# Energy Conservation Program: Energy Conservation Standards for Miscellaneous Refrigeration Products > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2016-24759 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** October 28, 2016 - **Citation:** 81 FR 75194 ## Text DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket Number EERE-2011-BT-STD-0043] RIN 1904-AC51 Energy Conservation Program: Energy Conservation Standards for Miscellaneous Refrigeration Products AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Direct final rule. Synopsis: The Energy Policy and Conservation Act of 1975, as amended, established the Energy Conservation Program for Consumer Products Other Than Automobiles. Based on provisions in EPCA that enable the Secretary of Energy to classify additional types of consumer products as covered products, the U.S. Department of Energy (DOE) classified miscellaneous refrigeration products as covered consumer products under EPCA. In this direct final rule, DOE is adopting new energy conservation standards for these products that correspond to the recommendations submitted jointly by interested persons that are fairly representative of relevant points of view. DOE has determined that the new energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified. A notice of proposed rulemaking that proposes identical energy efficiency standards is published elsewhere in this Federal Register . If DOE receives adverse comment and determines that such comment may provide a reasonable basis for withdrawal, DOE will withdraw the direct final rule and will proceed with the proposed rule. DATES: The effective date of this rule is February 27, 2017 unless adverse comment is received by February 15, 2017. If adverse comments are received that DOE determines may provide a reasonable basis for withdrawal of the final rule, a timely withdrawal of this rule will be published in the Federal Register . If no such adverse comments are received, compliance with the new standards established in this direct final rule will be required for miscellaneous refrigeration products as detailed in the SUPPLEMENTARY INFORMATION section of this document. Compliance with these new standards for miscellaneous refrigeration products is required starting on October 28, 2019. ADDRESSES: Any comments submitted must identify the direct final rule for Energy Conservation Standards for miscellaneous refrigeration products and provide docket number EERE-2011-BT-STD-0043 and/or regulatory information number (RIN) 1904-AC51. 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: WineChillers-2011-STD-0043@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: Appliance and Equipment Standards Program, 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: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., 6th Floor, Washington, DC 20024. Telephone: (202) 586-6636. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies. No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII of this document (“Public Participation”). Docket: The docket, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, some documents listed in the index 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://www.regulations.gov/docket?D=EERE-2011-BT-STD-0043. This Web page contains a link to the docket for this document on the www.regulations.gov site. The www.regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, contact the Appliance and Equipment Standards Program Staff at (202) 586-6636 or by email: appliance_standards_public_meetings@ee.doe.gov. FOR FURTHER INFORMATION CONTACT: Joseph Hagerman, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-4549. Email: refrigerators_and_freezers@ee.doe.gov . SUPPLEMENTARY INFORMATION: Table of Contents I. Synopsis of the Direct Final Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits and Costs D. Conclusion II. Introduction A. Authority B. History of Standards Rulemaking for Miscellaneous Refrigeration Products III. General Discussion A. Consensus Agreement 1. Background 2. Recommendations B. Compliance Date C. Scope of Coverage D. Product Classes E. Test Procedure F. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels G. Energy Savings 1. Determination of Savings 2. Significance of Savings H. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP) c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors 2. Rebuttable Presumption IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Scope of Coverage a. Coolers b. Combination Cooler Refrigeration Products c. Ice Makers d. Non-Compressor Refrigerators 2. Product Classes a. Coolers b. Combination Cooler Refrigeration Products 3. Technology Options B. Screening Analysis 1. Screened-Out Technologies 2. Remaining Technologies C. Engineering Analysis 1. Coolers a. Methodology b. Efficiency Levels c. Manufacturer Production Costs 2. Combination Cooler Refrigeration Products a. Methodology b. Efficiency Levels c. Manufacturer Production Costs 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 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 and Conclusions A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers a. Life-Cycle Cost and Payback Period b. Consumer Subgroup Analysis c. Rebuttable Presumption Payback 2. Economic Impacts on Manufacturers a. Industry Cash Flow Analysis Results b. Impacts on Direct Employment c. Impacts on Manufacturing Capacity d. Impacts on Subgroups of Manufacturers e. Cumulative Regulatory Burden 3. National Impact Analysis a. Significance of Energy Savings b. Net Present Value of Consumer Costs and Benefits c. Indirect Impacts on Employment 4. Impact on Utility or Performance 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 9. Conclusion a. Benefits and Burdens of TSLs Considered for Coolers b. Benefits and Burdens of TSLs Considered for Combination Cooler Refrigeration Products c. Summary of Annualized Benefits and Costs of the Adopted Standards VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 and 13563 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act 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 M. Congressional Notification VII. Public Participation A. Submission of Comments B. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary I. Synopsis of the Direct Final Rule Title III, Part B 1 of the Energy Policy and Conservation Act of 1975 (“EPCA” or in context, “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 July 18, 2016 (the July 2016 Final Coverage Determination), DOE classified miscellaneous refrigeration products (“MREFs”) as covered consumer products under EPCA. 81 FR 46768. The MREF category includes refrigeration products such as coolers ( e.g., wine chillers) and combination cooler refrigeration products ( e.g., wine chillers combined with a refrigerator, freezer, or refrigerator-freezer). 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 (April 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)) DOE received a statement submitted jointly by interested persons that are fairly representative of relevant points of view (including representatives of manufacturers of the covered equipment at issue, States, and efficiency advocates) containing recommendations with respect to new energy conservation standards for MREFs (see section III.A of this document for a description of the jointly-submitted statement). DOE has determined that the recommended standards contained in the statement are in accordance with 42 U.S.C. 6295(o), which prescribes the conditions under which DOE may adopt new standards. Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is issuing this direct final rule to establish new energy conservation standards for MREFs. The new MREF standards, which are expressed in maximum allowable annual energy use (“AEU”) in kilowatt-hours per year (“kWh/yr”) as a function of the calculated adjusted volume (“AV”) in cubic feet (“ft 3 ”), are shown in Table I.1 and Table I.2. The standards will apply to all MREFs listed in Table I.1 and Table I.2 and manufactured in, or imported into, the United States starting on October 28, 2019. Table I.1—Energy Conservation Standards for Coolers Product class Maximum allowable AEU ( kWh/yr ) Built-in Compact 7.88AV † + 155.8 Built-in Freestanding Compact Freestanding † AV = Adjusted volume, in ft 3 , as calculated according to title 10 of the Code of Federal Regulations (“CFR”) part 430, subpart B, appendix A. Table I.2—Energy Conservation Standards for Combination Cooler Refrigeration Products Product class description Product class designation * Maximum allowable AEU ( kWh/yr ) Cooler with all-refrigerator—automatic defrost C-3A 4.57AV † + 130.4 Built-in cooler with all-refrigerator—automatic defrost C-3A-BI 5.19AV + 147.8 Cooler with upright freezers with automatic defrost without an automatic icemaker C-9 5.58AV + 147.7 Built-in cooler with upright freezer with automatic defrost without an automatic icemaker C-9-BI 6.38AV + 168.8 Cooler with upright freezer with automatic defrost with an automatic icemaker C-9I 5.58AV + 231.7 Built-in cooler with upright freezer with automatic defrost with an automatic icemaker C-9I-BI 6.38AV + 252.8 Compact cooler with all-refrigerator—automatic defrost C-13A 5.93AV + 193.7 Built-in compact cooler with all-refrigerator—automatic defrost C-13A-BI †† 6.52AV + 213.1 * These product classes are consistent with the current product classes established for refrigerators, refrigerator-freezers, and freezers. 10 CFR 430.32. † AV = Adjusted volume, in ft 3 , as calculated according to 10 CFR part 430, subpart B, appendix A. †† There is no current product class 13A-BI for refrigerators, refrigerator-freezers, or freezers. A. Benefits and Costs to Consumers Table I.3 presents DOE's evaluation of the economic impacts of the adopted standards on consumers of MREFs, as measured by the average life-cycle cost (“LCC”) savings and the simple payback period (“PBP”). 3 The average LCC savings are positive for all product classes affected by the adopted standards, and the PBPs are less than the average lifetime of MREFs, which is estimated to be at least 10 years (see section IV.F of this direct final rule). 3 The average LCC savings are measured relative to the efficiency distribution in the compliance year in the absence of standards (see section IV.F of this document). The simple payback period, which is designed to compare specific efficiency levels, is measured relative to the lowest efficiency level in the no-new-standards case (see section IV.F.9 of this document). Table I.3—Impacts of New Energy Conservation Standards on Consumers of MREFs Product class Average LCC savings * (2015$) Simple payback period * (years) Coolers Freestanding compact coolers 265 1.4 Built-in compact coolers 28 4.6 Freestanding coolers 153 1.8 Built-in coolers 77 6.1 Combination Cooler Refrigeration Products C-3A n.a. n.a. C-3A-BI n.a. n.a. C-9 † n.a. n.a. C-9-BI † n.a. n.a. C-13A 32 4.3 C-13A-BI n.a. n.a. * Calculation of savings and PBP is not applicable (n.a.) if the standard is set at an efficiency level that is already met or exceeded in the MREF market. † Results for C-9 and C-9-BI are also applicable to C-9I and C-9I-BI. DOE's analysis of the impacts of the adopted standards on consumers is described in section IV.F of this document. 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 2048). Using a real discount rate of 7.7 percent, DOE estimates that the INPV for manufacturers of MREFs in the case without standards is $263.3 million for coolers and $108.2 million for combination cooler refrigeration products in 2015$. Under the new standards, DOE expects that manufacturers may lose up to 20.8 percent of this INPV for coolers, which is approximately $54.8 million; and manufacturers may lose up to 0.7 percent of this INPV for combination cooler refrigeration products, which is approximately $0.8 million. Additionally, based on DOE's interviews with the manufacturers of MREFs, DOE does not expect significant impacts on manufacturing capacity or loss of employment for the industry as a whole to result from the standards for MREFs adopted in this direct final rule. DOE's analysis of the impacts of new standards on manufacturers is described in section IV.J of this document. C. National Benefits and Costs 4 4 All monetary values in this section are expressed in 2015 dollars and, where appropriate, are discounted to 2016 unless explicitly stated otherwise. Energy savings in this section refer to the full-fuel-cycle (“FFC”) savings (see section IV.H of this document for discussion). DOE's analyses indicate that the adopted energy conservation standards for MREFs would save a significant amount of energy. Relative to the no-new-standards case, the lifetime energy savings for MREFs purchased in the 30-year period that begins in the anticipated year of compliance with the new standards (2019-2048) amount to 1.5 quadrillion Btu (“quads”). 5 This represents a savings of 58 percent relative to the energy use of these products in the no-new-standards case. 5 A quad is equal to 10 15 British thermal units (”Btu”). The quantity refers to 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 of this document. The cumulative net present value (“NPV”) of total consumer costs and savings of the standards for MREFs ranges from $4.78 billion (at a 7-percent discount rate) to $11.02 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 MREFs purchased in 2019-2048. In addition, the standards for MREFs are projected to yield significant environmental benefits. DOE estimates that the standards would result in cumulative greenhouse gas emission reductions (over the same period as for energy savings) of 91.8 million metric tons (“Mt”) 6 of carbon dioxide (“CO 2 ”), 54.0 thousand tons of sulfur dioxide (“SO 2 ”), 164.0 tons of nitrogen oxides (“NO X ”), 387.1 thousand tons of methane (“CH 4 ”), 1.1 thousand tons of nitrous oxide (“N 2 O”), and 0.2 tons of mercury (“Hg”). 7 The cumulative reduction in CO 2 emissions through 2030 amounts to 20.2 Mt, which is equivalent to the emissions resulting from the annual electricity use of more than 2.8 million homes. 6 A metric ton is equivalent to 1.1 short tons. Results for NO X and Hg are presented in short tons. 7 DOE calculated emissions reductions relative to the no-new-standards-case, which reflects key assumptions in the Annual Energy Outlook 2015 (“ AEO 2015 ”) Reference case, which generally represents current legislation and 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. 8 The derivation of the SCC values is discussed in section IV.L of this document. Using discount rates appropriate for each set of SCC values, DOE estimates that the net present monetary value of the CO 2 emissions reduction (not including CO 2 equivalent emissions of other gases with global warming potential) is between $0.679 billion and $9.271 billion, with a value of $3.047 billion using the central SCC case represented by $40.6/t in 2015. DOE also estimates that the net present monetary value of the NO X emissions reduction to be $0.142 billion at a 7-percent discount rate, and $0.326 billion at a 3-percent discount rate. 9 8 United States Government-Interagency Working Group on Social Cost of Carbon. Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. May 2013. Revised July 2015. Available at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf. 9 DOE estimated the monetized value of NO X emissions reductions associated with electricity savings using benefit per ton estimates from the Regulatory Impact Analysis for the Clean Power Plan Final Rule, published in August 2015 by EPA's Office of Air Quality Planning and Standards. Available at www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis. See section IV.L of this document for further discussion. The U.S. Supreme Court has stayed the rule implementing the Clean Power Plan until the current litigation against it concludes. Chamber of Commerce, et al. v. EPA, et al., Order in Pending Case, 577 U.S. (2016). However, the benefit-per-ton estimates established in the Regulatory Impact Analysis for the Clean Power Plan are based on scientific studies that remain valid irrespective of the legal status of the Clean Power Plan. DOE is primarily using a national benefit-per-ton estimate for NO X emitted from the Electricity Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski, et al. 2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele, et al. 2011), the values would be nearly two-and-a-half times larger. Table I.4 summarizes the economic benefits and costs expected to result from the adopted standards for MREFs. Table I.4—Summary of Economic Benefits and Costs of New Energy Conservation Standards for MREFs * Category Present value (billion 2015$) Discount rate (%) Benefits Consumer Operating Cost Savings 6.4 13.9 7 3 CO 2 Reduction (using mean SCC at 5% discount rate) ** 0.7 5 CO 2 Reduction (using mean SCC at 3% discount rate) ** 3.0 3 CO 2 Reduction (using mean SCC at 2.5% discount rate) ** 4.8 2.5 CO 2 Reduction (using 95th percentile SCC at 3% discount rate) ** 9.3 3 NO X Reduction † 0.1 0.3 7 3 Total Benefits †† 9.6 17.3 7 3 Costs Consumer Incremental Installed Costs 1.7 2.9 7 3 Net Benefits Including CO 2 and NO X Reduction Monetized Value †† 8.0 14.4 7 3 * This table presents the costs and benefits associated with MREFs shipped in 2019-2048. These results include benefits to consumers which accrue after 2048 from the products purchased in 2019-2048. The incremental installed costs include incremental equipment cost as well as installation costs. The CO 2 reduction benefits are global benefits due to actions that occur nationally. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. ** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC from the integrated assessment models, at discount rates of 5%, 3%, and 2.5%. For example, for 2015 emissions, these values are $12.4/t, $40.6/t, and $63.2/t, in 2015$, respectively. The fourth set ($118/t in 2015$ for 2015 emissions), which represents the 95th percentile of the SCC distribution calculated using a 3% discount rate, is included to represent higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. The SCC values are emission year specific. See section IV.L.1 of this document for more details. † DOE estimated the monetized value of NO X emissions reductions associated with electricity savings using benefit per ton estimates from the “Regulatory Impact Analysis for the Clean Power Plan Final Rule,” published in August 2015 by EPA's Office of Air Quality Planning and Standards. (Available at www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis. ) See section IV.L of this document for further discussion. DOE is primarily using a national benefit-per-ton estimate for NO X emitted from the Electricity Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski et al. 2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al. 2011), the values would be nearly two-and-a-half times larger. †† Total Benefits for both the 3% and 7% cases are presented using only the average SCC with 3-percent discount rate. The benefits and costs of the adopted standards for MREFs sold in 2019 to 2048 can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are the sum of (1) the national economic value of the benefits in reduced operating costs, minus (2) the increases in product purchase prices and installation costs, plus (3) the value of the benefits of CO 2 and NO X emission reductions, all annualized. 10 10 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.4. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year that yields the same present value. The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered products. The national operating cost savings is measured for the lifetime of MREFs shipped in 2019-2048. The CO 2 reduction is a benefit that accrues globally due to decreased domestic energy consumption that is expected to result from this rule. Because CO 2 emissions have a very long residence time in the atmosphere, the SCC values in future years reflect future CO 2 -emissions impacts that continue beyond 2100 through 2300. Estimates of annualized benefits and costs of the adopted 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 SCC series that has a value of $40.6/t in 2015), 11 the estimated cost of the standards in this rule is $153 million per year in increased equipment costs, while the estimated annual benefits are $593 million in reduced equipment operating costs, $165 million in CO 2 reductions, and $13.1 million in reduced NO X emissions. In this case, the net benefit amounts to $619 million per year. 11 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 of this document). Using a 3-percent discount rate for all benefits and costs and the SCC series has a value of $40.6/t in 2015, the estimated cost of the standards is $157 million per year in increased equipment costs, while the estimated annual benefits are $754 million in reduced operating costs, $165 million in CO 2 reductions, and $17.7 million in reduced NO X emissions. In this case, the net benefit amounts to $779 million per year. Table I.5—Annualized Benefits and Costs of New Standards for MREFs * Discount rate Primary estimate Low net benefits estimate High net benefits estimate (million 2015$/year) Benefits Consumer Operating Cost Savings 7% 3% 593 754 545 686 649. 839. CO 2 Reduction (using mean SCC at 5% discount rate) ** 5% 49 46 53. CO 2 Reduction (using mean SCC at 3% discount rate) ** 3% 165 155 179. CO 2 Reduction (using mean SCC at 2.5% discount rate) ** 2.5% 242 227 263. CO 2 Reduction (using 95th percentile SCC at 3% discount rate) ** 3% 502 471 546. NO X Reduction † 7% 3% 13.1 17.7 12.4 16.6 31.6. 43.6. Total Benefits †† 7% plus CO 2 range 655 to 1,108 603 to 1,028 733 to 1,226. 7% 771 712 860. 3% plus CO 2 range 820 to 1,273 748 to 1,173 935 to 1,428. 3% 937 857 1,062. Costs Consumer Incremental Product Costs ††† 7% 3% 153 157 145 148 118. 116. Net Benefits Total †† 7% plus CO 2 range 503 to 956 459 to 884 615 to 1,108. 7% 619 568 742. 3% plus CO 2 range 663 to 1,116 601 to 1,026 819 to 1,312. 3% 779 709 946. * This table presents the annualized costs and benefits associated with MREFs shipped in 2019-2048. These results include benefits to consumers which accrue after 2048 from the MREFs purchased from 2019-2048. The incremental installed costs include incremental equipment cost as well as installation costs. The CO 2 reduction benefits are global benefits due to actions that occur nationally. The Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices and housing starts from the AEO 2015 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental product costs reflect a constant price trend in the Primary Estimate and 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.F of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. ** The CO 2 reduction benefits are calculated using 4 different sets of SCC values. The first three use the average SCC calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC values are emission year specific. See section IV.L.1 of this document for more details. † DOE estimated the monetized value of NO X emissions reductions associated with electricity savings using benefit per ton estimates from the “Regulatory Impact Analysis for the Clean Power Plan Final Rule,” published in August 2015 by EPA's Office of Air Quality Planning and Standards. (Available at www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis. ) See section IV.L of this document for further discussion. For the Primary Estimate and Low Net Benefits Estimate, DOE used a national benefit-per-ton estimate for NO X emitted from the Electric Generating Unit sector based on an estimate of premature mortality derived from the ACS study (Krewski et al. 2009). For DOE's High Net Benefits Estimate, the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al. 2011), which are nearly two-and-a-half times larger than those from the ACS study. †† Total Benefits for both the 3% and 7% cases are presented using only the average SCC with 3-percent discount rate. 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. ††† The value of consumer incremental product costs is lower in the low net benefits estimate than it is in the primary estimate because both estimates use the same price trend and there are fewer shipments in the low net benefits estimate. The value of consumer incremental product costs is lower in the high net benefits scenario than it is in the primary case because the high net benefits scenario uses a highly declining price trend that more than offsets the increase in shipments due to higher economic growth. DOE's analysis of the national impacts of the adopted standards is described in sections IV.H, IV.K, and IV.L of this document. D. Conclusion Based on the analyses culminating in this direct final rule, DOE found the benefits to the nation of the standards (energy savings, consumer LCC savings, positive NPV of consumer benefit, and emission reductions) outweigh the burdens (reduction of INPV for manufacturers). DOE has concluded that the standards in this direct final rule represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in significant conservation of energy. Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is issuing this direct final rule to establish new energy conservation standards for MREFs. II. Introduction The following section briefly discusses the statutory authority underlying this direct final rule, as well as some of the relevant historical background related to the establishment of standards for MREFs. A. Authority As indicated above, EPCA includes provisions covering the products addressed by this Direct final rule. EPCA addresses, among other things, the energy efficiency of certain types of consumer products. Relevant provisions of the Act specifically include definitions (42 U.S.C. 6291), energy conservation standards (42 U.S.C. 6295), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), and the authority to require information and reports from manufacturers (42 U.S.C. 6296). Under 42 U.S.C. 6292(a)(20), DOE may extend coverage over a particular type of consumer product provided that DOE determines that classifying products of such type as covered products is necessary or appropriate to carry out the purposes of EPCA and that the average annual per-household energy use by products of such type is likely to exceed 100 kilowatt-hours (“kWh”) or its British thermal unit (“Btu”) equivalent per year. See 42 U.S.C. 6292(b)(1). EPCA sets out the following additional requirements to establish energy conservation standards for a new covered product: (1) The average per household domestic energy use by such products exceeded 150 kWh or its Btu equivalent for any 12-month period ending before such determination; (2) the aggregate domestic household energy use by such products exceeded 4.2 million kWh or its Btu equivalent for any such 12-month period; (3) substantial energy efficiency of the products is technologically feasible; and (4) applying a labeling rule is unlikely to be sufficient to induce manufacturers to produce, and consumers and other persons to purchase, products of such type that achieve the maximum level of energy efficiency. See 42 U.S.C. 6295(l)(1). Pursuant to EPCA, DOE's energy conservation program for covered products 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 MREFs currently appears at title 10 of the Code of Federal Regulations (“CFR”) part 430, subpart B, appendix A (appendix A). DOE follows specific criteria when prescribing new or amended standards for covered products. As indicated above, 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) and (3)(B)) 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 MREFs, if no test procedure has been established for the product, or (2) if DOE determines by rule that the new or amended standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a new or amended 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 considering, to the greatest extent practicable, the following seven factors: 1. The economic impact of the standard on manufacturers and consumers of the products subject to the standard; 2. The savings in operating costs throughout the estimated average life of the 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 imposition of the standard; 3. The total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard; 4. Any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard; 5. The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard; 6. The need for national energy and water conservation; and 7. Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 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 also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States 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, DOE may set energy conservation standards for a covered product that has two or more subcategories. In those instances, DOE must specify a different standard level for a type or class of products 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. 6295(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 such a 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). DOE is also 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 the 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 test procedures for MREFs address standby mode and off mode energy use, as do the new standards adopted in this direct final rule. With particular regard to direct final rules, the Energy Independence and Security Act of 2007 (“EISA 2007”), Public Law 110-140 (December 19, 2007), amended EPCA, in relevant part, to grant DOE authority to issue a type of final rule ( i.e., a “direct final rule”) establishing an energy conservation standard for a product on receipt of a statement that is submitted jointly by interested persons that are fairly representative of relevant points of view (including representatives of manufacturers of covered products, States, and efficiency advocates), as determined by the Secretary, and that contains recommendations with respect to an energy or water conservation standard. In the context of consumer products, if the Secretary determines that the recommended standard contained in the statement is in accordance with 42 U.S.C. 6295(o), the Secretary may issue a final rule establishing the recommended standard. A notice of proposed rulemaking (“NOPR”) that proposes an identical energy efficiency standard is published simultaneously with the direct final rule. A public comment period of at least 110 days is provided. See 42 U.S.C. 6295(p)(4). Not later than 120 days after the date on which a direct final rule issued under this authority is published in the Federal Register , the Secretary shall withdraw the direct final rule if the Secretary receives one or more adverse public comments relating to the direct final rule or any alternative joint recommendation and based on the rulemaking record relating to the direct final rule, the Secretary determines that such adverse public comments or alternative joint recommendation may provide a reasonable basis for withdrawing the direct final rule under subsection 42 U.S.C. 6295(o) or any other applicable law. On withdrawal of a direct final rule, the Secretary shall proceed with the NOPR published simultaneously with the direct final rule and publish in the Federal Register the reasons why the direct final rule was withdrawn. This direct final rule provision applies to the products at issue in this direct final rule. See 42 U.S.C. 6295(p)(4). DOE also notes that it typically finalizes its test procedures for a given regulated product or equipment prior to proposing new or amended energy conservation standards for that product or equipment, see 10 CFR part 430, subpart C, appendix A, sec. 7(c) (“Procedures, Interpretations and Policies for Consideration of New or Revised Energy Conservation Standards for Consumer Products” or “Process Rule”). In this instance, although DOE has finalized its test procedure for MREFs, rather than issue a notice of proposed rulemaking to set standards for these products, DOE is moving forward with a direct final rule. As part of the negotiated rulemaking that led to the Term Sheet setting out the standards that DOE is proposing, Working Group members recommended (with ASRAC's approval) that DOE implement the test procedure that DOE recently finalized. See 81 FR 46768 (July 18, 2016). The approach laid out in that final rule is consistent with the approach agreed upon by the various Working Group members who participated in the negotiated rulemaking. Accordingly, in accordance with section 14 of the Process Rule, DOE tentatively concludes that deviation from the Process Rule is appropriate here. B. History of Standards Rulemaking for Miscellaneous Refrigeration Products DOE has not previously established energy conservation standards for MREFs. Consistent with its statutory obligations, DOE sought to establish regulatory coverage over these products prior to establishing energy conservation standards to regulate MREF efficiency. On November 8, 2011, DOE published a notice of proposed determination of coverage (“NOPD”) to address the potential coverage of those refrigeration products that do not use a compressor-based refrigeration system. 76 FR 69147. Rather than employing a compressor/condenser-based system typically installed in the refrigerators, refrigerator-freezers, and freezers found in most U.S. homes, these “non-compressor-based” refrigeration products use a variety of other means to introduce chilled air into the interior of the storage cabinet of the product. Two systems that DOE specifically examined were thermoelectric- and absorption-based systems. 12 The former of these systems is used in some wine chiller applications. With respect to the latter group of products, DOE indicated its belief that these types of products were used primarily in mobile applications and would likely fall outside of DOE's scope of coverage. See 42 U.S.C. 6292(a) (excluding from coverage “those consumer products designed solely for use in recreational vehicles and other mobile equipment”). 12 Chapter 3 of the direct final rule technical support document provides a detailed description of each of these refrigeration technologies. On February 13, 2012, DOE published a document announcing the availability of the framework document, “Energy Conservation Standards Rulemaking Framework Document for Wine Chillers and Miscellaneous Refrigeration Products,” and a public meeting to discuss the proposed analytical framework for the energy conservation standards rulemaking. 77 FR 7547. In the framework document, DOE described the procedural and analytical approaches it anticipated using to evaluate potential energy conservation standards for four types of consumer refrigeration products: Wine chillers, non-compressor refrigerators, hybrid refrigerators ( i.e., a wine chiller combined with a refrigerator), and ice makers. DOE held a public meeting on February 22, 2012, to present the framework document, describe the analyses DOE planned to conduct during the rulemaking, seek comments from interested parties on these subjects, and inform them about, and facilitate their involvement in, the rulemaking. At the public meeting and during the comment period, DOE received multiple comments that addressed issues raised in the framework document and identified additional issues relevant to the rulemaking. On October 31, 2013, DOE published in the Federal Register a supplemental notice of proposed determination of coverage (the “October 2013 SNOPD”), in which it tentatively determined that the four categories of consumer products addressed in the framework document (wine chillers, non-compressor refrigeration products, hybrid refrigerators, and ice makers) satisfy the provisions of 42 U.S.C. 6292(b)(1). 78 FR 65223. DOE published a notice of public meeting and availability of the preliminary technical support document (“TSD”) for the MREF energy conservation standards rulemaking on December 3, 2014. 79 FR 71705. The preliminary analysis considered potential standards for the products proposed for coverage in the October 2013 SNOPD. The preliminary TSD includes the results of the following DOE preliminary analyses: (1) Market and technology assessment; (2) screening analysis; (3) engineering analysis; (4) markups analysis; (5) energy use analysis; (6) LCC and PBP analyses; (7) shipments analysis; (8) national impact analysis (“NIA”); and (9) preliminary manufacturer impact analysis (“MIA”). DOE held a public meeting on January 9, 2015, during which it presented preliminary results for the engineering and downstream economic analyses and sought comments from interested parties on these subjects. At the public meeting and during the comment period, DOE received comments that addressed issues raised in the preliminary analysis and identified additional issues relevant to this rulemaking. After reviewing the comments received in response to both the preliminary analysis and a test procedure NOPR published on December 16, 2014 (the “December 2014 Test Procedure NOPR,” 79 FR 74894), DOE ultimately determined that the development of test procedures and potential energy conservation standards for MREFs would benefit from a negotiated rulemaking process. On April 1, 2015, DOE published a notice of intent to establish an Appliance Standards and Rulemaking Federal Advisory Committee (“ASRAC”) negotiated rulemaking working group for MREFs (the “MREF Working Group” or in context, the “Working Group”) to discuss and, if possible, reach consensus on recommended scope of coverage, definitions, test procedures, and energy conservation standards. 80 FR 17355. The MREF Working Group consisted of 15 members, including two members from ASRAC and one DOE representative. The MREF Working Group met in person during six sets of meetings in 2015: May 4-5, June 11-12, July 15-16, August 11-12, September 16-17, and October 20. On August 11, 2015, the MREF Working Group reached consensus on a term sheet to recommend a scope of coverage, set of definitions, and test procedures for MREFs (“Term Sheet #1”). 13 That document laid out the scope of products that the Working Group recommended that DOE adopt with respect to MREFs, the definitions that would apply to MREFs and certain other refrigeration products, and the test procedure that manufacturers of MREFs would need to use when evaluating the energy usage of these products. On October 20, 2015, the MREF Working Group reached consensus on a term sheet to recommend energy conservation standards for coolers and combination cooler refrigeration products (“Term Sheet #2”). ASRAC approved Term Sheet #1 during an open meeting on December 18, 2015, and Term Sheet #2 during an open meeting on January 20, 2016. ASRAC subsequently sent the term sheets to the Secretary for consideration. 13 The MREF Working Group term sheets are available in docket ID EERE-2011-BT-STD-0043 on http://regulations.gov. In addition to these steps, DOE sought to ensure that it had obtained complete information and input regarding certain aspects related to manufacturers of thermoelectric refrigeration products. To this end, on December 15, 2015, DOE published a notice of data availability (the “December 2015 NODA”) in which it requested additional public feedback on the methods and information used in the development of the MREF Working Group term sheets. 80 FR 77589. DOE noted in particular its interest in information related to manufacturers of thermoelectric refrigeration products. Id. at 77590. After considering the MREF Working Group recommendations and comments received in response to the December 2015 NODA, DOE published an SNOPD and notice of proposed rulemaking (the “March 2016 SNOPD”) on March 4, 2016. 81 FR 11454. The March 2016 SNOPD proposed establishing coverage, definitions, and terminology consistent with Term Sheet #1. It also proposed to determine that coolers and combination cooler refrigeration products—as defined under the proposal—would meet the requirements under EPCA to be considered covered products. Id. at 11456-11459. The July 2016 Final Coverage Determination established coolers and combination cooler refrigeration products as covered products under EPCA. Because DOE did not receive any comments in response to the March 2016 SNOPD that would substantively alter its proposals, the findings of the final determination were unchanged from those presented in the March 2016 SNOPD. Moreover, DOE determined in the July 2016 Final Coverage Determination that MREFs, on average, consume more than 150 kWh/yr, and that the aggregate annual national energy use of these products exceeds 4.2 TWh. Accordingly, these data indicate that MREFs satisfy at least two of the four criteria required under EPCA in order for the Secretary to set standards for a product whose coverage is added pursuant to 42 U.S.C. 6292(b). See 42 U.S.C. 6295(l)(1)(A)-(D). See also 81 FR 46768 at 46773-46775 (detailing the data used to evaluate the energy usage of MREF products). In addition to establishing coverage, the July 2016 Final Coverage Determination established definitions for “miscellaneous refrigeration products,” “coolers,” and “combination cooler refrigeration products” in 10 CFR 430.2. The July 2016 Final Coverage Determination also amended the existing definitions for “refrigerator,” “refrigerator-freezer,” and “freezer” for consistency with the newly established MREF definitions. These definitions were generally consistent with the March 2016 SNOPD. Id. at 46775-46778. III. General Discussion A. Consensus Agreement 1. Background As discussed in section II.B of this document, the MREF Working Group approved two term sheets that recommended a scope of coverage, definitions, test procedures, and energy conservation standards for MREFs. ASRAC approved the two term sheets during open meetings and sent them to the Secretary of Energy for consideration. After carefully considering the consensus recommendations related to new energy conservation standards for MREFs submitted by the MREF Working Group and adopted by ASRAC, DOE has determined that these recommendations comprise a statement submitted by interested persons who are fairly representative of relevant points of view on this matter. In reaching this determination, DOE took into consideration the fact that the Working Group, in conjunction with ASRAC members who approved the recommendations, consisted of representatives of manufacturers of covered products, States, and efficiency advocates—all of which are groups specifically identified by Congress as potentially relevant parties to any consensus recommendation submitted by ASRAC. (42 U.S.C. 6295(p)(4)(A)) As delineated above, Term Sheet #2 was submitted by a broad cross-section of interests, including the manufacturers who produce the subject products, a trade association representing these manufacturers, environmental and energy-efficiency advocacy organizations, and an electric utility company. Although States were not direct signatories to the Term Sheet, the ASRAC Committee approving the Working Group's recommendations included one member representing the State of California. 14 Additionally, in spite of the MREF Working Group meetings already being publicized and open to all members of the public, DOE published the December 2015 NODA to present the data and analyses used in support of developing the term sheets to provide an opportunity for further comment from interested parties. 80 FR 77589 (December 15, 2015). Moreover, DOE does not read the statute as requiring absolute agreement among all interested parties before the Department may proceed with issuance of a direct final rule. By explicit language of the statute, the Secretary has the discretion to determine when a joint recommendation for an energy or water conservation standard has met the requirement for representativeness ( i.e., “as determined by the Secretary”). 14 The individual was David Hungerford (California Energy Commission). By its plain terms, the statute contemplates that the Secretary will exercise discretion to determine whether a given statement is submitted jointly by interested persons that are fairly representative of relevant points of view (including representatives of manufacturers of covered products, States, and efficiency advocates). In this case, given the broad range of persons participating in the process that led to the submission—in the Working Group and in ASRAC—and given the breadth of perspectives expressed in that process, DOE has determined that the statements it received meet this criterion. Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also determine whether a jointly-submitted recommendation for an energy conservation standard satisfies the criteria presented in 42 U.S.C. 6295(o). To make this determination, DOE has conducted an analysis to evaluate whether the potential energy conservation standards under consideration would meet these requirements. This evaluation is the same comprehensive approach that DOE typically conducts whenever it considers potential energy conservation standards for a given type of product or equipment. DOE applies the same principles to any consensus recommendations it may receive to satisfy its statutory obligation to ensure that any energy conservation standard that it adopts achieves the maximum improvement in energy efficiency that is technologically feasible and economically justified and will result in the significant conservation of energy. Upon review, the Secretary determined that the standards recommended in Term Sheet #2 submitted to DOE through ASRAC meet the standard-setting criteria set forth under 42 U.S.C. 6295(o). The consensus-recommended efficiency levels were included as trial standard level (“TSL”) 2 for coolers and TSL 1 for combination cooler refrigeration products (see section V.A of this document for a description of all of the considered TSLs). The details regarding how the consensus- recommended TSLs comply with the standard-setting criteria are discussed and demonstrated in the relevant sections throughout this document. In sum, as the relevant criteria under 42 U.S.C. 6295(p)(4) have been satisfied, the Secretary has determined that it is appropriate to adopt the consensus-recommended energy conservation standards for MREFs as presented in Term Sheet #2 through this direct final rule. Pursuant to the same statutory provision, DOE is also simultaneously publishing a NOPR proposing that the identical standard levels contained in this direct final rule be adopted. Consistent with the statute, DOE is providing a 110-day public comment period on this direct final rule. Based on the comments received during this period, the direct final rule will either become effective or DOE will withdraw it if: (1) One or more adverse comments is received; and (2) DOE determines that those comments, when viewed in light of the rulemaking record related to the direct final rule, provide a reasonable basis for withdrawal of the direct final rule under 42 U.S.C. 6295(o) and for DOE to continue this rulemaking under the NOPR. (Receipt of an alternative joint recommendation may also trigger a DOE withdrawal of the direct final rule in the same manner.) See 42 U.S.C. 6295(p)(4)(C). Typical of other rulemakings, it is the substance, rather than the quantity, of comments that will ultimately determine whether a direct final rule will be withdrawn. To this end, the substance of any adverse comment(s) received will be weighed against the anticipated benefits of the jointly-submitted recommendations and the likelihood that further consideration of the comment(s) would change the results of the rulemaking. DOE notes that, to the extent an adverse comment had been previously raised and addressed in the rulemaking proceeding, such a submission will not typically provide a basis for withdrawal of a direct final rule. 2. Recommendations The MREF Working Group recommended standards for all MREF product classes of coolers and combination cooler refrigeration products. Table III.1 and Table III.2 show the recommended standard levels, which are expressed as an equation whose value varies based on the calculated AV of a given product. The MREF Working Group recommended that these standard levels take effect three years following the publication of the direct final rule. See Term Sheet #2. Table III.1—Consensus-Recommended Standard Levels for Coolers Product class Maximum allowable AEU ( kWh/yr ) Built-in Compact 7.88AV† + 155.8 Built-in Freestanding Compact Freestanding † AV = Adjusted volume, in ft 3 , as calculated according to title 10 CFR part 430, subpart B, appendix A. Table III.2—Consensus-Recommended Standard Levels for Combination Cooler Refrigeration Products Product class description Product class designation * Maximum allowable AEU ( kWh/yr ) Cooler with all-refrigerator—automatic defrost C-3A 4.57AV† + 130.4 Built-in cooler with all-refrigerator—automatic defrost C-3A-BI 5.19AV + 147.8 Cooler with upright freezers with automatic defrost without an automatic icemaker C-9 5.58AV + 147.7 Built-in cooler with upright freezer with automatic defrost without an automatic icemaker C-9-BI 6.38AV + 168.8 Cooler with upright freezer with automatic defrost with an automatic icemaker C-9I 5.58AV + 231.7 Built-in cooler with upright freezer with automatic defrost with an automatic icemaker C-9I-BI 6.38AV + 252.8 Compact cooler with all-refrigerator—automatic defrost C-13A 5.93AV + 193.7 Built-in compact cooler with all-refrigerator—automatic defrost C-13A-BI†† 6.52AV + 213.1 * These product classes are consistent with the current product classes established for refrigerators, refrigerator-freezers, and freezers. 10 CFR 430.32. † AV = Adjusted volume, in ft 3 , as calculated according to 10 CFR part 430, subpart B, appendix A. †† There is no current product class 13A-BI for refrigerators, refrigerator-freezers, or freezers. B. Compliance Date When establishing new standards for products not previously covered, EPCA provides that newly-established standards shall not apply to products manufactured within five years after the publication of the final rule. See 42 U.S.C. 6295(l)(2). As part of its set of comprehensive recommendations, the MREF Working Group recommended that DOE instead apply a 3-year lead time. DOE has the authority under section 42 U.S.C. 6295(p)(4) to accept recommendations for compliance dates contained in a joint submission recommending amended standards. In DOE's view, the direct final rule authority provision specifies the finding DOE has to make. Specifically, Congress specified that if DOE determines that the recommended standard is in accordance with 42 U.S.C. 6295(o), DOE may issue a final rule establishing those standards. See 42 U.S.C. 6295(p)(4)(A)(i). Applying the direct final rule provision in this manner meets Congress's goal to promote consensus agreements that reflect broad input from interested parties who can fashion agreements that best promote the aims of the statute. In the absence of a consensus agreement, DOE notes that the more specific prescriptions of EPCA would ordinarily prevail. However, when DOE receives a recommendation resulting from the appropriate process—in this case, the detailed procedure laid out in the direct final rule provision of EPCA—that process provides the necessary fidelity to the statute, along with compliance with section 6295(o), that Congress instructed DOE to apply. DOE notes that its analysis of whether the consensus-recommended and other TSLs satisfy the criteria presented in 42 U.S.C. 6295(o) contemplates two compliance periods. For consensus-recommended TSLs, the analysis is based on a 2019 compliance date, as recommended by the MREF Working Group. The analysis for all other TSLs is based on a 2021 compliance date consistent with EPCA, which provides that newly-established standards shall not apply to products manufactured within five years after the publication of the final rule. In other words, DOE followed the prescriptions of EPCA for all TSLs that were not recommended by the MREF Working Group. The two different compliance dates are indicated in the relevant sections throughout this document. C. Scope of Coverage In the preliminary analysis, DOE considered potential standards for four consumer product categories proposed for coverage in the October 2013 SNOPD: Cooled cabinets, non-compressor refrigerators, ice makers, and hybrid products. See chapter 3 of the preliminary TSD. Based on comments received in response to the preliminary analysis, and on the recommendations of the MREF Working Group, DOE subsequently proposed in the March 2016 SNOPD that consumer ice makers and non-compressor refrigerators would not be included within MREFs. DOE proposed to remove ice makers from the scope of MREFs because they are significantly different from the other product types being considered for coverage, consistent with the MREF Working Group's recommendation. For non-compressor refrigerators, DOE is not aware of any products available on the market that would be considered non-compressor refrigerators. Instead, non-compressor products available on the market would be considered coolers under the March 2016 SNOPD proposal. DOE also revised the proposed definitions for cooled cabinets and hybrid products to designate these products as coolers and combination cooler refrigeration products, respectively, in accordance with the definitions recommended by the MREF Working Group in Term Sheet #1. See 81 FR 11454, 11456, 11458-11459. Interested parties generally supported the scope of coverage, energy use analysis, and definitions proposed in the March 2016 SNOPD. Therefore, in the July 2016 Final Coverage Determination, DOE determined that MREFs (including coolers and combination cooler refrigeration products) are covered products under EPCA. The July 2016 Final Coverage Determination also established definitions for these products that are generally consistent with the March 2016 SNOPD proposal. 81 FR 46768. This direct final rule establishes energy conservation standards for MREFs as defined in the July 2016 Final Coverage Determination. D. 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 differing standards. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (42 U.S.C. 6295(q)) In this direct final rule, DOE is establishing energy conservation standards for four product classes of coolers and nine product classes of combination cooler refrigeration products. These product classes are consistent with those recommended by the MREF Working Group in Term Sheet #2. The product classes established in this direct final rule and their descriptions are provided in Table III.3. Table III.3—MREF Product Classes Product class Product class description Coolers Built-in compact Total refrigerated volume less than 7.75 ft 3 and meeting the built-in definition requirements Built-in Total refrigerated volume 7.75 ft 3 or greater and meeting the built-in definition requirements Freestanding Compact Total refrigerated volume less than 7.75 ft 3 and not built-in Freestanding Total refrigerated volume 7.75 ft 3 or greater and not built-in Combination Cooler Refrigeration Products C-3A Cooler with all-refrigerator—automatic defrost C-3A-BI Built-in cooler with all-refrigerator—automatic defrost C-9 Cooler with upright freezer with automatic defrost without an automatic icemaker C-9-BI Built-in cooler with upright freezer with automatic defrost without an automatic icemaker C-9I Cooler with upright freezer with automatic defrost with an automatic icemaker C-9I-BI Built-in cooler with upright freezer with automatic defrost with an automatic icemaker C-13A Compact cooler with all-refrigerator—automatic defrost C-13A-BI Built-In compact cooler with all-refrigerator—automatic defrost E. Test Procedure EPCA sets forth generally applicable criteria and procedures for DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) Manufacturers of covered products must use these test procedures to certify to DOE that their product complies with energy conservation standards and to quantify the efficiency of their product. Similarly, DOE must use these test procedures to determine compliance with its energy conservation standards. (42 U.S.C. 6295(s)) DOE published the December 2014 Test Procedure NOPR on December 16, 2014, in which it proposed to establish definitions and test procedures for the product categories proposed for coverage in the October 2013 SNOPD. The proposed test procedures would measure the energy efficiency, energy use, and estimated annual operating cost of these products during a representative average use period and that would not be unduly burdensome to conduct, as required under 42 U.S.C. 6293(b)(3). 79 FR 74894. After reviewing comments responding to the December 2014 Test Procedure NOPR, DOE ultimately determined that developing the test procedures for these products would benefit from a negotiated rulemaking process. Therefore, DOE included potential test procedures within the scope of work for the MREF Working Group. On August 11, 2015, the MREF Working Group reached consensus on Term Sheet #1, which recommended scope of coverage, definitions, and test procedures for MREFs. The MREF Working Group generally agreed with the approach proposed in the December 2014 Test Procedure NOPR, but recommended updating usage factors, ambient temperatures, and volume adjustment factors. See Term Sheet #1. ASRAC approved the term sheet during an open meeting on December 18, 2015, and subsequently sent it to the Secretary for consideration. The test procedures for MREFs, which are consistent with the MREF Working Group Recommendation, were codified in appendix A by the July 2016 Final Coverage Determination. 81 FR 46768. The test procedures, which follow a similar methodology to those in place for refrigerators, refrigerator-freezers, and freezers, provide the provisions for determining a product's annual energy usage (kWh/yr) and total AV, which are the basis of the energy conservation standards established in this direct final rule. F. Technological Feasibility 1. General To assess the technological feasibility of setting standards for a product, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve its efficiency. 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 achieving a certain efficiency level. Section IV.B of this direct final rule discusses the results of the screening analysis for MREFs, 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 direct final rule TSD. 2. Maximum Technologically Feasible Levels When DOE proposes to adopt a new 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 MREFs, 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 of this direct final rule and in chapter 5 of the direct final rule TSD. G. Energy Savings 1. Determination of Savings For each TSL, DOE projected energy savings from application of the TSL to MREFs purchased in the 30-year period that begins in the year of compliance with any new standards (2019-2048 for the TSLs recommended by the MREF Working Group, 2021-2050 for all other TSLs). 15 The savings are measured over the entire lifetime of products purchased in the 30-year analysis period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the 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 energy conservation standards. 15 DOE also presents a sensitivity analysis that considers impacts for products shipped in a 9-year period. DOE used its NIA spreadsheet models to estimate energy savings from potential standards for MREFs. The NIA spreadsheet model (described in section IV.H of this document) 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. 16 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 document. For natural gas, the primary energy savings are considered to be equal to the site energy savings. 16 The FFC metric is discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 2012). 2. Significance of Savings To adopt 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), indicated that Congress intended “significant” energy savings in the context of EPCA to be savings that were not “genuinely trivial.” The energy savings for all the TSLs considered in this rulemaking, including the adopted standards, are nontrivial, and, therefore, DOE considers them “significant” within the meaning of section 325 of EPCA. H. 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 energy conservation standards on manufacturers, DOE conducts a manufacturer impact analysis ( i.e., MIA), as discussed in section IV.J of this document. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include: (1) INPV, which values the industry 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 standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national NPV of the economic impacts applicable to a particular rulemaking. DOE often also evaluates the LCC impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a national standard, such as low income and senior households. In the case of MREFs, the available house sample sizes for identifiable subgroups were insufficient to yield meaningful results. b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP) 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 cost (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 new standards (the no-new-standards case). DOE's LCC and PBP analysis is discussed in further detail in section IV.F of this document. 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 IV.H of this document, DOE uses the NIA spreadsheet models to project national energy savings. d. Lessening of Utility or Performance of Products In establishing product classes, and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards adopted in this direct final rule would not reduce the utility or performance of the products under consideration in this rulemaking. e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General that is likely to result from a proposed standard. (42 U.S.C. 6295(o)(1)(B)(i)(V)) Specifically, it instructs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General that is likely to result from the imposition of the standard. DOE is simultaneously publishing a NOPR containing proposed energy conservation standards identical to those set forth in this direct final rule and has transmitted a copy of the rule and the accompanying TSD to the Attorney General, requesting that the U.S. Department of Justice (“DOJ”) provide its determination on this issue. DOE will consider DOJ's comments on the direct final rule in determining whether to proceed with finalizing its standards. DOE will also publish and respond to the DOJ's comments in the Federal Register in a separate notice. f. Need for National Energy Conservation DOE also considers the need for national energy conservation in determining whether a new standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the adopted 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.0 of this document. Additionally, apart from the savings described above, the adopted standards also are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the emissions impacts are reported in section V.B.6 of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document. g. Other Factors In determining whether a standard is economically justified, DOE may consider any other factors that it deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) In developing the direct final rule, DOE has considered the submission of the jointly-submitted Term Sheet #2 from the MREF Working Group. In DOE's view, the term sheet sets forth a statement by interested persons that are fairly representative of relevant points of view (including representatives of manufacturers of covered equipment, States, and efficiency advocates) and contains recommendations with respect to energy conservation standards that are in accordance with 42 U.S.C. 6295(o), as required by EPCA's direct final rule provision. See 42 U.S.C. 6295(p)(4). DOE has encouraged the submission of agreements such as the one developed and submitted by the MREF Working Group as a way to bring diverse stakeholders together, to develop an independent and probative analysis useful in DOE standard setting, and to expedite the rulemaking process. DOE also believes that the standard levels recommended in Term Sheet #2 may increase the likelihood for regulatory compliance, while decreasing the risk of litigation. 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 effect potential new 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 of this direct final rule. IV. Methodology and Discussion of Related Comments This section addresses the analyses DOE has performed for this rulemaking with regard to MREFs. Separate subsections address each component of DOE's analyses. DOE presented information on its initial analytical approach in the preliminary analysis. As discussed in section II.B of this direct final rule, DOE received comments from interested parties in response to both the preliminary analysis and the December 2014 Test Procedure NOPR indicating that these rulemakings would benefit from a negotiated rulemaking process. Based on the subsequent MREF Working Group discussions, in the July 2016 Final Coverage Determination, DOE revised its scope of coverage, product definitions, and test procedures for MREFs, which resulted in significant changes to the rulemaking analysis. 81 FR 46786. Because of these significant changes, many comments received in response to the preliminary analysis are no longer applicable. Additionally, the substantive comments received in response to the preliminary analysis were from interested parties that were represented by members of the MREF Working Group. The Working Group discussed in detail all of the issues identified by these interested parties. As a result of these discussions, many MREF Working Group members revised their position on certain issues with respect to the analysis. To avoid presenting information that may not reflect the current opinions of Working Group members, DOE has not included summaries of comments received from Working Group members in response to the preliminary analysis in the following sections describing the direct final rule analyses. Rather, DOE has included summaries of the Working Group discussions, including citations to the relevant Working Group meeting transcripts that addressed issues with the preliminary analysis and recommended approaches for DOE in this direct final rule analysis. DOE used several analytical tools to estimate the impact of the standards considered in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended or new energy conservation standards. The NIA 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 energy conservation 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/71. Additionally, DOE used output from the latest version of the Energy Information Administration's (“EIA”) 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 1. Scope of Coverage 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 or design options that could improve the energy efficiency of MREFs. The key findings of DOE's market assessment are summarized below. See chapter 3 of the direct final rule TSD for further discussion of the market and technology assessment. In the preliminary market and technology assessment, and consistent with the October 2013 SNOPD, DOE identified four consumer product categories that would be subject to potential energy conservation standards. These were: Cooled cabinets, non-compressor refrigerators, hybrid refrigerators, and ice makers. DOE received multiple comments about the scope of coverage and the product classes considered in the preliminary analysis, summarized in the following sections. As described in section II.B of this document, the MREF Working Group discussed concerns regarding scope of coverage raised in comments received in response to the preliminary analysis. The following sections describe how DOE has revised its scope of coverage for MREFs since the preliminary analysis and after considering the MREF Working Group recommendations. DOE initially proposed a revised scope of coverage in the March 2016 SNOPD (81 FR 11454), and finalized the scope of coverage in the July 2016 Final Coverage Determination. 81 FR 46768. a. Coolers In the December 2014 Test Procedure NOPR, DOE generally proposed to define the term “cooled cabinet” as a product with a refrigeration system that requires electric energy input only that does not meet the regulatory definition for “refrigerator” because its compartment temperatures are warmer than the 39 degrees Fahrenheit (°F) threshold established for refrigerators, as determined in a 72 °F ambient temperature. 79 FR 74894, 74901-74902 (December 16, 2014). In the preliminary analysis, DOE presented information regarding cooled cabinets that, based on the proposed definition, included those products using either vapor-compression or non-compressor refrigeration systems. See chapter 3 of the preliminary TSD. The MREF Working Group's Term Sheet #1 recommended that DOE revise the term “cooled cabinet” to “cooler” and incorporated a number of other changes to the proposed definition of this new term. The Working Group recommended that compartment temperatures be determined during operation in a 90 °F ambient temperature to maintain consistency with the test conditions used for other refrigeration products. (ASRAC Public Meeting Transcript, No. 44 at pp. 158-202) 17 The Working Group also recommended excluding products designed to be used without doors, consistent with the exclusions DOE had proposed for the refrigerator, refrigerator-freezer, and freezer definitions in the December 2014 Test Procedure NOPR. 79 FR 74894, 74900 (December 16, 2014). The purpose of the exclusion would be to differentiate between consumer products and commercial equipment — in other words, products designed for use without doors ( e.g. reach-in freezers) would be treated as commercial equipment rather than consumer products, consistent with the statutory coverage of refrigerators, refrigerator-freezers, and freezers. See 42 U.S.C. 6292(a)(1). (ASRAC Public Meeting Transcript, No. 85 at pp. 9-11; No. 92 at pp. 18-25) The Working Group further recommended the requirement that coolers operate on single-phase, alternating current rather than simply specifying operation with electric energy input. This approach would exclude those products designed for direct current or 3-phase power supplies, which, because of the nature of these power sources, would likely apply to products intended for use in mobile or commercial applications, respectively. (ASRAC Public Meeting Transcript, No. 45 at pp. 83-97; No. 86 at pp. 19-21) See Term Sheet #1. 17 A notation in the form “ASRAC Public Meeting Transcript, No. 44 at pp. 158-202” identifies a comment: (1) Made during an MREF Working Group public meeting; (2) recorded in document number 44 that is filed in the docket of this energy conservation standards rulemaking (Docket No. EERE-2011-BT-STD-0043) and available for review at www.regulations.gov; and (3) which appears on pages 158 through 202 of document number 44. In the March 2016 SNOPD, DOE proposed to define coolers based on its proposed definition from the December 2014 Test Procedure NOPR but updated to reflect the Working Group's recommendations. 81 FR at 11458-11459. DOE did not receive any comments that would substantively change this proposed updated definition in response to the March 2016 SNOPD. Hence, in the July 2016 Final Coverage Determination, DOE established the definition for cooler as proposed in the March 2016 SNOPD, with minor revisions, in 10 CFR 430.2. 81 FR at 46775-46776. b. Combination Cooler Refrigeration Products In the December 2014 Test Procedure NOPR, DOE proposed the term “hybrid refrigeration product” to refer to products with a warm-temperature compartment ( e.g., a wine chiller), making up at least 50 percent of a product's volume, combined with a fresh food and/or freezer compartment. 79 FR at 74903-74904. DOE conducted the preliminary analysis for hybrid refrigeration products using that proposal's definitional scope. See chapter 3 of the preliminary TSD. The MREF Working Group discussed the proposed definition and recommended that DOE revise the term from “hybrid refrigeration product” to “combination cooler refrigeration product” to more clearly describe the product category. The Working Group also recommended that DOE refer to the warmer compartment within combination cooler refrigeration products as a “cooler compartment” (defined by the same temperature ranges as proposed for coolers) and that DOE drop the proposed requirement that cooler compartments make up at least 50 percent of a combination cooler refrigeration product's total volume. The Working Group noted that all products with cooler compartments would likely be used in the same way and asserted that the 50-percent threshold was an arbitrary cutoff. It further recommended that DOE exclude products designed for use without doors from the combination cooler refrigeration product definitions for the same reasons discussed for coolers ( i.e., differentiating between commercial equipment and consumer products). (ASRAC Public Meeting Transcript, No. 85 at pp. 31-52; No. 91 at pp. 55-58) See Term Sheet #1. DOE agreed with the recommended changes from the MREF Working Group and the Working Group's reasoning for each of them. The term “combination cooler refrigeration product” more clearly describes the characteristics of the products that would fall in this category. Additionally, the recommendation to remove the 50-percent threshold would limit the potential for circumvention by manufacturing products with cooler compartment volumes either just above or below the threshold. Removing the cooler compartment volume threshold ensures that all products with cooler compartments (which are likely to be used in the same way, as indicated by the MREF Working Group) are categorized consistently. Therefore, DOE proposed to define terms for combination cooler refrigeration products in the March 2016 SNOPD consistent with the definitions included in Term Sheet #1. See 81 FR at 11459 (detailing DOE's rationale for adopting the Working Group's approach). DOE did not receive any comments that would substantively change the proposed definitions of combination cooler refrigeration products in response to the March 2016 SNOPD; therefore, DOE subsequently codified the definition, with only minor revisions, in 10 CFR 430.2 through the July 2016 Final Coverage Determination. Further, the July 2016 Final Coverage Determination codified the definition for “cooler compartment” as recommended by the MREF Working Group into appendix A. See 81 FR at 46776-46777. c. Ice Makers In the preliminary analysis, DOE presented information regarding ice makers, which DOE tentatively defined as a consumer product other than a refrigerator, refrigerator-freezer, freezer, hybrid refrigeration product, non-compressor refrigerator, or cooled cabinet designed to automatically produce and harvest ice, but excluding any basic model that is certified under American National Standards Institute (ANSI)/NSF International (NSF) 12-2012 “Automatic Ice Making Equipment.” 18 Such a product would also include a means for storing ice, dispensing ice, or storing and dispensing ice. See chapter 3 of the preliminary TSD. 18 ANSI/NSF 12-2012 is available for purchase online at http://www.techstreet.com/nsf. In response to the preliminary analysis, DOE received feedback from several interested parties regarding ice maker coverage within MREFs. As such, the MREF Working Group discussed the issue of whether ice makers should be considered MREFs for coverage under EPCA. The MREF Working Group decided that ice makers are fundamentally different from the other product categories considered to be MREFs, as evidenced by DOE proposing a separate test procedure for ice makers in the December 2014 Test Procedure NOPR. The Working Group also noted that ice makers are currently covered as commercial equipment, and that there is no clear means to differentiate between consumer and commercial ice makers. (ASRAC Public Meeting Transcript, No. 44 at pp. 143-145, No. 45 at pp. 134-145; No. 92 at pp. 39-51). Accordingly, the Working Group recommended that DOE not maintain coverage of ice makers under MREFs. (ASRAC Public Meeting Transcript, No. 92 at p. 138) See Term Sheet #1. Consistent with the MREF Working Group's recommendation, the March 2016 SNOPD proposed excluding ice makers from coverage as MREFs. 81 FR at 11456. DOE did not receive comments opposing this approach in response to the March 2016 SNOPD, and, therefore, excluded ice makers from coverage as MREFs in the July 2016 Final Coverage Determination. 81 FR at 46773. Accordingly, DOE has not analyzed or adopted standards for ice makers as part of this direct final rule. d. Non-Compressor Refrigerators EPCA specifies that refrigerators, refrigerator-freezers, and freezers with compressor and condenser units as integral parts of the cabinet assembly ( i.e., products that utilize vapor-compression refrigeration technology) are covered consumer products. (42 U.S.C. 6292(a)(1)(B)) In the preliminary analysis, DOE stated that it had identified products that use thermoelectric and/or absorption technology that were sold as refrigerators but was unaware of any products using these technologies sold as refrigerator-freezers or freezers. For the preliminary analysis, DOE considered a non-compressor refrigerator as a cabinet that has a source of refrigeration that does not include a compressor and condenser unit, requires electric energy input only, and is capable of maintaining compartment temperatures above 32 °F (0 °C) and below 39 °F (3.9 °C) as determined in a 72 °F ambient temperature. See chapter 3 of the preliminary TSD. DOE tested six non-compressor refrigerator models in support of the preliminary analysis. In that testing, DOE determined that none of the six models were able to maintain compartment temperatures in the specified refrigerator range when tested in a 90 °F ambient temperature consistent with the current DOE test procedure for refrigerators and the approach recommended by the Working Group. See chapter 5 of the preliminary TSD. The MREF Working Group discussed whether non-compressor refrigerators should be considered MREFs. As discussed in the March 2016 SNOPD, the Working Group recommended that the compartment temperature ranges included in definitions be determined during product operation in a 90 °F ambient temperature. 81 FR at 11458-11460. Based on this suggested definition, the Working Group members stated that they were unaware of any products that would be considered non-compressor refrigerators available on the market, and recommended that DOE not establish a definition for this product category. (ASRAC Public Meeting Transcript, No. 45 at pp. 49-52; No. 91 at pp. 157-158) See Term Sheet #1. In examining the merits of creating a separate product category and definition for non-compressor refrigerators, DOE conducted additional literature reviews and manufacturer interviews. DOE, however, did not find any non-compressor (thermoelectric or absorption) products available on the market that would be capable of maintaining compartment temperatures in the range necessary for a refrigerator as specified in 10 CFR 430.2 when tested in a 90 °F ambient temperature consistent with the current refrigerator test procedure and the approach ultimately recommended by the Working Group. Accordingly, in light of the Working Group's recommendation, DOE did not establish a separate product category for non-compressor refrigerators under MREFs, a discussed in the July 2016 Final Coverage Determination. See 81 FR at 46775-46776. DOE notes that products previously analyzed as non-compressor refrigerators would be covered as coolers under the MREF definitions established in the July 2016 Final Coverage Determination. 2. Product Classes a. Coolers In the preliminary analysis, DOE proposed a single product class for all coolers (at the time referred to as “cooled cabinets”). DOE was aware of both vapor-compression and non-compressor coolers available on the market; however, DOE did not analyze these products in separate product classes because it did not identify any unique consumer utility associated with the different refrigeration systems. See chapter 3 of the preliminary TSD. The MREF Working Group discussed the topic of product classes when considering recommended standards for MREFs. For coolers, the Working Group agreed with DOE's preliminary analysis determination that there is no unique consumer utility associated with either thermoelectric or vapor-compression refrigeration systems. (ASRAC Public Meeting Transcript, No. 45 at pp. 13-14, 162) Working Group members also compared coolers to refrigerators, refrigerator-freezers, and freezers, and considered similar characteristics for differentiating product classes. Working Group members noted that compact and built-in coolers each provide unique consumer utility and have different energy use characteristics compared to full-size or freestanding coolers, respectively. (ASRAC Public Meeting Transcript, No. 44 at pp. 155-157; No. 45 at pp. 160-166) Accordingly, the Working Group recommended that DOE establish definitions and energy conservation standards for four cooler product classes: Built-in compact, built-in, freestanding compact, and freestanding. See Term Sheets #1 and #2. DOE sought additional information related to the consideration of non-compressor products in the December 2015 NODA. 80 FR 77589. DOE did not receive any information indicating that the approach used by the MREF Working Group was inappropriate. Based on the recommendations of the MREF Working Group, DOE proposed definitions for each of the cooler product classes in the March 2016 SNOPD, and subsequently codified the definitions in 10 CFR 430.2 in the July 2016 Final Coverage Determination. 81 FR at 11459; 81 FR at 46775-46776. The standards adopted in this direct final rule are based on these four cooler product classes discussed above. b. Combination Cooler Refrigeration Products In the preliminary analysis, DOE proposed that combination cooler refrigeration products (at the time referred to as “hybrid refrigeration products”) would be subject to the same product class structure as currently in place for refrigerators, refrigerator-freezers, and freezers. See generally, 10 CFR 430.32(a) (detailing the different classes applicable to refrigerators, refrigerator-freezers, and freezers). Under this approach, the applicable product class would be determined based on the total product volume, the compartment temperature ranges for the non-cooler compartments, and any relevant product features ( e.g., configuration, defrost type, ice making, etc. ). See chapter 3 of the preliminary TSD. The MREF Working Group discussed the topic of product classes when considering recommended standards for MREFs. Similar to coolers, the Working Group discussed how combination cooler refrigeration products are similar to refrigerators, refrigerator-freezers, and freezers. The Working Group considered whether the product class structure DOE proposed in the preliminary analysis would be appropriate. However, the Working Group indicated that because only certain of the previously considered product classes were available on the market or likely to become available on the market, DOE should only conduct analysis and consider potential standards for these product classes. Accordingly, the Working Group recommended that DOE establish eight product classes for combination cooler refrigeration products. These eight product classes represent the combination cooler refrigeration products that are either currently available on the market or very similar to products currently available ( i.e., the associated freestanding equivalent to a built-in product). Although combination cooler refrigeration products are not currently available in each of the eight product classes, the MREF Working Group included the additional product classes as a means to prevent circumvention. For example, if DOE established only built-in product classes, a manufacturer could readily modify a product to be freestanding to avoid having to meet the MREF standards. Accordingly, the Working Group recommended product classes for both built-in and freestanding configurations for each product type currently available. (ASRAC Public Meeting Transcript, No. 103 at pp. 55-67, 72-86, 104-109) See Term Sheets #1 and #2. Based on the recommendations of the MREF Working Group, in this direct final rule, DOE is establishing eight product classes for combination cooler refrigeration products. DOE has determined that each product class offers a unique consumer utility and has different energy use characteristics, warranting separate product classes. Table I.2 of this direct final rule includes a description of the eight product classes. More detailed descriptions of each of the product classes can be found in chapter 3 of the direct final rule TSD. 3. Technology Options In the preliminary analysis, DOE identified multiple technology options that may be used to improve MREF efficiencies. The preliminary analysis technology options are listed in Table IV.1 and described in chapter 3 of the preliminary TSD. Table IV.1—Preliminary Analysis Technology Options Technology options Compressor Improved compressor efficiency. Variable-speed compressor. Linear compressor. Evaporator Increased surface area. Enhanced heat exchanger. Forced-convection evaporator. Condenser Increased surface area. Enhanced heat exchanger. Forced-convection condenser. Fan and Fan Motor Higher-efficiency fan motors. Higher-efficiency fan blades. Insulation Improved resistivity of insulation. Increased insulation thickness. Vacuum-insulated panels (“VIPs”). Gas-filled panels. Gasket Improved gaskets. Double-door gaskets. Improved door face frame. Doors Improved resistivity of glass door. Solid door. Expansion Valve Improved: Thermostatic expansion valves (“TXV”) or electronic expansion valves (“EEV”). Cycling Losses Fluid control or solenoid valve. Defrost Off-cycle defrost. Reduced energy. Adaptive defrost. Hot-gas bypass. Controls Electronic temperature control. Alternative Refrigeration System Conversion to alternative refrigeration system. Alternative Heat Transfer Heat pipe. Other Component location. After receiving feedback from interested parties, conducting manufacturer interviews, and participating in the MREF Working Group discussions, DOE did not identify any additional technology options beyond those considered in the preliminary analysis. In this direct final rule, DOE considered the same list of technology options as presented in Table IV.1. 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, 4(a)(4) and 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. 1. Screened-Out Technologies In the preliminary analysis, DOE assessed the feasibility of each of the technologies listed in Table IV.1. Several of these technology options were found not to meet the four required screening criteria and were therefore screened out from further consideration in DOE's analysis. Table IV.2 lists the technology options DOE screened out for the preliminary analysis. More details on why these technology options were screened out can be found in chapter 4 of the preliminary TSD. Table IV.2—Preliminary Analysis Screened Out Technology Options Technology Reason for screening out Linear Compressors Lack of information on commercially-available compressors, uncertainty on whether they would be readily incorporated on a widespread basis. Increased Evaporator and Condenser Surface Area No physical room to increase the face area or add tubes, would impact product utility by requiring larger cabinets. Improved Evaporator Heat Exchange Most fin enhancements would increase frost accumulation, decreasing product utility. Improved Condenser Heat Exchange Maintenance concerns requiring more frequent cleaning of heat-exchanger, impacting product utility. Forced-Convection Condensers Already in use by baseline products, hence eliminated from consideration in subsequent analyses. Higher-Efficiency Fan Blades Likely already in use in baseline products, lack of information to provide credible calculation of savings and costs. Improved Resistivity of Insulation Panels Lack of information on available options, not technologically feasible based on available information. Gas-Filled Panels Not commercially-available, not practicable to manufacture on the scale necessary for the market. Solid Doors (for coolers, and cooler compartments) Would affect consumer utility ( i.e., availability of glass-door units). Improved Gaskets Already in use by nearly all MREF products. Improved Expansion Valves Automatic valves or EEV's are typically oversized for these products, not practicable to manufacture on the scale necessary for the market. Fluid-Control Valves Potential decrease in product reliability, negatively impacting consumer utility. Off-Cycle Defrost, Reduced Energy for Automatic Defrost, Adaptive Defrost, and Hot-Gas Bypass Defrost Already in use by nearly all MREF products. Electronic Temperature Control Lack of data on costs and savings. Conversion to Thermoelectric or Absorption Refrigeration Systems Unlikely to result in energy savings. Component Location (internal arrangement of components) Already in use by nearly all MREF products. For this direct final rule analysis, DOE has maintained one technology option for consideration in the engineering analysis that was screened out in the preliminary analysis. DOE is no longer screening out improved evaporator and condenser heat exchange. DOE received feedback during confidential manufacturer interviews that there may be opportunities to optimize evaporator and condenser designs for more effective heat transfer. For this direct final rule, DOE has continued to screen out the remaining technology options listed in Table IV.2. 2. Remaining Technologies Through a review of each technology, DOE concludes that all of the other identified technology options listed in section IV.A.3 of this document meet all four screening criteria to be examined further as design options in the direct final rule engineering analysis. In summary, and as explained further in this section, DOE did not screen out the following technology options shown in Table IV.3. Table IV.3—Direct Final Rule Remaining Design Options Design option Improved compressor efficiency. Variable-speed compressors. Improved evaporator and condenser heat exchange. Higher-efficiency fan motors. Increased insulation thickness. Vacuum-insulated panels. Improved glass door resistivity. Conversion to vapor-compression. Heat pipes. DOE determined that these technology options are technologically feasible because they are being used or have previously been used in commercially-available products or working prototypes. DOE also found that all of the remaining technology options meet the other screening criteria ( i.e., are practicable to manufacture, install, and service and do not result in adverse impacts on consumer utility, product availability, health, or safety). For additional details, see chapter 4 of the direct final rule TSD. C. Engineering Analysis In the engineering analysis, DOE establishes the relationship between the manufacturer production cost (“MPC”) and improved efficiency of MREFs. 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 product 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. The efficiency ranges from that of the least-efficient MREFs sold today to the max-tech efficiency level. At each efficiency level examined, DOE determines the MPC; this relationship is referred to as a cost-efficiency curve. 1. Coolers a. Methodology In the preliminary analysis, DOE adopted a combined efficiency-level/design-option/reverse-engineering approach to develop cost-efficiency curves for coolers. DOE first established efficiency levels by defining annual energy use as a percent of the California Energy Commission (“CEC”)-equivalent energy use. This is the maximum allowable energy use of the CEC energy standards for wine chillers with automatic defrost, adjusted to account for the fact that the CEC test procedure uses a different usage factor than DOE considered in its analysis. DOE based its analysis on the potential efficiency improvements associated with groups of design options. See chapter 5 of the preliminary TSD. DOE then developed manufacturing cost models based on its reverse-engineering of various MREF products. These reverse-engineering efforts yielded additional information that helped support DOE's calculation of the incremental costs associated with efficiency improvements. To develop the analytically derived cost-efficiency curves, DOE collected information from various sources on the manufacturing costs and energy use reductions associated with each of the considered design options. DOE reviewed product literature, conducted testing and reverse-engineering of current products, and interviewed component and product manufacturers. DOE modeled energy use reductions associated with design options using the Efficient Refrigerator Analysis program developed for the 2011 residential refrigeration products rulemaking and modified for this MREF standards rulemaking analysis. The incremental cost estimates combined with test data and energy modeling results led to the cost-efficiency curves for coolers developed for the preliminary analysis. See chapter 5 of the preliminary TSD. DOE did not receive any feedback on the overall methodology used for the coolers preliminary engineering analysis. In this direct final rule, DOE conducted the engineering analysis using the same approach as the preliminary analysis. However, DOE has updated its analysis to reflect the changes to the scope of coverage and product classes as discussed in sections IV.A.1 and IV.A.2 of this document. DOE also incorporated feedback from manufacturers obtained during additional interviews and information from MREF Working Group members during the Working Group discussions. Additional information on the methodology used for this direct final rule engineering analysis is available in chapter 5 of the direct final rule TSD. b. Efficiency Levels As described in section IV.C.1.a of this document, for the preliminary analysis, DOE considered efficiency levels defined by their performance with respect to the CEC-equivalent baseline level. DOE considered the CEC-equivalent standard level to be the baseline point of comparison for coolers; however, DOE observed that certain coolers performed worse than the CEC-equivalent standard level. From DOE's test sample, the worst-performing unit was a non-compressor cooler that tested at 267 percent of the CEC-equivalent standard. DOE used this level as the baseline in i [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2016-24759. Public record. Not legal advice.