# Energy Conservation Program for Commercial and Industrial Equipment: Energy Conservation Standards for Commercial Ice-Cream Freezers; Self-Contained Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers Without Doors; and Remote Condensing Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3AE8-19063 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** August 25, 2008 - **Citation:** 73 FR 50072 ## Text DEPARTMENT OF ENERGY 10 CFR Part 431 [Docket No. EE-2006-STD-0126] RIN 1904-AB59 Energy Conservation Program for Commercial and Industrial Equipment: Energy Conservation Standards for Commercial Ice-Cream Freezers; Self-Contained Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers Without Doors; and Remote Condensing Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking and notice of public meeting. SUMMARY: The Energy Policy and Conservation Act prescribes energy conservation standards for certain commercial and industrial equipment, and requires the Department of Energy (DOE) to administer an energy conservation program for this equipment. In this notice, DOE is proposing new energy conservation standards for commercial ice-cream freezers; self-contained commercial refrigerators, commercial freezers, and commercial refrigerator-freezers without doors; and remote condensing commercial refrigerators, commercial freezers, and commercial refrigerator-freezers. DOE is also announcing a public meeting on its proposed standards. DATES: DOE will hold a public meeting on Tuesday, September 23, 2008, from 9 a.m. to 5 p.m. in Washington, DC. DOE must receive requests to speak at the public meeting no later than 4 p.m., Tuesday, September 9, 2008 DOE must receive a signed original and an electronic copy of statements to be given at the public meeting no later than 4 p.m., Tuesday, September 16, 2008. DOE will accept comments, data, and information regarding the notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than October 24, 2008. See Section VII, “Public Participation,” of this NOPR for details. ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Please note that foreign nationals visiting DOE Headquarters are subject to advance security screening procedures, requiring a 30-day advance notice. If you are a foreign national and wish to participate in the public meeting, please inform DOE as soon as possible by contacting Ms. Brenda Edwards at (202) 586-2945 so that the necessary procedures can be completed. Any comments submitted must identify the NOPR for commercial refrigeration equipment, and provide docket number EE-2006-STD-0126 and/or RIN number 1904-AB59. Comments may be submitted using any of the following methods: • Federal eRulemaking Portal : http://www.regulations.gov. Follow the instructions for submitting comments. • E-mail: commercialrefrigeration.rulemaking@ee.doe.gov. Include docket number EE-2006-STD-0126 and/or RIN 1904-AB59 in the subject line of the message. • Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202) 586-2945. Please submit one signed original paper copy. • Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024. Please submit one signed original paper copy. For detailed instructions on submitting comments and additional information on the rulemaking process, see Section VII, “Public Participation,” of this document. Docket: For access to the docket to read background documents or comments received, visit the U.S. Department of Energy, Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024, (202) 586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Please call Ms. Brenda Edwards at the above telephone number for additional information regarding visiting the Resource Room. Please Note: DOE's Freedom of Information Reading Room (Room 1E-190 at the Forrestal Building) no longer houses rulemaking materials. FOR FURTHER INFORMATION CONTACT: Mr. Charles Llenza, U.S. Department of Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-2192, Charles.Llenza@ee.doe.gov. Ms. Francine Pinto, Esq., U.S. Department of Energy, Office of General Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-9507, Francine.Pinto@hq.doe.gov. SUPPLEMENTARY INFORMATION: I. Summary of the Proposed Rule II. Introduction A. Overview B. Authority C. Background 1. Current Standards 2. History of Standards Rulemaking for Commercial Refrigeration Equipment III. General Discussion A. Test Procedures B. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels C. Energy Savings 1. Determination of Savings 2. Significance of Savings D. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Commercial Customers b. Life-Cycle Costs c. Energy Savings d. Lessening of Utility or Performance of Equipment e. Impact of Any Lessening of Competition f. Need of the Nation to Conserve Energy g. Other Factors 2. Rebuttable Presumption IV. Methodology and Discussion of Comments A. Market and Technology Assessment 1. Definitions Related to Commercial Refrigeration Equipment a. Air Curtain Angle Definition b. Door Angle Definition 2. Equipment Classes B. Engineering Analysis 1. Approach 2. Equipment Classes Analyzed 3. Analytical Models a. Cost Model b. Energy Consumption Model c. Design Options 4. Baseline Models 5. Engineering Analysis Results C. Markups to Determine Equipment Price D. Energy Use Characterization E. Life-Cycle Cost and Payback Period Analyses 1. Manufacturer Selling Price 2. Increase in Selling Price 3. Markups 4. Installation Costs 5. Energy Consumption 6. Electricity Prices 7. Electricity Price Trends 8. Repair Costs 9. Maintenance Costs 10. Lifetime 11. Discount Rate 12. Payback Period F. Shipments Analysis G. National Impact Analysis 1. Base Case and Standards Case Forecasted Efficiencies 2. Annual Energy Consumption, Total Installed Cost, Maintenance Cost, and Repair Costs 3. Escalation of Electricity Prices 4. Electricity Site-to-Source Conversion H. Life-Cycle Cost Sub-Group Analysis I. Manufacturer Impact Analysis 1. Overview a. Phase 1, Industry Profile b. Phase 2, Industry Cash-Flow Analysis c. Phase 3, Sub-Group Impact Analysis 2. Government Regulatory Impact Model Analysis 3. Manufacturer Interviews a. Key Issues 4. Government Regulatory Impact Model Key Inputs and Scenarios a. Base Case Shipments Forecast b. Standards Case Shipments Forecast c. Markup Scenarios d. Equipment and Capital Conversion Costs J. Utility Impact Analysis K. Employment Impact Analysis L. Environmental Assessment V. Analytical Results A. Trial Standard Levels 1. Miscellaneous Equipment B. Economic Justification and Energy Savings 1. Economic Impacts on Commercial Customers a. Life-Cycle Cost and Payback Period b. Rebuttable Presumption Payback c. Life-Cycle Cost Sub-Group Analysis 2. Economic Impacts on Manufacturers a. Industry Cash-Flow Analysis Results b. Cumulative Regulatory Burden c. Impacts on Employment d. Impacts on Manufacturing Capacity e. Impacts on Sub-Groups of Manufacturers 3. National Impact Analysis a. Amount and Significance of Energy Savings b. Net Present Value c. Impacts on Employment 4. Impact on Utility or Performance of Equipment 5. Impact of Any Lessening of Competition 6. Need of the Nation to Conserve Energy 7. Other Factors C. Proposed Standard VI. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act/Initial Regulatory Flexibility Analysis C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review VII. Public Participation A. Attendance at Public Meeting B. Procedure for Submitting Requests to Speak C. Conduct of Public Meeting D. Submission of Comments E. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary I. Summary of the Proposed Rule The Energy Policy and Conservation Act, as amended (EPCA), specifies that any new or amended energy conservation standard the U.S. Department of Energy (DOE) prescribes for the equipment covered by this notice shall be designed to “achieve the maximum improvement in energy efficiency * * * which the Secretary determines is technologically feasible and economically justified.” (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) Furthermore, the new or amended standard must “result in significant conservation of energy.” (42 U.S.C. 6295(o)(3)(B) and 6316(e)(1)) In accordance with these and other statutory criteria discussed in this notice, DOE proposes to adopt new energy conservation standards for commercial ice-cream freezers; self-contained commercial refrigerators, commercial freezers, and commercial refrigerator-freezers without doors; and remote condensing commercial refrigerators, commercial freezers, and commercial refrigerator-freezers. 1 The proposed standards, shown in Table I-1, would apply to all commercial refrigeration equipment manufactured on or after January 1, 2012, and offered for sale in the United States. 42 U.S.C. 6313(c)(4)(A). 1 These types of equipment are referred to collectively hereafter as “commercial refrigeration equipment.” 2 For this rulemaking, equipment class designations consist of a combination (in sequential order separated by periods) of: (1) an equipment family code (VOP = vertical open, SVO = semivertical open, HZO = horizontal open, VCT = vertical transparent doors, VCS = vertical solid doors, HCT = horizontal transparent doors, HCS = horizontal solid doors, or SOC = service over counter); (2) an operating mode code (RC = remote condensing or SC = self-contained); and ( 3) a rating temperature code (M = medium temperature (38 °F), L = low temperature (0 °F), or I = ice-cream temperature (−15 °F)). For example, “VOP.RC.M” refers to the “vertical open, remote condensing, medium temperature” equipment class. See discussion below and chapter 3 of the TSD, market and technology assessment, for a more detailed explanation of the equipment class terminology. Table I-1—Proposed Standard Levels Equipment class 2 Proposed standard level * ** Equipment class Proposed standard level VOP.RC.M 0.82 × TDA + 4.07 VCT.RC.I 0.71 × TDA + 3.05 SVO.RC.M 0.83 × TDA + 3.18 HCT.RC.M 0.16 × TDA + 0.13 HZO.RC.M 0.35 × TDA + 2.88 HCT.RC.L 0.34 × TDA + 0.26 VOP.RC.L 2.28 × TDA + 6.85 HCT.RC.I 0.4 × TDA + 0.31 HZO.RC.L 0.57 × TDA + 6.88 VCS.RC.M 0.11 × V + 0.26 VCT.RC.M 0.25 × TDA + 1.95 VCS.RC.L 0.23 × V + 0.54 VCT.RC.L 0.6 × TDA + 2.61 VCS.RC.I 0.27 × V + 0.63 SOC.RC.M 0.51 × TDA + 0.11 HCS.RC.M 0.11 × V + 0.26 VOP.SC.M 1.74 × TDA + 4.71 HCS.RC.L 0.23 × V + 0.54 SVO.SC.M 1.73 × TDA + 4.59 HCS.RC.I 0.27 × V + 0.63 HZO.SC.M 0.77 × TDA + 5.55 SOC.RC.L 1.08 × TDA + 0.22 HZO.SC.L 1.92 × TDA + 7.08 SOC.RC.I 1.26 × TDA + 0.26 VCT.SC.I 0.73 × TDA + 3.29 VOP.SC.L 4.37 × TDA + 11.82 VCS.SC.I 0.38 × V + 0.88 VOP.SC.I 5.55 × TDA + 15.02 HCT.SC.I 0.56 × TDA + 0.43 SVO.SC.L 4.34 × TDA + 11.51 SVO.RC.L 2.28 × TDA + 6.85 SVO.SC.I 5.52 × TDA + 14.63 VOP.RC.I 2.9 × TDA + 8.7 HZO.SC.I 2.44 × TDA + 9 SVO.RC.I 2.9 × TDA + 8.7 SOC.SC.I 1.76 × TDA + 0.36 HZO.RC.I 0.72 × TDA + 8.74 HCS.SC.I 0.38 × V + 0.88 * “TDA” is the total display area of the case, as measured in the Air-Conditioning and Refrigeration Institute (ARI) Standard 1200-2006, Appendix D. ** “V” is the volume of the case, as measured in ARI Standard 1200-2006, Appendix C. DOE's analyses indicate that the proposed energy conservation standards, trial standard level (TSL) 4 (see Section V.A for a detailed description of TSLs), would save a significant amount of energy—an estimated 0.83 quadrillion British thermal units (Btu), or quads, of cumulative energy over 30 years (2012-2042). The economic impacts on commercial consumers (i.e., the average life-cycle cost (LCC) savings) are positive for all equipment classes. The cumulative national net present value (NPV) of the proposed standards at TSL 4 from 2012 to 2042 ranges from $1.1 billion (at a seven percent discount rate) to $3.24 billion (at a three percent discount rate), in 2007$. This is the estimated total value of future operating cost savings minus the estimated increased equipment costs, discounted to 2007$. The benefits and costs of the standard can also be expressed in terms of annualized 2007$ values over the forecast period 2012 through 2062. Using a 7 percent discount rate for the annualized cost analysis, the cost of the standard is estimated to be $109 million per year in increased equipment and installation costs while the annualized benefits are expected to be $214 million per year in reduced equipment operating costs. Using a 3 percent discount rate, the annualized cost of the standard is expected to be $92 million per year while the annualized benefits of today's standard are expected to be $234 million per year. See Section V.B.3 for additional details. If DOE adopts the proposed standards, it expects manufacturers will lose 8 to 35 percent of the industry net present value (INPV), which is approximately $40 to $180 million. DOE estimates that the proposed standards will have environmental benefits leading to reductions in greenhouse gas emissions (i.e., cumulative (undiscounted) emission reductions) of 44 million tons (Mt) of carbon dioxide (CO 2 ) from 2012 to 2042. 3 Most of the energy saved is electricity. In addition, DOE expects the energy savings from the proposed standards to eliminate the need for approximately 640 megawatts (MW) of generating capacity by 2042. These results reflect DOE's use of energy price projections from the U.S. Energy Information Administration (EIA)'s Annual Energy Outlook 2007 (AEO 2007). 4 3 Additionally, the standards would result in 17 thousand tons (kt) of nitrogen oxides (NO X ) emissions reductions or generate a similar amount of NO X emissions allowance credits in areas where such emissions are subject to regulatory or voluntary emissions caps. 4 DOE intends to use EIA's AEO 2008 to generate the results for the final rule. The AEO2008 Early Release contains reference case energy price forecasts which show higher commercial electricity prices at the national level compared with the AEO 2007 on a real (inflation adjusted) basis. If these early release energy prices remain unchanged in the final release, then incorporation of the AEO 2008 forecasts would likely result in reduced payback periods and greater life-cycle cost savings and greater national net present value for the proposed standards. DOE proposes that TSL 4 represents the maximum improvement in energy efficiency that is technologically feasible and economically justified. DOE proposes that the benefits to the Nation of TSL 4 (energy savings, commercial consumer average LCC savings, national NPV increase, and emission reductions) outweigh the costs (loss of manufacturer INPV) and is therefore proposing TSL 4 as the energy conservation standards for commercial refrigeration equipment in this NOPR. TSL 4 is technologically feasible because the technologies required to achieve these levels already exist. In this NOPR, DOE proposes that TSL 5 is not economically justified because, under the current circumstances, DOE believes that the benefits to the Nation of TSL 5 (energy savings, commercial consumer average LCC savings, and emission reductions) do not outweigh the costs (national NPV decrease and loss of manufacturer INPV). DOE's analyses indicate that TSL 5 would save a greater amount of energy than TSL 4—an estimated 1.21 quadrillion quads of cumulative energy over 30 years (2012-2042). At TSL 5, while the economic impacts on commercial consumers (i.e., LCC savings and NPV) are still positive for the majority of equipment classes, the impacts on commercial customers for five classes (VOP.RC.M, VOP.SC.M, SVO.RC.M, SVO.SC.M, and SOC.RC.M) are negative. The life-cycle cost savings are negative for three classes and NPV results for each of these five classes are negative. The cumulative NPV at TSL 5, from 2012 to 2042, ranges from −$200 million (at a seven percent discount rate) to $1.16 billion (at a three percent discount rate), in 2007$. Using a 7 percent discount rate, the annualized cost of the standard is estimated to be $285 million per year in increased equipment and installation costs while the annualized benefits are expected to be $266 million per year in reduced equipment operating costs. Using a 3 percent discount rate, the annualized cost of the standard is expected to be $241 million per year while the annualized benefits are expected to be $292 million per year. See Section V.B.3 for additional details. At TSL 5, DOE expects manufacturers will lose 3 to 56 percent of the industry net present value INPV, which is approximately $18 to $285 million. DOE based its estimates of the economic impacts referenced above on current costs for energy improving technologies used in commercial refrigeration equipment. A key technology for energy savings benefits in most commercial refrigeration equipment is the use of solid state lighting (i.e., light emitting diodes or LEDs). At current LED prices, the life-cycle cost savings at TSL 5 are substantially lower than TSL 3 and TSL 4 for several equipment classes. For example, the average per unit LCC savings for the VOP.RC.M equipment class is $1,551 at TSL 3, but this number falls by $1,785 to −$234 when moving to TSL 5. When accounting for the projected volume of sales for these equipment classes in 2012, the net effect of moving from TSL 3 to TSL 5 is a decrease in LCC savings of $130 million per year. To achieve the same or greater LCC savings at TSL 5 as other efficiency levels (e.g., TSL 3 or 4), for all equipment classes, average LED costs would need to decrease by almost 45 percent. While considerable information is available that suggests LED costs are likely to decline more than assumed in DOE's analysis, DOE believes it must have a higher degree of confidence of further cost reductions than assumed in today's proposed rule. In this NOPR, DOE projected future LED costs based on DOE's Multi-Year Program Plan, 5 which are consistent with historical LED price reductions between 2000 and 2007. The Multi-Year Program Plan projects that LED chip costs will continue to decrease at a compound annual growth rate (CAGR) of approximately −27 percent between 2007 and 2012, which represents a price reduction of 80 percent over that time period. Since LED chips are only a portion of the total LED system (other components include power supply and the LED fixture), the 80 percent reduction in chip costs contributes to an estimated decrease in total LED system cost of approximately 50 percent by 2012, assuming the costs of the power supply and LED fixtures do not change significantly. Such a decrease in cost would be sufficient for TSL 5 to achieve LCC savings equal to or greater than other TSLs. 5 U.S. Department of Energy, Solid-State Lighting Research and Development, Multi-Year Program Plan FY'09-FY'14. This document was prepared under the direction of a Technical Committee from the Next Generation Lighting Initiative Alliance (NGLIA). Information about the NGLIA and its members is available at http://www.nglia.org . DOE examined whether the projected LED costs presented in the Multi-Year Program Plan and used in this NOPR are consistent with publicly available empirical historical cost data. DOE reviewed available price data for the LED market and found that between 2000 and 2007, white-light LEDs had a CAGR ranging from approximately −18 to −31 percent. DOE's LED cost projection (i.e., −27 percent CAGR) falls within the range of CAGRs observed. DOE expanded its examination by comparing this projected trend to the red-light LED market, which is a related technology, with cost information spanning approximately three decades (i.e., 1973 to 2005). DOE found that the CAGR of red-light LED costs was −22 percent over this longer time span. The trend in red-light LED costs derived from empirical data over this longer time period is of a similar magnitude to DOE's projected costs for white-light LEDs. Due to the technological similarities between red-light LEDs and white-light LEDs, DOE believes that the historical cost reductions for red-light LEDs are indicative of future cost reductions for white-light LEDs. Furthermore, the white-light LED market is undergoing a massive expansion and growth phase, with significant investment, new products and innovative applications for LED technology, including illumination of commercial refrigeration equipment. See Section V.C of this NOPR and Appendix B of the technical support document (TSD) for more detail on the cost projection and DOE's validation of those estimates. DOE seeks comment on the extent to which these price trends are indicative of what can be expected for commercial refrigeration equipment LED lighting from 2007 to 2012 and the extent to which the cost reduction observed for red-light LEDs is relevant to DOE's cost projections for white-light LEDs. DOE also seeks comment on the extent to which stakeholders expect projected LED cost reductions would occur, the timing of the projected LED cost reductions, and the certainty of the projected LED cost reductions. Finally, considering the rapid development of LED technology and the steady reductions in cost, DOE seeks comment on the extent to which manufacturers would adopt LED technology into the design of commercial refrigeration equipment in the absence of standards. DOE also performed sensitivity analyses of the effect of projected cost reductions in LED lighting systems on LCC and NPV. Incorporation of DOE LED lighting system cost projections of a 50 percent decline by 2012 shift the calculated NPV, for 2012-2042, from −$200 million to a positive $1.62 billion at a seven percent discount rate, for TSL 5. See Section V.C of this NOPR or Chapter 8 of the TSD for additional details. TSL 5 is estimated to have environmental benefits leading to reductions in greenhouse gas emissions of 63 Mt of CO 2 from 2012 to 2042. Additionally, TSL 5 would result in 23 kt of NO X emissions reductions or generate a similar amount of NO X emissions allowance credits in areas where such emissions are subject to emissions caps. Most of the energy saved is electricity. In addition, DOE expects the energy savings from the proposed standards to eliminate the need for approximately 930 MW of generating capacity by 2042. Although DOE has tentatively rejected TSL 5 because, under the current circumstances, it tentatively found that the benefits to the Nation do not outweigh the costs, and therefore does not consider TSL 5 economically justified, DOE expects that LED costs will decline substantially over the next 4-5 years and could have a dramatic effect on the economic impacts described above. Therefore, DOE requests data or information that could provide a greater level of confidence that the projected LED cost reductions will occur and DOE will assess that data in determining whether to further consider TSL 5 in its final rule analysis. II. Introduction A. Overview DOE proposes to set energy conservation standards for commercial refrigeration equipment at the levels shown in Table I-1. The proposed standards would apply to equipment manufactured on or after January 1, 2012, and offered for sale in the United States. DOE has tentatively found that the standards would save a significant amount of energy (see Section III.C.2) and result in a cleaner environment. In the 30-year period after the new standard becomes effective, the Nation would tentatively save 0.83 quads of primary energy. These energy savings also would tentatively result in significantly reduced emissions of air pollutants and greenhouse gases associated with electricity production, by avoiding the emission of 44 Mt of CO 2 and 17 kt of NO X . In addition, DOE expects the standard to prevent the construction of the new power plants that would be necessary to produce approximately 640 MW by 2042. In total, DOE tentatively estimates the net present value to the Nation of this standard to be $1.1 billion from 2012 to 2042 in 2007$. Commercial customers would see benefits from the proposed standards. Although DOE expects the price of the higher efficiency commercial refrigeration equipment to be approximately 11 percent higher than the average price of this equipment today, weighted by shipments across equipment classes, the energy efficiency gains would result in lower energy costs, saving customers about 26 percent per year on their energy bills. Based on DOE's LCC analysis, DOE tentatively estimates that the mean payback period for the higher efficiency commercial refrigeration equipment would be between a low of 1.4 to a high of 6.1 years. In addition, when the net results of these price increases and energy cost savings are summed over the lifetime of the higher efficiency equipment, customers could save approximately $690 to $3800, depending on equipment class, compared to their expenditures on today's baseline commercial refrigeration equipment. B. Authority Title III of EPCA sets forth a variety of provisions designed to improve energy efficiency. Part A of Title III (42 U.S.C. 6291-6309) provides for the Energy Conservation Program for Consumer Products Other Than Automobiles. Part A-1 of Title III (42 U.S.C. 6311-6317) establishes a similar program for certain types of commercial and industrial equipment. 6 The Energy Policy Act of 2005 (EPACT 2005), Pub. L. 109-58, included an amendment to Part A-1 requiring that DOE prescribe energy conservation standards for the commercial refrigeration equipment that is the subject of this rulemaking. (EPACT 2005, Section 136(c); 42 U.S.C. 6313(c)(4)(A)) Hence, DOE publishes today's notice of proposed rulemaking (NOPR) pursuant to Part A-1, which provides definitions, test procedures, labeling provisions, energy conservation standards, and the authority to require information and reports from manufacturers. The test procedures for commercial refrigeration equipment appear at Title 10 Code of Federal Regulations (CFR) Sections 431.63 and 431.64. 6 This part was originally titled Part C, however, it was renamed Part A-1 after Part B of Title III was repealed by EPACT 2005. EPCA provides criteria for prescribing new or amended standards for covered equipment. As indicated above, any new or amended standard for commercial refrigeration equipment must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. 7 (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) But EPCA precludes DOE from adopting any standard that would not result in significant conservation of energy. (42 U.S.C. 6295(o)(3) and 6316(e)(1)) Moreover, DOE may not prescribe a standard for certain equipment if no test procedure has been established for that equipment, or if DOE determines by rule that the standard is not technologically feasible or economically justified, and that such standard will not result in significant conservation of energy. (42 U.S.C. 6295(o)(3) and 6316(e)(1)) EPCA also provides that, in deciding whether a standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens after receiving comments on the proposed standard. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) To the greatest extent practicable, DOE must consider the following seven factors: 7 This notice concerns types of “covered equipment” as that term is defined in EPCA, (42 U.S.C. 6311(1)(E)) in Part A-1, Certain Industrial Equipment. Therefore, when DOE quotes from, paraphrases or describes general provisions in Part A, for instance, 42 U.S.C. 6295(o), it substitutes the term “equipment” for “product” when the latter term appears in those provisions. (See 42 U.S.C. 6316 (a)(3)) (I) The economic impact of the standard on manufacturers and consumers of the equipment subject to the standard; (II) The savings in operating costs throughout the estimated average life of the covered equipment in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the equipment that are likely to result from the imposition of the standard; (III) The total projected amount of energy savings likely to result directly from the imposition of the standard; (IV) Any lessening of the utility or the performance of the covered equipment likely to result from the imposition of the standard; (V) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard; (VI) The need for national energy conservation; and (VII) Other factors the Secretary considers relevant. Id. Furthermore, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States of any equipment type (or class) with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295 (o)(4) and 6316(e)(1)) In addition, there is a rebuttable presumption that a standard level is economically justified if the Secretary finds that “the additional cost to the consumer of purchasing equipment 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) and 6316(e)(1)) The rebuttable presumption test is an alternative path to establishing economic justification. Section 325(q)(1) of EPCA addresses the situation where DOE sets a standard for a type or class of covered equipment that has two or more groups of covered equipment. DOE must specify a different standard level than that which applies generally to such equipment “for any group of covered equipment which have the same function or intended use, if * * * equipment within such group—(A) consume a different kind of energy from that consumed by other covered equipment within such type (or class); or (B) have a capacity or other performance-related feature which other equipment within such type (or class) do not have and such feature justifies a higher or lower standard” than applies or will apply to the other equipment. (42 U.S.C. 6295(q)(1) and 6316(e)(1)) In determining whether a performance-related feature justifies a different standard for a group of equipment, DOE must “consider such factors as the utility to the consumer of such a feature” and other factors DOE deems appropriate. Any rule prescribing such a standard must include an explanation of the basis on which a higher or lower level was established. (42 U.S.C. 6295(q)(2) and 6316(e)(1)) Finally, Federal energy conservation requirements for commercial equipment generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards for such equipment. (42 U.S.C. 6316(a)-(b)) For the commercial refrigeration equipment covered by this rulemaking, Federal energy conservation requirements will supersede all such State laws or regulations beginning on the date of publication of the Federal standards, except that any state or local standard issued before that time will be superseded only when the Federal standards take effect. (42 U.S.C. 6316(e)(3)) Furthermore, DOE can grant waivers of preemption to any State laws or regulations that are superseded in accordance with the procedures and other provisions of Section 327(d) of the Act. (42 U.S.C. 6297(d) and 6316(e)(3)) C. Background 1. Current Standards There are no national energy conservation standards for the commercial refrigeration equipment covered by this rulemaking. EPACT 2005 did amend EPCA to establish energy conservation standards that will apply to certain other types of commercial refrigerators, freezers, and refrigerator-freezers when manufactured on or after January 1, 2010. (42 U.S.C. 6313(c)(2)-(3)) Those standards are not at issue in this rulemaking. 2. History of Standards Rulemaking for Commercial Refrigeration Equipment On August 8, 2005, Section 136(c) of EPACT 2005 amended EPCA, in part to direct DOE to issue energy conservation standards for the equipment covered by this rulemaking, which standards would apply to equipment manufactured on or after January 1, 2012. (42 U.S.C. 6313(c)(4)(A)) Section 136(a)(3) of EPACT 2005 also amended EPCA, by adding definitions for terms relevant to this equipment. (42 U.S.C. 6311(9)) In defining the term “commercial refrigerator, freezer, and refrigerator-freezer,” EPCA states that this refrigeration equipment is connected to either a self-contained condensing unit or to a remote condensing unit. 42 U.S.C. 6311(9)(A)(vii). Subsequently, EPCA defines the terms “remote condensing unit” and “self-contained condensing unit.” 42 U.S.C. 6311(9)(E)-(F). These are the two condenser configurations of equipment covered by this rulemaking. On December 19, 2006, the Energy Independence and Security Act of 2007 (EISA 2007) was signed into law by the President. This legislation affected some of the products for which DOE had rulemakings underway. However, it did not create any additional requirements for commercial refrigeration equipment. As an initial step to comply with EPCA's mandate to issue standards for commercial refrigeration equipment, and to commence this rulemaking, on April 25, 2006, DOE published notice of a public meeting and of the availability of its Framework Document for this rulemaking. 71 FR 23876. The Framework Document described the procedural and analytical approaches that DOE anticipated using to evaluate energy conservation standards for commercial refrigeration equipment, and identified various issues to be resolved in conducting the rulemaking. DOE held a public meeting on May 16, 2006 to present the contents of the Framework Document, describe the analyses it planned to conduct during the rulemaking, obtain public comment on these subjects, and inform and facilitate interested persons' involvement in the rulemaking. DOE also gave interested persons an opportunity, after the public meeting, to submit written statements in response to the Framework Document. DOE received five statements. On July 26, 2007, DOE published an advance notice of proposed rulemaking (ANOPR) concerning energy conservation standards for commercial refrigeration equipment. 72 FR 41161. In the ANOPR, DOE described and sought comment on its proposed equipment classes for this rulemaking, and on the analytical framework, models, and tools (e.g., LCC and national energy savings (NES) spreadsheets) that DOE used to analyze the impacts of energy conservation standards for commercial refrigeration equipment. In conjunction with the ANOPR, DOE also published on its Web site the complete ANOPR TSD. The TSD included the results of DOE's preliminary (1) engineering analysis, (2) markups analysis to determine equipment price, (3) energy use characterization, (4) LCC and payback period (PBP) analyses, (5) NES and national impact analyses (NIA), and (6) manufacturer impact analysis (MIA). In the ANOPR, DOE requested comment on these results, and on a range of other issues. These issues included equipment classes, definitions for air-curtain angle and door angle, case lighting operating hours, operation and maintenance practices, equipment lifetime, LCC baseline levels, NIA base case, base case and standards case forecasts, differential impact of new standards on future shipments, selection of standard levels for post-ANOPR analysis, the equation that expresses the energy conservation standards, and the nature of standards for commercial refrigerator-freezers. DOE held a public meeting in Washington, DC on August 23, 2007, to present the methodology and results of the ANOPR analyses, and to solicit both oral and written comments from the interested persons who attended. Public comment focused on DOE's assumptions, approach, and equipment class breakdown, and are addressed in detail in this NOPR. III. General Discussion A. Test Procedures On December 8, 2006, DOE published a final rule in which it adopted American National Standards Institute (ANSI)/Air-Conditioning and Refrigeration Institute (ARI) Standard 1200-2006, Performance Rating of Commercial Refrigerated Display Merchandisers and Storage Cabinets, as the DOE test procedure for this equipment. 71 FR 71340, 71369-70; 10 CFR 431.63-431.64. ANSI/ARI Standard 1200-2006 contains rating temperature specifications of 38 °F (±2 °F) for commercial refrigerators and refrigerator compartments, 0 °F (±2 °F) for commercial freezers and freezer compartments, and −5 °F (±2 °F) for commercial ice-cream freezers. The standard also requires performance tests to be conducted according to the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 72-2005, Method of Testing Commercial Refrigerators and Freezers . In this final rule, DOE also adopted a −15 °F (±2 °F) rating temperature for commercial ice-cream freezers. 71 FR 71370. In addition, DOE adopted ANSI/Association of Home Appliance Manufacturers (AHAM) Standard HRF-1-2004, Energy, Performance and Capacity of Household Refrigerators, Refrigerator-Freezers and Freezers, for determining compartment volumes for this equipment. 71 FR 71369-70. B. Technological Feasibility 1. General DOE considers design options technologically feasible if industry already uses these options or if research has progressed to the development of a working prototype. “Technologies incorporated in commercially available equipment or in working prototypes will be considered technologically feasible.” 10 CFR Part 430, Subpart C, Appendix A, Section 4(a)(4)(i). In each standards rulemaking, DOE conducts a screening analysis, which it bases on information it has gathered regarding all current technology options and prototype designs. In consultation with interested parties, DOE develops a list of design options for consideration in the rulemaking. All technologically feasible design options are candidates in this initial assessment. Early in the process, DOE eliminates from consideration any design option (a) that is not practicable to manufacture, install, or service; (b) that will have adverse impacts on equipment utility or availability; or (c) for which there are health or safety concerns that cannot be resolved. Chapter 4 of the TSD accompanying this notice contains a description of the screening analysis for this rulemaking. In the ANOPR, DOE eliminated five of the technologies considered in the market and technology assessment: (1) Air-curtain design, (2) thermoacoustic refrigeration, (3) magnetic refrigeration, (4) electro-hydrodynamic heat exchangers, and (5) copper rotor motors. Because all five of these technologies are in the research stage, DOE believes that they would not be practicable to manufacture, install and service on the scale necessary to serve the relevant market at the time of the effective date of the standard. In addition, because these technologies are in the research stage, DOE cannot assess whether they would have any adverse impacts on utility to significant subgroups of consumers, result in the unavailability of any types of equipment, or present any significant adverse impacts on health or safety. Therefore, DOE did not consider these technologies as design options for improving the energy efficiency of commercial refrigeration equipment. DOE believes that all the efficiency levels discussed in today's notice are technologically feasible because there is equipment either in the market or in working prototypes at all of the efficiency levels analyzed. See Chapter 4 of the TSD for further discussion of the screening analysis. 2. Maximum Technologically Feasible Levels In deciding whether to adopt a new standard for a type or class of commercial refrigeration equipment, DOE must “determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible” for such equipment. (42 U.S.C. 6295(p)(1) and 6316(e)(1)) If such standard is not designed to achieve such efficiency or use, the Secretary shall state the reasons such is the case in the proposed rule. Id. For this rulemaking, DOE determined that the values in Table III-1 represent the energy use levels that would achieve the maximum reductions in energy use that are technologically feasible at this time for commercial refrigeration equipment. DOE identified these “max-tech” levels for the equipment classes analyzed as part of the engineering analysis (Chapter 5 of the TSD). For each equipment class, DOE applied the most efficient design options available for energy-consuming components. These levels are set forth in TSL 5. Table III-1—“Max-Tech” Energy Use Levels Equipment class “Max-Tech” level kilowatt hours per day (kWh/day) Equipment class “Max-Tech” level kilowatt hours per day (kWh/day) VOP.RC.M 0.68 × TDA + 4.07 VCT.RC.I 0.71 × TDA + 3.05 SVO.RC.M 0.69 × TDA + 3.18 HCT.RC.M 0.16 × TDA + 0.13 HZO.RC.M 0.35 × TDA + 2.88 HCT.RC.L 0.34 × TDA + 0.26 VOP.RC.L 2.28 × TDA + 6.85 HCT.RC.I 0.4 × TDA + 0.31 HZO.RC.L 0.57 × TDA + 6.88 VCS.RC.M 0.11 × V + 0.26 VCT.RC.M 0.25 × TDA + 1.95 VCS.RC.L 0.23 × V + 0.54 VCT.RC.L 0.6 × TDA + 2.61 VCS.RC.I 0.27 × V + 0.63 SOC.RC.M 0.39 × TDA + 0.11 HCS.RC.M 0.11 × V + 0.26 VOP.SC.M 1.57 × TDA + 4.71 HCS.RC.L 0.23 × V + 0.54 SVO.SC.M 1.58 × TDA + 4.59 HCS.RC.I 0.27 × V + 0.63 HZO.SC.M 0.77 × TDA + 5.55 SOC.RC.L 0.83 × TDA + 0.22 HZO.SC.L 1.92 × TDA + 7.08 SOC.RC.I 0.97 × TDA + 0.26 VCT.SC.I 0.73 × TDA + 3.29 VOP.SC.L 3.95 × TDA + 11.82 VCS.SC.I 0.38 × V + 0.88 VOP.SC.I 5.02 × TDA + 15.02 HCT.SC.I 0.56 × TDA + 0.43 SVO.SC.L 3.98 × TDA + 11.51 SVO.RC.L 2.28 × TDA + 6.85 SVO.SC.I 5.06 × TDA + 14.63 VOP.RC.I 2.9 × TDA + 8.7 HZO.SC.I 2.44 × TDA + 9 SVO.RC.I 2.9 × TDA + 8.7 SOC.SC.I 1.35 × TDA + 0.36 HZO.RC.I 0.72 × TDA + 8.74 HCS.SC.I 0.38 × V + 0.88 C. Energy Savings 1. Determination of Savings DOE used the NES spreadsheet to estimate energy savings. The spreadsheet forecasts energy savings over the period of analysis for TSLs relative to the base case. DOE quantified the energy savings attributable to an energy conservation standard as the difference in energy consumption between the trial standards case and the base case. The base case represents the forecast of energy consumption in the absence of new mandatory efficiency standards. The NES spreadsheet model is described in Section IV.G of this notice and in Chapter 11 of the TSD accompanying this notice. The NES spreadsheet model calculates the energy savings in site energy or kilowatt hours (kWh). Site energy is the energy directly consumed at building sites by commercial refrigeration equipment. DOE expresses national energy savings in terms of the source energy savings, which are the energy savings used to generate and transmit the energy consumed at the site. Chapter 11 of the TSD contains a table of factors used to convert kWh to Btu. DOE derives these conversion factors, which change with time, from DOE's EIA's AEO2007. 2. Significance of Savings For commercial refrigeration equipment, EPCA prohibits DOE from adopting a standard that would not result in significant additional energy savings. (42 U.S.C. 6295(o)(3)(B) and 6316(e)(1)) While the term “significant” is not defined in the Act, the U.S. Court of Appeals, in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended significant energy savings in this context to be savings that were not “genuinely trivial.” The estimated energy savings for all of the trial standard levels considered in this rulemaking are nontrivial, and therefore DOE considers them significant within the meaning of Section 325 of the Act. D. Economic Justification 1. Specific Criteria As noted earlier, EPCA provides seven factors to be evaluated in determining whether an energy conservation standard is economically justified. The following sections discuss how DOE has addressed each factor thus far in this rulemaking. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) a. Economic Impact on Manufacturers and Commercial Customers DOE uses an annual cash-flow approach in determining the quantitative impacts of a new or amended standard on manufacturers. This includes both a short-term assessment based on the cost and capital requirements between the announcement of a regulation and when the regulation comes into effect, and a long-term assessment. Impacts analyzed include INPV, cash flows by year, and changes in revenue and income. Next, DOE analyzes and reports the impacts on different types of manufacturers, with particular attention to impacts on small manufacturers. DOE then considers the impact of standards on domestic manufacturer employment, manufacturing capacity, plant closures, and loss of capital investment. Finally, DOE takes into account the cumulative impact of regulations on manufacturers. For commercial consumers, measures of economic impact are generally the changes in installed cost and annual operating costs, i.e., the LCC. Chapter 6 of the TSD presents the LCC of the equipment at each TSL. The LCC is one of the seven factors to be considered in determining the economic justification for a new or amended standard. (42 U.S.C. 6295(o)(2)(B)(i)(II) and 6316(e)(1)) It is discussed in the paragraphs that follow. b. Life-Cycle Costs The LCC is the sum of the purchase price, including the installation and operating expense (i.e., operating energy, maintenance, and repair expenditures) discounted over the lifetime of the equipment. To determine the purchase price including installation, DOE estimated the markups that distributors and contractors add to the manufacturer selling price (MSP); DOE also estimated installation costs from an analysis of commercial refrigeration equipment installation costs for each equipment class. DOE determined that preventative maintenance costs do not depend on efficiency but that repair costs increase with efficiency and that the cost of replacement lighting fixtures (“lighting maintenance”) increased with higher efficiency. See Sections IV.E.8 and IV.E.9 for more detail. In estimating operating energy costs, DOE used average effective commercial electricity prices at the State level from the EIA publication, State Energy Consumption, Price, and Expenditure Estimates . DOE modified the 2006 average commercial electricity prices to reflect the average electricity prices for each of the four types of businesses examined in this analysis. The LCC analysis compares the LCCs of equipment designed to meet possible energy conservation standards with the LCCs of equipment likely to be installed in the absence of standards. The LCC analysis also identifies a range of energy price forecasts for the electricity prices used in the economic analyses and provides results showing the sensitivity of the LCC results to these price forecasts. Recognizing that each commercial building that uses commercial refrigeration equipment is unique, DOE analyzed variability and uncertainty by performing the LCC and PBP calculations for two prototype commercial buildings (i.e., stores) and four types of businesses (two types of businesses for each prototype store). The first store prototype is a large grocery store, which encompasses supermarkets and wholesaler/retailer multi-line stores such as big-box stores, warehouse stores, and supercenters. The second prototype is a small store, which encompasses convenience stores and small specialty stores such as meat markets; wine, beer, and liquor stores; and convenience stores associated with gasoline stations. Various types of commercial refrigeration equipment can serve a given type of store's refrigeration needs. DOE gives the LCC savings as a distribution, with a mean value and a range. DOE developed average discount rates for each of four business types analyzed, ranging from 5.1 to 8.4 percent for the calculations, and assumed that the customer purchases the equipment in 2012. Chapter 8 of the TSD contains the details of the LCC calculations. c. Energy Savings While significant energy conservation is a separate statutory requirement for imposing an energy conservation standard, EPCA requires DOE, in determining the economic justification of such 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) and 6316(e)(1)) DOE used the NES spreadsheet results in its consideration of total projected savings. Section IV.G.1 of this notice discusses the savings figures. d. Lessening of Utility or Performance of Equipment In establishing equipment classes, evaluating design options, and assessing the impact of potential standard levels, DOE tried to avoid having new standards for commercial refrigeration equipment lessen the utility or performance of the equipment under consideration in this rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(e)(1)) None of the proposed trial standard levels considered in this rulemaking involve changes in equipment design or unusual installation requirements that would reduce the utility or performance of the equipment. See Chapter 4 and Chapter 16 of the TSD for more detail. e. Impact of Any Lessening of Competition EPCA directs DOE to consider any lessening of competition likely to result from standards. It directs the Attorney General to determine in writing the impact, if any, of any lessening of competition likely to result from imposition of a proposed standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (ii); and 6316(e)(1)) DOE has transmitted a written request to the Attorney General soliciting a written determination on this issue. f. Need of the Nation to Conserve Energy The non-monetary benefits of the proposed standard are likely to be reflected in improvements to the security and reliability of the Nation's energy system. Reductions in the overall demand for energy will reduce the Nation's reliance on foreign sources of energy and increase reliability of the Nation's electricity system. DOE conducts a utility impact analysis to show the reduction in installed generation capacity. Reduced power demand (including peak power demand) generally improves the security and reliability of the energy system. The proposed standard also is likely to result in improvements to the environment. In quantifying these improvements, DOE has defined a range of primary energy conversion factors and associated emission reductions based on the generation that energy conservation standards displaced. DOE reports the environmental effects from each trial standard level for this equipment in the environmental assessment in the TSD. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(e)(1)) g. Other Factors EPCA allows the Secretary of Energy, in determining whether a standard is economically justified, to consider any other factors the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) and 6316(e)(1)) Under this provision, DOE considered LCC impacts on identifiable groups of customers, such as customers of different business types, who may be disproportionately affected by any national energy conservation standard level. In particular, DOE examined the LCC impact on independent small grocery/convenience store businesses where both higher discount rates and lack of access to national account equipment purchases might disproportionately affect those business types when compared to the overall commercial refrigeration equipment market. 2. Rebuttable Presumption Another criterion for determining whether a standard level is economically justified is the following rebuttable presumption test: If the Secretary finds that the additional cost to the consumer of purchasing equipment 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, there shall be a rebuttable presumption that such standard level is economically justified. A determination by the Secretary that such criterion is not met shall not be taken into consideration in the Secretary's determination of whether a standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(e)(1)) If the initial price of equipment increases due to a conservation standard, and the consumer would recover the increase in energy savings in less than three years through reduced energy costs resulting from the standard, then DOE presumes that such standard is economically justified. This presumption of economic justification can be rebutted upon a proper showing. The rebuttable presumption payback calculation is discussed in Sections III.D.2 and V.B.1.b of this NOPR. IV. Methodology and Discussion of Comments DOE used two spreadsheet tools to determine the impact of energy conservation standards on the Nation. The first spreadsheet calculates LCCs and payback periods of potential new energy conservation standards. The second provides shipments forecasts and then calculates national energy savings and net present value impacts of potential new energy conservation standards. DOE also assessed manufacturer impacts, largely through use of the Government Regulatory Impact Model (GRIM). Additionally, DOE estimated the impacts of energy conservation standards for commercial refrigeration equipment on utilities and the environment. DOE used a version of EIA's National Energy Modeling System (NEMS) for the utility and environmental analyses. The NEMS model simulates the energy economy of the United States and has been developed over several years by the EIA primarily for the purpose of preparing the Annual Energy Outlook (AEO). The NEMS produces a widely known baseline forecast for the Nation through 2025 that is available on the DOE Web site. The version of NEMS used for efficiency standards analysis is called NEMS-BT, 8 and is based on the AEO2007 version with minor modifications. The NEMS offers a sophisticated picture of the effect of standards, since its scope allows it to measure the interactions between the various energy supply and demand sectors and the economy as a whole. 8 The EIA approves use of the name NEMS to describe only an AEO version of the model without any modification to code or data. Because the present analysis entails some minor code modifications and runs the model under various policy scenarios that deviate from AEO assumptions, the name NEMS-BT refers to the model used here. For more information on NEMS, refer to The National Energy Modeling System: An Overview 1998. DOE/EIA-0581 (98), February, 1998. BT is DOE's Building Technologies Program. NEMS-BT was formerly called NEMS-BRS. A. Market and Technology Assessment When beginning an energy conservation standards rulemaking, DOE develops information that provides an overall picture of the market for the equipment concerned, including the purpose of the equipment, the industry structure, and market characteristics. 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 (Chapter 3 of the TSD) include equipment classes, manufacturers, quantities, and types of equipment sold and offered for sale, retail market trends, and regulatory and non-regulatory programs. 1. Definitions Related to Commercial Refrigeration Equipment a. Air Curtain Angle Definition For equipment without doors, an air curtain divides the refrigerated compartment from the ambient space. DOE stated in the ANOPR that the orientation of the air curtain affects the energy consumption of both remote condensing and self-contained equipment, and that equipment without doors can be broadly categorized by the angle of the air curtain. DOE considered defining the air-curtain angle as “the angle between a vertical line and the line formed by the points at the center of the discharge air grille and the center of the return air grille, when viewed in cross-section.” DOE presented this definition in the ANOPR, 72 FR 41173, and for discussion at the ANOPR public meeting, and requested feedback. ARI and Edison Electric Institute (EEI) recommended that DOE slightly modify its definition of air-curtain angle to “the angle formed between a vertical line and the line formed by the points at the inside edge of the discharge air opening and the inside edge of the return air opening, when viewed in cross-section.” For equipment without doors and without a discharge air grille or discharge air honeycomb, the air curtain should be defined as “the angle between a vertical line extended down from the highest point on the manufacturer's recommended load limit line and the same load limit line.” (ARI, No. 18 at p. 2 and EEI, No. 15 at p. 2) DOE recognizes that these proposed definitions are consistent with industry-approved standards and is therefore including the suggested modifications to the definition for air-curtain angle in today's proposed rule. b. Door Angle Definition For equipment with doors, DOE stated in the ANOPR that the orientation of the doors affects the energy consumption, and that equipment with doors can be broadly categorized by the angle of the door. DOE considered defining door angle as “the angle between a vertical line and the line formed by the plane of the door, when viewed in cross-section.” 72 FR 41174. DOE also presented this definition for discussion at the ANOPR public meeting and requested feedback. While stakeholders agreed with DOE's proposed definition of door angle flat doors, it was not clear how DOE would define the door angle for curved doors such as those found on service over-the-counter cases. True stated that curved door angle should be defined by forming a plane between “the end plane and the end peak in-section.” (Public Meeting Transcript, No. 13.5 at p. 59) Southern California Edison (SCE) suggested defining door angle for curved doors in the way air-curtain angle is defined, by the angle formed between the vertical and a line drawn between the top and bottom edges. (Public Meeting Transcript, No. 13.5 at p. 59) DOE is proposing its original definition of door angle for cases with flat doors. For cases with curved doors, DOE is not clear what True's intent was in defining door angle, and no clarification was made in True's written comments. DOE believes the approach suggested by SCE is appropriate because it accounts for the complex geometry of curved doors while still remaining consistent with the existing definition for air-curtain angle. Therefore, DOE is proposing to define door angle as “the angle formed between a vertical line and the straight line drawn by connecting the top and bottom points where the display area glass joins the cabinet, when the equipment is viewed in cross-section.” 2. Equipment Classes When establishing energy conservation standards, DOE generally divides covered equipment into equipment classes by the type of energy used, capacity, or other performance-related features that affect efficiency. Different energy conservation standards may apply to different equipment classes. (42 U.S.C. 6295(q) and 6316(e)(1)) Commercial refrigerators, commercial freezers, and commercial refrigerator-freezers can be divided into various equipment classes categorized largely by physical characteristics that affect energy efficiency. Some of these characteristics delineate the categories of equipment covered by this rulemaking. 9 Most affect the merchandise that the equipment can be used to display, and how the customer can access that merchandise. Key physical characteristics that affect energy efficiency are the operating temperature, the presence or absence of doors (i.e., closed cases or open cases), the type of doors used (i.e., transparent or solid), the angle of the door or air-curtain (i.e., horizontal, semivertical, or vertical) and the type of condensing unit (i.e., remote or self-contained). As discussed in the ANOPR, 72 FR 41173-77, and below, DOE has developed equipment classes in this rulemaking by (1) dividing commercial refrigerators, commercial freezers, and commercial refrigerator-freezers into equipment families, (2) subdividing these families based on condensing unit configurations and rating temperature designations, and (3) identifying the resulting classes that are within each of the three equipment categories covered by this rulemaking. 9 “Commercial refrigerators, commercial freezers, and commercial refrigerator-freezers” is a type of covered commercial equipment. For purposes of discussion only in this proceeding, DOE uses the term “categories” to designate groupings of “commercial refrigeration equipment.” The categories of equipment are: Self-contained commercial refrigerators, commercial freezers, and commercial refrigerator-freezers without doors; remote condensing commercial refrigerators, commercial freezers, and commercial refrigerator-freezers; and commercial ice-cream freezers. DOE will analyze specific equipment classes that fall within these general categories and set appropriate standards. DOE divided covered equipment into eight equipment families, which are shown in Table IV-1. Following the ANOPR, DOE did not receive any comments that it believes warranted changes to the eight equipment families proposed in the ANOPR and therefore, the eight families are unchanged. The two issues related to equipment family designations are discussed below. Table IV-1—Equipment Family Designations Equipment family Description Vertical Open (VOP) Equipment without doors and an air-curtain ≥ 0° and < 10° from the vertical. Semivertical Open (SVO) Equipment without doors and an air-curtain angle ≥ 10° and < 80° from the vertical. Horizontal Open (HZO) Equipment without doors and an air-curtain angle ≥ 80° from the vertical. Vertical Closed Transparent (VCT) Equipment with hinged or sliding transparent doors and a door angle < 45°. Horizontal Closed Transparent (HCT) Equipment with hinged or sliding transparent doors and a door angle ≥ 45°. Vertical Closed Solid (VCS) Equipment with hinged or sliding solid (opaque) doors and a door angle < 45°. Horizontal Closed Solid (HCS) Equipment with hinged or sliding solid (opaque) doors and a door angle ≥ 45°. Service Over Counter (SOC) Equipment with sliding or hinged doors intended for use by sales personnel and fixed or hinged glass for displaying merchandise. Within each of the eight equipment families is equipment that has one of the two condensing unit configurations, which are shown in Table IV-2. Because these are the only two condensing unit configurations used in commercial refrigeration equipment, and since DOE did not receive any comments on these configurations following the ANOPR, DOE did not make any changes. Table IV-2—Condensing Unit Configuration Condensing unit configuration Description Remote Condensing (RC) Condensing unit is remotely located from the refrigerated equipment and consists of one or more refrigerant compressors, refrigerant condensers, condenser fans and motors, and factory-supplied accessories. Self-Contained (SC) Condensing unit is an integral part of the refrigerated equipment and consists of one or more refrigerant compressors, refrigerant condensers, condenser fans and motors, and factory-supplied accessories. DOE is also organizing equipment classes based on the three operating temperature ranges shown in Table IV-3. Based on the temperature at which the equipment is designed to operate, it will fall into one of these operating temperature ranges. This is identified as Issue 3 under “Issues on Which DOE Seeks Comment” in Section VII.E of this NOPR. Each temperature range coincides with a rating temperature used in the test procedure final rule for the different equipment types. 10 CFR 431.64. Following the ANOPR, DOE did not receive any comments regarding the rating temperature designations proposed in the ANOPR, and therefore DOE did not make any changes to the rating temperature designations. Table IV-3—Rating Temperature Designations Operating temperature (°F) Rating temperature (°F) Description ≥ 32 (M) 38 Medium temperature (refrigerators). < 32 and > −5 (L) 0 Low temperature (freezers). ≤ −5 (I) −15 Ice-cream temperature (ice-cream freezers). In the ANOPR, DOE responded to several comments and presented a discussion (Section II.A.2) of the air-curtain angle ranges used to delineate vertical, semivertical, and horizontal equipment families without doors (VOP, SVO, and HZO). 72 FR 41173-74. In comments received following the Framework document publication, some stakeholders felt that the air-curtain angle ranges used in the data provided by ARI might encourage manufacturers to redesign equipment to take advantage of less stringent standards. Specifically, the stakeholders were concerned that manufacturers of VOP.RC.M equipment (a high-volume equipment class) would make slight alterations in their designs that would shift the equipment to the SVO.RC.M equipment class. If this shift occurred for a large number of models, and if standards for SVO.RC.M equipment were significantly less stringent than standards for VOP.RC.M equipment, a significant amount of energy savings would be avoided. In other words, energy savings will be less than if that equipment was not modified and remained under the vertical classification. DOE responded to these comments in the ANOPR, concurring with stakeholders' concerns, and requesting any relevant data or feedback regarding the ranges of air-curtain angle proposed in the ANOPR. No further comments were received on this issue following the ANOPR. DOE is proposing standards for the SVO.RC.M equipment class that are virtually equivalent to standards for the VOP.RC.M equipment class (see the proposed rule language of this NOPR). As a result, DOE believes that the proposed standards eliminate motivation for market shifts between these equipment classes. However, to assure that no changes to the air-curtain ranges for the VOP, SVO, and HZO equipment families are warranted, DOE seeks comment on the possibility of market shifts between equipment classes based on the proposed standards. As discussed in the ANOPR, 72 FR 41174 and during the ANOPR public meeting, DOE stated that it was considering defining two equipment families each for equipment with solid and transparent doors, based on door angles of 0° to 45° (vertical) and 45° to 90° (horizontal). EEI stated that DOE should consider revising its definition of door angle, because it is unclear whether a door angle of 45° to be vertical or horizontal. (Public Meeting Transcript, No. 13.5 at p. 58) DOE agrees with EEI that its previous designation did not specify what equipment family a unit with a 45° door angle would fall under. Therefore, DOE has tentatively decided that it will designate vertical equipment with transparent or solid doors as “equipment with hinged or sliding doors and a door angle less than 45°,” and horizontal equipment with transparent or solid doors as “equipment with hinged or sliding doors and a door angle greater than or equal to 45°.” DOE is considering 38 of the 48 equipment classes shown in Table IV-4. 10 The equipment classes are organized by equipment family, compressor operating mode, and rating temperature. The right-hand column in Table IV-4 with the heading “Equipment Class Designation” identifies each of the 48 equipment classes with a particular set of letters. The first three letters for each class represent its equipment family. The next two letters represent the condensing unit configuration. The last letter represents the rating temperature. Table IV-1 through Table IV-3 set forth the meaning of the equipment class lettering designations. 10 Table IV-4 identifies 48 classes of commercial refrigerators, commercial freezers, and commercial refrigerator-freezers. Of the 48 classes, 10 classes are identified by asterisks. EPCA has already established energy conservation standards for these 10 classes, (42 U.S.C. 6313(c)(2)-(3)) which are not covered under this rulemaking. Table IV-4—Commercial Refrigeration Equipment Classes Equipment family Condensing unit configuration Operating temperature (°F) Equipment class designation Vertical Open Remote ≥ 32 < 32 and > −5 ≤ −5 VOP.RC.M VOP.RC.L VOP.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 VOP.SC.M VOP.SC.L VOP.SC.I Semivertical Open Remote ≥ 32 < 32 and > −5 ≤ −5 SVO.RC.M SVO.RC.L SVO.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 SVO.SC.M SVO.SC.L SVO.SC.I Horizontal Open Remote ≥ 32 < 32 and > −5 ≤ −5 HZO.RC.M HZO.RC.L HZO.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 HZO.SC.M HZO.SC.L HZO.SC.I Vertical Closed Transparent Remote ≥ 32 < 32 and > −5 ≤ −5 VCT.RC.M VCT.RC.L VCT.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 VCT.SC.M* VCT.SC.L* VCT.SC.I Horizontal Closed Transparent Remote ≥ 32 < 32 and > −5 ≤ −5 HCT.RC.M HCT.RC.L HCT.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 HCT.SC.M* HCT.SC.L* HCT.SC.I Vertical Closed Solid Remote ≥ 32 < 32 and > −5 ≤ −5 VCS.RC.M VCS.RC.L VCS.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 VCS.SC.M* VCS.SC.L* VCS.SC.I Horizontal Closed Solid Remote ≥ 32 < 32 and > −5 ≤ −5 HCS.RC.M HCS.RC.L HCS.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 HCS.SC.M* HCS.SC.L* HCS.SC.I Service Over Counter Remote ≥ 32 < 32 and > −5 ≤ −5 SOC.RC.M SOC.RC.L SOC.RC.I Self-Contained ≥ 32 < 32 and > −5 ≤ −5 SOC.SC.M* SOC.SC.L* SOC.SC.I * These equipment classes are covered by standards established in EPCA and are not covered under this rulemaking. (42 U.S.C. 6313(c)(2)-(3)) EPCA contains standards for self-contained commercial refrigerators, commercial freezers and commercial refrigerator-freezers with doors (42 U.S.C. 6313(c)(2)-(3)); this equipment is not included in this rulemaking. Equipment classes already covered by EPCA, and therefore not included in this rulemaking, are indicated with asterisks in Table IV-4. DOE has based the designations of these possible equipment classes on the classification methodology presented in Table IV-1 through Table IV-3. Table IV-5 presents the equipment classes covered under this rulemaking, organized by the three equipment categories. Table IV-5—Commercial Refrigeration Equipment Classes by Category Equipment category Condensing unit configuration Equipment family Operating temperature (°F) Equipment class designation Remote Condensing Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers Remote Vertical Open ≥ 32 < 32 and > −5 VOP.RC.M VOP.RC.L Semivertical Open ≥ 32 < 32 and > −5 SVO.RC.M SVO.RC.L Horizontal Open ≥ 32 < 32 and > −5 HZO.RC.M HZO.RC.L Vertical Closed Transparent ≥ 32 < 32 and > −5 VCT.RC.M VCT.RC.L Horizontal Closed Transparent ≥ 32 < 32 and > −5 HCT.RC.M HCT.RC.L Vertical Closed Solid ≥ 32 < 32 and > −5 VCS.RC.M VCS.RC.L Horizontal Closed Solid ≥ 32 < 32 and > −5 HCS.RC.M HCS.RC.L Service Over Counter ≥ 32 < 32 and > −5 SOC.RC.M SOC.RC.L Self-Contained Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers without Doors Self-Contained Vertical Open ≥ 32 < 32 and > −5 VOP.SC.M VOP.SC.L Semivertical Open ≥ 32 < 32 and > −5 SVO.SC.M SVO.SC.L Horizontal Open ≥ 32 < 32 and > −5 HZO.SC.M HZO.SC.L Commercial Ice-Cream Freezers Remote Vertical Open ≤ −5 VOP.RC.I Semivertical Open SVO.RC.I Horizontal Open HZO.RC.I Vertical Closed Transparent VCT.RC.I Horizontal Closed Transparent HCT.RC.I Vertical Closed Solid VCS.RC.I Horizontal Closed Solid HCS.RC.I Service Over Counter SOC.RC.I Self-Contained Vertical Open VOP.SC.I Semivertical Open SVO.SC.I Horizontal Open HZO.SC.I Vertical Closed Transparent VCT.SC.I Horizontal Closed Transparent HCT.SC.I Vertical Closed Solid VCS.SC.I Horizontal Closed Solid HCS.SC.I Service Over Counter SOC.SC.I B. Engineering Analysis The engineering analysis develops cost-efficiency relationships to show the manufacturing costs of achieving increased efficiency. DOE has identified the following three methodologies to generate the manufacturing costs needed for the engineering analysis: (1) The design option approach, which provides the incremental costs of adding design options to a baseline model that will improve its efficiency; (2) the efficiency-level approach, which provides the relative costs of achieving increases in energy efficiency levels without regard to the particular design options used to achieve such increases; and (3) the cost-assessment (or reverse engineering) approach, which provides “bottom-up” manufacturing cost assessments for achieving various levels of increased efficiency based on detailed cost data for parts and material, labor, shipping/packaging, and investment for models that operate at particular efficiency levels. 1. Approach In the ANOPR engineering analysis, the primary methodology was an efficiency-level approach, supplemented by a design option approach. DOE analyzed only the 15 equipment classes with shipment volumes greater than 100 per year. The basis of the approach was four industry-supplied cost-efficiency curves for the four equipment classes shipped most frequently (i.e., VCT.RC.L, VOP.RC.M, SVO.RC.M, and HZO.RC.L). See Section 0 for shipment data. DOE developed these classes using an efficiency-level approach. DOE supplemented these industry-supplied curves with 15 curves it developed using a design option approach. Four of DOE's curves were intended only for comparison with the industry-supplied curves, as verification of the industry data. The other 11 curves formed the basis of analysis for the other 11 analyzed equipment classes. The ANOPR provides more details on this approach. 72 FR 41180. During the ANOPR public meeting and subsequent comment period, stakeholders raised concerns over using industry-supplied data as the basis of the engineering analysis. ARI stated that the intent was to use the industry curves only to validate DOE's design option analysis, not to use them directly in the analysis. (Public Meeting Transcript, No. 13.5 at p. 91) The American Council for an Energy Efficient Economy (ACEEE) stated that rulemakings have always used industry curves when they were available. (Public Meeting Transcript, No. 13.5 at p. 91) ARI stated that the industry data represents an average and covers the range of available equipment, but not all manufacturers' equipment would span the whole range. ARI also stated that as few as three manufacturers submitted data for some of the cost-efficiency curves, while in the best cases there were up to seven. ARI explained that three manufacturers might not represent the entire industry. (Public Meeting Transcript, No. 13.5 at pp. 94-95) Hussmann stated that it doesn't know, for example, how many shelf lights other manufacturers included in the data they submitted to ARI, and therein lies some of the danger of using an industry average. (Public Meeting Transcript, No. 13.5 at p. 95) Regarding the HZO.RC.L equipment class, EEI stated that DOE's data does not appear to have the same range as ARI's data. (Public Meeting Transcript, No. 13.5 at p. 93) Copeland also questioned whether the cost-efficiency curves from industry made sense [because they did not appear to be ordered in terms of increasing payback]. (Public Meeting Transcript, No. 13.5 at p. 149) ACEEE noted that the analytically derived price points for several equipment classes are significantly higher than the industry-supplied data at high efficiency, and suggested that DOE reexamine this data. (ACEEE, No. 16 at p. 2) ARI stated that DOE's design option approach appears to be technically sound, and that the ARI cost-efficiency curves are only available for a limited number of equipment classes. For consistency, ARI recommended that DOE base its analysis solely on DOE's analytically derived curves. (ARI, No. 18 at p. 6) As mentioned above, DOE used the four cost-efficiency curves 11 provided by ARI as the basis for its ANOPR engineering analysis. DOE was not aware of ARI's intent that they be used only to validate DOE's own analysis, or of ARI's concerns that the data may have been insufficient for some classes. DOE agrees with stakeholders that using the analytically derived curves (a design option approach) for all equipment classes would be more consistent and provide more transparency. Although the efficiency-level and design option approaches have been used together in other rulemakings, DOE recognizes the challenges in using the industry-supplied data as the primary engineering analysis approach in this rulemaking. The ARI data cannot be disaggregated for public review, since doing so would disclose sensitive manufacturer information. This prevents a rigorous investigation of any discrepancies or irregularities in data submitted by the manufacturers. At the ANOPR public meeting, Hussmann mentioned lighting levels as one example of a design feature that could cause discrepancies among data from different manufacturers. In the design option approach, data on design features that affect performance (such as lighting) are available for interested persons to review and comment on, along with other assumptions and calculations. The aggregation of industry data seems to have resulted in cost-efficiency curves that lack the marked cost increases at higher levels of efficiency that are typical of the cost-efficiency relationship. The industry-supplied curves tended to be “flatter” than those developed by DOE, and in some cases appear to have efficiency levels that were not in order of increasing payback, as noted by Copeland. DOE believes the flatness of the industry curves may account for some of the discrepancies in pricing between the industry-supplied and analytically derived data, as noted by ACEEE. 11 These four curves applied to the following four equipment classes: VCT.RC.L, VOP.RC.M, SVO.RC.M, and HZO.RC.L. These represent the equipment classes with the highest shipment volumes. The extent of the industry-supplied data was also cause for concern. ARI's statement that not all manufacturers' equipment would span the whole range of efficiency levels is consistent with EEI's concern that the data derived using DOE's design option approach did not span the same range as the industry data. Because of overlapping ranges of efficiency of manufacturers' data, the overall cost-efficiency data reported by ARI spans a range that in some cases is greater than the range covered by DOE's design option data. DOE realizes this could raise a concern that its analysis is incomplete, for example by neglecting design options that could account for additional increases in efficiency, and thus an increase in the span of efficiencies covered. However, based on the comments received, DOE believes the extra range in the ARI data is instead largely due to inconsistencies in the manufacturer data submitted to ARI, such as lighting levels. A smaller portion of the extra range may also be attributable to subtle aspects of design and manufacturing (e.g., airflow and air-curtain design) that have an insignificant impact on performance and that cannot be modeled accurately in the design option approach. DOE appreciates the feedback from ARI that the design option approach appears sound, and believes that the design option data is more accurate in depicting the cost-efficiency relationship for commercial refrigeration equipment. For the NOPR engineering analysis, DOE analyzed the same 15 equipment classes as in the ANOPR analysis, but used only a design option approach. That approach is identical to the one used in the ANOPR, involving consultation with outside experts, review of publicly available cost and performance information, and modeling of equipment cost and energy consumption, but DOE applied it to all 15 equipment classes analyzed. The industry-supplied data developed using an efficiency-level approach is used only as a check on DOE's data. DOE believes this approach is more reliable, and affords the public full transparency of assumptions and results and the ability to perform independent analyses for verification. See Chapter 5 of the TSD for more detail. 2. Equipment Classes Analyzed For the NOPR, DOE did not make any changes to the equipment classes directly analyzed in the ANOPR engineering analysis. Because of the large number of equipment classes in this rulemaking, DOE did not directly analyze all equipment classes using the design option approach. DOE maintained the same equipment class prioritization used in the ANOPR. Equipment classes with more than 100 units shipped per year (“primary” classes), as well as the VOP.RC.L 12 equipment class, were directly analyzed. Table IV-6 lists these equipment classes, which represent approximately 98 percent of the shipments of commercial refrigeration equipment reported by ARI. 12 The VOP.RC.L equipment class was reported as having zero shipments in the ARI shipment data, but was included in the analysis based on recommendations from manufacturers. During interviews conducted for the NOPR, manufacturers reported to DOE their individual shipment numbers for the VOP.RC.L class. Regardless of the actual shipment volume, DOE believes there are significantly more than 100 annual shipments of the VOP.RC.L equipment class. Table IV-6—Equipment Classes Directly Analyzed in the Engineering Analysis Equipment class Description VOP.RC.M Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature. VOP.RC.L Vertical Freezer without Doors with a Remote Condensing Unit, Low Temperature. SVO.RC.M Semi-Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature. HZO.RC.M Horizontal Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature. HZO.RC.L Horizontal Freezer without Doors with a Remote Condensing Unit, Low Temperature. VCT.RC.M Vertical Refrigerator with Transparent Doors with a Remote Condensing Unit, Medium Temperature. VCT.RC.L Vertical Freezer with Transparent Doors with a Remote Condensing Unit, Low Temperature. SOC.RC.M Service Over Counter Refrigerator with a Remote Condensing Unit, Medium Temperature. VOP.SC.M Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature. SVO.SC.M Semi-Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature. HZO.SC.M Horizontal Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature. HZO.SC.L Horizontal Freezer without Doors with a Self-Contained Condensing Unit, Low Temperature. VCT.SC.I Vertical Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature. VCS.SC.I Vertical Ice-Cream Freezer with Solid Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature. HCT.SC.I Horizontal Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature. 3. Analytical Models In the design option approach, DOE used models to develop estimates of cost and energy consumption for each equipment class at each efficiency level. DOE used a cost model to estimate the manufacturer production cost (MPC) in dollars, and an energy consumption model to estimate the daily energy consumption in kWh for each of the 15 primary equipment classes analyzed. a. Cost Model Development of the cost model involved the disassembly of a self-contained refrigerator with transparent doors, an analysis of the materials and manufacturing processes, and the development of a parametric spreadsheet model flexible enough to cover all equipment classes. The manufacturing cost model estimated MPC and reported it in aggregated form to maintain confidentiality of sensitive cost data. DOE obtained input from stakeholders on the MPC estimates and assumptions to confirm accuracy. The cost model was used for 7 of the 15 examined equipment classes and the results were extended to 6 of the remaining examined equipment classes. The cost of the remaining two equipment classes was estimated using available manufacturer list price (MLP) information discounted to MPC. Details of the cost model are provided in chapter 5 of the TSD. Following the ANOPR, no comments were received regarding DOE's cost model, and therefore no significant changes were made to the methodology used in the NOPR analysis. One change was made to the manufacturer markup assumption, which is discussed below. One key element of DOE's cost model concerned features and structural elements common in commercial refrigeration equipment, but that would not affect the energy use of the equipment. Development of this part of the cost model involved disassembling a self-contained refrigerator with transparent doors, analyzing the materials and manufacturing processes, and developing a parametric spreadsheet model flexible enough to cover all equipment classes. The other key part of the cost model estimated the costs of particular features or design options that would affect the energy use of the equipment. DOE obtained input from stakeholders on the MPC estimates and assumptions to confirm their accuracy. DOE used the cost model for 7 of the 15 examined equipment classes and extended the results to 6 of the remaining examined equipment classes. DOE estimated the cost of the remaining two equipment classes using available manufacturer list price (MLP) information reduced to MPC. Chapter 5 of the TSD provides details of the cost model. A manufacturer markup is applied to the MPC estimates to arrive at the MSP. This is the price of equipment sold at which the manufacturer can recover both production and non-production costs and can earn a profit. DOE calculated the manufacturer markup as the market share weighted average value for the industry. For the ANOPR, DOE developed this manufacturer markup by examining several major commercial refrigeration equipment manufacturers' gross margin information from annual reports and the Securities and Exchange Commission (SEC) 10-K reports. The manufacturers DOE analyzed account for approximately 80 percent of the market, and each company is a subsidiary of a more diversified parent company that manufactures equipment other than commercial refrigeration equipment. Because the 10-K reports do not provide gross margin information at the subsidiary level, the estimated markups represent the average markups that the parent company applies over its entire range of equipment offerings and does not necessarily represent the manufacturer markup of the subsidiary. The ANOPR analysis indicated that the average manufacturer markup is 1.39. However, DOE adjusted the markups to be more representative of the industry following discussions with manufacturers during the MIA interviews (Chapter 13). An aggregation of the MIA interview responses gives a market share weighted average manufacturer markup value of 1.32. For the NOPR, DOE used this revised manufacturer markup with the MPC values from the engineering analysis to arrive at the MSP values used in the GRIM. As explained in the ANOPR, DOE received industry-supplied curves from ARI in the form of daily energy consumption versus MLP, both normalized by total display area (TDA). Since DOE developed its analytically derived curves in the form of calculated daily energy consumption (CDEC) versus MSP, it was necessary for DOE to estimate an industry list price markup so that it could make comparisons between the two sets of curves. The industry list price markup is a markup to the selling price that provides the list price. To make comparisons between the analytically derived and industry-supplied cost-efficiency curves, DOE discounted the industry data with the list price markup and normalized the analytically derived curves by TDA. Manufacturers typically offer a discount from the MLP, which depends on factors such as the relationship with the customer and the volume and type of equipment being purchased. For the estimate of list price markup, DOE relied on information gathered on self-contained commercial refrigeration equipment, since list price information is readily available and typically published by manufacturers of this equipment. A review of the data shows that the list price markup is typically 2.0 (i.e., manufacturers will typically sell their equipment for 50 percent off the published list price). DOE further verified the estimate by obtaining list price quotes from several remote condensing equipment manufacturers. During manufacturer interviews, some commercial refrigeration equipment manufacturers agreed with the 2.0 markup estimate, while others stated the estimate was somewhat high. Although the list price markup can vary significantly by manufacturer and by customer, DOE believes the estimated list price markup of 2.0 is representative of the industry. DOE applied this markup to all equipment classes. DOE did not receive any additional comments or information indicating that revision of the cost model used in the ANOPR analysis is warranted. Therefore DOE has adhered to that model in the NOPR analysis. b. Energy Consumption Model The energy consumption model estimates the daily energy consumption of commercial refrigeration equipment at various performance levels using a design options approach. The model is specific to the categories of equipment covered under this rulemaking, but is sufficiently generalized to model the energy consumption of all covered equipment classes. For a given equipment class, the model estimates the daily energy consumption for the baseline and the energy consumption of several levels of performance above the baseline. The model is used to calculate each performance level separately. In developing the energy consumption model, DOE made general assumptions about the analysis methodology and specific numerical assumptions regarding load components and design options. DOE based its energy consumption estimates on new equipment tested in a controlled-environment chamber in accordance with ANSI/ARI Standard 1200-2006, the DOE test procedure for commercial refrigeration equipment, which references the ANSI/ASHRAE Standard 72-2005 test method. 13 Once Federal standards for this equipment become operative, manufacturers will be required to test units with this test method, which specifies a certain ambient temperature, humidity, light level, and other requirements. This test method, however, contains no specification as to the operating hours of the display case lighting, and DOE's energy consumption model considers the operating hours to be 24 hours per day (i.e., that lights are on continuously). This assumption is consistent with the lighting operating time assumption used in the energy use characterization (see Section IV.D). Chapter 5 of the TSD discusses further the assumptions used in the energy consumption model. 13 The test procedures are found at 10 CFR 431.64. The energy consumption model calculates CDEC as having two major components: Compressor energy consumption and component energy consumption (expressed as kWh/day). Component energy consumption is the sum of the direct electrical energy consumption of fan motors, lighting, defrost and drain heaters, anti-sweat heaters, and pan heaters. Compressor energy consumption is calculated from the total refrigeration load (expressed in Btu/h) and one of two compressor models: One version for remote condensing equipment and one for self-contained equipment. The total refrigeration load is a sum of the component load and the non-electric load. The component load is the sum of the heat emitted by evaporator fan motors, lighting, defrost and drain heaters, and anti-sweat heaters inside and adjacent to the refrigerated space (condenser fan motors and pan heaters are outside of the refrigerated space and do not contribute to the component heat load). The non-electric load is the sum of the heat contributed by radiation through glass and openings, heat conducted through walls and doors, and sensible and latent loads from warm, moist air infiltration through openings. Chapter 5 of the TSD discusses component energy consumption, compressor energy consumption, and load models. DOE made one change to the methodology of calculating the radiation load for cases without doors (VOP, SVO, and HZO equipment families). In the ANOPR analysis, the view factor 14 from the interior of the case to the walls of the test chamber was estimated as 0.025. This value was kept as a constant for all cases and sizes in the ANOPR analysis, but it is clear this value should change somewhat as the geometry and the overall size of the case changes. For the NOPR, DOE calculated the view factor separately for each equipment class depending on the geometry specific to the baseline design specifications of that class. The view factor from the case to the room is calculated as the ratio of TDA (i.e., the area of the plane separating the case from the room) to the test chamber wall surface area. 14 A view factor is the proportion of all radiation that leaves one surface and strikes another. Stakeholders raised questions regarding DOE's method of calculating the infiltration load 15 for commercial refrigeration equipment. Carrier asserted that DOE's method of using defrost water to model infiltration has limitations. Carrier pointed out that as the case is run at higher suction temperatures, the coil has a tendency to run as a wet coil and does not retain much of the moisture on its exterior. Typically on manufacturer specification sheets, defrost meltwater is only the water that comes out during a defrost period, and Carrier noted that there may be additional water that would come off the coil between defrost periods. Carrier believes DOE may be underestimating the infiltration load using information from the specification sheets, and estimated that the infiltration load is typically around 75 percent of total cooling water. Carrier questioned whether or not DOE compared its estimates with the calculated infiltration loads. (Public Meeting Transcript, No. 13.5 at p. 83) Hussmann stated that when it publishes data for defrost meltwater, it does so for the sole purpose of sizing sewer lines and not for estimating the infiltration load. (Public Meeting Transcript, No. 13.5 at p. 85) 15 The mass of warm ambient store air that displaces the cold air inside of the case. In the ANOPR analysis, DOE calculated infiltration load using empirical defrost meltwater data obtained from manufacturers' detailed specification sheets. DOE assumed that defrost meltwater could be correlated with infiltration load, given certain known parameters such as ambient relative humidity. This methodology was calibrated with detailed refrigeration load data obtained from Southern California Edison for several large-volume equipment classes. DOE agrees with the assessment made by stakeholders and has altered its methodology accordingly. In the NOPR engineering design specifications, defrost meltwater (in pounds per hour, lbs/hr) is replaced with infiltrated air (also in lbs/hr) for all equipment classes. DOE estimated infiltrated air by using manufacturers' detailed specification sheets, recognizing that infiltration load is the only load component that cannot be directly calculated. Using physical parameters about each case, the other load components (internal load, conduction load, radiation load) are calculated. DOE subtracted these load components from the listed total refrigeration load, and it is assumed that the remaining load is due to infiltration. Chapter 5 of the TSD provides more details of the change to this methodology. At the public meeting, stakeholders expressed concern over the refrigerants DOE used in the analysis. EEI asked if hydrofluorocarbon (HFC) refrigerants were already assumed to be in use in the baseline. (Public Meeting Transcript, No. 13.5 at p. 97) ARI stated that most of the data it provided to DOE was based on such refrigerants and no changes are expected in that regard. (Public Meeting Transcript, No. 13.5 at p. 97) In its analysis, DOE assumed that HFC refrigerants are already fully in use for commercial refrigeration equipment. For all remote condensing equipment, in accordance with the DOE test procedure in ANSI/ARI Standard 1200-2006, DOE assumes the use of a compressor using an HFC refrigerant (i.e., R-404A). Likewise, all of the compressors DOE used in modeling self-contained equipment use either R-404A or R-134A, another HFC refrigerant. c. Design Options In the market and technology assessment for the ANOPR, DOE defined an initial list of technologies that have the potential to reduce the energy consumption of commercial refrigeration equipment. In the screening analysis for the ANOPR, DOE screened out some of these technologies based on four screening criteria: Technological feasibility; practicability to manufacture, install and service; impacts on equipment utility or availability; and impacts on health or safety. 72 FR 41179-80. The remaining technologies became inputs to the ANOPR engineering analysis as design options. However, for reasons described in the ANOPR, DOE did not incorporate all of these technologies as design options in the energy consumption model. 72 FR 41182-83. Stakeholders commented that some of these technologies should be included in the NOPR engineering analysis, and recommended additional design options DOE should consider. Comments pertaining to each suggested technology and DOE's response are provided below. As a general comment about design options, ACEEE stated that some design options that were screened out should be considered for further analysis and that prevalence in the marketplace is not necessarily a good reason to screen out a design option. (Public Meeting Transcript, No. 13.5 at p. 62) DOE screened out five technologies in the ANOPR screening analysis. These are air-curtain design, thermoacoustic refrigeration, magnetic refrigeration, electro-hydrodynamic heat exchangers, and copper rotor motors. All five of these design options were screened out because they are in the research stage and would not be practical to manufacture, install, and service. Since the publication of the ANOPR, DOE is not aware of any significant changes to the status of these technologies, and has not included them in the NOPR analysis. ACEEE recommended that variable-speed compressors be included in the analysis. (ACEEE, No. 16 at p. 2) EEI also suggested that DOE consider the use of variable-speed drives for compressors. (EEI, No. 15 at p. 2) Variable-speed compressors could potentially improve the efficiency of commercial refrigeration equipment classes that are self-contained units without doors and self-contained ice-cream freezers. Variable-speed compressors can reduce energy consumption under real-world conditions by matching cooling capacity to the refrigeration load, which can change due to variations in ambient conditions and product loading. This load matching allows for a more constant temperature inside the case, eliminating the large fluctuations in temperature that are typical of single-speed compressors. The stability in temperature allows manufacturers to design equipment with higher evaporator temperatures, improving compressor efficiency. However, the energy-saving benefit of variable-speed compressors is not clear under ANSI/ASHRAE Standard 72-2005, because it is a steady-state test for commercial refrigeration equipment. Further, DOE is not aware of any test data showing the energy savings benefit of variable speed compressors in the types of equipment covered in this rule. Certain test data does exist for walk-ins and residential refrigerators, but DOE does not believe that this data can be used to predict the performance of variable-speed compressors in commercial refrigeration equipment. Therefore, DOE did not include variable-speed compressors as a design option in its engineering analysis. ACEEE recommended that variable-speed evaporator fans be included in the analysis. (ACEEE, No. 16 at p. 2) San Diego Gas & Electric Company (SDGE) also recommended that DOE include in its analysis the energy savings, cost-effectiveness, and feasibility of such fans for enclosed refrigeration equipment served by remote refrigeration compressors. (SDGE, No. 22 at p. 2) SCE recommended that DOE consider the cost-effectiveness of variable-speed evaporator fans for this equipment. SCE asserted that variable-speed fan control was a very effective and cost-effective means of increasing refrigerated warehouse efficiency and should be applicable to commercial refrigeration equipment as well. SCE stated that this reduces the energy consumption of the fan and the amount of load that the refrigerant must reject. SCE also noted that its work in support of California building and appliance standards showed variable-speed controls on evaporator fans had approximately one-year simple paybacks in both refrigerated warehouses and small walk-in coolers. (Public Meeting Transcript, No. 13.5 at p. 69 and SCE, No. 19 at p. 3) EEI also suggested that DOE consider the use of variable-speed drives for evaporator fans and compressors. (EEI, No. 15 at p. 2) Variable-speed evaporator fans can operate at speeds that match changing conditions in the case. DOE recognizes that the use of these fans provides some opportunity for energy savings, because the buildup and removal of frost creates differing pressure drops across the evaporator coil. Theoretically, less fan power is required when the coil is free of frost. Additionally, when an evaporator fan operates at variable speeds, the coil would operate at a more stable temperature during the period of frost build-up. However, the effectiveness of the air curtain in equipment without doors is very sensitive to changes in airflow, so fan motor controllers would likely disrupt air curtains. DOE believes the likely disturbance to the air curtain, which would lead to higher infiltration loads and higher overall energy consumption, would negate the use of evaporator fan motor controllers in equipment without doors, even if there were some reduction in fan energy use. In addition, the ANSI/ASHRAE Standard 72-2005 test method is a steady-state test for commercial refrigeration equipment, so similar to variable-speed compressors, the energy-saving benefit of variable-speed fans is not clear. Therefore, DOE did not include variable-speed fans as a design option in its engineering analysis. ACEEE recommended that remote ballast location be included in the analysis. (ACEEE, No. 16 at p. 2) Fluorescent lamp ballasts generate heat, and their relocation outside the refrigerated space can reduce energy consumption by lessening the refrigeration load on the compressor. However, for the majority of commercial refrigeration equipment currently manufactured, ballasts are already located in electrical trays outside of the refrigerated space, in either the base or top of the equipment. The notable exceptions are the equipment classes in the VCT equipment family, where ballasts are most often located on the interior of each door mullion. Most commercial refrigeration equipment manufacturers purchase doors for VCT units that are preassembled with the entire lighting system in place rather than configured for separate ballasts. DOE believes that most commercial refrigeration equipment manufacturers choose these kinds of doors because it would be labor intensive and time consuming to relocate these ballasts at the factory, and because of the additional cost and labor of wiring separate ballasts. Manufacturers have indicated that the potential energy savings are also small, since modern electronic ballasts are very efficient and typically contribute only a few watts (W) each to the refrigeration load. Because (1) lamp ballasts are already located externally on most equipment; (2) most units that have internally located lamp ballasts use preassembled lighting systems; and (3) potential energy savings are small, DOE did not consider remote relocation of ballasts as a design option in its engineering analysis. ACEEE recommended that improved insulation be included in the analysis. (ACEEE, No. 15 at p. 2) Potential improvements to insulation material used in commercial refrigeration equipment cabinets include better polyurethane foams and vacuum panels. In consultation with insulation material manufacturers, DOE determined that there are no significant differences in “grades” of insulation material, so equipment manufacturers are already using the best commercially available foam materials in their equipment. Vacuum panels are an alternative form of insulation; however, they may degrade in performance in time as small leaks develop. Based on knowledge of typical manufacturing practices, DOE also believes it would be impractical to use vacuum panels to construct commercial refrigeration equipment, because they cannot be penetrated by fasteners, and do not provide the rigidity of “foamed-in-place” polyurethane insulation panels. Thicker insulation is another possible option, but could be problematic because it would likely result in either a reduced volume for the refrigerated space or an increase in the overall size of the equipment cabinet. Reducing the volume of the refrigerated space could affect the utility of the equipment, and because the outer dimensions of commercial refrigeration equipment are often limited (e.g., by interior dimensions of shipping containers), it is often not practical to increase the overall size of the cabinet. For all these reasons, DOE did not consider insulation thickness increases or improvements as a design option in its ANOPR engineering analysis. However, DOE did add increases in insulation thickness as a design option in the NOPR engineering analysis, because it now believes this is a cost-effective option in several equipment types, most notably self-contained ice-cream freezers with doors. DOE understands that in equipment classes where conduction makes up a significant portion of the total refrigeration load, a modest increase in insulation thickness can lead to small, but significant energy savings. In relatively large units, which make up the largest portion of the shipments of commercial refrigeration equipment, even if such added insulation results in reduction of the refrigerated volume, any such reduction would not be substantial. DOE does not foresee any impact on the availability of this type of equipment from the use of increased insulation that would trigger EPCA's prohibition at 42 U.S.C. 6295(o)(4) and 6316(e)(1). As to smaller units, DOE assumes that their outer dimensions are less constrained than the dimensions of larger units, and that therefore manufacturers could accommodate a small increase in insulation thickness, and maintain the amount of refrigerated volume, by making a small increase in the overall size of the cabinet. Therefore, in the NOPR, DOE modeled a 1/2 -inch increase in insulation thickness for all equipment classes. When implemented as a design option, this increase in thickness was added to the baseline value of insulation thickness and DOE recalculated the conduction load. DOE based the cost of increasing the insulation thickness on a sunk cost per unit, considering foam fixture engineering and tooling costs, production line lifetime, and number of fixtures and units produced. Chapter 5 of the TSD provides details of the assumptions DOE used to calculate the additional cost of insulation thickness increases. ACEEE recommended that DOE include defrost cycle control in the analysis. (ACEEE, No. 16 at p. 2) Defrost cycle control can reduce energy consumption by reducing the frequency and duration of defrost periods. The majority of equipment currently manufactured already uses partial defrost cycle control in the form of cycle termination control. However, defrost cycle initiation is still scheduled at regular intervals. Full defrost cycle control would involve detecting frost buildup and initiating defrost. As described in the market and technology assessment (Chapter 3 of the TSD), this could be accomplished through an optical sensor or by sensing the temperature differential across the evaporator coil. However, both methods are unreliable due to problems with fouling of the coil from dust and other surface contaminants. This becomes more of an issue as the display case ages. Because of these issues, DOE did not consider defrost cycle control as a design option in its engineering analysis. SCE asserted that doors should be considered a design option for open units, and that open units without doors should be held to energy consumption standards at levels warranted for units with doors. (Public Meeting Transcript, No. 13.5 at p. 44) SCE advocates, in essence, that manufacture of new, open commercial refrigeration equipment be discontinued and replaced by manufacture of equipment with doors. It stated that this would be a cost-effective way of saving substantial amounts of energy. (SCE, No. 19 at p. 2) Although SCE did not state it explicitly, DOE understands that its main argument for advocating that doors be considered for open cases is that doors should be regarded as a design option and not a feature, such that there are not separate equipment classes for equipment with and without doors. DOE acknowledges SCE's position. Substantial, cost-effective energy savings might well result from standards that would, in effect, require the manufacture of commercial refrigeration equipment with doors instead of without. DOE has not considered such standards in this proceeding, however, nor has it studied their potential energy savings or economic justification (including the extent of their impact on product utility), because it believes EPCA precludes their adoption. First, DOE believes that, for commercial refrigeration equipment, the existence or lack of doors (i.e., whether the case is open or closed) does affect the utility of the equipment to its owner and user, and therefore is a “feature” as that term is used in 42 U.S.C. 6295(o)(4) and 6316(e)(1). Because a standard based on combining open and closed equipment classes would result in the unavailability of open cases, as described above, such a standard would violate EPCA's prohibition against any standard that would “result in the unavailability” of equipment with “features * * * that are substantially the same” as those currently available in the United States. (42 U.S.C. 6295(o)(4) and 6316(e)(1)) Second, EPCA prescribes energy conservation standards for self-contained equipment with doors, and mandates that DOE issue standard levels for “self-contained commercial refrigerators, freezers, and refrigerator-freezers without doors.” (42 U.S.C. 6313(c)(2)-(4)) The latter equipment is one of the subjects of this rulemaking. Hence, the plain language of EPCA covers standards for commercial refrigeration equipment with and without doors. DOE must follow this legislative mandate. For these reasons, DOE did not consider doors as a design option for open equipment in its engineering analysis. The design options DOE considered in the NOPR engineering analysis are: • Higher efficiency lighting and ballasts for the VOP, SVO, HZO, and SOC equipment families (horizontal fixtures); • Higher efficiency lighting and ballasts for the VCT equipment family (vertical fixtures); • Higher efficiency evaporator fan motors; • Increased evaporator surface area; • Increased insulation thickness; • Improved doors for the VCT equipment family, low temperature; • Improved doors for the VCT equipment family, medium temperature; • Improved doors for the HCT equipment family, ice-cream temperature; • Improved doors for the SOC equipment family, medium temperature; • Higher efficiency condenser fan motors (for self-contained equipment only); • Increased condenser surface area (for self-contained equipment only); and • Higher efficiency compressors (for self-contained equipment only). 16 16 Improvements to the condensing unit are not considered for remote condensing equipment, since the test procedure and standard apply only to the cabinet and not the condensing unit. At the public meeting and during the comment period, stakeholders raised concerns about some of the design option data DOE used in its analysis and about DOE's depiction of some of the design options. Several stakeholders were concerned with the lighting design option data. Zero Zone stated that DOE's estimate of the incremental increase in cost for light emitting diode (LED) lighting was too low. (Public Meeting Transcript, No. 13.5 at p. 89) ARI seemed to agree with Zero Zone's assessment, stating that DOE appears to have significantly underestimated the incremental cost for LED lighting by about 50 percent. DOE revised its cost assumption for LED lighting used in the VOP, SVO, HZO, and SOC equipment families (horizontal four-foot fixtures) and the VCT equipment family (vertical 5-foot fixtures). For the ANOPR, DOE based LED lighting costs on an LED retrofit case study, but DOE revised some of its assumptions for the NOPR based on conversations with manufacturers of LED chips and LED fixtures. Specifically, DOE revised its assumptions on the relative weight of the costs of LED chips, power supplies, and the balance of fixtures (which includes labor). These changes cause the original equipment manufacturer (OEM) cost (i.e., the cost to commercial refrigeration equipment manufacturers) of LED fixtures to increase for both horizontal and vertical fixtures. DOE believes the cost estimates for LED fixtures are now more accurate and are consistent with the costs commercial refrigeration equipment manufacturers would experience in today's market at mass-production volumes. Further discussion of the assumptions used to calculate LED fixture costs are provided in Chapter 5 of the TSD. Although DOE found that current LED costs are higher than originally estimated in the ANOPR analysis, through a closer examination of cost data for currently available LEDs, DOE recognizes that LED technology has historically exceeded DOE's efficiency and cost targets. In this NOPR, DOE conducted a sensitivity study that analyzed future LED costs based on DOE's Multi-Year Program Plan, 17 which are consistent with historical LED price reductions between 2000 and 2007 (see Appendix B of the TSD). The Multi-Year Program Plan projects that LED chip costs will continue to decrease at a compound annual growth rate (CAGR) of approximately −27 percent between 2007 and 2012, which represents a price reduction of 80 percent over that time period. Also in agreement, EIA's NEMS uses a technology characterization for LED light sources, which show that LED chip costs are expected to decline by approximately 71 percent for the same time period. Since LED chips are only a portion of the total LED system (other components include power supply and the LED fixture), the 80 percent reduction in chip costs contributes to an estimated decrease in total LED system cost of approximately 50 percent by 2012, assuming the costs of the power supply and LED fixtures do not change significantly. 17 U.S. Department of Energy, Solid-State Lighting Research and Development, Multi-Year Program Plan FY'09-FY'14. This document was prepared under the direction of a Technical Committee from the Next Generation Lighting Initiative Alliance (NGLIA). Information about the NGLIA and its members is available at http://www.nglia.org . DOE examined whether the projected LED costs presented in the Multi-Year Program Plan and used in this NOPR are consistent with publicly available empirical historical cost data. DOE reviewed available price data for the LED market and found that between 2000 and 2007, white-light LEDs had a CAGR ranging from approximately −18 to −31 percent. DOE's LED cost projection (i.e., −27 percent CAGR) falls within the range of CAGRs observed. DOE expanded its examination by comparing this projected trend to the red-light LED market, which is a related technology, with price information spanning approximately three decades (i.e., 1973 to 2005). DOE found that the CAGR of red-light LED costs was −22 percent over this longer time span. The trend in red-light LED costs derived from empirical data over this longer time period is of a similar magnitude to DOE's projected costs for white-light LEDs. Due to the technological similarities between red-light LEDs and white-light LEDs, DOE believes that the historical cost reductions for red-light LEDs are indicative of future cost reductions for white-light LEDs. Furthermore, the white-light LED market is undergoing a massive expansion and growth phase, with significant investment, new products and innovative applications for LED technology, including illumination of commercial refrigeration equipment. See Section V.C of this NOPR and Appendix B of the TSD for more detail on the cost projection and DOE's validation of those estimates. DOE seeks comment on the extent to which these price trends are indicative of what can be expected for commercial refrigeration equipment LED lighting from 2007 to 2012 and the extent to which the cost reduction observed for red-light LEDs is relevant to DOE's cost projections for white-light LEDs. Also, in order to consider that LED costs are to decline more than assumed in this analysis, DOE will need more information than currently available on the extent, timing, and certainty of such further price reductions. Finally, DOE seeks comment on the extent to which manufacturers would adopt LED technology into the design of commercial refrigeration equipment in the absence of standards considering the rapid development of LED technology and the steady reductions in cost. See Section VII.E.1 for details. The design option data for doors on VCT equipment were another area of concern for stakeholders. Zero Zone stated that the incremental increase in cost for high-efficiency doors (particularly cooler doors) seemed too high. (Public Meeting Transcript, No. 13.5 at p. 89) ACEEE also indicated that DOE's costs for high-efficiency doors are too high. (ACEEE, No. 16 at p. 2) ARI stated that it does not believe that the door [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%3AE8-19063. Public record. Not legal advice.