

Oxygen Trim Systems.

Integrated, High-Efficiency Steam Boilers.

B. Screening Analysis

After DOE identified the technologies that might improve the energy efficiency of commercial packaged boilers, DOE conducted a screening analysis. The goal of the screening analysis is to identify technology options that will be considered further, and those that will be eliminated from further consideration, in the rulemaking analyses. DOE applied the following set of screening criteria to each of the technologies identified in the technology assessment to determine which technology options are unsuitable for further consideration in the rulemaking:

•

Technological feasibility:

DOE will consider technologies incorporated in commercial products or in working prototypes to be technologically feasible.

•

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.

•

Adverse impacts on product utility or equipment 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.

•

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))

Additionally, DOE notes that these 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).

In the preliminary analysis TSD, DOE applied the screening criteria to the technology options that were considered in the market and technology assessment and sought comments and feedback on the technology options that passed the screening analysis.

DOE received several general comments on the options that passed the screening analysis in the preliminary analysis TSD chapter. Lochinvar agreed with technology options that passed the screening test, noting that the options identified are technologically feasible. (Lochinvar, No. 34 at p. 2) AHRI and Raypak agreed with the technology options that successfully passed the screening analysis, with the exception of pulse combustion (as discussed in further detail later in this section). (AHRI, No. 37 at p. 3; Raypak No. 35 at p. 2)

ACEEE commented that the deficiencies in the current test procedure have led to the exclusion of modulating gas burners as an efficiency improving technology. (ACEEE, Public Meeting Transcript, No. 39 at p. 29)

Regarding modulating boilers, DOE notes that in the equipment database it found several CPB models at baseline and near baseline efficiency levels that utilize a modulating burner. As noted by ACEEE, the test procedure currently does not provide an efficiency advantage for modulating burners. DOE notes that the February 2016 test procedure NOPR also does not provide an efficiency benefit for the inclusion of a modulating burner for reasons explained further in that notice. As a result, DOE did not consider modulating burners as a technology option for improving the efficiency of commercial packaged boilers for this NOPR.

The technology options that were identified in the market and technology assessment are presented immediately below, along with whether or not the technology was ultimately considered further in the analysis.

Jacket Insulation

Optimizing jacket insulation thickness reduces the heat loss from commercial packaged boiler to the

outside air. However, most manufacturers already use this technology option and the potential benefits of using this option are a minimal increase in thermal efficiency. Consequently, DOE did not consider this technology option further.

Heat Exchanger Improvements (Including Condensing Heat Exchanger)

DOE considered several heat exchanger improvement options that can increase thermal and combustion efficiencies of commercial packaged boilers. These options include incorporation of baffles and turbulators; improved fin designs such as micro-fins and louvered fins; improved tube designs such as corrugated tubes and internally rifled tubes; and addition of a condensing heat exchanger. In response to these technology options, Lochinvar commented that options such as increased heat exchanger surface area, baffles and creative pin/fin arrangements are all viable options for natural draft boilers and have been implemented by manufacturers for decades. Lochinvar also stated that DOE needs to consider that design changes are complex and often involve significant redesign to achieve efficiency targets without sacrificing safety and reliability. (Lochinvar, No. 34 at p. 2) Raypak commented that consideration of any additional restrictions of the heat exchanger must be balanced with the need to ensure safe operation and venting. (Raypak No. 35 at p. 2) AHRI commented that DOE must avoid considering heat exchanger designs that are so restrictive that they adversely affect safe operation and venting of the boiler. (AHRI, No. 37 at p. 3)

DOE reviewed the comments and examined whether the extent of heat exchanger improvements considered are restrictive such that any of these options would potentially adversely impact safe operation and venting of the commercial packaged boiler. In considering improved heat exchanger designs, DOE focused on technology options that are currently being used by commercial packaged boilers available on the market, as a vast array of heat exchanger designs and efficiencies was observed. DOE examined product literature and operation manuals and is not aware of potential safety concerns for commercial packaged boilers with heat exchanger designs that achieve the efficiency levels analyzed in this NOPR. Where upgraded venting is required for potential condensate formation in the vent piping, DOE considered such cost in its analysis of installation costs (see section IV.F.2 of this document). Consequently, the technology option of heat exchanger improvements passed the screening analysis and is considered as a design option to improve CPB thermal or combustion efficiency.

Burner Derating

Burner derating increases the ratio of the heat transfer area to fuel input by reducing the burner input rating while maintaining the same heat exchanger, which can increase the thermal efficiency of commercial packaged boilers. In the preliminary analysis public meeting, AHRI commented that burner derating has already been used by the industry to achieve the current efficiency standards, so there is not much more potential for this option to further improve efficiency. (AHRI, Public Meeting Transcript, No. 39 at pp. 25-26)

As in the preliminary analysis, DOE proposes to screen out burner derating as it reduces the usable heat output, and would reduce utility. Therefore, DOE did not consider this technology option further in the analysis.

Improved Burner Technology

Burner technologies that were considered under this technology option include pulse combustion, premix burners and low pressure, air atomized oil burners. In the preliminary analysis TSD, all three burner technology options passed the screening analysis and were considered as options to improve thermal and combustion efficiency. In response to the inclusion of the three burner technologies, AHRI and Raypak commented that they do not consider pulse combustion as a technology option. Raypak stated that it views pulse combustion more as a fundamental aspect of the boiler design comparable to whether the boiler is water tube or fire tube. (Raypak No. 35 at p. 2) AHRI also stated pulse combustion is one way to create a boiler that condenses. (AHRI, No. 37 at p. 3)

After considering the comments discussed above, DOE has re-classified pulse combustion as a type of condensing boiler technology, rather than a design option that would be applied to a less efficient boiler to make it more efficient. In the screening analysis of the NOPR TSD, DOE included pulse combustion under heat exchanger improvement technology options and premix burners and low pressure air atomized oil burners under improved burner technology options. All three technology options passed the screening analysis.

Combustion Air Preheaters

Combustion air pre heaters use a gas to gas heat exchanger to transfer heat from the flue gases to the incoming combustion air. Although this option can increase the operating efficiency of a commercial packaged boiler in the field, this efficiency is not measured by the current test procedure, because the current test procedure requires inlet air to be within ± 5°F of the room ambient temperature. Therefore, DOE did not consider this technology option further in its analysis.

Economizers

Economizers are gas to water heat exchangers that are used to transfer residual heat in the flue gases to the inlet water to the commercial packaged boiler. Unlike a condensing commercial packaged boiler that operates on the same principle, economizers are used as an add-on to the existing commercial packaged boilers and improve efficiency by pre heating the incoming water before it enters the primary heat exchanger. Although this technology option has the potential to improve efficiency by reducing the fuel input required to heat the water, the improvement in efficiency is not measured by the current test procedure, because the current test procedure requires the inlet water to have a set temperature before it enters the primary heat exchanger of the commercial packaged boiler. Therefore, DOE did not consider economizers as a technology option for improving commercial packaged boiler efficiency ratings.

Blowdown Waste Heat Recovery

Some large commercial steam boilers require a blowdown operation to remove dissolved solids and salts that are left behind after the boiling process. These solids are usually dissolved in water that is hot and can be utilized to pre heat incoming water before it enters the primary heat exchanger of the commercial packaged boiler. Although this option can improve operating efficiency, measurement of the improvement in efficiency can only occur is there is sufficient deposit left behind in the boiler after continuous boiler operation. The current DOE test procedure is a laboratory based test that uses a commercial packaged boiler that is not previously installed or commissioned. During the test, the commercial packaged boiler will not be able to extract the waste heat from a blowdown operation. Therefore, DOE did not consider blowdown waste heat recovery further in the analysis.

Oxygen Trim Systems

DOE added this technology option in the market and technology assessment chapter at the NOPR stage of the rulemaking. An oxygen “trim” system is a control strategy that can be used to minimize excess combustion air and optimize the air-to-fuel ratio. These systems can increase efficiencies by 1 to 2 percentage points. This option passed the screening analysis.

For this NOPR the following technology options were found to have an impact on the rated efficiency metric and passed the screening analysis to be considered further in the downstream analyses: (1) Heat exchanger improvements (including condensing heat exchanger), (2) improvement in burner technology, and (3) oxygen trim systems.

C. Engineering Analysis

The engineering analysis establishes the relationship between manufacturer selling prices (MSP) and energy-efficiency of commercial packaged boilers. This price-efficiency relationship serves as a basis for subsequent cost-benefit calculations for individual consumers, manufacturers, and the nation.

To determine this price-efficiency relationship, DOE uses data from the market and technology assessment, publicly available equipment literature and research reports, and information from manufacturers, distributors, and contractors. For this rulemaking, DOE first used information from the market and technology assessment to identify efficiency levels and representative equipment for analysis. In the market assessment DOE compiled a set of data containing the rated performance information and various characteristics of all CPB equipment available on the market. In the engineering analysis DOE refers to this as the “equipment database”. The equipment database contains all commercial packaged boilers that are listed in AHRI's Directory of Certified Product Performance

and commercial packaged boilers that are manufactured by members of ABMA. In the engineering analysis, DOE collected CPB prices primarily from manufacturers, mechanical contractors, and equipment distributors. DOE tabulated all of the price data in a separate database, which is referred to as the “prices database.”

AHRI's Directory of Certified Product Performance can be found at:

https://www.ahridirectory.org/ahridirectory/pages/home.aspx.

1. Methodology

DOE has identified three basic methods for developing price-efficiency curves: (1) The design-option approach, which provides the incremental manufacturing costs of adding design options to a baseline model that will improve its efficiency; (2) the efficiency-level approach, which provides the incremental price of moving to higher efficiency levels without regard to any particular design option; (3) the reverse-engineering (or cost-assessment) approach, which provides “bottom-up” manufacturing cost assessments for achieving various levels of increased efficiency based on teardown analyses (or physical teardowns) providing detailed data on costs for parts and material, labor, shipping/packaging, and investment for models that operate at particular efficiency levels.

The term `cost' refers to the manufacturing cost, while the term `price' refers to the manufacturer selling price. In some of the engineering analysis approaches DOE calculates the manufacturing cost which is multiplied with the appropriate markups to get the manufacturer selling price.

For this rulemaking, DOE has decided to use the efficiency-level approach to conduct the engineering analysis. This methodology generally involves calculating prices of commercial packaged boilers for a given fuel input rate (representative fuel input rate) for each manufacturer at different efficiency levels spanning from the minimum allowable standard (

i.e.,

baseline level) to the maximum technologically feasible efficiency level. The primary output of the analysis is a set of price-efficiency relationships that represent the average change in manufacturer selling price for higher efficiency equipment (

i.e.,

“incremental price”). In the subsequent markups analysis (chapter 6 in the NOPR TSD), DOE determines customer prices by applying additional distribution chain markups and sales tax to the manufacturer selling prices developed in the engineering analysis. After applying these markups, the data serve as inputs to the life-cycle cost and payback period analyses (chapter 8 in the NOPR TSD).

In the preliminary analysis, as noted previously, DOE classified commercial packaged boilers into sixteen equipment classes and analyzed each class separately. DOE received CPB price information for several mechanical draft equipment classes that was sufficient to develop a price-efficiency trend. However, DOE was unable to collect sufficient pricing data to develop a price-efficiency trend for the condensing efficiency levels, and the large mechanical draft steam and all natural draft equipment classes, and instead relied on alternate methodologies.

In the preliminary analysis for the classes that had sufficient price data, DOE calculated the incremental increase in price at each efficiency level analyzed for each manufacturer at the representative fuel input rate, and then took an average of these price at each efficiency level to get the final price efficiency curve for all equipment classes. For the other equipment classes that did not have adequate pricing information, DOE used alternate methods of calculating incremental prices. These methods include extrapolation of price efficiency curves or actual pricing data to other equipment classes. DOE requested comments and feedback from interested parties on various aspects of the engineering analysis performed for the preliminary analysis, and specifically on the methodology and results. In response, DOE received several comments, which are discussed further in the following applicable sections.

For the NOPR, as discussed in section IV.C.2 of this document, DOE was able to obtain more pricing information than it had for the preliminary analysis. As a result, DOE updated its approach for several equipment classes to include a direct analysis of that class using only pricing data obtained for that class. DOE also improved its methodology to account for the difference in equipment price as a function of capacity.

In the NOPR analysis, for each price obtained, DOE first calculated the ratio of the price of the commercial packaged boiler with respect to its fuel input rate to obtain all prices on a per unit fuel input rate basis (dollars per kBtu/h). DOE then used its equipment database to determine and apply appropriate weights to individual prices (on a per fuel input rate basis) based on the distribution of input capacities on the market. The weight given to each CPB price per fuel input rate represents the number of commercial packaged boilers of that fuel input rate available in the market. Thus, price per fuel input rate of models that are similar in capacity to higher numbers of models on the market were weighted more heavily than price per fuel input rate of models at a fuel input rate for which relatively few models are available. DOE applied these weights to calculate the weighted average price per fuel input rate and the weighted average fuel input rate for each efficiency level analyzed.

Next, DOE scaled the weighted average price (on a per fuel input rate basis) at each efficiency level from the weighted average fuel input rate (at

which the price was calculated in the previous step) to the representative fuel input rate for a given equipment class. To do this, DOE plotted the price per input as a function of fuel input rate and applied a non-linear regression model that best represented the trend. In these plots, it is apparent that for lower input capacities the price on a per input basis is higher, and as the fuel input rate increases, the price per input decreases. In addition, the rate of change of the price on a per-unit input basis with respect to fuel input rate also decreases considerably as the fuel input rate increases. The result is a scatter plot that appears to resemble a decreasing exponential curve. DOE applied the regression equation to determine the weighted average price per input at the representative fuel input rate.

DOE performed a regression analysis on the weighted average price per input results at the representative fuel input rate and the efficiency levels to deduce the equation that best represents the price-efficiency relationship. Using the regression equation, DOE calculated the predicted weighted average price per input at the representative fuel input rate for all efficiency levels that were analyzed in each equipment class. DOE then multiplied the predicted weighted average price per input at the representative fuel input rate by the representative fuel input rate to get the manufacturer selling price at each efficiency level. As a final step, DOE calculated the incremental prices by subtracting the baseline price from the manufacturer selling price of each efficiency level above the baseline. Further details on the methodology and results are provided in the chapter 5 of the NOPR TSD.

DOE requests feedback on the methodology used to analyze all equipment classes and the results obtained. In particular DOE is interested in comments on whether the results are appropriate and representative of the current market prices for such type of equipment.

See section VII.E for a list of issues on which DOE seeks comment.

a. Overall Methodology and Extrapolation of Prices

DOE received several comments from interested parties in response to DOE's preliminary analyses on the overall methodology that was used to develop the price-efficiency relationships.

ACEEE, ASAP, and NRDC noted that in other rulemakings, DOE typically constructs cost estimates by conducting teardowns and generating a Bill of Materials (BOMs); however, for the current rulemaking, DOE has not conducted any teardowns for commercial packaged boilers. The commenters stated that in contractor-installed systems such as commercial packaged boilers, prices are highly variable and may be based on factors other than efficiency (

e.g.

labor costs). (ACEEE, ASAP, and NRDC, No. 36 at p. 2) ASAP asked if DOE looked at the incremental costs, as opposed to incremental prices and that in looking at the incremental prices, the actual costs to improve efficiency are overestimated. (ASAP, Public Meeting Transcript No. 39 at p. 60)

As discussed previously, DOE has decided to use the efficiency-level approach to conduct the engineering analysis. In this approach DOE collects prices at various efficiency levels and estimates the incremental price for higher efficiency models as an average or weighted average of the commercial packaged boilers available on the market. Although DOE commonly uses a reverse-engineering approach, DOE decided not to use this approach for commercial packaged boilers due to practical concerns involved in tearing down commercial packaged boilers, especially those belonging to large equipment classes. Commercial packaged boilers exhibit a large variety of designs depending on a number of factors including, size, efficiency, fuel used, heating medium, draft type, heat exchanger design/material, and whether it is fire-tube or water-tube. In the analysis for this rulemaking, DOE collected pricing information for 584 commercial packaged boilers, which covered a range of different types of CPB equipment. Tearing down enough units to perform a reverse-engineering analysis would be extremely time intensive given the large number of CPB designs at each efficiency level and within each equipment class, and the physical size of some commercial packaged boilers. In addition, there are several practical issues involved with tearing down large commercial packaged boilers, given the size and weight of this equipment, which can require upgraded infrastructure for handling the equipment. In view of these issues, DOE felt that a pricing survey to collect information on actual CPB prices at various efficiency levels for each equipment class is a more practical methodology for conducting the engineering analysis for commercial packaged boilers.

ACEEE, ASAP, and NRDC also encouraged DOE to ensure that the estimates of incremental prices only include the incremental price associated with the technology options required to meet a given efficiency level, and not the cost of auxiliary options that are often associated with premium products but are not associated with efficiency. (ACEEE, ASAP, and NRDC, No. 36 at pp. 3-4)

DOE shares the commenters' concerns regarding the incremental price options being influence by auxiliary options that are not associated with energy efficiency. To the extent possible, DOE normalized optional features when gathering pricing by specifying the same options for all CPB prices collected. For example, DOE noticed that in several CPB series, prices of burner systems are listed separately and the price of the burner system that is selected is added to the basic model trade price for the total price for the commercial packaged boiler. For such cases, DOE chose the same type of burner for all CPB models where a choice is offered. While selecting the prices DOE also encountered scenarios where (1) a feature that DOE has consistently selected for all CPB models is not offered for a particular series; and (2) a particular feature becomes inapplicable for commercial packaged boilers of higher capacity within the same CPB series. In such cases DOE selected a similar feature that would offer similar functionality. DOE believes this approach helped to minimize the effects of optional auxiliary components.

At the preliminary analysis public meeting ACEEE argued that the level field for comparing purchase options would be output capacity, and as a result it is time to migrate to output capacities, rather than input capacities, that are comparable across classes. (ACEEE, Public Meeting Transcript No. 39 at p. 44) DOE notes that in EPCA, commercial packaged boilers are defined as having “capacity (rated maximum input)” greater than or equal to 300 kBtu/h, and CPB equipment classes are currently divided based on fuel input rate. DOE notes that in adopting the existing equipment class divisions based on fuel input rate, DOE followed the approach in ASHRAE Standard 90.1 for dividing equipment based on fuel input rate. Moreover, while DOE agrees many purchasers would consider output capacity when purchasing a replacement commercial packaged boiler, DOE believes there is also a contingent of CPB purchasers that may only look at the fuel input rate for comparison purposes when choosing a new commercial packaged boiler, as both ratings are featured prominently in product literature. Therefore, DOE believes it appropriate to continue to use rated fuel input rate as the performance parameter for carrying out the analyses.

b. Large CPB Analysis and Representative Fuel Input Rate

Another topic on which DOE received comments and feedback is related to large CPB pricing and its representative fuel input rate for analysis. AHRI commented that most of the analysis appears to be based on information for models with input rates of 5,000,000 Btu/h or less, and commercial packaged boilers that have input rates in the high millions of Btu per hour are very different products. AHRI stated that many factors that have been considered in the engineering analysis and the associated conclusions cannot be simply extrapolated up to characterize the particular factor as it applies to those very large commercial packaged boiler. (AHRI, No. 37 at p. 1) AHRI also commented that DOE should not assume a linear relationship between boiler size and component costs and encouraged DOE to review the data it has collected so far on the relationship and extrapolation between input rate and price, or obtain additional data for the analysis. (AHRI, No. 37 at p. 3 and p. 5) Raypak stated that DOE should not assume a linear relationship between commercial packaged boiler size and component costs and that as a commercial packaged boiler gets larger in input the cost of gas burner and blower components rises exponentially. (Raypak, No. 35 at pp. 2-4) Raypak also provided comments during the preliminary analysis public meeting stating that made-to-order units will be priced higher due to the engineering work necessary to create a custom boiler. (Raypak, Public Meeting Transcript, No. 39 at p. 49)

ABMA provided written comments on the methodology used for analyzing large commercial packaged boilers. In particular, ABMA expressed concern over the large commercial packaged boilers representative fuel input rate being 3,000 kBtu/h. ABMA argued that the representative fuel input rate of 3,000 kBtu/h is one of the smallest size boilers manufactured by ABMA member manufacturers and that it does not accurately represent the large boiler market. (ABMA, No. 33 at p. 2) ABMA advocated capping the scope of the analysis to 2.5 million Btu/h. (ABMA, No. 33 at p. 2; ABMA, Public Meeting Transcript, No. 39 at p. 65)

PGE & SCE commented that the comparison of small and large sized custom made boilers is not linear and DOE should look at methods for estimating very large equipment other than simply extrapolation. Further, PGE and SCE stated their concern that the methods used to estimate energy use, equipment classes and prices for medium sized commercial boilers are not appropriate for extrapolation to large commercial custom engineered boilers. (PGE & SCE, No. 38 at p. 3)

As discussed in section IV.A.2, DOE has proposed to establish separate equipment classes for very large commercial packaged boilers with input capacities of greater than10,000 kBtu/h, and DOE is not considering amended standards for the proposed very large equipment classes in this rulemaking. Instead, DOE's current energy conservation standards that are set forth at 10 CFR 431.87 for commercial packaged boilers with a fuel input rate greater than 2,500 kBtu/h would continue to apply to all commercial packaged boilers that have a fuel input rate above 10,000 kBtu/h. DOE believes this addresses many concerns that the analysis does not apply to very large commercial packaged boilers. As discussed previously, DOE noticed a smooth increase in prices (devoid of any inflection) from the low fuel input rate commercial packaged boilers (

i.e.,

near 300 kBtu/h) to the maximum fuel input rate commercial packaged boiler for which prices are available (~9,500 kBtu/h). DOE did not observe any sudden change in the price structure within this range of fuel input rate and, based on this observation, believes its analysis would be applicable for input capacities ranging from 300 kBtu/h to 10,000 kBtu/h.

DOE chose the representative fuel input rate in the preliminary analysis as 3,000 kBtu/h by considering CPB models offered in the market and information received during manufacturer interviews. Several commenters suggested that a fuel input rate of 3,000 kBtu/h would not be appropriate for representing very large commercial packaged boilers. However, as discussed above, for this NOPR DOE proposes to consider commercial packaged boilers with fuel input rate above 10,000 kBtu/h separately from the commercial packaged boilers in the large (

i.e.,

> 2,500 and ≤ 10,000 kBtu/h) equipment class (which would be represented by the 3,000 kBtu/h fuel input rate). Further, the analysis of prices included data points for prices of commercial packaged boilers with input capacities up to 9,500 kBtu/h, and DOE did not observe any step change in the price-efficiency trend up to that point. DOE did not receive any new data that would justify choosing a different representative fuel input rate for large equipment classes, and therefore has maintained the 3,000 kBtu/h representative fuel input rate for this NOPR analysis.

In the preliminary analysis, DOE used the price of two small commercial packaged boilers at 1,500 kBtu/h as a proxy for the price of one large 3,000 kBtu/h commercial packaged boiler, because DOE did not have sufficient price data in certain large CPB equipment classes to accurately establish the relationship between boiler size and price. In response to the preliminary analysis, DOE received comments from ACEEE, ASAP, and NRDC, questioning the accuracy of this approach. ACEEE, ASAP, and NRDC encouraged DOE to collect additional data to validate its assumption that the price of two 1,500 kBtu/h boilers is an accurate proxy for the price of a 3,000 kBtu/h boiler. The commenters elaborated that a large boiler will have only one burner, one heat exchanger, one shell, and one set of controls, possibly reducing prices for large boilers in comparison to two smaller boilers; however, there are far fewer 3,000 kBtu/h boilers sold than 1,500 kBtu/h boilers, so the allocation of design, testing, certification and other common costs will be much higher. (ACEEE, ASAP, and NRDC, No. 36 at pp. 2-3) The commenters also argued that DOE's methodology related to slope and inflection points of the efficiency curves for small gas-fired mechanical draft hot water boilers raises questions about the overall accuracy of the analysis. (ACEEE, ASAP, and NRDC, No. 36 at p. 3)

For the NOPR analysis, as discussed in section IV.C.2, DOE was able to collect an additional 258 CPB prices. Despite the additional data, there were still certain efficiency levels for large CPB equipment classes where DOE lacked enough data to perform a robust analysis. Generally these were levels where there are few models available on the market to begin with. In these cases, DOE again leveraged the pricing collected for the small CPB equipment classes to estimate the price of a large commercial packaged boiler. However, in the NOPR analysis, to address the concerns expressed by stakeholders, DOE used a modified approach to calculate the price of a large commercial packaged boiler based on two or more smaller sized boilers. In this approach, DOE first combined the price data of each small and large equipment classes that have the same characteristics (

e.g.,

small oil fired hot water and large oil fired hot water classes). DOE then performed a regression analysis of the entire dataset to find an equation that represents the relationship between equipment price and fuel input rate for the given type of equipment. DOE then

used the equation to estimate the price of a commercial packaged boiler when its size is scaled up to 3,000 kBtu/h. DOE used this modified approach for three equipment classes: (1) Large, oil-fired, hot water; (2) large, oil-fired, steam and (3) large, gas-fired, steam. The detailed methodology for the engineering analysis including the plots that show the variation of CPB price with fuel input rate are included in chapter 5 of the NOPR TSD. The new methodology adopted by DOE addresses the concerns expressed by stakeholders in their comments as it considers pricing data across a range of input capacities to estimate the change in price as input increases.

2. Data Collection and Categorization

As part of the engineering analysis, DOE collected CPB prices from manufacturers, wholesalers, distributors and contractors. In the preliminary analysis, DOE collected pricing data, but as discussed previously was able to conduct a direct analysis of only six equipment classes: (1) Small, gas-fired, mechanical draft hot water; (2) large, gas-fired, mechanical draft hot water; (3) small, oil-fired, mechanical draft, hot water; (4) large, oil-fired, mechanical draft, hot water; (5) small, gas-fired, mechanical draft, steam; and (6) small, oil-fired, mechanical draft, steam. For the remaining classes, DOE did not have enough data to analyze the equipment directly, and consequently relied upon extrapolation of results from the equipment classes with adequate pricing information. In response to the preliminary analysis, DOE received several comments urging DOE to collect additional data for the NOPR stage.

ACEEE, ASAP, and NRDC commented that the limited amount of price data available for classes other than small, gas-fired, mechanical draft boilers forces DOE to rely on very uncertain extrapolations. The commenters encouraged DOE to collect additional price data to supplement its analysis, as they are concerned that the price-efficiency curves in the preliminary TSD were developed using a limited data set that may yield inaccurate results. Further the commenters also expressed concern that the analysis does not contain any information about the number of individuals surveyed, number of useful results, etc. (ACEEE, ASAP, and NRDC, No. 36 at p. 2) ACEEE, ASAP, and NRDC encouraged DOE to collect additional price data through interviews with and surveys of those who write specifications (consulting engineers and others) and those who bid on projects (mechanical contractors). The commenters also suggested DOE could obtain data on CPB purchases by the Federal government. Finally, ACEEE, ASAP, and NRDC stated that DOE should ensure that the data reflects the prices that consumers are actually paying as opposed to the “list” price that are widely discounted in actual bids (ACEEE, ASAP, and NRDC, No. 36 at p. 3) AHRI and Raypak encouraged DOE to contact additional contractors and others involved in selling and installing commercial packaged boilers to obtain more prices for natural draft models. (AHRI, No. 37 at p. 3; Raypak, No. 35 at p. 2) PGE and SCE recommended that DOE pursue other options for obtaining sales and price figures for commercial boilers that will generate more accurate results, and suggested the use of use market surveys or working with industry to gain insight into costs for larger boiler equipment. PGE and SCE also recommended that DOE explore California's Database of Energy Efficiency Resources for incremental costs of commercial boilers. (PGE & SCE, No. 38 at p. 3) ACEEE commented during the public meeting that the Building Services Research and Information Association (BSRIA) is a resource that has done cost comparisons, including condensing boilers, and various commercial sizes. ACEEE also suggested reviewing the comments from the transcripts of negotiated rulemaking of 2013 on certification, compliance, and enforcement (CCE) where many CPB manufacturers were represented. (ACEEE, Public Meeting Transcript No. 39 at p. 54)

DOE explored the suggestions provided by stakeholders, and found that the most reliable and complete price information was obtained directly from manufacturers, contractors, and distributors. DOE was able to collect a significant number of additional CPB prices in the NOPR stage, which were used to conduct a direct analysis of each equipment class. This eliminated the need to extrapolate price results between two different equipment classes, addressing the concerns of ACEEE, ASAP, and NRDC.

DOE agrees with ACEEE, ASAP, and NRDC that the list price is different from the actual manufacturer selling price and that this should be accounted for in the analysis. DOE accounted for this in both the preliminary analysis and in this NOPR analysis. A distributor or wholesaler is usually the first consumer in the distribution chain and typically receives a discount compared to the list price when purchasing equipment from the manufacturer. This discount varies by manufacturer and also depends on the business relationship between the manufacturer and the purchaser (

i.e.,

the discount may vary depending on the volume of units that a distributor or contractor purchases). While collecting price data, DOE also obtained information on typical discounts given from the list pricing, and applied the average discount to list prices to obtain the actual manufacturer selling price. All manufacturer selling prices used in the engineering analysis include the appropriate discount to the list prices.

In the NOPR analysis, DOE used prices collected in the preliminary analysis stage with additional CPB prices that were collected in the NOPR stage.

In total, DOE was able to obtain prices for a variety of commercial packaged boilers. These commercial packaged boilers included mechanical draft, natural (or atmospheric) draft, condensing boilers and non-condensing boilers. And their input capacities ranged from 300 kBtu/h to 9,500 kBtu/h. In aggregate, DOE used 584 CPB prices for its analysis. The 584 prices include 326 CPB prices that were used in the preliminary analysis stage and 258 that were collected in the NOPR stage of the rulemaking. The Table IV.4 shows the number of CPB prices that DOE used in the engineering analysis in each equipment class.

For the prices used from the preliminary analysis stage, DOE first confirmed the models were still active and then updated the price to account for inflation.

Table IV.4—Number of Prices Collected for Engineering Analysis

Equipment class

Number of prices used in analysis

SGHW

203

LGHW

SHOW

LOHW

SGST

LGST

SOST

LOST

Total

584

3. Baseline Efficiency

DOE selects baseline efficiency levels as reference points for each equipment class, against which DOE calculates potential changes in energy use, cost, and utility that could result from an amended energy conservation standard. A baseline unit is one that meets, but does not exceed, the required existing energy conservation standard, as applicable, and provides basic consumer utility. A CPB model that has a rated efficiency equal to its applicable

baseline efficiency is referred to as a “baseline model.” DOE uses the baseline model for comparison in several phases of the analyses, including the engineering analysis, life-cycle cost (LCC) analysis, payback period (PBP) analysis and national impacts analysis (NIA). For the engineering analysis, DOE used the current energy conservation standards that are set forth in CFR 431.87 as baseline efficiency levels.

As discussed previously in section IV.A.2 of this document, DOE has proposed to modify the equipment classes for commercial packaged boilers for this analysis. If the proposed equipment classes are ultimately adopted in the final rule, then the equipment classes that are set forth in the current regulations would be consolidated such that the current draft-specific classes (

i.e.,

those identified as being “natural draft” and “all except natural draft”) would be merged into non-draft-specific classes. For the remaining equipment classes, DOE retained the current standards in 10 CFR 431.87 as the baseline efficiency levels in the engineering analysis. For the four draft-specific classes, DOE used the natural draft equipment class efficiency standard as the baseline efficiency level. The baseline efficiency levels for each equipment class are presented in Table IV.5.

Table IV.5—Baseline Efficiencies Considered in the Engineering Analysis

Equipment class

Baseline efficiency*

(

)

Small Gas fired Hot Water

Large Gas fired Hot Water

Small Oil fired Hot Water

Large Oil fired Hot Water

Small Gas fired Steam

Large Gas fired Steam

Small Oil fired Steam

Large Oil fired Steam

*Efficiency levels represent thermal efficiency for all equipment classes except for Large Gas Hot Water and Large Oil Hot Water, for which the efficiency levels are in terms of combustion efficiency.

**Mechanical draft equipment within this class currently has a mi

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.