# Energy Conservation Program: Energy Conservation Standards for Portable Air Conditioners

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A2016-13549

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** June 13, 2016
- **Citation:** 81 FR 38398

## Text

DEPARTMENT OF ENERGY
10 CFR Parts 429 and 430
[Docket Number EERE-2013-BT-STD-0033]
RIN 1904-AD02
Energy Conservation Program: Energy Conservation Standards for Portable Air Conditioners

AGENCY:

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

ACTION:

Notice of proposed rulemaking (NOPR) and announcement of public meeting.

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, sets forth various provisions designed to improve energy efficiency for consumer products and certain commercial and industrial equipment. In addition to specifying a list of covered residential products and commercial equipment, EPCA contains provisions that enable the Secretary of Energy to classify additional types of consumer products as covered products. The U.S. Department of Energy (DOE) has previously published a proposed determination of coverage to classify portable air conditioners (ACs) as covered consumer products under the applicable provisions in EPCA. In this document, DOE proposes energy conservation standards for portable ACs following its notice of final determination of coverage. This document also announces a public meeting to receive comment on these proposed standards and associated analyses and results.

DATES:

Comments:
DOE will accept comments, data, and information regarding this NOPR before and after the public meeting, but no later than August 12, 2016. See section VIII, “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 August 12, 2016.

Meeting:
DOE will hold a public meeting on Wednesday, July 20, 2016, from 9:00 a.m. to 4:00 p.m., in Washington, DC. The meeting will also be broadcast as a webinar. See section VIII, “Public Participation” for webinar registration information, participant instructions, and information about the capabilities available to webinar participants.

ADDRESSES:

The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue SW., Washington, DC 20585.

Instructions:
Any comments submitted must identify the NOPR for Energy Conservation Standards for Portable Air Conditioners, and provide docket number EERE-2013-BT-STD-0033 and/or regulatory information number (RIN) number 1904-AD02. Comments may be submitted using any of the following methods:

1.
Federal eRulemaking Portal:

www.regulations.gov
. Follow the instructions for submitting comments.

2.
Email:

PortableAC2013STD0033@ee.doe.gov
. Include the docket number and/or RIN in the subject line of the message. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form of encryption.

3.
Postal Mail:
Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

4.
Hand Delivery/Courier:
Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Room 6094, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

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

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
.

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 July 13, 2016. Please indicate in the “Subject” line of your email the title and Docket Number of this rulemaking notice.

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

A link to the docket Web page can be found at:
https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/79
. This Web page will contain a link to the docket for this proposed rulemaking 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 VIII, “Public Participation,” for further information on how to submit comments through
www.regulations.gov
.

FOR FURTHER INFORMATION CONTACT:

Mr. Bryan Berringer, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-0371. Email:
portable_ACs@ee.doe.gov
.

Ms. Sarah Butler, U.S. Department of Energy, Office of the General Counsel, Mailstop GC-33, 1000 Independence Ave. SW., Washington, DC 20585-0121. Telephone: 202-586-1777; Email:
Sarah.Butler@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

III. General Discussion

A. Product Classes and Scope of Coverage

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 Products

e. Impact of Any Lessening of Competition

f. Need for National Energy Conservation

g. Other Factors

2. Rebuttable Presumption

IV. Methodology and Discussion

A. Market and Technology Assessment

1. Definition and Scope of Coverage

2. Product Classes

a. Preliminary Analysis Proposals

b. Comments and Responses

c. NOPR Proposals

3. Technology Options

B. Screening Analysis

1. Screened-Out Technologies

2. Additional Comments

3. Remaining Technologies

C. Engineering Analysis

1. Efficiency Levels

a. Baseline Efficiency Levels

b. Higher Energy Efficiency Levels

2. Manufacturer Production Cost Estimates

D. Markups Analysis

E. Energy Use Analysis

F. Life-Cycle Cost and Payback Period Analysis

1. Product Cost

2. Installation Cost

3. Annual Energy Consumption

4. Energy Prices

5. Maintenance and Repair Costs

6. Product Lifetime

7. Discount Rates

8. Efficiency Distribution in the No-New-Standards Case

9. Payback Period Analysis

G. Shipments Analysis

H. National Impact Analysis

1. Product Efficiency Trends

2. National Energy Savings

3. Net Present Value Analysis

I. Consumer Subgroup Analysis

J. Manufacturer Impact Analysis

1. Overview

2. Government Regulatory Impact Model (GRIM)

a. Government Regulatory Impact Model Key Inputs

b. Government Regulatory Impact Model Scenarios

3. Manufacturer Interviews

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 Approach 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 Employment

c. Impacts on Manufacturing Capacity

d. Impacts on Subgroups of Manufacturers

e. Cumulative Regulatory Burden

3. National Impact Analysis

a. Significance of Energy Savings

b. Net Present Value of Consumer Costs and Benefits

c. Indirect Impacts on Employment

4. Impact on Utility or Performance of Products

5. Impact of Any Lessening of Competition

6. Need of the Nation To Conserve Energy

7. Other Factors

8. Summary of National Economic Impacts

C. Conclusion

1. Benefits and Burdens of Trial Standard Levels Considered for Portable ACs

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

VI. Certification Reporting and Enforcement Requirements

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

B. Review Under the Regulatory Flexibility Act

C. Review Under the Paperwork Reduction Act

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

VIII. 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

IX. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

Title III, Part B
1

of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles.
2

In addition to specifying a list of covered residential products and commercial equipment, EPCA contains provisions that enable the Secretary of Energy to classify additional types of consumer products as covered products. (42 U.S.C. 6292(a)(20)) In a final determination of coverage published in the
Federal Register
on April 18, 2016 (the “April 18, 2016 final coverage determination”), DOE classified portable ACs as covered consumer products under EPCA. 81 FR 22514.

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

2
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 (Apr. 30, 2015).

Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B))

In accordance with these and other statutory provisions discussed in this proposed rule, DOE proposes new energy conservation standards for portable ACs. The proposed standards, which correspond to trial standard level (TSL) 2 (described in section V.A), are minimum allowable combined energy efficiency ratio (CEER) standards, which are expressed in British thermal units (Btu) per watt-hour (Wh), are shown in Table I.1. These proposed standards, if adopted, would apply to all single-duct portable ACs and dual-duct portable ACs that are manufactured in, or imported into, the United States starting on the date five years after the publication of the final rule for this rulemaking.
3

3
For more information regarding portable ACs for which DOE is not proposing energy conservation standards in this NOPR, see section IV.A.1 and section IV.A.2 of this notice.

EP13JN16.003

A. Benefits and Costs to Consumers

Table I.2 presents DOE's evaluation of the economic impacts of the proposed standards on consumers of portable ACs, as measured by the average life-cycle cost (LCC) savings and the payback period (PBP).
4

The average LCC savings are positive and the PBP is less than the average lifetime for portable ACs, which is approximately 10 years (see section IV.F.6).

4
The average LCC savings are measured relative to the efficiency distribution in the no-new-standards case, which depicts the market in the compliance year in the absence of standards (see section IV.F.9). The simple PBP, which is designed to compare specific efficiency levels, is measured relative to the baseline model (see section IV.C.1.a).

Table I.2—Impacts of Proposed Energy Conservation Standards on Consumers of Portable Air Conditioners

Consumer type

Average LCC savings
(2014$)

Simple payback period
(years)

Residential
144
2.2

Commercial
292
1.2

All
162
2.1

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

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 (2016 to 2050). Using a real discount rate of 6.60 percent,
5

DOE estimates that the INPV for manufacturers of portable ACs is $725.5 million.
6

Under the proposed standards, DOE expects that manufacturers may lose up to 30.6 percent of their INPV, which is approximately $221.7 million over the 35 years of the analysis period. DOE also recognizes there may be additional compliance burden for those manufacturers of portable ACs that also produce other appliances which are currently regulated by DOE. DOE has identified existing or pending Federal energy conservation standards for three other appliance categories with compliance dates that will take effect 3 years before or after the anticipated 2021 compliance date of the portable AC rule. This cumulative regulatory burden is described in more detail in section V.B.2.e of this notice. However, based on DOE's interviews with the manufacturers of portable ACs, DOE does not expect significant impacts on domestic manufacturing capacity or loss of employment for the industry as a whole to result from the proposed standards for portable ACs.

5
The real discount rate is the weighted-average cost of capital derived from industry financials and modified based on feedback received during confidential interviews with manufacturers.

6
All monetary values in this section are expressed in 2014 dollars; discounted values are discounted to 2015 unless explicitly stated otherwise.

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

C. National Benefits and Costs

DOE's analyses indicate that the proposed energy conservation standards for portable ACs would save a significant amount of energy. Relative to the case without new standards, the lifetime energy savings for portable ACs purchased in the 30-year period that begins in the anticipated year of compliance with the new standards (2021-2050) amount to 0.53 quadrillion Btu (quads).
7

This represents a savings of 8.6 percent relative to the energy use of these products in the case without new standards (referred to as the “no-new-standards case”).

7
A quad is equal to 10
15
British thermal units (Btu). The quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (
i.e.,
coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.2.

The cumulative net present value (NPV) of total consumer costs and savings of the proposed standards for portable ACs ranges from $2.15 billion (at a 7-percent discount rate) to $5.20 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for portable ACs purchased in 2021-2050.

In addition, the proposed standards for portable ACs are projected to yield significant enviornmental benefits. DOE estimates that the proposed standards would result in cumulative emission reductions (over the same period as for energy savings) of 37.7 million metric tons (Mt)
8

of carbon dioxide (CO
2
), 20.2 thousand tons of sulfur dioxide (SO
2
), 69.6 thousnd tons of nitrogen oxides (NO
X
), 165.3 thousand tons of methane (CH
4
), 0.4 thousnad tons of nitrous oxide (N
X
O), and 0.07 tons of mercury (Hg).
9
The cumulative reduction in CO
2

emissions through 2030 amounds to 6.7 Mt, which is the equilavent to the emissions resulting from the annual electricity use of over 900,000 homes.

8
A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO
2
are presetned in short tons.

9
DOE calculated emissions reduction relative to the no-new-standards case, which reflects key assumptions in the
Annual Energy Outlook 2015
(
AEO 2015
) Reference case.
AEO 2015
generally represents current legislation environmental regulations for which implementing regulations were available as of October 31, 2014.

The value of the CO
2
reductions is calculated using a range of values per metric ton of CO
2
(otherwise known as the “Social Cost of Carbon”, or SCC) developed by a Federal interagency working group.
10

The derivation of the SCC values is discussed in section IV.L. Using discount rates appropriate for each set of SCC values (see Table I.3), DOE estimates the present monetary value of the CO
2
emissions reduction (not including CO
2
equivalent emissions of other gases with global warming potential) is between $0.3 billion and $3.6 billion, with a value of $1.2 billion using the central SCC case represented by $40.0/t in 2015. DOE also estimates the present monetary value of the NO
X
emissions reduction to be $0.05 billion at a 7-percent discount rate and $0.12 billion at a 3-percent discount rate.
11

10

Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866,
Interagency Working Group on Social Cost of Carbon, United States Government (May 2013; revised July 2015) (Available at:
https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf
).

11
DOE is currently investigating valuation of avoided SO
2
and Hg emissions.

Table I.3 summarizes the national economic benefits and costs expected to result from the proposed standards for portable ACs. Table I.4 presents the impacts to manufacturers and consumers expected to result from these proposed standards.

Table I.3—Summary of National Economic Benefits and Costs of Proposed Energy Conservation Standards for Portable Air Conditioners (TSL 2) 2021-2050 *

Category

Present
values
(billion 2014$)

Discount
rate
(%)

Benefits

Consumer Operating Cost Savings
2.4
7

5.7
3

CO
2
Reduction Monetized Value ($12.2/t case) **

0.3
5

CO
2
Reduction Monetized Value ($40.0/t case) **

1.2
3

CO
2
Reduction Monetized Value ($62.3/t case) **

1.9
2.5

CO
2
Reduction Monetized Value ($117/t case) **

3.6
3

NO
X
Reduction Monetized Value †

0.05
7

0.12
3

Total Benefits ††
3.6
7

7.0
3

Costs

Consumer Incremental Installed Costs
0.27
7

0.51
3

Total Net Benefits

Including CO
2
and NO
X
Reduction Monetized Value ††

3.4
7

6.5
3

* This table presents the costs and benefits associated with portable ACs shipped in 2021-2050. These results include benefits to consumers which accrue after 2050 from the products purchased in 2021-2050. The costs account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule.

** The CO
2
values represent global monetized values of the SCC, in 2014$, in 2015 under several scenarios of the updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series incorporate an escalation factor. The value for NO
X
is the average of high and low values found in the literature.

† The $/ton values used for NO
X
are described in section IV.L.

†† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate ($40.0/t case).

Table I.4—Manufacturer (2016-2050) and Consumer (2021-2050) Impacts From Proposed Energy Conservation Standards for Portable Air Conditioners (TSL 2)

Manufacturer Impacts

Industry NPV (
2014$ millions
) (
Base Case INPV = 725.5
)

503.8 to 521.7.

Industry NPV (
% change
)

(30.6%) * to (28.1%).*

Consumer Average LCC Savings (2014$)

Residential
144.

Commercial
292.

All
162.

Consumer Simple PBP (years)

Residential
2.2.

Commercial
1.2.

All
2.1.

% of Consumers that Experience Net Cost

Residential
13.

Commercial
2.

All
12.

* Parentheses indicate negative (−) values.

The benefits and costs of the proposed standards, for portable ACs sold in 2021-2050, can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are the sum of: (1) The national economic value of the benefits in reduced operating costs, minus (2) the increase in product purchase prices and installation costs, plus (3) the value of the benefits of CO
2
and NO
X
emission reductions, all annualized.
12

12
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
2
reductions, for which DOE used case-specific discount rates, as shown in Table I.3. 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.

Although the values of operating cost savings and CO
2
emission reductions are both important, two issues are relevant. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions, whereas the value of CO
2
reductions is based on a global value. Second, the assessments of operating cost savings and CO
2
savings are performed with different methods that use different time frames for analysis. The national operating cost savings is measured for the lifetime of portable ACs shipped in 2021-2050. Because CO
2
emissions have a very long residence time in the atmosphere,
13

the SCC values in future years reflect future CO
2
-emissions impacts that continue beyond 2100.

13
The atmospheric lifetime of CO
2
is estimated of the order of 30-95 years. Jacobson, MZ (2005), “Correction to `Control of fossil-fuel particulate black carbon and organic matter, possibly the most effective method of slowing global warming,' ”
J. Geophys. Res.
110. pp. D14105.

Estimates of annualized benefits and costs of the proposed standards are shown in Table I.5. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO
2
reduction (for which DOE used a 3-percent discount rate along with the average SCC series that has a value of $40.0/t in 2015),
14

the estimated cost of the standards proposed in this rule is $30 million per year in increased equipment costs, while the estimated annual benefits are $273 million in reduced equipment operating costs, $70 million in CO
2
reductions, and $ 5.4 million in reduced NO
X
emissions. In this case, the net benefit amounts to $318 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/t in 2015, the estimated cost of the proposed standards is $30 million per year in increased equipment costs, while the estimated annual benefits are $338 million in reduced operating costs, $70 million in CO
2
reductions, and $7.2 million in reduced NO
X
emissions. In this case, the net benefit amounts to $385 million per year.

14
DOE used a 3-percent discount rate because the SCC values for the series used in the calculation were derived using a 3-percent discount rate (see section IV.L).

Table I.5—Annualized Benefits and Costs of Proposed Energy Conservation Standards for Portable Air Conditioners (TSL 2) 2021-2050

Discount rate
Million 2014$/year

Primary
estimate *

Low net benefits
estimate * ‡

High net benefits
estimate *

Benefits

Consumer Operating Cost Savings
7%
273
125
296.

3%
338
153
371.

CO
2
Reduction Value ($12.2/t case) **

5%
21
10
23.

CO
2
Reduction Value ($40.0/t case) **

3%
70
33
75.

CO
2
Reduction Value ($62.3/t case) **

2.5%
102
48
109.

CO
2
Reduction Value ($117/t case) **

3%
213
100
228.

NO
X
Reduction Monetized Value †

7%
5.4
3
12.9.

3%
7.2
3
17.4.

Total Benefits ††

7% plus CO
2
range

300 to 492
137 to 227
331 to 537.

7%
348
160
383.

3% plus CO
2
range

366 to 558
167 to 256
411 to 616.

3%
415
189
463.

Costs

Consumer Incremental Installed Product Costs
7%
30
31
27.

3%
30
31
26.

Net Benefits

Total ††

7% plus CO
2
range

269 to 462
106 to 196
304 to 510.

7%
318
129
357.

% plus CO
2
range

336 to 528
135 to 225
385 to 590.

3%
385
158
437.

* This table presents the annualized costs and benefits associated with portable ACs shipped in 2021-2050. These results include benefits to consumers which accrue after 2050 from the products purchased in 2021-2050. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices from the EIA's
AEO 2015
Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental product costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Benefits Estimate, and a high decline rate in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.H.

** The CO
2
values represent global monetized values of the SCC, in 2014$, in 2015 under several scenarios of the updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series incorporate an escalation factor.

† The $/ton values used for NO
X
are described in section IV.L.

†† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with a 3-percent discount rate ($40.0/t case). In the rows labeled “7% plus CO
2
range” and “3% plus CO
2
range,” the operating cost and NO
X
benefits are calculated using the labeled discount rate, and those values are added to the full range of CO
2
values.

‡ In addition to the
AEO 2015
Low Economic Growth case, the Low Net Benefits Estimate reflects a 50 percent reduction in the number of operating hours. Details of the sensitivity analysis can be found in appendix 8F.

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

D. Conclusion

DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that products achieving these standard efficiency levels are already commercially available for the products 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).

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

II. Introduction

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

A. Authority

Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (codified as 42 U.S.C. 6291-6309) established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances (collectively referred to as “covered products”).

EPCA, as amended, grants DOE authority to prescribe an energy conservation standard for any type (or class) of covered products of a type specified in 42 U.S.C. 6292(a)(19)
15

if the requirements of 42 U.S.C. 6295(o) and (p) are met and the Secretary determines that—

15
On April 18, 2016, DOE published a final coverage determination in which DOE determined that portable ACs qualify as a covered product because classifying products of such type as covered products is necessary or appropriate to carry out the purposes of EPCA, and the average U.S. household energy use for portable ACs is likely to exceed 100 kilowatt-hours per year. 81 FR 22514.

(1) the average per household energy use within the United States by products of such type (or class) exceeded 150 kilowatt-hours (kWh) (or its Btu equivalent) for any 12-month period ending before such determination;

(2) the aggregate household energy use within the United States by products of such type (of class) exceeded 4,200,000,000 kWh (or its Btu equivalent) for any such 12-month period;

(3) Substantial improvement in the energy efficiency of products of such type (or class) is technologically feasible; and

(4) the application of a labeling rule under 42 U.S.C. 6294 to such type (or class) is not likely to be sufficient to induce manufacturers to produce, and consumers and other persons to purchase, covered products of such type (or class) which achieve the maximum energy efficiency which is technologically feasible and economically justified. (42 U.S.C. 6295(l)(1))

DOE has determined that portable ACs meet the four criteria outlined in 42 U.S.C. 6295(l)(1) to prescribe energy conservation standards for new covered products. Specifically, DOE has determined that the average per household energy use within the United States by portable ACs exceeded 150 kWh for a 12-month period ending before such determination (see chapter 7 of the NOPR technical support document (TSD)). DOE has also determined that the aggregate household energy use within the United States by portable ACs exceeded 4,200,000,000 kWh (or its Btu equivalent) for such a 12-month period (see chapter 10 of the NOPR TSD). Further, DOE has determined that substantial improvement in the energy efficiency of portable ACs is technologically feasible (see section IV.C of this NOPR and chapter 5 of the NOPR TSD), and has determined that the application of a labeling rule under 42 U.S.C. 6294 to portable ACs is not likely to be sufficient to induce manufacturers to

produce, and consumers and other persons to purchase, portable ACs that achieve the maximum energy efficiency which is technologically feasible and economically justified (see chapter 17 of the NOPR TSD).

Pursuant to EPCA, DOE's energy conservation program consists essentially of four parts: (1) Testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. The Federal Trade Commission (FTC) is primarily responsible for labeling, and DOE implements the remainder of the program. Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and (r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test procedure for portable ACs was recently established in a Final Rule issued on April 26, 2016 (the “April 26, 2016 TP Final Rule”), and appears at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix CC (appendix CC).

DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including portable ACs. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a standard: (1) For certain products, including portable ACs, if no test procedure has been established for the product, or (2) if DOE determines by rule that the proposed standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:

(1) The economic impact of the standard on manufacturers and consumers of the 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 products that are likely to result from the standard;

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

(4) Any lessening of the utility or the performance of the covered products likely to result from the standard;

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

(6) The need for national energy and water conservation; and

(7) Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

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 savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))

EPCA states that 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 in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4))

Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. DOE must specify a different standard level for a type or class of product that has the same function or intended use, if DOE determines that products within such group: (A) Consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6294(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE deems appropriate.
Id.
Any rule prescribing such a standard must include an explanation of the basis on which such higher or lower level was established. (42 U.S.C. 6295(q)(2))

Federal energy conservation requirements generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d).

Finally, pursuant to the amendments contained in the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's recently established test procedures for portable ACs address standby mode and off mode energy use. In this rulemaking, DOE proposes to adopt a single energy conservation standard that addresses active, off, and standby modes.

B. Background

DOE has not previously conducted an energy conservation standards rulemaking for portable ACs. Consequently, there are currently no Federal energy conservation standards for portable ACs.

Under the authority established in EPCA, DOE published the April 18, 2016 final coverage determination that portable ACs qualify as a covered product because classifying products of such type as a covered product is necessary or appropriate to carry out the purposes of EPCA, and the average U.S. household energy use for portable ACs

is likely to exceed 100 kWh per year. 81 FR 22514 (April 18, 2016).

DOE published a notice of data availability (NODA) on May 9, 2014 (the May 2014 NODA), reviewing various industry test procedures for portable ACs and presenting results from its investigative testing. DOE requested comment and additional information regarding the results and potential methodologies. 79 FR 26639. Comments received on the May 2014 NODA helped DOE identify issues related to the provisional analyses, as well as informed the analysis for the test procedure rulemaking.

On February 27, 2015, DOE published an energy conservation standards notice of public meeting and notice of availability of preliminary TSD for portable ACs (February 2015 Preliminary Analysis). In the preliminary analysis, DOE conducted in-depth technical analyses in the following areas: (1) Engineering; (2) markups to determine product price; (3) energy use; (4) life-cycle cost and payback period; and (5) national impacts. The preliminary TSD that presented the methodology and results of each of these analyses is available at
http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0033-0007
.

DOE also conducted, and included in the preliminary TSD, several other analyses that supported the major analyses or were expanded upon for this NOPR. These analyses included: (1) The market and technology assessment; (2) the screening analysis, which contributes to the engineering analysis; and (3) the shipments analysis,
16

which contributes to the LCC and PBP analysis and national impact analysis (NIA). In addition to these analyses, DOE began preliminary work on the manufacturer impact analysis and identified the methods to be used for the consumer subgroup analysis, the emissions analysis, the employment impact analysis, the regulatory impact analysis, and the utility impact analysis. 80 FR 10628 (Feb. 27, 2015).

16
Industry data track shipments from manufacturers into the distribution chain. Data on national unit retail sales are lacking, but are presumed to be close to shipments under normal circumstances.

DOE held a public meeting on March 18, 2015, to discuss the analyses and solicit comments from interested parties regarding the preliminary analysis it conducted. The meeting covered the analytical framework, models, and tools that DOE uses to evaluate potential standards; the results of preliminary analyses performed by DOE for this product; the potential energy conservation standard levels derived from these analyses that DOE could consider for this product; and any other issues relevant to the development of energy conservation standards for portable ACs.

Interested parties discussed at the public meeting and followed up with written comments regarding the following major issues: Rulemaking schedule with respect to the test procedure availability and timing; covered product configurations; product classes and impacts on consumer utility; technology options; efficiency levels (ELs); incremental costs; sources of data; and cumulative regulatory burden.

Comments received in response to the February 2015 Preliminary Analysis helped DOE identify and resolve issues related to the preliminary analysis. After reviewing these comments, DOE gathered additional information, held further discussions with manufacturers, and completed and revised the various analyses described in the preliminary analysis. The results of these analyses are presented in this NOPR.

III. General Discussion

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

A. Product Classes and Scope of Coverage

When evaluating and establishing energy conservation standards, DOE divides covered products into product classes by the type of energy used or by capacity or other performance-related features that justify differing standards. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE determines are appropriate. (42 U.S.C. 6295(q))

In the February 2015 Preliminary Analysis, DOE did not consider energy conservation standards for portable ACs other than single-duct or dual-duct protable ACs, as the test procedure proposed at that time did not include provisions for testing other portable ACs, and DOE did not separate portable ACs into multiple product classes following a determination that there is no unique utility associated with single-duct or dual-duct portable ACs.

In this NOPR, DOE maintains the proposals from the February 2015 Preliminary Analysis to consider standards for one product class for all single-duct and dual-duct portable ACs. Comments received relating to the scope of coverage and product classes are discussed in section IV.A of this proposed rule.

B. Test Procedure

DOE initiated a test procedure rulemaking by publishing the May 2014 NODA to request feedback on potential testing options. In the May 2014 NODA, DOE discussed various industry test procedures and presented results from its investigative testing that evaluated existing methodologies and alternate approaches adapted from these methodologies that could be incorporated in a future DOE test procedure, should DOE determine that portable ACs are covered products. 79 FR 26639 (May 9, 2014).

On February 25, 2015, DOE published a NOPR (hereinafter referred to as “February 2015 TP NOPR”) in which it proposed to establish test procedures for single-duct and dual-duct portable ACs. The proposed test procedures were based upon industry methods to determine energy consumption in active modes, off-cycle mode, standby modes, and off mode, with certain modifications to ensure the test procedures are repeatable and representative. 80 FR 10211.

On November 27, 2015, DOE published a supplemental notice of proposed rulemaking (SNOPR) (hereinafter referred to as “November 2015 TP SNOPR”), in which it proposed revisions to the test procedure proposed in the February 2015 TP NOPR, to improve repeatability, reduce test burden, and ensure the test procedure is representative of typical consumer usage. 80 FR 74020.

On April 26 2016, DOE issued the April 2016 TP Final Rule that established appendix CC. DOE based its analysis in this proposed rule on capacities and CEERs determined according to the appendix CC test procedure.

DOE received comments expressing concern about the timing of the portable AC test procedure rulemaking in relation to the February 2015 Preliminary Analysis and this NOPR.

The Association of Home Appliance Manufacturers (AHAM) expressed concern that the preliminary analysis was developed in the absence of a final test procedure, which it expected would be published around the same time as this NOPR. AHAM stated that if a test procedure is not finalized in a sufficient period of time before a proposed rule is issued, interested parties will not have sufficient opportunity to evaluate design options and proposed standard levels.

AHAM commented that the industry is unable to determine and provide market representative performance data to DOE without a final test procedure, and that DOE's test and teardown sample of units may not be suitable to inform appropriate baseline and higher efficiency levels representative of the majority of products currently on the market. However, AHAM believes that once the final test procedure is published, manufacturers would be more willing to test their products and determine performance according to the DOE portable AC test procedure. Therefore, AHAM urged DOE to release the final test procedure before it continues with its standards analysis and manufacturer interviews. (AHAM, Public Meeting Transcript, No. 11 at pp. 9-11, 21-22, 57; AHAM, No. 16 at pp. 1-4)
17 18

De' Longhi Appliances s.r.l. (De' Longhi) agreed that energy conservation standards can only be developed when a test procedure has been completely defined. (De' Longhi, Public Meeting Transcript, No. 11 at p. 5; De' Longhi, No. 12 at p. 1)

17
A notation in the form “AHAM, Public Meeting Transcript, No. 11 at pp. 9-11, 21-22, 57” identifies an oral comment that DOE received on March 18, 2015 during the Preliminary Analysis public meeting, was recorded in the public meeting transcript in the docket for this test procedure rulemaking (Docket No. EERE-2013-BT-STD-0033). This particular notation refers to a comment (1) made by the Association of Home Appliance Manufacturers (AHAM) during the public meeting; (2) recorded in document number 11, which is the public meeting transcript that is filed in the docket of this test procedure rulemaking; and (3) which appears on pages 9 through 11, 21 through 22, and 57 of document number 11.

18
A notation in the form “AHAM, No. 16 at pp. 1-4” identifies a written comment: (1) Made by AHAM; (2) recorded in document number 16 that is filed in the docket of this standards rulemaking (Docket No. EERE-2013- BT-TP-0033) and available for review at
www.regulations.gov;
and (3) which appears on pages 1 through 4 of document number 16.

As described previously in this section, on April 26, 2016 DOE issued the April 26, 2016 TP Final Rule to establish the portable AC test procedure in appendix CC. April 2016 issued TP Final Rule. Manufacturers may use appendix CC to test their products and evaluate the standard levels proposed in this NOPR.

Other comments that DOE received from interested parties related to specific provisions of the portable AC test procedure were addressed in that rulemaking. For further information, please see the docket for test procedures for portable ACs:
http://www.regulations.gov/#!docketDetail;D=EERE-2014-BT-TP-0014
. In this NOPR analysis, all presented product capacities and efficiencies are consistent with the appendix CC test procedures.

C. Technological Feasibility

1. General

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

After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-(iv). Additionally, it is DOE policy not to include in its analysis any proprietary technology that is a unique pathway to achieve a certain efficiency level. Section IV.B of this proposed rule discusses the results of the screening analysis for portable ACs, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR TSD.

2. Maximum Technologically Feasible Levels

When DOE proposes to adopt a new or amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for portable ACs, using the design parameters for the most efficient products available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.1.b of this proposed rule and in chapter 5 of the NOPR TSD.

D. Energy Savings

1. Determination of Savings

For each TSL, DOE projected energy savings at the TSL for portable ACs purchased in the 30-year period that begins in the year of compliance with the proposed standards (2021-2050).
19

The savings are measured over the entire lifetime of portable ACs purchased in the above 30-year period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the no-new-standards case. The no-new-standards case represents a projection of energy consumption that reflects how the market for a product would likely evolve in the absence of any energy conservation standards.

19
Each TSL is comprised of specific efficiency levels for each product class. The TSLs considered for this NOPR are described in section V.A. DOE conducted a sensitivity analysis that considers impacts for products shipped in a 9-year period.

DOE used its NIA spreadsheet model to estimate energy savings from potential new standards for portable ACs. The NIA spreadsheet model (described in section IV.H of this proposed rule) calculates savings in site energy, which is the energy directly consumed by products at the locations where they are used. Based on the site energy, DOE calculates national energy savings (NES) in terms of primary energy savings at the site or at power plants, and also in terms of full-fuel-cycle (FFC) energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (
i.e.,
coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy conservation standards.
20

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

20
The FFC metric is discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012).

2. Significance of Savings

To adopt any new or amended standards for a covered product, DOE must determine that such action would result in “significant” energy savings. (42 U.S.C. 6295(o)(3)(B)) 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
v.
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.” The energy savings for all of the TSLs considered in this rulemaking, including the proposed standards (presented in section V.B.3.a), are nontrivial, and, therefore, DOE considers them “significant” within the meaning of section 325 of EPCA.

E. Economic Justification

1. Specific Criteria

As noted above, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking.

a. Economic Impact on Manufacturers and Consumers

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

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

b. Savings in Operating Costs Compared To Increase in Price

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

The LCC is the sum of the purchase price of a product (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value.

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.

For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with new standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of standards. DOE's LCC and PBP analysis is discussed in further detail in section IV.F.

c. Energy Savings

Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section III.D, DOE uses the NIA spreadsheet models to project national energy savings.

d. Lessening of Utility or Performance of Products

In evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards proposed in this proposed rule would not reduce the utility or performance of the products under consideration in this rulemaking. For more information on consumer utility and product performance of portable ACs, see section IV.A.2 and section IV.C of this proposed rule.

e. Impact of Any Lessening of Competition

EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General that is likely to result from a proposed standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii))

To assist the Attorney General in making such determination, DOE will provide the Department of Justice (DOJ) with copies of the NOPR and NOPR TSD for review. DOE will consider DOJ's comments on the proposed rule in preparing the final rule, and DOE will publish and respond to DOJ's comments in that document. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the
ADDRESSES
section for information to send comments to DOJ.

f. Need for National Energy Conservation

DOE also considers the need for national energy conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the nation's

energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the nation's needed power generation capacity, as discussed in section IV.M.

The proposed standards also are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases (GHGs) associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K; the emissions impacts are reported in section V.B.3 of this proposed rule. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L.

g. Other Factors

EPCA allows the Secretary of Energy, in determining whether a standard is economically justified, to consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) 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

As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F.9 of this proposed rule.

IV. Methodology and Discussion

This section addresses the analyses DOE has performed for this rulemaking with regard to portable ACs. Separate subsections address each component of DOE's analyses.

DOE used several analytical tools to estimate the impact of the standards proposed in this document. The first tool is a spreadsheet that calculates LCC savings and PBP of potential new energy conservation standards. The national impact analysis uses a second spreadsheet set that provides shipments forecasts and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (GRIM), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the DOE Web site for this rulemaking:
https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/76
. Additionally, DOE used output from the latest version of Energy Information Administration (EIA)'s
Annual Energy Outlook
(
AEO
), a widely known energy forecast for the United States, for the emissions and utility impact analyses.

A. Market and Technology Assessment

DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly available information. The subjects addressed in the market and technology assessment for this rulemaking include: (1) A determination of the scope of the rulemaking and product classes; (2) manufacturers and industry structure; (3) existing efficiency programs; (4) shipments information; (5) market and industry trends; and (6) technologies that could improve the energy efficiency of portable ACs. The key findings of DOE's market assessment are summarized below. See chapter 3 of the NOPR TSD for further discussion of the market and technology assessment.

1. Definition and Scope of Coverage

DOE conducted the February 2015 Preliminary Analysis based on the portable AC definition proposed in the February 2015 Test Procedure NOPR, which stated that a portable AC is an encased assembly, other than a “packaged terminal air conditioner,” “room air conditioner,” or “dehumidifier,” that is designed as a portable unit to deliver cooled, conditioned air to an enclosed space. A portable AC is powered by single-phase power and may rest on the floor or elevated surface. It includes a source of refrigeration and may include additional means for air circulation and heating. 80 FR 10212, 10215 (Feb. 25, 2015).

In the April 18, 2016 final coverage determination, DOE codified this definition at 10 CFR 430.2, with minor editorial revisions that do not modify the intent or scope of the definition:

A portable encased assembly, other than a “packaged terminal air conditioner,” “room air conditioner,” or “dehumidifier,” that delivers cooled, conditioned air to an enclosed space, and is powered by single-phase electric current. It includes a source of refrigeration and may include additional means for air circulation and heating. 81 FR 22514.

The Pacific Gas and Electric Company (PG&E), Southern California Gas Company (SCGC), Southern California Edison (SCE), and San Diego Gas and Electric Company (SDG&E) (hereinafter the “California IOUs”), AHAM, and De' Longhi supported the analysis of portable ACs for future energy conservation standards. (California IOUs, No. 15 at p. 1; AHAM, No. 16 at pp. 1-2; De' Longhi, Public Meeting Transcript, No. 11 at p. 5; De' Longhi, No. 12 at p. 1)

DENSO expressed concern about defining covered products on the basis of supply power, noting that some commercial/industrial portable ACs are powered by single-phase power. According to DENSO, commercial units may be differentiated from residential ones on the basis of more rugged construction and the tendency to be larger and heavier for a given cooling capacity. (DENSO, No. 13 at pp. 3-4)

DOE notes that the definition for “portable air conditioner” in 10 CFR 430.2 excludes units that could not be normally used as a consumer product. Therefore, a product that requires three-phase power, a requirement that is not appropriate for consumer products, is not covered under the definition of portable AC. Conversely, any product with single-phase power that otherwise meets the definition for a portable AC

would be considered by DOE to be such a covered product regardless of the manufacturer-intended application or installation location. DOE also recognized that certain portable ACs that exhaust condenser air within the conditioned space (“spot coolers”) do not provide net cooling to the typical conditioned consumer space. In addition, spot coolers incorporate different design features and a wider variety of installation types and usage patterns than single-duct and dual-duct portable ACs. For these reasons, DOE did not identify a test procedure that would measure representative performance of spot coolers. DOE instead established a test procedure for single-duct and dual-duct portable ACs in its recent rulemaking that established appendix CC (80 FR 10211, 10213, 10214-10215 (Feb. 25, 2015); April 26, 2016 issued TP Final Rule), and correspondingly is proposing standards only for single-duct and dual-duct portable ACs in this NOPR. DOE welcomes comment on this decision and its rationale for proposing standards for single-duct and dual-duct portable ACs.

2. Product Classes

When evaluating and establishing energy conservation standards, DOE divides covered products into product classes by the type of energy used or by capacity or other performance-related features that justify a different standard. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE determines are appropriate. (42 U.S.C. 6295(q))

Portable ACs only recently became a covered product when DOE issued the April 18, 2016 final coverage determination, and therefore do not have previous energy conservation standards or product class divisions. 81 FR 22515

a. Preliminary Analysis Proposals

Following an evaluation of the portable AC market in preparation of the February 2015 Preliminary Analysis, DOE determined that there are three types of duct configurations that affect product performance: Single-duct, dual-duct, and spot cooler. DOE noted in the February 2015 Preliminary Analysis that the DOE test procedure proposed in the February 2015 Test Procedure NOPR did not include measures of spot cooler performance, and therefore as discussed previously, DOE did not consider standards for spot coolers. See chapter 3 of the preliminary TSD for more information.

DOE further evaluated if there was any consumer utility associated with the single-duct and dual-duct configurations under consideration. As detailed in chapter 3 of the preliminary TSD, DOE investigated installation locations and noise levels, and found that duct configuration had no impact on either of these key consumer utility variables. Therefore, DOE determined in the February 2015 Preliminary Analysis that a single product class is appropriate for portable ACs.

b. Comments and Responses

Spot Coolers

DENSO supported the exclusion of spot coolers from potential energy conservation standards. It commented that its spot coolers, which may also be operated with optional adapters to configure them as single-duct or dual-duct portable ACs, are typically installed in commercial applications such as a warehouses, auto repair shops, or similar businesses, and are not appropriate for a typical retail commercial establishment or residential application. DENSO believes that these units should therefore be exempt from the rulemaking, particularly due to the low market volume compared to other currently covered products. According to DENSO, annual shipments of spot coolers are approximately 15,000 units, or about 1.6 percent of the DOE-estimated portable AC market. DENSO further commented that there is little differentiation in energy efficiency ratio (EER) across all spot coolers on the market with capacities ranging from 12,000 to 60,000 Btu/hr. (DENSO, No. 13 at pp. 1, 5, 9) DENSO expressed concern regarding the features that DOE proposed to distinguish commercial and industrial portable ACs from residential portable ACs. According to DENSO, it is presumed to be mutually agreed that units powered from a three-phase power source are commercial/industrial units, but there are some units powered by single-phase power which are clearly commercial/industrial products. (DENSO, No. 13 at pp. 3-4)

The California IOUs urged DOE to include spot coolers in the energy conservation standards rulemaking analyses and to adopt active mode test procedures for spot coolers utilizing existing industry test procedures such as ANSI/ASHRAE Standard 128-2011. The California IOUs noted that 321 of the 427 spot cooler models in the California Energy Commission (CEC) Appliance Efficiency Database have cooling capacities below 14,000 Btu/hr and as low as 4,000 Btu/hr. Assuming this distribution is an indicator of widespread market availability of products below 14,000 Btu/hr, the California IOUs urged DOE to adopt test procedures and performance standards for spot coolers. (California IOUs, No. 15 at p. 2)

While the portable AC definition excludes products with a 3-phase power supply, DOE agrees with DENSO that certain spot coolers that operate with a single-phase power supply would meet the portable AC definition. Because spot coolers with a single-phase power supply could be used as a consumer product, DOE is maintaining the approach in the February 2015 Preliminary Analysis in which such spot coolers would be included as covered products. As discussed in section IV.A.1, however, DOE has established a test procedure for single-duct and dual-duct portable ACs at this time and is proposing energy conservation standards only for these portable ACs in this NOPR. DOE further notes that, upon review of the spot cooler entries in the CEC Appliance Efficiency Database,
21

it concludes that a number of listed products would meet DOE's definitions of single-duct or dual-duct portable ACs.

21
The CEC Appliance Efficiency Database is accessible at:
https://cacertappliances.energy.ca.gov/Pages/ApplianceSearch.aspx
.

Single Product Class

The Appliance Standards Awareness Project (ASAP), Alliance to Save Energy (ASE), American Council for an Energy-Efficient Economy (ACEEE), National Consumer Union (CU), and Northwest Energy Efficiency Alliance (NEEA) (hereinafter the “Joint Commenters”) and the California IOUs agreed with DOE that there is no unique consumer utility associated with duct configuration and support establishing a single product class for portable ACs. The California IOUs noted that the negative pressure within a room created by a single-duct portable AC can lead to more infiltration air from outside the conditioned space, which can result in lower efficiencies than for dual-duct units. The California IOUs, therefore, asserted that adopting performance standards for a single product class that includes both single-duct and dual-duct portable ACs would incentivize manufacturers to produce higher efficiency units. (ASAP, Public Meeting Transcript, No. 11 at p. 17; Joint Commenters, No. 14 at p. 1; California IOUs, No. 15 at pp. 1-2)

AHAM and De' Longhi commented that duct configuration warrants

separate product classes. They believe that single-duct portable ACs offer unique consumer utility in terms of smaller size and slimmer profiles, greater portability and versatility, and easier installation. AHAM stated that portability and size are a key issue for consumers, and that consumers indicate to manufacturers that they prefer slimmer designs. According to AHAM, maintaining smaller unit sizes can impact a manufacturer's ability to improve efficiency because of limitations on air flow, which in turn impact performance. AHAM further commented that if manufacturers are required to improve efficiency while maintaining smaller, more portable units, then noise would increase, thereby impacting consumer utility. AHAM further stated that single-duct and dual-duct portable ACs may have different applications. For example, dual-duct units are more often used in commercial applications, such as computer server rooms. AHAM suggested that without separate product classes, single-duct portable ACs would likely be eliminated from the market. (AHAM, No. 16 at p. 2; De' Longhi, No. 12 at p. 2)

DOE reviewed the comments and, with the input from manufacturer interviews and additional research, further analyzed the differences between single-duct and dual-duct portable ACs. DOE recognizes that the additional duct for dual-duct units results in shipping packages that are slightly larger than for single-duct units, with a corresponding impact on shipping costs and consumer portability prior to unpacking. However, the size differences do not significantly impact product availability or consumer utility during operation. Additionally, DOE found that window mounting brackets are typically the same size, regardless of whether they are configured for one or two ducts, and therefore a mounting bracket for two ducts would not reduce consumer utility. Further, DOE estimates from its engineering analysis that a dual-duct portable AC would be less than 5 pounds heavier than a comparable single-duct unit with the same capacity, and with wheels on all units, portability of a dual-duct unit is not reduced when relocating the unit within the home. DOE also determined that many portable AC profiles and chassis sizes are a function of the heat exchanger dimensions rather than the number of ducts. The potential standards that DOE is contemplating would impose no restrictions on what side of the unit a duct should be located, and therefore manufacturers are free to determine the form factor of their portable ACs to suit customer preferences. Noise is a concern for consumers when operating all portables ACs, but DOE did not find a substantive difference in noise levels between the two duct configurations. DOE believes that insulation and case sealing to reduce infiltration air would offset any additional noise associated with the increased fan power of a dual-duct portable AC. DOE received feedback from manufacturers during interviews indicating that their customers are not typically aware of any functional difference between single-duct and dual-duct units, and that consumer preference hinges primarily on the aesthetics of the product, rated cooling capacity, and purchase price. Additionally, DOE is not aware of any significant difference between the typical applications of single-duct and dual-duct portable ACs. Therefore, DOE has found no unique consumer utility associated with the number of ducts for portable ACs that would warrant a division of single-duct and dual-duct units into separate product classes. Furthermore, as described in section IV.C, testing according to the test procedure in appendix CC results in no significant performance differences between single-duct and dual-duct portable ACs. Therefore, due to the lack of consumer utility differences and lack of energy efficiency differentiation, DOE has determined that separate product classes for single-duct and dual-duct portable ACs are not warranted.

The definitions established in the April 26, 2016 TP Final Rule for single-duct and dual-duct portable ACs describe the various duct configurations based on differences in air flow patterns. DOE further established, in the April 26, 2016 TP Final Rule, that single-duct and dual-duct portable ACs distributed in commerce with multiple duct configuration options must be tested in each applicable configuration and the performance in each tested configuration must comply with any applicable energy conservations standards. April 2016 issued TP Final Rule. This NOPR analysis was performed in accordance with appendix CC established by the issued April 2016 TP Final Rule.

c. NOPR Proposals

In summary, DOE proposes to maintain the February 2015 Preliminary Analysis approach, in which only single-duct and dual-duct portable ACs would be considered, and would be classified as one product class, for the purposes of energy conservation standards. For portable ACs that can be optionally configured in both single-duct and dual-duct configurations, DOE further proposes that operation with both duct configurations be certified under any future portable AC energy conservation standards.

3. Technology Options

In the preliminary market analysis and technology assessment, DOE identified 16 technology options in four different categories that would be expected to improve the efficiency of portable ACs, as shown in the following Table IV.1:

Table IV.1—Technology Options for Portable Air Conditioners—Preliminary Analysis

Increased Heat-Transfer Surface Area:

1. Increased frontal coil area.

2. Increased depth of coil (add tube rows).

3. Increased fin density.

4. Add subcooler to condenser coil.

Increased Heat-Transfer Coefficients:

5. Improved fin design.

6. Improved tube design.

7. Spray condensate onto condenser coil.

8. Microchannel heat exchangers.

Component Improvements:

9. Improved compressor efficiency.

10. Improved blower/fan efficiency.

11. Low-standby-power electronic controls.

12. Ducting insulation.

13. Improved duct connections.

14. Case insulation.

Part-Load Technology Improvements:

15. Variable-speed compressors.

16. Thermostatic or electronic expansion valves.

AHAM commented that the Significant New Alternatives Policy (SNAP) final rule, published by the Environmental Protection Agency (EPA) on April 10, 2015, approved the use of propane (R-290) and R-32 for portable ACs. 80 FR 19454. AHAM asserted that these refrigerants would result in capacity and efficiency improvements, compared with the common refrigerants currently in use. AHAM suggested that DOE consult with manufacturers regarding their plans to use these refrigerants in future designs and determine the associated performance improvements. (AHAM, No. 16 at p. 9) DOE observes that propane refrigerant is widely used for portable ACs manufactured and sold internationally, and that R-32 is being introduced in some markets outside the United States for portable and room ACs, albeit primarily because it has a low global warming potential (GWP). Based on this product availability and discussions with manufacturers, DOE agrees that

propane and possibly other alternative refrigerants could improve portable AC efficiencies. Accordingly, DOE has included alternative refrigerants as a potential technology option in the technology assessment.

DOE also notes that a potential means of improving portable AC efficiencies, air flow optimization, was not included as a technology option in the February 2015 Preliminary Analysis. DOE did, however, consider optimized air flow in the engineering analysis in both the February 2015 Preliminary Analysis and has addressed this technology further in this NOPR. Accordingly, DOE has included it as a technology option in the technology assessment. Therefore, in addition to the technology options considered in the preliminary analysis, DOE additionally considered alternative refrigerants and air flow optimization when conducting this NOPR analysis, as shown in Table IV.2.

Table IV.2—Technology Options for Portable Air Conditioners—NOPR Analysis

Increased Heat-Transfer Surface Area:

1. Increased frontal coil area.

2. Increased depth of coil (add tube rows).

3. Increased fin density.

4. Add subcooler to condenser coil.

Increased Heat-Transfer Coefficients:

5. Improved fin design.

6. Improved tube design.

7. Spray condensate onto condenser coil.

8. Microchannel heat exchangers.

Component Improvements:

9. Improved compressor efficiency.

10. Improved blower/fan efficiency.

11. Low-standby-power electronic controls.

12. Ducting insulation.

13. Improved duct connections.

14. Case insulation.

Part-Load Technology Improvements:

15. Variable-speed compressors.

16. Thermostatic or electronic expansion valves.

Alternative Refrigerants:

17. Propane and R-32.

Reduced Infiltration Air:

18. Air flow Optimization.

After identifying all potential technology options for improving the efficiency of portable ACs, DOE performed a screening analysis (see section IV.B of this proposed rule and chapter 4 of the NOPR TSD) to determine which technologies merited further consideration in the engineering analysis.

B. Screening Analysis

DOE uses the following four screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking:

1.
Technological feasibility.
Technologies that are not incorporated in commercial products or in working prototypes will not be considered further.

2.
Practicability to manufacture, install, and service.
If it is determined that mass production and reliable installation and servicing of a technology in commercial products could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further.

3.
Impacts on product utility or product availability.
If it is determined that a technology would have 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 be considered further.

4.
Adverse impacts on health or safety.
If it is determined that a technology would have significant adverse impacts on health or safety, it will not be considered further.

(10 CFR part 430, subpart C, appendix A, 5(b))

In sum, if DOE determines that a technology, or a combination of technologies, fails to meet one or more of the above four criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology are discussed below.

The subsequent sections include comments from interested parties pertinent to the screening criteria, DOE's evaluation of each technology option against the screening analysis criteria, and whether DOE determined that a technology option should be excluded (“screened out”) based on the screening criteria.

1. Screened-Out Technologies

Ducting Insulation

In the February 2015 Preliminary Analysis, DOE identified duct insulation as a potential means for improving portable AC efficiency, as less heat from the condenser air would be transferred through the duct wall and would instead be transferred out of the conditioned space. During interviews, manufacturers indicated that they have considered insulated ducts to improve performance but have not identified any insulated ducts that are collapsible for packaging and shipping. No portable AC in DOE's teardown sample for the engineering analysis included insulated ducts. In the absence of a collapsible design, such an insulated duct would need to be packaged for shipment in its fully expanded configuration, significantly increasing the package size. Because of this significantly increased packaging size for non-collapsible insulated ducts and unavailability on the market of collapsible designs, DOE determined that insulated ducts are not technologically feasible, are impractical to manufacture and install, and would impact consumer utility. Therefore, DOE screened out insulated ducts as a design option for portable ACs in the February 2015 Preliminary Analysis. DOE received no feedback on this tentative proposal and maintains this approach for the NOPR analysis.

Alternative Refrigerants

The SNAP rule limits the maximum allowable charge of alternative refrigerants in portable ACs to 300 grams for R-290 (propane), 2.45 kilograms for R-32, and 330 grams for R-441A. The SNAP rule limits were consistent with those included for portable room ACs in Underwriter's Laboratories (UL) Standard 484, “Standard for Room Air Conditioners” (UL 484), eighth edition. However, the most recent version of UL 484, the ninth edition, reduces the allowable amount of flammable refrigerant (
e.g.,
propane and R-441A) to less than 40 percent of the SNAP limits. Manufacturers informed DOE that the new UL charge limits for portable ACs are not feasible for providing the necessary minimum cooling capacity, and therefore it would not be feasible to manufacture a portable AC with an alternative refrigerant for the U.S. market while complying with the UL safety standard. DOE reviewed propane refrigerant charges for portable ACs available internationally and found a typical charge of 300 grams. DOE also investigated other similar AC products that utilize propane refrigerant and found that the minimum charge for capacities in a range expected for portable ACs was 265 grams, which is still above the maximum allowable propane charge for portable ACs in the ninth edition of UL 484. Therefore, although portable ACs are currently available internationally with amounts of flammable refrigerants acceptable under the SNAP rule, manufacturers are unable to sell those products in the U.S.

market while complying with the ninth edition of UL 484. In addition, DOE is aware of very few portable or room ACs available commercially in other markets that utilize the mildly flammable R-32. Therefore, DOE screened out alternative refrigerants as a design option for portable ACs as they are not practicable to manufacture at this time while meeting all relevant safety standards. DOE invites comment on the determination that alternative refrigerants should be screened out as a design option for portable ACs.

2. Additional Comments

Improved Compressor Efficiency

DENSO suggested that the portable AC industry is too small to drive compressor efficiencies. DENSO further stated that there is little efficiency improvement available associated with compressors. (DENSO, No. 13 at p. 7) AHAM commented that improved compressor efficiency would increase the stack height of the compressor motor, increasing the size and weight of the portable AC. (AHAM, No. 16 at p. 8) DOE notes that the units in its teardown sample implemented compressors with a range of efficiencies and capacities (see chapter 5 of the NOPR TSD for additional information regarding DOE's test sample and teardown observations). DOE further researched the maximum efficiency of compressors available on the market with capacities suitable for portable ACs. As discussed further in section IV.C.1.b, DOE considered compressor improvements associated with the compressor types currently implemented in portable ACs up to the maximum available efficiency on the market or those compressor types that may be implemented in portable ACs in the foreseeable future, which would not impact the size or weight of the portable ACs to the extent that consumer utility would be significantly affected. Accordingly, DOE did not eliminate compressor efficiency improvements from further consideration in the NOPR analysis.

Increased Heat-Transfer Surface Area

AHAM and DENSO stated that larger heat exchangers, fans with higher air flow rates, and larger ducting components would increase efficiency, but size and noise would limit the extent those design options could be implemented. They further commented that increasing the frontal coil area, depth of the coil, and fin density would increase product sizes, due to larger heat exchangers or fans. In addition, AHAM and DENSO believe that increased fin density may cause reliability and safety concerns because it would result in increased dust and dirt accumulation. (AHAM, No. 16 at p. 8; DENSO, No. 13 at p. 6) DOE agrees that increased heat exchanger areas may require an increase in enclosure size. For that reason, the heat exchanger changes that DOE considered in the February 2015 Preliminary Analysis were limited to a 10-percent increase at the highest efficiency level. In this NOPR analysis, DOE considered further heat exchanger area increases, up to 20 percent of the existing heat exchanger area for the units in DOE's test sample, discussed in section IV.C.1.b and in chapter 5 of the NOPR TSD. DOE observed in its test sample that heat exchanger areas varied significantly from unit to unit. Additionally, DOE observed a significant range in heat exchanger area among the units in its test sample. The range in observed heat exchanger area suggests that manufacturers have more latitude to increase heat exchanger areas for a substantial number of units than DOE had estimated in the February 2015 Preliminary Analysis. Based on the range of observed heat exchanger areas in its test sample and the strong correlation between heat exchanger area and cooling capacity, DOE determined that a 20-percent increase in area is a more appropriate limit. See chapter 5 of the NOPR TSD for additional details regarding the 20-percent threshold. DOE considered all subsequent component and chassis size increases related to this heat exchanger size increase. Accordingly, while there may be some increase in product sizes with increased heat exchanger area, DOE did not eliminate this technology option from further consideration because consumer utility could be maintained. DOE did not screen out increased fin density due to reliability concerns from dirt or dust accumulation because these issues could potentially be prevented with better inlet air filtering. However, increased fin density is not a design option that DOE assumed manufacturers would pursue to reach higher efficiencies because, as discussed further in chapter 5 of the NOPR TSD, other design options are more effective in achieving efficiency improvements.

Improved Blower/Fan Efficiency

DENSO expressed concern that improved blower motor efficiency would require an electronically commutated motor (ECM), which, according to DENSO, would add substantial cost and control complexity. (DENSO, Public Meeting Transcript, No. 11 at pp. 34-35; DENSO, No. 13 at p. 7) As discussed in chapter 3 of the NOPR TSD, DOE considered blower motor efficiency improvements associated with substituting an ECM, with efficiencies as high as 80 percent, for the typical permanent split capacitor (PSC) motor with efficiencies ranging from 60 to 65 percent. Although an ECM is more expensive than a PSC motor, this is not a criteria for screening out a particular technology option. Therefore, DOE has retained this technology option in its NOPR analysis. DOE has factored the incremental cost associated with the ECM and its controls into the engineering analysis (see section IV.C of this NOPR and chapter 5 of the NOPR TSD).

Variable-Speed Compressors

AHAM observed that any efficiency improvement due to variable-speed compressors would not be captured under the proposed test procedure because portable ACs would be tested at the maximum fan speed and therefore commented that DOE should not consider variable-speed compressors in its analysis for proposed standards. (AHAM, No. 16 at p. 8) DOE notes that variable-speed compressors offer the highest efficiencies available in the capacity range appropriate for portable ACs whether operating at single or variable speeds. Because this technology option meets the screening criteria set forth in 10 CFR part 430, subpart C, appendix A, 4, DOE has retained it for consideration in the engineering analysis for this NOPR.

3. Remaining Technologies

Through a review of each technology, DOE tentatively concludes that all of the identified technologies, with the exception of insulated ducts and alternative refrigerants, as discussed in section IV.B.1, met all four screening criteria to be examined further as design options in DOE's NOPR analysis, as shown in Table IV.3. For additional details, see chapter 4 of the NOPR TSD.

Table IV.3—Remaining Design Options for Portable Air Conditioners

Increased Heat-Transfer Surface Area:

1. Increased frontal coil area.

2. Increased depth of coil (add tube rows).

3. Increased fin density.

4. Add subcooler to condenser coil.

Increased Heat-Transfer Coefficients:

5. Improved fin design.

6. Improved tube design.

7. Spray condensate onto condenser coil.

8. Microchannel heat exchangers.

Component Improvements:

9. Improved compressor efficiency.

10. Improved blower/fan efficiency.

11. Low-standby-power electronic controls.

12. Improved duct connections.

13. Case insulation.

Part-Load Technology Improvements:

14. Variable-speed compressors.

15. Thermostatic or electronic expansion valves.

Reduced Infiltration Air:

16. Air flow Optimization.

C. Engineering Analysis

In the engineering analysis DOE establishes the relationship between the manufacturer production cost (MPC) and improved portable AC efficiency. This relationship serves as the basis for cost-benefit calculations for individual consumers, manufacturers, and the Nation. DOE typically structures the engineering analysis using one of three approaches: (1) Design option; (2) efficiency level; or (3) reverse engineering (or cost assessment). The design-option approach involves adding the estimated cost and associated efficiency of various efficiency-improving design changes to the baseline to model different levels of efficiency. The efficiency-level approach uses estimates of costs and efficiencies of products available on the market at distinct efficiency levels to develop the cost-efficiency relationship. The reverse-engineering approach involves testing products for efficiency and determining cost from a detailed bill of materials (BOM) derived from reverse engineering representative products.

In the preliminary engineering analysis, DOE used a hybrid approach of the design-option and reverse-engineering approaches described above. This approach involved physically disassembling commercially available products, reviewing publicly available cost information, and modeling equipment cost. From this information, DOE estimated the MPCs for a range of products available at that time on the market. DOE then considered the steps manufacturers would likely take to improve product efficiencies. In its analysis, DOE determined that manufacturers would likely rely on certain design options to reach higher efficiencies. From this information, DOE estimated the cost and efficiency impacts of incorporating specific design options at each efficiency level.

For this NOPR, DOE followed the same general approach as for the preliminary engineering analysis, but modified the analysis based on the newly established appendix CC test procedure, comments from interested parties, and the most current available information. This section provides more detail on how DOE selected the efficiency levels used for its analysis and developed the MPC at each level. Chapter 5 of the NOPR TSD contains further description of the engineering analysis.

1. Efficiency Levels

a. Baseline Efficiency Levels

A baseline unit typically just meets current energy conservation standards and provides basic consumer utility. Because there are no existing energy conservation standards for portable ACs, DOE observed whether units tested with lower efficiencies incorporated similar design options or features, and considered these features when defining a baseline configuration. To determine energy savings that will result from a new energy conservation standard, DOE compares energy use at each of the higher efficiency levels to the energy consumption of the baseline unit. Similarly, to determine the changes in price to the consumer that will result from an energy conservation standard, DOE compares the price of a unit at each higher efficiency level to the price of a unit at the baseline.

DOE noted in chapter 5 of the preliminary analysis TSD that the air flow pattern through a portable AC has a significant effect on measured cooling capacity and energy efficiency ratio. For units that draw air from the conditioned space over the condenser and then exhaust it outside of the conditioned space, an equivalent amount of infiltration air must enter the conditioned space due to the net negative pressure differential that is created between the conditioned and unconditioned spaces. Because the test conditions proposed in the February 2015 Test Procedure NOPR (the current proposal at the time of the preliminary analysis) specify that infiltration air would be at a higher temperature than the conditioned air, the infiltration air offsets a portion of the cooling provided by the portable AC. The greater the amount of infiltration air, the lower the overall cooling capacity will be. Based on the measured condenser exhaust air flow rates and the corresponding calculated magnitudes of the infiltration air heating effect, DOE determined in the February 2015 Preliminary Analysis that single-duct units (
i.e.,
units that draw all of the condenser intake air from within the conditioned space and exhaust to the unconditioned space via a duct) would represent the baseline efficiency level for portable ACs.

After the February 2015 Preliminary Analysis, DOE established the portable AC test procedure in appendix CC, which incorporates two cooling mode test conditions and weighting factors to determine overall performance. Because the additional test condition is at a lower outdoor temperature and has a significantly larger weighting factor than the original test condition, the impact of infiltration air on overall performance is greatly reduced. Therefore, the approach of considering a baseline unit to be a single-duct portable AC with typical system components is no longer valid for this rulemaking. DOE instead pursued an alternate analysis approach in this NOPR, which utilizes the results from all units in DOE's test sample, including 24 portable ACs (one test sample was tested in both a single-duct and dual-duct configuration) covering a range of configurations, product capacities, and efficiency as tested according the DOE test procedure in appendix CC.

DOE developed a relationship between cooling mode power and seasonally adjusted cooling capacity (SACC), which is a measure of cooling capacity that weights the performance at each of the cooling mode test conditions in appendix CC, using a best fit curve. DOE then used this relationship to develop an equation to determine nominal CEER for a given SACC based on the results of DOE's testing according to the test procedure in appendix CC, shown below.

EP13JN16.004

DOE assessed the relative efficiency of each unit in the test sample by comparing the measured CEER from testing to the nominal CEER as defined by the equation above (DOE will refer to this ratio of actual CEER to nominal

CEER as the performance ratio (PR) for a given unit). DOE proposes to define baseline performance as a PR of 0.72, which is based on the minimum PR observed for units in the test sample. Additional details on the baseline units may be found in chapter 5 of the NOPR TSD DOE invites comment on the baseline performance level proposal and the determination based on the minimum PR observed in DOE's test sample.

b. Higher Energy Efficiency Levels

Preliminary Analysis Proposal

For the February 2015 Preliminary Analysis, DOE developed incremental efficiency levels based on the design options manufacturers would likely use to improve portable AC efficiency. Recognizing that the presence of infiltration air has a large impact on unit performance, DOE expected that when improving efficiencies beyond the baseline, manufacturers would first make improvements to incrementally reduce the amount of infiltration air. While certain technology options identified in Table IV.1 of this NOPR and discussed in chapter 3 of the preliminary analysis TSD meet all the screening criteria and may produce energy savings in certain real-world situations, DOE did not further consider them in the preliminary analysis because specific efficiency gains were either not clearly defined or the DOE test procedure would not capture those potential improvements. Thus, DOE did not expect manufacturers to rely on these features to meet higher efficiency levels. Such technology options included: (1) Adding a subcooler or condenser coil, (2) increasing the heat transfer coefficients, (3) improving duct connections, (4) improving case insulation, and (5) implementing part-load technologies. Further discussion of these technology options and the reasons why DOE tentatively concluded that they would be unlikely to be implemented to improve efficiency can be found in chapter 5 of the preliminary analysis TSD.

The first efficiency level beyond the baseline in the February 2015 Preliminary Analysis, Efficiency Level 1 (EL 1), represented the first improvement a manufacturer would make for a single-duct unit. This efficiency level assumed manufacturers would convert single-duct units to a dual-duct configuration, although the units would still have infiltration air flow equal to half of the total air flow over the condenser (
i.e.,
half of the condenser air flow is from the conditioned space, and the other half is from the unconditioned space via the condenser inlet duct). This amount of infiltration air flow was approximately equal to the average value observed for the dual-duct units in DOE's test sample.

Efficiency Level 2 (EL 2) in the February 2015 Preliminary Analysis represented dual-duct units with infiltration air flow reduced to 25 percent of the total condenser air flow. Efficiency Level 3 (EL 3) represented a dual-duct unit that is perfectly sealed with no infiltration air, such that 100 percent of the condenser air flow is drawn from outside the conditioned space. DOE noted in the preliminary analysis that it did not observe units with zero infiltration air in its test sample, but included such a configuration in the analysis because DOE tentatively concluded it is technically feasible and would result in a significant increase in efficiency.

Efficiency Level 4 (EL 4) in the February 2015 Preliminary Analysis corresponded to the max-tech level as determined by DOE. This level combined the ideal dual-duct air flow configuration described for EL 3 with additional design option changes to improve efficiency. Although DOE did not observe any portable ACs in its sample with these additional design options, DOE regarded each of them as options that manufacturers would likely consider incorporating to achieve the highest possible efficiencies. At EL 4, units would incorporate more efficient compressors and blower motors, larger heat exchangers, and low-standby-power electronic controls. Similar to EL 3, DOE's test sample did not include any portable ACs incorporating all of the design options associated with EL 4, but DOE estimated the potential performance improvements for products incorporating these design changes based on available information and modeling described in chapter 5 of the preliminary analysis TSD.

From this data, DOE derived relationships between cooling capacity
22

and cooling mode energy efficiency ratio, EER
cm
, at each of the efficiency levels. DOE presented the following general relationship in the February 2015 Preliminary Analysis, based on observed trends at each efficiency level:

22
DOE notes that the cooling capacity analyzed in the preliminary analysis is equal to the adjusted cooling capacity (ACC) as proposed in the February 2015 Test Procedure NOPR.

EP13JN16.005

Table IV.4 below provides the coefficients A, in Wh/Btu, and B, in watts (W), for each analyzed efficiency level in the February 2015 Preliminary Analysis that would be used to determine EER
cm
in Btu/Wh. Figure IV-1 plots each efficiency level curve for cooling capacities from 0 to 10,000 Btu/h. DOE noted that the cooling capacity and EER
cm
were based upon how products would be expected to perform under the test procedure proposed in the February 2015 TP NOPR, and thus the range of values for each metric in DOE's analysis did not necessarily correspond to manufacturer-advertised ratings or data in the CEC Appliance Efficiency Database.

Table IV.4—Portable Air Conditioner Efficiency Level Equation Coefficients—Preliminary Analysis

Efficiency level

A coefficient
(Wh/Btu)

B coefficient
(W)

Baseline
0.113
855.5

EL1
0.1201
685.4

EL2
0.1222
566.3

EL3
0.1256
426.9

EL4
0.1205
355.1

EP13JN16.006

Comments and Responses

1. Efficiency Versus Capacity Relationship

In response to the February 2015 Preliminary Analysis, DOE received multiple comments regarding its proposal to define efficiency levels as a function of cooling capacity.

The Joint Commenters, California IOUs, and AHAM agreed that DOE's test data showed a relationship between capacity and efficiency for units in the test sample when measured by the proposed DOE test procedure. However, these commenters did not agree that there is an inherent relationship between capacity and efficiency for all portable ACs, variously citing the following reasons:

(1) Both metrics are sensitive to infiltration air and other heating effects;

(2) other product features or configurations may contribute to efficiency, including improved air flow and compressor or blower motor efficiency;

(3) the observed trend between efficiency and capacity is specific only to DOE's test sample and is not representative of the market in its entirety; and

(4) this trend is atypical of heating and cooling equipment, which typically show a general decline in efficiency with increased cooling capacity.

The California IOUs stated that portable ACs with lower capacities may be capable of increasing EER via design options that do not affect capacity, so that lower standard levels for these units may fail to capture technologically feasible energy savings. The Joint Commenters noted that while the current standards for dehumidifiers (refrigeration-based products similar to portable ACs with comparable capacities) are higher for units with higher capacities, the difference in required efficiency for small-capacity and large-capacity dehumidifiers is significantly less than the range of efficiencies within each proposed portable AC efficiency level curve. According to the Joint Commenters, the availability of dehumidifiers with capacities as low as 25 pints/day that meet the current ENERGY STAR specification (which specifies the same energy factor for all dehumidifiers with capacities up to 75 pints/day) also suggests that there may not be an inherent relationship between capacity and efficiency for portable ACs. Accordingly, the Joint Commenters and the California IOUs urged DOE to consider portable AC standards that would require the same minimum efficiency level for all units. DENSO recommended that DOE evaluate the trends in room AC efficiency as a function of capacity because the engineering analysis in the February 2015 Preliminary Analysis was based in part on room ACs. (ASAP, Public Meeting Transcript, No. 11 at pp. 17-18, 40; Joint Commenters, No. 14 at pp. 2-4; California IOUs, No. 15 at pp. 2-3; AHAM, No. 16 at p. 5; DENSO, No. 13 at p. 5)

DOE's test sample included 24 portable ACs covering a range of configurations and product capacities. Although this sample represents only a portion of the portable AC market, DOE observed little substantive variation in the design and construction between the test units and expects that all units available on the market use similar technologies. Therefore, DOE expects that the results from this test sample likely reflect typical performance of the overall portable AC market.

Although DOE expected that manufacturers would rely on air flow optimization to reach higher efficiency levels as part of the February 2015 Preliminary Analysis, DOE agrees that certain design options would increase efficiency at a relatively constant capacity. However, for the preliminary analysis, DOE estimated that air flow optimization was the most cost-effective pathway for manufacturers to move to higher efficiency levels. In this NOPR analysis, DOE based its analysis on the portable AC test procedure in appendix CC. Under this test procedure, air flow optimization does not have a significant impact on efficiency. Accordingly, DOE has revised its engineering analysis to reflect primarily a component-based approach to achieving higher efficiencies.

DOE notes that although room ACs have similar components as portable ACs, the efficiency versus capacity trends for room ACs do not necessarily apply to portable ACs due to the

significant chassis size constraints on room ACs. Therefore, each product must be analyzed separately due to unique consumer use, installation, and component configuration. Similarly, although dehumidifiers and portable ACs utilize many of the same internal components, the configuration of these components significantly impacts the resulting functionality and delivered benefit to consumers. Dehumidifiers are arranged in a configuration to optimize latent heat transfer or removal of condensate, while portable ACs are configured to provide sensible cooling, with latent heat removal as a secondary function. Further, the two products are tested with different test procedures that produce incomparable capacity and efficiency metrics. Therefore, although they share many components, dehumidifier trends in efficiency versus capacity do not necessarily inherently apply to portable ACs.

DENSO commented that efficiency levels should be based on inherent product characteristics and not on performance related to installation. DENSO stated this would be consistent with packaged central ACs, which are typically installed as ducted units but are tested unducted, with the rating based on unit performance with a modest allowance for ducting. (DENSO, No. 13 at p. 4) The efficiency levels developed for this NOPR analysis are based on testing in accordance with the DOE test procedure for portable ACs in appendix CC. The DOE test procedure, which incorporates industry standards, establishes a repeatable test setup and method to determine representative and repeatable measure of portable AC performance that is comparable among single-duct and dual-duct configurations. DOE further notes that packaged central ACs differ from portable ACs in that the duct exhausting the hot condenser air is outside the conditioned space, and it is only the cooler evaporator ducts that interface with the conditioned space. Therefore, the impacts of duct heat transfer to the conditioned space would be significantly different for portable ACs than for packaged central ACs, and the general approach for testing packaged central ACs is not applicable to portable ACs.

2. Efficiency Level Equations

Several commenters expressed concern about the distillation of DOE's data points into discrete efficiency levels. The Joint Commenters
23

stated that modeled EER
cm
values do not all fall along the efficiency level curves. For example, they commented that units in DOE's sample with cooling capacities at EL 4 ranging from about 3,500 to 9,500 Btu/h achieve modeled EER
cm
values as high as approximately 7 Btu/Wh, but, the EL 4 curve does not exceed 6.5 Btu/Wh for cooling capacities up to 10,000 Btu/h. The Joint Commenters asserted, therefore, that it is inappropriate to use average values in determining the efficiency levels, particularly the max-tech EL 4. (ASAP, Public Meeting Transcript, No. 11 at pp. 48-49; Joint Commenters, No. 14 at pp. 4-5) DENSO suggested that the R-squared value for the curve fits may be low, and therefore the equations may not represent the data accurately. (DENSO, Public Meeting Transcript, No. 11 at pp. 43-45)

23
For some issues, the Appliance Standards Awareness Project submitted substantively similar comments both individually and as a signatory to the Joint Commenters' submission. In those instances, DOE provides citations to both comments.

DOE notes that because there are currently no energy conservation standards for portable ACs, the limited data that are available are not necessarily measured on a consistent basis. DOE therefore conducted testing and modeling to characterize the performance of portable ACs on the market. For the February 2015 Preliminary Analysis, DOE's modeling of air flow optimization resulted in a range of product efficiencies. To minimize potential impacts of outliers or error in the modeling, DOE used best-fit curves to characterize the efficiency versus capacity trends for each corresponding design option. For the NOPR analysis, DOE determined efficiency levels based on the range of observed and modeled performance according to appendix CC for units in its test sample. The baseline efficiency level represents the lowest observed efficiency and the max-tech efficiency level represents the highest modeled efficiency. Accordingly, the efficiency levels for the NOPR analysis span the range of observed and modeled data and no longer rely on best-fit trends for a set of data points at a given efficiency level.

The Joint Commenters encouraged DOE to ensure that units with negative cooling capacities would not be able to meet potential efficiency standards. They noted that at negative cooling capacities, the EER
cm
values for all efficiency levels above the baseline are lower than the baseline values, and the units tested by DOE that have negative cooling capacities have EER
cm
values that are higher than all of the efficiency levels evaluated. (ASAP, Public Meeting Transcript, No. 11 at pp. 46-48; Joint Commenters, No. 14 at pp. 7-8) The data presented in the February 2015 Preliminary Analysis showed the potential for negative efficiencies and cooling capacities. However, the preliminary analysis was based on the test procedure proposed in the February 2015 TP NOPR. The newly established test procedure in appendix CC incorporates a lower-temperature outdoor condition and weights performance under this condition heavily in the final performance calculations. As a result, DOE does not expect any negative SACC or CEER results, and is not proposing standards that would account for these negative values.

3. Design Approaches for Higher Efficiency Levels

AHAM and De' Longhi expressed concern about basing higher efficiency levels on reduced or zero infiltration air, pointing out that DOE did not find any portable ACs with zero infiltration air. De' Longhi suggested that completely sealed dual-duct portable ACs should not be considered as an efficiency level because these units are hypothetical and only included in the analysis based on their technical feasi

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2016-13549. Public record. Not legal advice.