# Energy Conservation Program: Energy Conservation Standards for Portable Air Conditioners > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2019-26350 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** January 10, 2020 - **Citation:** 85 FR 1378 ## Text DEPARTMENT OF ENERGY 10 CFR Parts 429 and 430 [Docket Number EERE-2013-BT-STD-0033] RIN 1904-AD02 Energy Conservation Program: Energy Conservation Standards for Portable Air Conditioners AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Final rule. SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA or the Act), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment. In addition to specifying a list of covered consumer products and commercial equipment, EPCA contains provisions that enable the Secretary of Energy to classify additional types of consumer products as covered products. On April 18, 2016, the U.S. Department of Energy (DOE or the Department) published a final coverage determination to classify portable air conditioners (ACs) as covered consumer products under the applicable provisions in EPCA. In this final rule, DOE establishes new energy conservation standards for portable ACs. DOE has determined that the energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified. DATES: The effective date of this rule is March 10, 2020. Compliance with the standards established for portable ACs in this final rule is required on and after January 10, 2025. ADDRESSES: The docket for this rulemaking, 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, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure. The docket web page can be found at https://www.regulations.gov/docket?D=EERE-2013-BT-STD-0033. The docket web page contains simple instructions on how to access all documents, including public comments, in the docket. For further information on how to review the docket, contact the Appliance and Equipment Standards Program staff at (202) 586-6636 or by email: ApplianceStandardsQuestions@ee.doe.gov. FOR FURTHER INFORMATION CONTACT: Mr. Bryan Berringer, 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) 586-0371. Email: Bryan.Berringer@ee.doe.gov. Ms. Sarah Butler, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-1777. Email: Sarah.Butler@hq.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Synopsis of the Final Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits and Costs D. Conclusion II. Introduction A. Authority B. Background III. General Discussion A. Product Classes and Scope of Coverage B. Test Procedure C. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels D. Energy Savings 1. Determination of Savings 2. Significance of Savings E. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Savings in Operating Costs Compared to Increase in Price c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors 2. Rebuttable Presumption F. Other Issues IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Definition and Scope of Coverage 2. Product Classes a. Preliminary Analysis and Notice of Proposed Rulemaking (NOPR) Proposals b. Comments and Responses 3. Technology Options B. Screening Analysis 1. Screened-Out Technologies 2. Additional Comments 3. Remaining Technologies C. Engineering Analysis 1. Efficiency Levels a. Baseline Efficiency Levels b. Higher Energy Efficiency Levels 2. Manufacturer Production Cost Estimates D. Markups Analysis E. Energy Use Analysis 1. Consumer Samples 2. Cooling Mode Hours and Sensitivity Analyses 3. Fan-only Mode and Standby Mode Hours 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. Energy Efficiency Distribution in the No-New-Standards Case 9. Payback Period Analysis G. Shipments Analysis H. National Impact Analysis 1. Product Efficiency Trends 2. National Energy Savings 3. Net Present Value Analysis I. Consumer Subgroup Analysis J. Manufacturer Impact Analysis 1. Overview 2. Government Regulatory Impact Model (GRIM) and Key Inputs a. Manufacturer Production Costs b. Shipment Projections c. Product and Capital Conversion Costs d. Markup Scenarios 3. Discussion of Comments 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 Methane and Nitrous Oxide 3. Social Cost of Other Air Pollutants M. Utility Impact Analysis N. Employment Impact Analysis V. Analytical Results and Conclusions A. Trial Standard Levels (TSLs) B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers a. Life-Cycle Cost and Payback Period b. Consumer Subgroup Analysis c. Rebuttable Presumption Payback 2. Economic Impacts on Manufacturers a. Industry Cash Flow Analysis Results b. Impacts on Employment c. Impacts on Manufacturing Capacity d. Impacts on Subgroups of Manufacturers e. Cumulative Regulatory Burden 3. National Impact Analysis a. Significance of Energy Savings b. Net Present Value of Consumer Costs and Benefits c. Indirect Impacts on Employment 4. Impact on Utility or Performance of Products 5. Impact of Any Lessening of Competition 6. Need of the Nation to Conserve Energy 7. Other Factors 8. Summary of National Economic Impacts C. Conclusion 1. Benefits and Burdens of TSLs Considered for Portable AC Standards 2. 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. Approval of the Office of the Secretary I. Synopsis of the Final Rule Title III, Part B 1 of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles. 2 In addition to specifying a list of covered residential products and commercial equipment, EPCA contains provisions that enable the Secretary of Energy to classify additional types of consumer products as covered products. (42 U.S.C. 6292(a)(20)) In a final determination of coverage published in the Federal Register on April 18, 2016 (the “April 2016 Final Coverage Determination”), DOE classified portable ACs as covered consumer products under EPCA. 81 FR 22514. 1 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. 2 All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act of 2015, Public Law 114-11 (Apr. 30, 2015). Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with these and other statutory provisions discussed in this document, DOE is adopting energy conservation standards for portable ACs. The standards, which correspond to trial standard level (TSL) 2 (described in section V.A of this document), are minimum allowable combined energy efficiency ratio (CEER) standards, which are expressed in British thermal units (Btu) per watt-hour (Wh), and are shown in Table I.1. These standards apply to all single-duct portable ACs and dual-duct portable ACs that are manufactured in, or imported into, the United States starting on January 10, 2025. ER10JA20.021 A. Benefits and Costs to Consumers Table I.2 summarizes DOE's evaluation of the economic impacts of the adopted standards on consumers of portable ACs, as measured by the average life-cycle cost (LCC) savings and the simple payback period (PBP). 3 The average LCC savings are positive and the PBP is less than the average lifetime of portable ACs, which is estimated to be approximately 10 years (see section IV.F.6 of this document). 3 The average LCC savings refer to consumers that are affected by a standard and are measured relative to the efficiency distribution in the no-new-standards case, which depicts the market in the compliance year in the absence of standards (see section IV.F of this document). The simple PBP, which is designed to compare specific ELs, is measured relative to the baseline product (see section IV.C of this document). Table I.2—Impacts of New Energy Conservation Standards on Consumers of Portable Air Conditioners Product class Average LCC savings (2015$) Simple payback period (years) Single-duct and dual-duct portable air conditioners 125 2.6 DOE's analysis of the impacts of the adopted standards on consumers is described in section IV.F of this document. DOE also performed three sensitivity analyses on its primary assertion that portable air conditioners are used and operated in a similar manner to room air conditioners to further analyze the effects of the benefits and cost to consumers from these products. In one sensitivity analysis, DOE found that reducing operating hours by 50 percent, resulted in an estimate of one-third of the energy cost savings relative to the primary estimate. In this low-usage case, the average LCC savings for all consumers under the adopted standards would be $35 (compared with $125 in the primary estimate), and 42 percent of consumers would be impacted negatively (compared with 27 percent in the primary estimate). The simple payback period would be 5.1 years (compared with 2.6 years in the primary estimate). Further details are presented in section IV.E, V.B.1, and appendix 8F and appendix 10E of the final rule TSD. B. Impact on Manufacturers The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2017-2051). Using a real discount rate of 6.6 percent, DOE estimates that the INPV for manufacturers of portable ACs in the case without new standards is $738.5 million in 2015$. Under the adopted standards, DOE expects the change in INPV to range from −34.3 percent to −28.8 percent, which is approximately −$253.4 million to −$212.4 million. In order to bring products into compliance with new standards, DOE expects the industry to incur total conversion costs of $320.9 million. DOE's analysis of the impacts of the adopted standards on manufacturers is described in section IV.J and section V.B.2 of this document. C. National Benefits and Costs 4 4 All monetary values in this document are expressed in 2015 dollars and, where appropriate, are discounted to 2015 unless explicitly stated otherwise. DOE's analyses indicate that the adopted energy conservation standards for portable ACs would save a significant amount of energy. Relative to the case without new standards the lifetime energy savings for portable ACs purchased in the 30-year period that begins in the anticipated year of compliance with the new standards (2022-2051), amount to 0.49 quadrillion Btu, or quads. 5 This represents a savings of 6.4 percent relative to the energy use of these products in the case without new standards (referred to as the “no-new-standards case”). 5 The quantity refers to full-fuel-cycle (FFC) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels ( i.e., coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.1 of this document. The cumulative net present value (NPV) of total consumer benefits of the standards for portable ACs ranges from $1.25 billion (at a 7-percent discount rate) to $3.06 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for portable ACs purchased in 2022-2051. In addition, the new standards for portable ACs are projected to yield significant environmental benefits. DOE estimates that the standards will result in cumulative emission reductions (over the same period as for energy savings) of 25.6 million metric tons (Mt) 6 of carbon dioxide (CO 2 ), 16.4 thousand tons of sulfur dioxide (SO 2 ), 32.2 tons of nitrogen oxides (NO X ), 124.8 thousand tons of methane (CH 4 ), 0.4 thousand tons of nitrous oxide (N 2 O), and 0.06 tons of mercury (Hg). 7 The estimated reduction in CO 2 emissions through 2030 amounts to 4.0 Mt, which is equivalent to the emissions resulting from the annual electricity use of more than 0.42 million homes. 6 A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO 2 are presented in short tons. 7 DOE calculated emissions reductions relative to the no-standards-case, which reflects key assumptions in the Annual Energy Outlook 2016 ( AEO 2016 ). AEO 2016 represents current legislation and environmental regulations for which implementing regulations were available as of the end of February 2016. The value of the CO 2 reductions is calculated using a range of values per metric ton (t) of CO 2 (otherwise known as the “social cost of carbon”, or SC-CO 2 ) developed by a Federal interagency working group. 8 The derivation of the SC-CO 2 values is discussed in section IV.L.1 of this document. Using discount rates appropriate for each set of SC-CO 2 values, DOE estimates the present value of the CO 2 emissions reduction is between $0.2 billion and $2.5 billion, with a value of 0.8 billion using the central SC-CO 2 case represented by $40.6/metric ton (t) in 2015. 8 U.S. 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. https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf. DOE also calculated the value of the reduction in emissions of the non-CO 2 greenhouse gases (GHGs), CH 4 and N 2 O, using values for the social cost of methane (SC-CH 4 ) and the social cost of nitrous oxide (SC-N 2 O) recently developed by the interagency working group. 9 See section IV.L.2 for description of the methodology and the values used for DOE's analysis. The estimated present value of the CH 4 emissions reduction is between $0.04 billion and $0.3 billion, with a value of $0.1 billion using the central SC-CH 4 case, and the estimated present value of the N 2 O emissions reduction is between $0.001 billion and $0.011 billion, with a value of $0.004 billion using the central SC-N 2 O case. 9 U.S. Government—Interagency Working Group on Social Cost of Greenhouse Gases. Addendum to Technical Support Document on Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide. August 2016. https://www.whitehouse.gov/sites/default/files/omb/inforeg/august_2016_sc_ch4_sc_n2o_addendum_final_8_26_16.pdf. DOE also estimates that the present value of the NO X emissions reduction to be $0.02 billion using a 7-percent discount rate, and $0.06 billion using a 3-percent discount rate. 10 DOE is still investigating appropriate valuation of the reduction in other emissions, and therefore did not include any such values in the analysis for this final rule. 10 DOE estimated the monetized value of NO X emissions reductions associated with electricity savings using benefit per ton estimates from the Regulatory Impact Analysis for the Clean Power Plan Final Rule, published in August 2015 by Environmental Protection Agency's (EPA's) Office of Air Quality Planning and Standards. Available at www.epa.gov/cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis. See section IV.L of this document for further discussion. The U.S. Supreme Court has stayed the rule implementing the Clean Power Plan until the current litigation against it concludes. Chamber of Commerce, et al. v. EPA, et al. , Order in Pending Case, 577 U.S. (2016). However, the benefit-per-ton estimates established in the Regulatory Impact Analysis for the Clean Power Plan are based on scientific studies that remain valid irrespective of the legal status of the Clean Power Plan. DOE is primarily using a national benefit-per-ton estimate for NO X emitted from the Electricity Generating Unit sector based on an estimate of premature mortality derived from the American Cancer Society (ACS) study (Krewski et al. 2009). If the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al. 2011), the values would be nearly two-and-a-half times larger. Table I.3 summarizes the economic benefits and costs expected to result from the adopted standards for portable ACs. Table I.3—Selected Categories of Economic Benefits and Costs of New Energy Conservation Standards for Portable Air Conditioners * [TSL 2] Category Present value (billion 2015$) Discount rate percent Benefits Consumer Operating Cost Savings 1.8 7 4.1 3 GHG Reduction (using avg. social costs at 5% discount rate) **. 0.2 5 GHG Reduction (using avg. social costs at 3% discount rate) **. 1.0 3 GHG Reduction (using avg. social costs at 2.5% discount rate) **. 1.5 2.5 GHG Reduction (using 95th percentile social costs at 3% discount rate) **. 2.9 3 NO X Reduction † 0.02 7 0.06 3 Total Benefits ‡ 2.8 7 5.1 3 Costs Consumer Incremental Installed Costs 0.5 7 1.0 3 Total Net Benefits Including GHG and NO X Reduction Monetized Value ‡ 7 4.1 3 * This table presents the costs and benefits associated with portable ACs shipped in 2022-2051. These results include benefits to consumers which accrue after 2051 from the products shipped in 2022-2051. The incremental installed costs include incremental equipment cost as well as installation costs. The costs account for the incremental variable and fixed costs incurred by manufacturers due to the proposed standards, some of which may be incurred in preparation for the rule. The GHG reduction benefits are global benefits due to actions that occur domestically. ** The interagency group selected four sets of SC-CO 2 , SC-CH 4 , and SC-N 2 O values for use in regulatory analyses. Three sets of values are based on the average social costs from the integrated assessment models, at discount rates of 5 percent, 3 percent, and 2.5 percent. The fourth set, which represents the 95th percentile of the SC-CO 2 distribution calculated using a 3-percent discount rate, is included to represent higher-than-expected impacts from climate change further out in the tails of the social cost distributions. The social cost 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 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-percent and 7-percent cases are presented using the average social costs with 3-percent discount rate. The benefits and costs of the adopted standards, for portable ACs sold in 2022-2051, can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the reduced consumer 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. 11 11 To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2016, 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 2016. The calculation uses discount rates of 3 and 7 percent for all costs and benefits except for the value of CO 2 reductions, for which DOE used case-specific discount rates, as shown in Table I.3. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value. The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered products and are measured for the lifetime of portable ACs shipped in 2022-2051. The benefits associated with reduced CO 2 emissions achieved as a result of the adopted standards are also calculated based on the lifetime of portable ACs shipped in 2022-2051. Because CO 2 emissions have a very long residence time in the atmosphere, the SC-CO 2 values for CO 2 emissions in future years reflect impacts that continue through 2300. The CO 2 reduction is a benefit that accrues globally. Estimates of annualized benefits and costs of the adopted standards are shown in Table I.4. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than GHG reduction (for which DOE used average social costs with a 3-percent discount rate, 12 the estimated cost of the standards in this rule is $61 million per year in increased equipment costs, while the estimated annual benefits are $202.7 million in reduced equipment operating costs, $56.7 million in GHG reductions, and $2.6 million in reduced NO X emissions. In this case, the net benefit amounts to $201 million per year. Using a 3-percent discount rate for all benefits and costs, the estimated cost of the standards is $59 million per year in increased equipment costs, while the estimated annual benefits are $240.0 million in reduced operating costs, $56.7 million in GHG reductions, and $3.3 million in reduced NO X emissions. In this case, the net benefit amounts to $241 million per year. 12 DOE used average social costs with a 3-percent discount rate. These values are considered as the “central” estimates by the interagency group. Table I.4—Selected Categories of Annualized Benefits and Costs of New Standards (TSL 2) for Portable ACs * Discount rate (percent) Primary estimate Low-net- benefits estimate High-net- benefits estimate (million 2015$/year) Benefits Consumer Operating Cost Savings 7 202.7 99.1 214.4. 3 240.0 116.3 256.1. CO 2 Reduction (using avg. social costs at 5% discount rate) ** 5 18.4 8.8 19.9. CO 2 Reduction (using avg. social costs at 3% discount rate) ** 3 56.7 27.0 61.4. CO 2 Reduction (using avg. social costs at 2.5% discount rate) ** 2.5 81.1 38.6 87.9. CO 2 Reduction (using 95th percentile SC-CO 2 at 3% discount rate) ** 3 169.9 80.9 184.1. NO X Reduction † 7 2.6 1.2 6.2. 3 3.3 1.6 8.1. Total Benefits ‡ 7 plus CO 2 range 224 to 375 213 to 354 240 to 405. 7 262 249 282. 3 plus CO 2 range 262 to 413 248 to 389 284 to 448. 3 300 283 326. Costs Consumer Incremental Product Costs 7 61.0 60.8 55.6. 3 59.0 58.9 53.3. Net Benefits Total ‡ 7 plus CO 2 range 163 to 314 48 to 120 185 to 349. 7 201 67 226. 3 plus CO 2 range 203 to 354 68 to 140 231 to 395. 3 241 86 272. * This table presents the annualized costs and benefits associated with portable ACs shipped in 2022-2051. These results include benefits to consumers which accrue after 2051 from the portable ACs purchased from 2022-2051. 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 Net Benefits, and High Net Benefits Estimates utilize projections of energy price trends from the AEO 2016 No-CPP case, a Low Economic Growth case, and a High Economic Growth case, respectively. In addition, incremental product costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Benefits Estimate, and a high decline rate in the High Benefits Estimate. The Low Benefits Estimate reflects a 50-percent reduction in the operating hours relative to the reference case operating hours. The methods used to derive projected price trends are explained in section IV.F of this document. The benefits and costs are based on equipment efficiency distributions as described in sections IV.F.8 and IV.H.1. Purchases of higher efficiency equipment are a result of many different factors unique to each consumer including past purchases, expected usage, and others. For each consumer, all other factors being the same, it would be anticipated that higher efficiency purchases in the no-new-standards case may correlate positively with higher energy prices. To the extent that this occurs, it would be expected to result in some lowering of the consumer operating cost savings from those calculated in this rule. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. ** The interagency group selected four sets of SC-CO 2 , SC-CH 4 , and SC-N 2 O values for use in regulatory analyses. Three sets of values are based on the average social costs from the integrated assessment models, at discount rates of 5 percent, 3 percent, and 2.5 percent. The fourth set, which represents the 95th percentile of the social cost distributions calculated using a 3-percent discount rate, is included to represent higher-than-expected impacts from climate change further out in the tails of the social cost distributions The SC-CO 2 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 for further discussion. For the Primary Estimate and Low Net Benefits Estimate, DOE used national benefit-per-ton estimates 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 the High Net Benefits Estimate, the benefit-per-ton estimates were based on the Six Cities study (Lepuele et al. 2011); these are nearly two-and-a-half times larger than those from the ACS study. ‡ Total Benefits for both the 3-percent and 7-percent cases are presented using the average social costs with 3-percent discount rate. In the rows labeled “7% plus GHG range” and “3% plus GHG 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 social cost values. 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 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 (loss of INPV and LCC increases for some users of these products). DOE has concluded that the standards in this final rule represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in significant conservation of energy. II. Introduction The following section briefly discusses the statutory authority underlying this final rule, as well as some of the relevant historical background related to the establishment of standards for portable ACs. A. Authority Title III, Part B of the EPCA, Public Law 94-163 (codified as 42 U.S.C. 6291-6309) established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances (collectively referred to as “covered products”). EPCA authorizes the Secretary of Energy to classify additional types of consumer products not otherwise specified in Part A as covered products. For a type of consumer product to be classified as a covered product, the Secretary must determine that: (1) Classifying the product as a covered product is necessary for the purposes of EPCA; and (2) The average annual per-household energy use by products of such type is likely to exceed 100 kilowatt-hours (kWh) per year. (42 U.S.C. 6292(b)(1)) Under the authority established in EPCA, DOE published the April 2016 Final Coverage Determination that established portable ACs as a covered product because such a classification is necessary or appropriate to carry out the purposes of EPCA, and the average U.S. household energy use for portable ACs is likely to exceed 100 kWh per year. 81 FR 22514 (Apr. 18, 2016). EPCA, as amended, grants DOE authority to prescribe an energy conservation standard for any type (or class) of covered products of a type specified in 42 U.S.C. 6292(a)(19) 13 if the requirements of 42 U.S.C. 6295(o) and (p) are met and the Secretary determines that— 13 In amending EPCA, Congress added metal halide lamp fixtures as a covered product at 42 U.S.C. 6292(a)(19) and redesignated the existing listing for (19) ( i.e., any other type of consumer product which the Secretary classifies as a covered product under subsection (b) of this section) as (20). However, the corresponding reference in 42 U.S.C. 6295(l)(1) was not updated. DOE has determined this to be a drafting error and is giving the provision its intended effect as if such error had not occurred. (1) the average per household energy use within the United States by products of such type (or class) exceeded 150 kilowatt-hours (kWh) (or its Btu equivalent) for any 12-month period ending before such determination; (2) the aggregate household energy use within the United States by products of such type (of class) exceeded 4,200,000,000 kWh (or its Btu equivalent) for any such 12-month period; (3) substantial improvement in the energy efficiency of products of such type (or class) is technologically feasible; and (4) the application of a labeling rule under 42 U.S.C. 6294 to such type (or class) is not likely to be sufficient to induce manufacturers to produce, and consumers and other persons to purchase, covered products of such type (or class) which achieve the maximum energy efficiency which is technologically feasible and economically justified. (42 U.S.C. 6295(l)(1)) DOE has determined that portable ACs meet the four criteria outlined in 42 U.S.C. 6295(l)(1) for prescribing energy conservation standards for newly covered products. Specifically, DOE has determined that for a 12-month period ending before such determination, the average per household energy use within the U.S. by portable ACs exceeded 150 kWh (see chapter 7 of this final rule technical support document (TSD)). DOE has also determined that the aggregate household energy use within the United States by portable ACs exceeded 4,200,000,000 kWh (or its Btu equivalent) for such a 12-month period (see chapter 10 of this final rule TSD). Further, DOE has determined that substantial improvement in the energy efficiency of portable ACs is technologically feasible (see section IV.C of this document and chapter 5 of the final rule TSD), and has determined that the application of a labeling rule under 42 U.S.C. 6294 to portable ACs is not likely to be sufficient to induce manufacturers to produce, and consumers and other persons to purchase, portable ACs that achieve the maximum energy efficiency which is technologically feasible and economically justified (see chapter 17 of this final rule TSD). 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)) 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 procedures for portable ACs were established in a final rule published on June 1, 2016 (81 FR 35241; hereinafter the “June 2016 TP Final Rule”), and appear at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix CC (hereinafter “appendix CC”) and 10 CFR 430.23(dd). DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including portable ACs. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy determines 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)(B)) Moreover, DOE may not prescribe a standard (1) for certain products, including portable ACs, if no test procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors: (1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard; (2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard; (3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard; (4) Any lessening of the utility or the performance of the covered products likely to result from the standard; (5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; (6) The need for national energy and water conservation; and (7) Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) EPCA, as codified, states that the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the U.S. 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 U.S. (42 U.S.C. 6295(o)(4)) Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. DOE must specify a different standard level for a type or class of 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)). Finally, pursuant to the amendments contained in the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test procedures for portable ACs address standby mode and off mode energy use, as do the new standards adopted in this final rule. B. Background DOE has not previously conducted an energy conservation standards rulemaking for portable ACs. Consequently, there are currently no Federal energy conservation standards for portable ACs. On February 27, 2015, DOE published a notice of public meeting and notice of availability of a preliminary TSD for portable AC energy conservation standards (hereinafter the “February 2015 Preliminary Analysis”). In the preliminary analysis, DOE conducted in-depth technical analyses in the following areas: (1) Engineering, (2) markups to determine product price, (3) energy use, (4) LCC and PBP, and (5) national impacts. 80 FR 10628. The preliminary TSD that presented the methodology and results of each of these analyses is available at http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0033-0007. DOE also conducted, and discussed in the preliminary TSD, several other analyses that supported the major analyses or were expanded upon in the later stages of the standards rulemaking. These analyses included: (1) The market and technology assessment; (2) the screening analysis, which contributes to the engineering analysis; and (3) the shipments analysis, 14 which contributes to the LCC and PBP analysis and national impact analysis (NIA). In addition to these analyses, DOE began preliminary work on the manufacturer impact analysis (MIA) and identified the methods to be used for the consumer subgroup analysis, the emissions analysis, the employment impact analysis, the regulatory impact analysis, and the utility impact analysis. 80 FR 10628 (Feb. 27, 2015). 14 Industry data track shipments from manufacturers into the distribution chain. Data on national unit retail sales are lacking, but are presumed to be close to shipments under normal circumstances. DOE held a public meeting on March 18, 2015, to discuss the analyses and solicit comments from interested parties regarding the preliminary analysis it conducted. The meeting covered the analytical framework, models, and tools that DOE uses to evaluate potential standards; the results of preliminary analyses performed by DOE for this product; the potential energy conservation standard levels derived from these analyses that DOE could consider for this product; and any other issues relevant to the development of energy conservation standards for portable ACs. Interested parties commented at the public meeting and submitted written comments regarding the following major issues: Rulemaking schedule with respect to establishing the test procedure, covered product configurations, product classes and impacts on consumer utility, technology options, efficiency levels (ELs), incremental costs, data sources, and cumulative regulatory burden. Comments received in response to the February 2015 Preliminary Analysis helped DOE identify and resolve issues related to the preliminary analysis. After reviewing these comments, DOE gathered additional information, held further discussions with manufacturers, and completed and revised the various analyses described in the preliminary analysis. On June 13, 2016, DOE published an energy conservation standards (ECS) notice of proposed rulemaking (hereinafter the “June 2016 ECS NOPR”) and notice of public meeting. 81 FR 38397. The June 2016 ECS NOPR and accompanying TSD presented the results of DOE's updated analyses and proposed new standards for portable ACs. On July 20, 2016, DOE held a standards public meeting to discuss the issues detailed in the June 2016 ECS NOPR (hereinafter the “July 2016 STD Public Meeting”). Interested parties, listed in Table II.1, commented on the various aspects of the proposed rule and submitted written comments. Table II.1—Interested Parties Providing Comments on the June 2016 ECS NOPR for Portable ACs Name Acronym Commenter type * Appliance Standards Awareness Project ASAP EA ASAP, Natural Resources Defense Council, Alliance to Save Energy, American Council for an Energy-Efficient Economy, Consumers Union, Northwest Energy Efficiency Alliance, and Northwest Power and Conservation Council The Joint Commenters EA Association of Home Appliance Manufacturers AHAM TA De' Longhi Appliances s.r.l De' Longhi M GE Appliances, a Haier Company GE M GREE Electrical Appliance GREE M Industrial Energy Consumers of America IECA TA Tomás Carbonell, Environmental Defense Fund (EDF); Rachel Cleetus, Union of Concerned Scientists; Jayni Hein **; Peter H. Howard **; Benjamin Longstreth, NRDC; Richard L. Revesz **; Jason A. Schwartz **; Peter Zalzal, EDF The Joint Advocates EA Intertek Testing Services Intertek TL JMATEK—Honeywell Authorized Licensee JMATEK M LG Electronics LG M National Association of Manufacturers NAM TA Natural Resources Defense Council NRDC EA Pacific Gas and Electric Company, Southern California Gas Company, San Diego Gas and Electric, and Southern California Edison (the California Investor-Owned Utilities) California IOUs U People's Republic of China China GA Temp-Air Temp-Air M U.S. Chamber of Commerce, American Chemistry Council, American Forest & Paper Association, American Fuel & Petrochemical Manufacturers, American Petroleum Institute, Brick Industry Association, Council of Industrial Boiler Owners, National Association of Manufacturers, National Mining Association, National Oilseed Processors Association The Associations TA * EA: Efficiency Advocate; GA: Government Agency; M: Manufacturer; RO: Research Organization; TA: Trade Association; TL: Third-party Test Laboratory; U: Utility. ** Institute for Policy Integrity, NYU School of Law; listed for identification purposes only and does not purport to present New York University School of Law's views, if any. Following the July 2016 STD Public Meeting, DOE gathered additional information and incorporated feedback from comments received in response to the June 2016 ECS NOPR. Based on this information, DOE revised the analyses presented in the June 2016 ECS NOPR for this final rule. The results of these analyses are detailed in the final rule TSD, available in the docket for this rulemaking. III. General Discussion DOE developed this final rule after considering verbal and written comments, data, and information from interested parties that represent a variety of interests. The following discussion addresses issues raised by these commenters. A. Product Classes and Scope of Coverage When evaluating and establishing energy conservation standards, DOE divides covered products into product classes by the type of energy used or by capacity or other performance-related features that justify differing standards. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (42 U.S.C. 6295(q)) In the February 2015 Preliminary Analysis, DOE did not consider energy conservation standards for portable ACs other than single-duct or dual-duct portable ACs, as the test procedure proposed at that time did not include provisions for testing other portable ACs. Furthermore, DOE did not separate portable ACs into multiple product classes for the February 2015 Preliminary Analysis following a determination that there is no unique utility associated with single-duct or dual-duct portable ACs. The test procedure established in the June 2016 TP Final Rule maintained provisions for testing only single-duct and dual-duct portable AC configurations and therefore, in the June 2016 ECS NOPR that was published following the June 2016 TP Final Rule, DOE proposed standards for a single product class of single-duct and dual-duct portable AC configurations. In this final rule, DOE is establishing standards for one product class for all single-duct and dual-duct portable ACs. Comments received relating to the scope of coverage and product classes are discussed in section IV.A of this document. B. 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. With respect to the process of establishing test procedures and standards for a given product, DOE notes that it generally follows the approach laid out in its guidance found in 10 CFR part 430, subpart C, appendix A (Procedures, Interpretations and Policies for Consideration of New or Revised Energy Conservation Standards for Consumer Products). Pursuant to that guidance, DOE endeavors to issue final test procedure rules for a given covered product in advance of the publication of a NOPR proposing energy conservation standards for that covered product. On May 9, 2014, DOE initiated a test procedure rulemaking for portable ACs by publishing a notice of data availability (hereinafter the “May 2014 TP NODA”) to request feedback on potential testing options. In the May 2014 TP NODA, DOE discussed various industry test procedures and presented results from its investigative testing that evaluated existing methodologies and alternate approaches that could be incorporated in a future DOE test procedure, should DOE determine that portable ACs are covered products. 79 FR 26639. On February 25, 2015, DOE published a NOPR (hereinafter the “February 2015 TP NOPR”) in which it proposed to establish test procedures for single-duct and dual-duct portable ACs. The proposed test procedures were based upon industry methods to determine energy consumption in active modes, off-cycle mode, standby modes, and off mode, with certain modifications to ensure the test procedures are repeatable and representative. 80 FR 10211. On November 27, 2015, DOE published a supplemental notice of proposed rulemaking (SNOPR) (hereinafter the “November 2015 TP SNOPR”), in which it proposed revisions to the test procedure proposed in the February 2015 TP NOPR to improve repeatability, reduce test burden, and ensure the test procedure is representative of typical consumer usage. 80 FR 74020. On June 1, 2016, following publication of the April 2016 Final Coverage Determination, DOE published the June 2016 TP Final Rule that established test procedures for portable ACs at appendix CC and 10 CFR 430.23(dd). 81 FR 35241. The energy conservation standards established in this final rule are expressed in terms of CEER, in Btu per Wh, based on the seasonally adjusted cooling capacity (SACC), in Btu per hour, as determined in accordance with the DOE test procedure for portable ACs at appendix CC. In response to the June 2016 ECS NOPR, DOE received comments from interested parties regarding DOE's portable AC test procedures and the associated impacts on the analysis for new standards. The following sections discuss the relevant test procedure comments. Laboratory Testing Capability DOE received several comments regarding the timing of the publication of the June 2016 TP Final Rule and manufacturers' opportunity to use the final test procedure in evaluating design options and the proposed standards level from the June 2016 ECS NOPR. GE, AHAM, JMATEK, and China claimed that neither manufacturers nor third-party laboratories have the equipment or expertise to conduct tests according to appendix CC. GE and China commented that laboratories would require additional time and investment to upgrade their test chambers to measure the infiltration air and to fully understand the repeatability and reproducibility of the new test procedure. AHAM stated that, with sufficient time, it expected to identify laboratories that could test enough portable AC models to provide additional test data for DOE's analysis. JMATEK asserted that additional time would be necessary to test its full product line. (GE, Public Meeting Transcript, No. 39 at pp. 17, 64, 129-130; AHAM, Public Meeting Transcript, No. 39 at pp. 14-15, 64; AHAM, No. 43 at p. 3; China, No. 34 at p. 3; JMATEK, No. 40 at p. 2) 15 16 Intertek stated that it had tested a portable AC according to the test procedures in appendix CC and was able to achieve all required test conditions. (Intertek, No. 37 at p. 1) 15 A notation in the form “GE, Public Meeting Transcript, No. 39 at pp. 17, 64, 129-130” identifies an oral comment that DOE received on July 20, 2016 during the NOPR public meeting, and was recorded in the public meeting transcript in the docket for this standards rulemaking (Docket No. EERE-2013-BT-STD-0033). This particular notation refers to a comment (1) made by GE during the public meeting; (2) recorded in document number 39, which is the public meeting transcript that is filed in the docket of this test procedure rulemaking; and (3) which appears on pages 17, 64, and 129 through 130 of document number 39. 16 A notation in the form “AHAM, No. 43 at p. 3” identifies a written comment: (1) Made by the Association of Home Appliance Manufacturers; (2) recorded in document number 43 that is filed in the docket of this standards rulemaking (Docket No. EERE-2013-BT-STD-0033) and available for review at www.regulations.gov; and (3) which appears on page 3 of document number 43. In a memo published on August 19, 2016, and titled, “Memo_AHAM Request for Info on PACs_2016-08-19” (hereinafter the “DOE response memo”), 17 DOE stated that it was aware of at least one third-party laboratory capable of testing according to appendix CC. In response to that memo, AHAM commented that a single laboratory cannot do all of the testing necessary for manufacturers to understand the potential impact of the proposed standard within the time allotted, and accordingly, its members have been unable to conduct a sufficient amount of testing to meaningfully participate in this standards rulemaking. (AHAM, No. 43 at p. 3) 17 DOE's response memo can be found at https://www.regulations.gov/document?D=EERE-2013-BT-STD-0033-0038. As discussed in section III.F of this document, several interested parties requested that DOE extend the June 2016 ECS NOPR comment period to provide manufacturers and test laboratories additional time to gain expertise with the test procedures in appendix CC and collect and analyze performance data to help support the standards rulemaking. To address those comments, on August 8, 2016, DOE published a notice to extend the original comment period for the June 2016 ECS NOPR by 45 days. DOE stated that this extension would allow additional time for AHAM and its members and other interested parties to test existing models to the test procedure; examine the data, information, and analysis presented in the STD NOPR TSD; gather any additional data and information to address the proposed standards; and submit comments to DOE. 81 FR 53961. As discussed further in section IV.C of this final rule, DOE believes that the comment period extension addressed the concerns presented by commenters as this timeline allowed AHAM and its members to conduct testing and provide data for 22 portable AC models, which DOE has incorporated into its analysis. C. Technological Feasibility 1. General In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially available products or in working prototypes to be technologically feasible. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i). After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-(iv) Additionally, it is DOE policy not to include in its analysis any proprietary technology that is a unique pathway to achieving a certain efficiency level. Section IV.B of this final rule discusses the results of the screening analysis for portable ACs, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the final rule TSD. 2. Maximum Technologically Feasible Levels When DOE adopts a new or amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for portable ACs, using the design parameters for the most efficient products available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.1.b of this document and in chapter 5 of the final rule TSD. D. Energy Savings 1. Determination of Savings For each TSL, DOE projected energy savings from application of the TSL to portable ACs purchased in the 30-year period that begins in the year of compliance with the standards (2022-2051). 18 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. 18 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 national energy savings (NES) from potential standards for portable ACs. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports NES in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. For natural gas, the primary energy savings are considered to be equal to the site energy savings. DOE also calculates NES 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. 19 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 final rule. 19 The FFC metric is discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012). 2. Significance of Savings To adopt any new or amended standards for a covered product, DOE must determine that such action would result in significant energy savings. (42 U.S.C. 6295(o)(3)(B)) Although the term “significant” is not defined in the Act, the U.S. Court of Appeals, for the District of Columbia Circuit in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended “significant” energy savings in the context of EPCA to be savings that are 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. E. Economic Justification 1. Specific Criteria As noted above, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)(VII)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking. a. Economic Impact on Manufacturers and Consumers In determining the impacts of potential standards on manufacturers, DOE conducts a 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 or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national NPV of the economic impacts applicable to a particular rulemaking. DOE also evaluates the LCC impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a national standard. b. Savings in Operating Costs Compared To Increase in Price EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered 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 or amended 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 or amended standards. 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 III.D.1 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 document would not reduce the utility or performance of the products under consideration in this rulemaking. e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) To assist the Department of Justice (DOJ) in making such a determination, DOE transmitted copies of its proposed rule and the NOPR TSD to the Attorney General for review, with a request that the DOJ provide its determination on this issue. In its assessment letter responding to DOE, DOJ concluded that the proposed energy conservation standards for portable ACs are unlikely to have a significant adverse impact on competition. DOE is publishing the Attorney General's assessment at the end of this final rule. f. Need for National Energy Conservation DOE also considers the need for national energy conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the 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.M of this document. The adopted standards also are likely to result in environmental benefits in the form of reduced emissions of air pollutants and GHGs associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the emissions impacts are reported in section V.B.6 of this final rule. 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 an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent interested parties submit any relevant information regarding economic justification that does not fit into the other categories described above, DOE could consider such information under “other factors.” 2. Rebuttable Presumption As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effect potential new or amended 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 document. F. Other Issues In response to the June 2016 ECS NOPR, DOE received additional comments from interested parties regarding general issues, discussed in the following section. Establishment of New Standards AHAM, De' Longhi, GE, Temp-Air, ASAP, and the California IOUs supported DOE's efforts to establish a test procedure and initial energy conservation standards for portable ACs. GE expects that, with the DOE test procedure and standards in place, consumers will be better able to select an appropriately sized portable AC for their cooling needs. ASAP similarly believes that a portable AC test procedure and energy conservation standards would help consumers compare the actual performance of portable ACs and reduce energy consumption, particularly because this is a growing product category and portable ACs use approximately twice as much energy as room ACs. The California IOUs claimed that consumers may use portable ACs as replacements for room ACs and dehumidifiers, and therefore encouraged DOE to set standards that have similar levels of stringency to those products. (AHAM, Public Meeting Transcript, No. 39 at p. 12; AHAM, No. 43 at p. 1; De' Longhi, No. 41 at p. 1; GE, Public Meeting Transcript, No. 39 at pp. 16-17; Temp-Air, No. 45 at p. 1; ASAP, Public Meeting Transcript, No. 39 at p. 10; California IOUs, No. 42 at p. 1) In this final rule, DOE is establishing energy conservation standards for portable ACs that, pursuant to EPCA (42 U.S.C. 6295(o)(2)(A)), are determined to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. NOPR Comment Period and Test Procedure Timing GE expressed concern about the NOPR proposals due to the lack of time manufacturers and third-party laboratories have had to understand the test procedure. (Public Meeting Transcript, No. 39 at pp. 16-18) AHAM noted that DOE developed the portable AC test procedure in parallel with the standards analysis, which, according to AHAM, minimized manufacturers' ability to participate in the rulemaking. AHAM suggested that manufacturers need at least 6 months between the date of publication of the test procedure and the close of the June 2016 ECS NOPR comment period to gain expertise with the test procedure and collect a sufficient sample of test results to assess the proposed standards. AHAM asserted that its portable AC test standard, which is referenced by the DOE test procedure with certain adjustments, is not currently used industry-wide by all manufacturers and third-party test laboratories. With sufficient time, AHAM stated that it expects to collect and aggregate manufacturer-provided data under the DOE test procedure to supplement or support DOE's analysis. AHAM noted that in its opinion, the analysis must be based on such data rather than assumptions. (AHAM, Public Meeting Transcript, No. 39 at pp. 13-14, 16, 26-27) In response to AHAM's request for a comment period extension, on August 15, 2016, DOE extended the comment period for the June 2016 ECS NOPR by 45 days from the original comment deadline of August 12, 2016, to September 26, 2016. 81 FR 53961. Following the comment period extension, AHAM submitted additional comments expressing concern with DOE's approach to proceed with a standards analysis and development in the absence of a final test procedure. AHAM noted that 42 U.S.C. 6295(r) requires that a new standard must include test procedures prescribed in accordance with 42 U.S.C. 6293, and AHAM stated that it believes this requirement is not effective if a test procedure is not finalized with sufficient time prior to a proposed or final standards rule, limiting the involvement and ability for manufacturers and interested parties to evaluate the standards. In the case of the June 2016 ECS NOPR analysis, AHAM asserted that manufacturers, efficiency advocates, and interested parties have had little experience with the test procedure and have been unable to use it to assess the standards analysis, and in particular the estimated impacts on consumers and manufacturers. AHAM suggested that DOE should not issue a new portable AC standard without determining if it is justified and how consumers, especially those with low and fixed incomes, may be impacted via increased product cost and loss of functionality, features, and choice. (AHAM, No. 43 at pp. 2, 30) AHAM commented that no standard can pass the substantial evidence test if it is not based on a final test procedure, if one is required, and noted that such test procedure must have been based on a full and useful opportunity for the public to comment on the procedure and its impact on proposed standard levels. AHAM additionally noted that Section 7 of the Process Improvement Rule (10 CFR part 430, subpart C, appendix A) states that DOE will attempt to identify any necessary modifications to establish test procedures when “initiating the standards development process.” Further, AHAM stated that section 7(b) states that “needed modifications to test procedures will be identified in consultation with experts and interested parties early in the screening stage of the standards development process,” and section 7(c) states that “final, modified test procedures will be issued prior to the NOPR on proposed standards.” AHAM commented that the same principles apply to new test procedures and the Process Improvement Rule indicates that it also applies to development of new standards. (AHAM, No. 43 at p. 2) In response, DOE notes that AHAM and several other interested parties, including, manufacturers, efficiency advocates, utilities, and manufacturer organizations, have participated in every stage of the portable AC standards rulemaking, providing valuable feedback to DOE. As discussed earlier in this section, DOE extended the comment period for the June 2016 ECS NOPR by 45 days from the original comment deadline. With this additional time, AHAM's members were able to test 22 portable ACs according to the test procedures in appendix CC. AHAM provided the test data to DOE, performed a similar analysis to determine appropriate efficiency levels, and recommended a new standards level. Therefore, DOE believes that AHAM has had sufficient time to evaluate the June 2016 ECS NOPR proposal. DOE appreciates AHAM's feedback and has incorporated their information into this final rule analysis. In addition to its standard LCC analysis, DOE did consider how the standards would affect certain groups of consumers, including senior-only households, low-income households, and small business. Presentation of the approach to the consumer sub-groups development can be found in section IV.I of this document and LCC results can be found in section V.B.1.b of this final rule. China suggested an additional year for manufacturers to comply with any portable AC standards. (China, No. 34 at p. 3) EPCA requires that newly-established standards shall not apply to products manufactured within five years after the publication of the final rule. (42 U.S.C. 6295(l)(2)) In accordance with this requirement, compliance with the energy conservation standards established in this final rule will be required 5 years after the date of publication of this standards final rule in the Federal Register . This 5-year period is intended to provide manufacturers ample time to assess their product designs and implement any necessary modifications to meet the new standards. Certification and Enforcement Requirements The Joint Commenters supported DOE's proposal that portable AC certification reports include CEER and SACC, duct configuration, presence of a heating function, and primary condensate removal feature, noting that these proposed certification reporting requirements will provide useful information both to the public and to DOE for use in a future rulemaking. (Joint Commenters, No. 44 at p. 6) AHAM opposed reporting of the presence of a heating function in the certification reports because the test procedure in appendix CC does not test the heating function and the heating function is not relevant to compliance with DOE's proposed standard. (AHAM, No. 43 at p. 30) DOE is including the reporting requirement for presence of a heating function in this final rule because the information will aid DOE in collecting and analyzing product characteristics in support of future rulemakings, and does not believe that including this reporting requirement represents a substantive burden to manufacturers in preparing certification reports. JMATEK requested clarification regarding the acceptable tolerance of cooling capacity and efficiency and heating mode measurements, specifically the SACC and CEER tolerances, and detailed information regarding calculating heating mode performance. (JMATEK, No. 40 at p. 2) The certification requirements proposed in the NOPR only require reporting the presence of heating mode and do not require reporting heating mode performance. The provisions in 10 CFR 429.62(a) specify the sampling plan to be used to demonstrate compliance with the portable AC standards, including 10 CFR 429.62(a)(3) and 10 CFR 429.62(a)(4) which provide the rounding requirements for SACC and CEER, respectively. Appendix CC contains test equipment and measurement requirements. China asked, under the proposed enforcement provision in 10 CFR 429.134(n), whether the certified SACC is valid only if the average measured SACC is within 5 percent of the certified SACC is an upper or lower limit, or both. (China, No. 34 at p. 4) The provision refers to the absolute value of the difference between the measured SACC and certified SACC, and that difference must be less than 5 percent for the certified SACC to be used to demonstrate compliance; otherwise, the measured value would be used to determine compliance with the standard. AHAM agreed with DOE's proposed enforcement approach but noted that a 5-percent tolerance might not be enough given the inexperience with the new test procedure. AHAM suggested that DOE should work to understand the variation in that test with regard to determining cooling capacity before deciding on a threshold. (AHAM, No. 43 at p. 30) The 5-percent tolerance on cooling capacity for enforcement is consistent with the tolerance used for packaged terminal air conditioners (PTACs) and packaged terminal heat pumps (PTHPs). Because cooling mode testing for PTACs and PTHPs utilize the same air enthalpy method that is the basis for the cooling mode testing in appendix CC, DOE determined that a similar cooling capacity tolerance for enforcement is appropriate for portable ACs, and thus establishes 5-percent tolerance limit in this final rule. Dual Coverage The California IOUs urged DOE to require portable ACs with dehumidification mode to meet the Federal standards for dehumidifiers, and that DOE should include the presence of dehumidification mode in the certification reporting requirements. They noted that the majority of portable ACs currently available for purchase from major retailers are equipped with a dehumidification mode, and the advertised moisture removal capacities for these units are comparable to those of residential dehumidifiers. The California IOUs also noted that certain retailer websites allow consumers to sort and filter listings for portable AC units by moisture removal capacity, and therefore posited that consumer purchasing decisions are likely influenced by the dehumidification capacity. The California IOUs further suggested that consumers may opt for a portable AC unit instead of purchasing a separate dehumidifier, or may use their existing portable AC as a dehumidifier. The California IOUs stated that DOE opted to exclude dehumidification mode from the portable AC test procedure because it determined dehumidification mode operating hours are insignificant, based on the assessment of a metered study, even though the study included only 19 sites from two states and participants were informed of the test purpose and scope prior to the study. Therefore, the California IOUs suggested that the study did not accurately estimate the consumer propensity for using dehumidification mode, as it did not capture consumers purchasing, or repurposing, a portable AC with the intent of also using it as a dehumidifier. The California IOUs suggested that if portable ACs are not covered under the Federal standards for dehumidifiers, DOE should require that portable ACs with dehumidification mode also meet the Federal energy conservation standards for dehumidifiers when operating in that mode and require that manufacturers indicate the presence of dehumidification mode as a certification requirement, similar to the same requirement for heating mode. According to the California IOUs, this additional requirement would mandate that moisture removal performed by portable ACs is tested and labeled in accordance with DOE requirements for residential dehumidifiers, and as a result, consumers would be better-informed when making purchasing decisions. The California IOUs stated that this would ensure that standards for residential dehumidifiers are not circumvented by multi-functional units such as portable ACs. (California IOUs, No. 42 at p. 2) Dehumidification naturally occurs as a result of the refrigeration-based air-cooling process. However, air conditioning products are typically optimized to remove sensible heat, while dehumidifiers are optimized to remove latent heat, so they would achieve different operating efficiencies when dehumidifying. Additionally, the definition for dehumidifier in 10 CFR 430.2 specifically excludes air conditioning products (portable ACs, room ACs, and packaged terminal ACs) to avoid ambiguity as to what would be classified as a dehumidifier. Therefore, portable ACs would not be subject to energy conservation standards for dehumidifiers. Furthermore, requiring portables ACs to be tested, labeled, and certified for performance in dehumidification mode according to the same requirements as for residential dehumidifiers would be de facto establishing coverage of the product as both a portable AC and a dehumidifier, and such multiple classification is not allowable under the definition of “covered product” established in EPCA. (42 U.S.C. 6291(2)) IV. Methodology and Discussion of Related Comments This section addresses the analyses DOE has performed for this rulemaking with regard to portable ACs. Separate subsections address each component of DOE's analyses. DOE used several analytical tools to estimate the impact of the standards 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 tool that provides shipments projections and calculates NES and NPV 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 website for this rulemaking: https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/76. Additionally, DOE used output from the latest version of the Energy Information Administration's (EIA)'s Annual Energy Outlook ( AEO ) for the emissions and utility impact analyses. A. Market and Technology Assessment DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this rulemaking include: (1) A determination of the scope of the rulemaking and product classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends, and (6) technologies or design options that could improve the energy efficiency of portable ACs. The key findings of DOE's market assessment are summarized below. See chapter 3 of the final rule TSD for further discussion of the market and technology assessment. 1. Definition and Scope of Coverage DOE conducted the February 2015 Preliminary Analysis based on the portable AC definition proposed in the February 2015 TP NOPR, which stated that a portable AC is an encased assembly, other than a “packaged terminal air conditioner,” “room air conditioner,” or “dehumidifier,” that is designed as a portable unit to deliver cooled, conditioned air to an enclosed space. A portable AC is powered by single-phase power and may rest on the floor or elevated surface. It includes a source of refrigeration and may include additional means for air circulation and heating. 80 FR 10212, 10215 (Feb. 25, 2015). In the April 2016 Final Coverage Determination, DOE codified this definition at 10 CFR 430.2, with minor editorial revisions that did not modify the intent or scope of the definition: A portable encased assembly, other than a “packaged terminal air conditioner,” “room air conditioner,” or “dehumidifier,” that delivers cooled, conditioned air to an enclosed space, and is powered by single-phase electric current. It includes a source of refrigeration and may include additional means for air circulation and heating. 81 FR 22514 (April 18, 2016). NAM requested clarification regarding what is considered a spot cooler and what products are covered under the energy conservation standards proposed in the June 2016 ECS NOPR. NAM stated that there are approximately five small business manufacturers in the U.S. that produce “portable commercial ACs,” which they consider to be niche products manufactured on a case-by-case basis. NAM suggested that these small business manufacturers are unsure if the test procedure is applicable to their products, as 90 to 95 percent of them operate on single-phase power, and are unsure as well if their products would be covered under the proposed energy conservation standards. Temp-Air commented that their products are intended for temporary applications and the usage environment for their products is different than those products currently under consideration. Temp-Air stated that its portable AC market share is less than 0.1 percent of DOE's annual projected portable AC shipments volume. Therefore, Temp-Air urged DOE to revise and clarify its portable AC definition to exclude single-phase models destined for commercial industrial applications. NAM and Temp-Air commented that classifying these products as covered products obliges small business manufacturers to expend a significant amount of their research and development (R&D) budgets to save a limited amount of overall energy due to the low shipments volume. NAM and Temp-Air claimed that if the small business manufacturers' products are expected to meet the proposed conservation standards, these manufacturers will be unable to take on the additional costs and will close. (NAM, Public Meeting Transcript, No. 39 at pp. 19-20, 110; Temp-Air, No. 45 at p. 1) During the July 2016 STD Public Meeting, DOE clarified that in the April 2016 Final Coverage Determination, DOE established a definition of all portable ACs that are considered to be covered products that could be subject to test procedures or standards. Under EPCA, a “consumer product” is any article of a type that consumes, or is designed to consume, energy and which, to any significant extent, is distributed in commerce for personal use or consumption by individuals. (42 U.S.C. 6291(1)) EPCA further specifies that the definition of a consumer product applies without regard to whether the product is in fact distributed in commerce for personal use or consumption by an individual. (42 U.S.C. 6291(1)(B)) DOE's definition of “portable air conditioner” excludes units that could normally not be used in a residential setting by including only those portable ACs that are powered by single-phase electric current. Thus, any product with single-phase power that otherwise meets the definition of a portable AC is a covered product, regardless of the manufacturer-intended application or installation location. However, DOE also clarified in the July 2016 STD Public Meeting that not every product that meets the definition of portable AC may be subject to DOE's test procedures and standards. As DOE explained, only those products that meet the definition of single-duct or dual-duct portable AC, as established in the June 2016 TP Final Rule, would be subject to the appendix CC test procedure and the standards proposed in the June 2016 ECS NOPR. DOE maintains this approach in this final rule, and establishes energy conservation standards only for products that meet the definition of single-duct or dual-duct portable AC as codified 10 CFR 430.2 2. Product Classes When evaluating and establishing energy conservation standards, DOE divides covered products into product classes by the type of energy used or by capacity or other performance-related features that justify a different standard. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE determines are appropriate. (42 U.S.C. 6295(q)) Portable ACs recently became a covered product when DOE issued the April 2016 Final Coverage Determination on April 18, 2016, and therefore do not have existing energy conservation standards or product class divisions. 81 FR 22514. a. Preliminary Analysis and Notice of Proposed Rulemaking (NOPR) Proposals Following an evaluation of the portable AC market in preparation of the February 2015 Preliminary Analysis, DOE determined that there are three types of duct configurations that affect product performance: Single-duct, dual-duct, and spot cooler. DOE noted in the February 2015 Preliminary Analysis that the DOE test procedure proposed in the February 2015 TP NOPR did not include measures of spot cooler performance, and, therefore, as discussed previously, DOE did not consider standards for spot coolers. See chapter 3 of the preliminary TSD for more information. DOE further evaluated if there was any consumer utility associated with the single-duct and dual-duct configurations under consideration. As detailed in chapter 3 of the preliminary TSD, DOE investigated installation locations and noise levels, and found that duct configuration had no impact on either of these key consumer utility variables. Therefore, DOE determined in the February 2015 Preliminary Analysis that a single product class is appropriate for portable ACs. In the June 2016 ECS NOPR, DOE proposed to maintain the February 2015 Preliminary Analysis approach, in which only single-duct and dual-duct portable ACs would be considered for potential standards as one product class. For portable ACs that can be optionally configured in both single-duct and dual-duct configurations, DOE further proposed that operation in both duct configurations be certified under any future portable AC energy conservation standards. In the June 2016 TP Final Rule, DOE subsequently required that if a product is able to operate as both a single-duct and dual-duct portable AC as distributed in commerce by the manufacturer, it must be tested and rated for both duct configurations. 81 FR 35241, 35247 (June 1, 2016). b. Comments and Responses ASAP, the Joint Commenters, and the California IOUs supported a single product class for portable ACs and agreed with DOE's conclusion that there is no consumer utility associated with duct configuration. The California IOUs further stated that although aesthetics is an important consumer utility, product images from several major online retailers ( e.g., Best Buy, Home Depot, and Sears) typically do not display the ducts and therefore, duct configuration is likely not a major consideration for consumers when assessing the aesthetics of a portable AC unit. (ASAP, Public Meeting Transcript, No. 39 at p. 37; Joint Commenters, No. 44 at p. 4-5; California IOUs, No. 42 at p. 1) AHAM opposed a single product class for portable ACs and instead proposed that DOE define separate product classes for single-duct and dual-duct portable ACs. AHAM argued that dual-duct units are not as portable as single-duct units, primarily due to having two hoses instead of one. AHAM also noted that one hose is typically longer with a greater pressure drop, so a larger diameter hose is needed. (AHAM, Public Meeting Transcript, No. 39 at p. 36; AHAM, No. 43 at p. 9) AHAM further asserted that a recent AHAM consumer survey showed that size and weight of a unit are important considerations for consumers, and that nearly seven of ten portable AC owners indicated that duct configuration was a key purchase factor. AHAM concluded from this survey that duct configuration does offer a unique consumer utility and therefore is a basis for separate product classes. (AHAM, No. 43 at p. 9) In addition to the consumer utility factors of installation locations and product noise, which DOE previously determined did not depend on duct configuration, DOE considered other factors raised by AHAM that could justify separate product classes for portable ACs based on duct configuration. For all units in its test sample, DOE observed that the ducts are similarly constructed from plastic in a collapsible design, and typically weigh approximately 1 pound, as compared to overall product weights ranging from 45 to 86 pounds. DOE also notes that all dual-duct units in its test sample had the same size and length ducts for the condenser inlet and exhaust ducts. DOE does not expect the minimal weight increase associated with a second duct to have a significant impact on consumer utility in terms of portability. Further, DOE has observed no consistent efficiency improvement associated with either single-duct or dual-duct portable ACs. Accordingly, duct configuration would not justify different standards. Therefore, DOE maintains the approach used in the February 2015 Preliminary Analysis and June 2016 ECS NOPR and establishes a single product class for portable ACs in this final rule. 3. Technology Options In the preliminary market and technology assessment, DOE identified 16 technology options in four different categories that would be expected to improve the efficiency of portable ACs, as measured by the DOE test procedure, shown in Table IV.1: Table IV.1—Technology Options for Portable Air Conditioners—February 2015 Preliminary Analysis Increased Heat-Transfer Surface Area: 1. Increased frontal coil area. 2. Increased depth of coil (add tube rows). 3. Increased fin density. 4. Add subcooler to condenser coil. Increased Heat-Transfer Coefficients: 5. Improved fin design. 6. Improved tube design. 7. Spray condensate onto condenser coil. 8. Microchannel heat exchangers. Component Improvements: 9. Improved compressor efficiency. 10. Improved blower/fan efficiency. 11. Low-standby-power electronic controls. 12. Ducting insulation. 13. Improved duct connections. 14. Case insulation. Part-Load Technology Improvements: 15. Variable-speed compressors. 16. Thermostatic or electronic expansion valves. In the June 2016 ECS NOPR, DOE noted that propane refrigerant is widely used for portable ACs manufactured and sold internationally, and that R-32 is being introduced in some markets outside the U.S. for portable and room ACs, albeit primarily because it is has a low global warming potential (GWP). Based on this product availability and discussions with manufacturers, DOE included alternative refrigerants as a potential technology option in the technology assessment. DOE also noted in the June 2016 ECS NOPR that a potential means of improving portable AC efficiencies, air flow optimization, was not included as a technology option in the February 2015 Preliminary Analysis. DOE did, however, consider optimized air flow in the engineering analysis in the February 2015 Preliminary Analysis, and therefore further assessed optimized air flow as a technology option in the June 2016 ECS NOPR. Therefore, in addition to the technology options considered in the February 2015 Preliminary Analysis, DOE considered alternative refrigerants and air flow optimization in the June 2016 ECS NOPR, as shown in Table IV.2. Table IV.2—Technology Options for Portable Air Conditioners—June 2016 ECS NOPR Analysis Increased Heat-Transfer Surface Area: 1. Increased frontal coil area. 2. Increased depth of coil (add tube rows). 3. Increased fin density. 4. Add subcooler to condenser coil. Increased Heat-Transfer Coefficients: 5. Improved fin design. 6. Improved tube design. 7. Spray condensate onto condenser coil. 8. Microchannel heat exchangers. Component Improvements: 9. Improved compressor efficiency. 10. Improved blower/fan efficiency. 11. Low-standby-power electronic controls. 12. Ducting insulation. 13. Improved duct connections. 14. Case insulation. Part-Load Technology Improvements: 15. Variable-speed compressors. 16. Thermostatic or electronic expansion valves. Alternative Refrigerants: 17. Propane and R-32. Reduced Infiltration Air: 18. Air flow optimization. After identifying all potential technology options for improving the efficiency of portable ACs, DOE performed a screening analysis (see section IV.B of this final rule and chapter 4 of the final rule TSD) to determine which technologies merited further consideration in the engineering analysis. B. Screening Analysis DOE uses the following four screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking: (1) Technological feasibility. Technologies that are not incorporated in commercial products or in working prototypes will not be considered further. (2) Practicability to manufacture, install, and service. If it is determined that mass production and reliable installation and servicing of a technology in commercial products could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further. (3) Impacts on product utility or product availability. If it is determined that a technology would have significant adverse impact on the utility of the product to significant subgroups of consumers or would result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the U.S. 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 subsequent sections include comments from interested parties pertinent to the screening criteria and whether DOE determined that a technology option should be excluded (“screened out”) based on the screening criteria. 1. Screened-Out Technologies Alternative Refrigerants The Significant New Alternatives Policy (SNAP) final rule, published by the U.S. EPA on April 10, 2015 (hereinafter the “SNAP rule”), limits the maximum allowable charge of alternative refrigerants in portable ACs to 300 grams for R-290 (propane), 2.45 kilograms for R-32, and 330 grams for R-441A. The SNAP rule limits were consistent with those included for portable room ACs in Underwriter's Laboratories (UL) Standard 484, “Standard for Room Air Conditioners” (UL 484), eighth edition. However, the most recent version of UL 484, the ninth edition, reduces the allowable amount of flammable refrigerant ( e.g., propane and R-441A) to less than 40 percent of the SNAP limits. Manufacturers informed DOE that the new UL charge limits for propane and other flammable refrigerants in portable ACs are not sufficient for providing the necessary minimum cooling capacity, and therefore it would not be feasible to manufacture a portable AC with propane or R-441A for the U.S. market while complying with the UL safety standard. DOE reviewed propane refrigerant charges for portable ACs available internationally and found a typical charge of 300 grams. DOE also investigated other similar AC products that utilize propane refrigerant and found that the minimum charge for capacities in a range expected for portable ACs was 265 grams, which is still greater than the maximum allowable propane charge for portable ACs in the ninth edition of UL 484. Therefore, although portable ACs are currently available internationally with charge quantities of propane acceptable under the SNAP rule, manufacturers are unable to sell those products in the U.S. market while complying with the ninth edition of UL 484. Accordingly, in the June 2016 ECS NOPR DOE screened out propane and other flammable refrigerants as a design option for portable ACs as they would not be practicable to manufacture while meeting all relevant safety standards. AHAM agreed with DOE's determination that although portable ACs are currently available internationally with amounts of flammable refrigerants, such as propane, manufacturers are unable to sell those products in the U.S. market while complying with the ninth edition of UL 484. (AHAM, No. 43 at p. 14) The California IOUs disagreed with DOE's decision to screen out alternative refrigerants as a technology option, because the most common refrigerant for portable air conditioners (R-410A) will likely be prohibited in California and Europe in favor of more efficient alternatives by the 2021 effective date, and the analysis in the June 2016 ECS NOPR did not consider the likely state of the industry in 2021. The California IOUs also suggested that DOE consider the 2016 strategy proposal by the California Air Resources Board (CARB) that is likely to push the industry towards more efficient refrigerants, such as R-32 and R-290. The California IOUs noted that this climate pollutant reduction strategy proposes to limit the 100-year GWP of refrigerants in portable ACs to 750, and would also be effective in 2021. The proposal effectively prohibits the sale of portable ACs that use the R-410A refrigerant in California. The authors of the proposal note that AC refrigerants are likely to meet this requirement due to a fluorinated GHG regulation by the European Union (EU) and a White House Council on Environmental Quality pledge of $5 billion over the next 10 years in research of low-GWP refrigerants for refrigerators and air conditioning equipment. The California IOUs noted that while the 2016 CARB strategy is still in the proposal stage, the EU regulation will take effect in 2020, and Article 11 of this regulation prohibits placing on the market any “movable room air-conditioning equipment” that contains hydrofluorocarbon (HFC) refrigerants with GWP of 150 or more. The regulation would likely prohibit both R-410A and R-32. The California IOUs stated that, in response, manufacturers such as De' Longhi and GREE have begun producing portable ACs using R-290, which is claimed to be 10 percent more efficient than its R-410A counterpart. (California IOUs, No. 42 at p. 3) The Joint Commenters stated that although DOE screened out propane due to the refrigerant charge limitations of the UL safety standards, UL certification has failed to become an industry standard for portable ACs, and TopTenReviews' list of the 10 best portable ACs of 2016 includes four units that are not UL-certified. (Joint Commenters, No. 44 at p. 3) DOE believes that UL certification is a key consumer protection program that ensures the operational safety of portable ACs. Manufacturers implementing propane in their portable ACs would not be able to receive UL certification for their products, which may result in significant adverse safety impacts. Accordingly, DOE continued to screen propane (R-290) from further consideration in this final rule analysis. In the June 2016 ECS NOPR, DOE noted that certain room ACs commercially available on the U.S. market utilize the mildly flammable R-32, but it was not aware of any portable ACs available in the U.S. market or on other markets that incorporate R-32. Because this technology has not been incorporated in commercial products or in working prototypes for portable ACs, DOE screened out R-32 refrigerant as a technology option. In response to the June 2016 ECS NOPR, AHAM agreed with DOE's proposal to screen out R-32 refrigerant because the UL standard, which is based on the elevation of the installed product and did not specifically assess use of R-32 in portable ACs that sit on the floor. AHAM and GE noted that the UL standard does not preclude, but also does not consider, the high pressure refrigeration system inside the room. Instead, it considers a compressor outside the room. Therefore, even if the UL safety standard currently does not preclude use of R-32 in portable ACs based on charge limits, these commenters urged DOE to further consider any safety concerns that might arise from a compressor and refrigeration system inside the room. AHAM also commented that efficiency gains associated with R-32 are currently unknown, and due to higher static pressure, the portable AC refrigeration system would need to be redesigned for the use of this refrigerant. (AHAM, No. 43 at pp. 13-14; GE, Public Meeting Transcript, No. 39 at pp. 45-46) In response to the June 2016 ECS NOPR, other commenters generally stated that R-32 is a viable alternative refrigerant for portable ACs that would improve efficiency. ASAP and LG noted that the R-32 charge limit in UL 484 (approximately 1 kilogram) would not preclude use of R-32 in portable ACs, and ASAP stated that one manufacturer claims a 10-percent reduction in energy use with R-32 as compared to R-410A for other similar products such as PTACs. ASAP, NRDC, and the Joint Commenters disagreed with DOE's decision to screen out R-32 as a viable technology option and urged DOE to include it in the final rule engineering analysis due to the expected increase in efficiency as compared to R-410A. The Joint Commenters stated that manufacturers claim a 10-percent reduction in energy use using R-32 in PTACs and that Oak Ridge National Laboratory (ORNL) found that R-32 demonstrates a 1 to 6-percent higher coefficient of performance across a range of test conditions compared to R-410A in mini-split ACs engineered for R-410A. The Joint Commenters further claimed, albeit without further supporting information, that portable ACs designed for R-32 should be capable of outperforming R-410A by an even higher margin. The California IOUs recommended that DOE consider certain non-U.S. models already utilizing the R-32 refrigerant, claiming that these models would meet both CARB and UL requirements. The California IOUs suggested that DOE test these models when determining the maximum observed efficiency level used for TSL 3. ASAP, NRDC, and the Joint Commenters further stated that, regardless of DOE's approach in the final rule, manufacturers would have the option of using R-32 as a way to improve portable AC efficiency and achieve the proposed energy conservation standards. (ASAP, Public Meeting Transcript, No. 39 at pp. 11-12, 42-43; LG, Public Meeting Transcript, No. 39 at p. 45; NRDC, Public Meeting Transcript, No. 39 at p. 43; Joint Commenters, No. 44 at pp. 3-4; California IOUs, No. 42 at p. 3) To evaluate the commenters' estimates of the reduction in energy use and increase in efficiency for R-32 as compared to R-410A and to identify any other performance impacts, DOE further investigated changes in performance associated with switching to R-32. As discussed in chapter 3 of the final rule TSD, DOE reviewed multiple studies and experiments conducted on other air conditioning products which suggested performance improvements when switching to R-32 ranging from 2 to 5 percent for cooling capacity and 1 to 4 percent for efficiency, depending upon the test conditions. DOE notes that the models referenced by the California IOUs are not sold in the U.S., and therefore were not included in this rulemaking analysis. Nonetheless, because R-32 is a viable refrigerant based on the UL safety requirements and because the information provided by interested parties and described in various studies consistently indicate performance improvements through the use of this refrigerant, in this final rule DOE maintained R-32 as a potential design option for improving portable AC efficiency. Duct Insulation In the February 2015 Preliminary Analysis, DOE identified duct insulation as a potential means for improving portable AC efficiency, as less heat from the condenser air would be transferred through the duct wall and would instead be transferred out of the conditioned space. During interviews, manufacturers indicated that they have considered insulated ducts to improve performance but have not identified any insulated ducts that are collapsible for packaging and shipping. No portable AC in DOE's teardown sample for the engineering analysis included insulated ducts. In the absence of a collapsible design, such an insulated duct would need to be packaged for shipment in its fully expanded configuration, significantly increasing the package size. Because of this significantly increased packaging size for non-collapsible insulated ducts and unavailability on the market of collapsible designs, DOE determined that insulated ducts are not technologically feasible, are impractical to manufacture and install, and would impact consumer utility. Therefore, DOE screened out insulated ducts as a design option for portable ACs in the February 2015 Preliminary Analysis and in the June 2016 ECS NOPR. AHAM agreed with DOE's assessment of duct insulation, because incorporating such a design option would significantly increase shipping costs and weight of the product, and could also cause it to be more difficult for consumers to install and eventually store the product in the off season. (AHAM, No. 43 at p. 12) 2. Additional Comments AHAM noted that DOE modeled and considered only four of the sixteen retained design options in the engineering analysis and provided reasons for not modeling seven other design options that were retained from the screening analysis. AHAM argued that the retention of these seven design options is not justified if they are not used in the engineering analysis for the various reasons provided in the June 2016 ECS NOPR and STD NOPR TSD. AHAM proposed that DOE remove the design options that were not considered in the June 2016 ECS NOPR engineering analysis. (AHAM, No. 43 at pp. 9-10) In the market and technology assessment, DOE identifies all technology options that may increase portable AC efficiency. The screening analysis eliminates certain technology options from further consideration based on the four criteria outlined at 10 CFR part 430, subpart C, appendix A, 4(a)(4) and 5(b). Any technology options meeting the four criteria are considered in the engineering analysis. However, DOE does not necessarily incorporate all of the retained technologies in developing the cost-efficiency relationship. Any technology options meeting the screening criteria but not included as a means to improve efficiency in the engineering analysis are discussed further in section IV.C of this document. Increased Heat-Transfer Surface Area In the June 2016 ECS NOPR, DOE considered increased heat exchanger area as a technology option that passed the screening analysis and was implemented in the engineering analysis as a design approach for reaching higher efficiency levels. DOE considered up to a 20-percent heat exchanger area increase and determined that the associated increase in weight and case size would not significantly impact consumer utility. The Joint Commenters agreed with DOE's conclusion that all available data suggest that heat exchanger areas can be increased by 20 percent and represents a significant improvement to the analysis to better capture the full range of potential efficiency improvements. (Joint Commenters, No. 44 at p. 5) AHAM disagreed with DOE's assertion that ability to move, install, or store the product would not be impacted if the case dimensions were to change to accommodate a 20 percent larger heat exchanger. AHAM argued that an increased heat exchanger size would increase the overall case size and increase weight, thereby impacting consumer utility by making the product more difficult to move from room to room and, particularly, up and down stairs. AHAM therefore urged DOE to remove increased heat exchanger area from the design approaches to reach higher efficiency levels and screen out this technology option. AHAM also commented that, although DOE did not indicate how much weight an increased heat exchanger might add to a product, AHAM determined from data gathered by its members that a heat exchanger area increase associated with a 4,000 Btu/h capacity increase would correlate to an average product weight increase of 16.6 pounds. AHAM further suggested that current portable ACs are already pushing the limits of a “single lift” product, and further increases in the size and weight could push the product from being a “single lift” to a “dual lift” product, which would impact portability. AHAM concluded that because consumers will likely not accept increased size and/or weight, DOE should screen out increased heat exchanger area as a technology option and should not use it as a design option in its analysis of higher efficiency levels. (AHAM, Public Meeting Transcript, No. 39 at pp. 44-45, 72; AHAM, No. 43 at p. 17) As discussed in chapter 5 of the final rule TSD, DOE does not expect that the increase in heat exchanger size, and the resulting increases in case size and weight, would impact product portability. In addition to noting that all portable ACs equipped with wheels, which assist in changing locations on the same floor, DOE found the typical unit weight increase would be limited to about 6 percent, or less than 5 pounds, at the maximum heat exchanger size increase of 20 percent, which did not result in any units in DOE's test sample requiring additional lifting assistance compared to what would already be required with the currently reported unit weight. Additional detail can be found in chapter 5 of the final rule TSD. DOE also notes that the heat exchanger size increases do not necessarily affect the depth of the product case, typically a portable AC's smallest dimension, and would not preclude any units with this technology option from fitting through doorways, hallways, or stairwells. For these reasons, DOE retained the technology option of a 20-percent heat exchanger area increase in the final rule screening analysis. Air Flow Optimization As discussed in section IV.A.3 of this document, in the June 2016 ECS NOPR DOE noted that a potential means of improving portable AC efficiencies, air flow optimization, was not included as a technology option in the February 2015 Preliminary Analysis. DOE did, however, consider optimized air flow in the engineering analysis in the February 2015 Preliminary Analysis, and therefore further assessed optimized air flow and included it as a technology option in the June 2016 ECS NOPR. AHAM requested that DOE define “optimized airflow” and demonstrate a specific efficiency improvement that corresponds to it; otherwise, AHAM asserted, this design option is too uncertain and should be screened out. AHAM suggested that if optimized airflow means reducing the flow over the condenser, that approach would be a safety concern for single-duct units, as the condenser must to be cooled for safe operation of the unit. (AHAM, No. 43 at p. 14) Chapter 3 of the NOPR TSD explains that optimized airflow refers to the reduction of infiltration air. Further, the optimized airflow technology option satisfies all four of the screening criteria, and it was therefore further considered in the final rule engineering analysis. However, as discussed in section IV.C of this document, DOE has determined that manufacturers would likely not rely on optimized airflow to improve portable AC efficiency because of the limited impact on performance under the test procedures in appendix CC. 3. Remaining Technologies Through a review of each technology, DOE concludes that all of the other identified technologies listed in section IV.A.3 of this document met all four screening criteria to be examined further as design options in DOE's final rule analysis. In summary, DOE did not screen out the following technology options, as shown in Table IV.3: Table IV.3—Remaining Design Options for Portable Air Conditioners Increased Heat-Transfer Surface Area: 1. Increased frontal coil area. 2. Increased depth of coil (add tube rows). 3. Increased fin density. 4. Add subcooler to condenser coil. Increased Heat-Transfer Coefficients: 5. Improved fin design. 6. Improved tube design. 7. Spray condensate onto condenser coil. 8. Microchannel heat exchangers. Component Improvements: 9. Improved compressor efficiency. 10. Improved blower/fan efficiency. 11. Low-standby-power electronic controls. 12. Improved duct connections. 13. Case insulation. Part-Load Technology Improvements: 14. Variable-speed compressors. 15. Thermostatic or el [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%3A2019-26350. Public record. Not legal advice.