Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test Procedures for Commercial Heating, Air-Conditioning, and Water-Heating Equipment

DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2008-BT-STD-0013]

RIN 1904-AB83

Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test Procedures for Commercial Heating, Air-Conditioning, and Water-Heating Equipment

AGENCY:

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

ACTION:

Notice of proposed rulemaking and public meeting.

SUMMARY:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, directs the U.S. Department of Energy (DOE) to establish energy conservation standards for certain commercial and industrial equipment, including commercial heating, air-conditioning, and water-heating equipment. Of particular relevance here, the statute also requires that each time the corresponding industry standard—the American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE)/Illuminating Engineering Society of North America (IESNA) Standard 90.1—is amended, DOE must assess whether there is a need to update the uniform national energy conservation standards for the same equipment covered under EPCA. ASHRAE officially released an amended version of this industry standard (ASHRAE Standard 90.1-2007) on January 10, 2008, thereby triggering DOE's related obligations under EPCA. Specifically, pursuant to EPCA, DOE assessed whether the revised ASHRAE efficiency levels are more stringent than the existing Federal energy conservation standards; and for those equipment classes for which ASHRAE set more-stringent efficiency levels (

i.e.

, commercial packaged boilers), analyzed the economic and energy savings potential of amended national energy conservation standards (at both the new ASHRAE Standard 90.1 levels and more-stringent efficiency levels).

DOE has tentatively concluded that the statutory criteria have been met for commercial packaged boilers and water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h, thereby justifying consideration of national energy conservation standards set at the revised levels in ASHRAE Standard 90.1-2007.

Furthermore, DOE has tentatively concluded that clear and convincing evidence does not exist, as would justify more-stringent standard levels than the efficiency levels in ASHRAE Standard 90.1-2007 for commercial packaged boilers. DOE has also tentatively concluded that there are no water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h being currently manufactured, and therefore, it is not possible to assess the economic and energy savings potential for adopting efficiency levels at or above the ASHRAE Standard 90.1-2007 efficiency levels for such equipment. Accordingly, in this notice, DOE is proposing to amend the energy conservation standards for commercial packaged boilers and to adopt a new energy conservation standard for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h at the efficiency levels specified by ASHRAE Standard 90.1-2007. DOE is also proposing related amendments to its test procedures for commercial packaged boilers. In addition, DOE is announcing a public meeting to receive comment on its proposal and related issues.

DATES:

DOE will hold a public meeting on April 7, 2009, from 9 a.m. to 4 p.m., in Washington, DC. DOE must receive requests to speak at the public meeting before 4 p.m., March 24, 2009. DOE must receive a signed original and an electronic copy of statements to be made at the public meeting before 4 p.m., March 31, 2009.

DOE will accept comments, data, and information regarding the notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than June 3, 2009. 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. Please note that foreign nationals visiting DOE Headquarters are subject to advance security screening procedures. 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 Energy Conservation Standards and Test Procedures for ASHRAE Standard 90.1 Products, and provide the docket number EERE-2008-BT-STD-0013 and/or Regulatory Information Number (RIN) 1904-AB83. 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:

ASHRAE_90.1_rulemaking@ee.doe.gov

. Include the docket number EERE-2008-BT-STD-0013 and/or RIN 1904-AB83 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. Please submit one signed paper original.

•

Hand Delivery/Courier:

Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L'Enfant Plaza, 6th Floor, Washington, DC 20024. Telephone: (202) 586-2945. Please submit one signed paper original.

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.

FOR FURTHER INFORMATION CONTACT:

Mr. Mohammed Khan, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202) 586-7892. E-mail:

Mohammed.Khan@ee.doe.gov

.

Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, Mailstop GC-72, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202) 586-9507. E-mail:

Eric.Stas@hq.doe.gov

.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of Proposed Rule

II. Introduction

A. Authority

B. Background

1. ASHRAE Standard 90.1-2007

2. Notice of Data Availability and Request for Public Comment

III. General Discussion of Comments Regarding the ASHRAE Process and DOE's Interpretation of EPCA's Requirements With Respect to ASHRAE Equipment

A. The ASHRAE Process

B. The Definition of Amendment With Respect to the Efficiency Levels in an ASHRAE Standard

C. Different Types of Changes in ASHRAE Standard 90.1-2007

D. DOE's Review of ASHRAE Equipment Independent of the ASHRAE Standards Process

E. Equipment Classes With a Two-Tier Efficiency Level Specified in ASHRAE Standard 90.1-2007

IV. General Discussion of the Changes in ASHRAE Standard 90.1-2007 and Determination of Scope for Further Rulemaking Analyses

A. Commercial Warm Air Furnaces

1. Gas-Fired Commercial Warm Air Furnaces

2. Oil-Fired Commercial Warm Air Furnaces

B. Commercial Package Air-Conditioning and Heating Equipment

1. Three-Phase Through-the-Wall Air-Cooled Air Conditioners and Heat Pumps

2. Three-Phase, Small-Duct, High-Velocity Air-Cooled Air Conditioners and Heat Pumps

3. Commercial Package Air-Cooled Air Conditioners With a Cooling Capacity at or Above 760,000 Btu per Hour

4. Water-Cooled and Evaporatively-Cooled Commercial Package Air Conditioners and Heat Pumps With a Cooling Capacity at or Above 135,000 Btu/h and Less Than 240,000 Btu/h

5. Water-Cooled and Evaporatively-Cooled Commercial Package Air Conditioners and Heat Pumps With a Cooling Capacity at or Above 240,000 Btu/h and Below 760,000 Btu/h

C. Commercial Packaged Boilers

1. Efficiency Metric Description (Combustion Efficiency and Thermal Efficiency)

2. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-1999

3. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-2007

4. Preliminary Conclusions From Market Analysis for Commercial Packaged Boilers

a. Accuracy of Thermal Efficiency Ratings

b. Benefits of the Thermal Efficiency Metric

c. Overall Energy Savings

5. Conclusions Regarding the Efficiency Levels in ASHRAE Standard 90.1-2007 for Commercial Packaged Boilers

V. Methodology and Discussion of Comments for Commercial Packaged Boilers

A. Test Procedures

B. Market Assessment

1. Definitions of Commercial Packaged Boilers

2. Equipment Classes

3. Review of Current Market for Commercial Packaged Boilers

a. Trade Association Information

b. Manufacturer Information

c. Shipments Information

C. Engineering Analysis

1. Approach

2. Representative Input Capacities

3. Baseline Equipment

4. Identification of Efficiency Levels for Analysis

a. Small Gas-Fired Hot Water Commercial Packaged Boiler Efficiency Levels

b. Small Gas-Fired Steam All Except Natural Draft Commercial Packaged Boiler Efficiency Levels

c. Small Gas-Fired Steam Natural Draft Water Commercial Packaged Boiler Efficiency Levels

d. Small Oil-Fired Hot Water Commercial Packaged Boiler Efficiency Levels

e. Small Oil-Fired Steam Commercial Packaged Boiler Efficiency Levels

f. Large Gas-Fired Hot Water Commercial Packaged Boiler Efficiency Levels

g. Large Gas-Fired Steam, All Except Natural Draft Commercial Packaged Boiler Efficiency Levels

h. Large Gas-Fired Steam Natural Draft Commercial Packaged Boiler Efficiency Levels

i. Large Oil-Fired Hot Water Commercial Packaged Boiler Efficiency Levels

j. Large Oil-Fired Steam Commercial Packaged Boiler Efficiency Levels

5. Oil-Fired Commercial Packaged Boilers

6. Dual Output Boilers

7. Engineering Analysis Results

D. Markups to Determine Equipment Price

E. Energy Use Characterization

F. Life-Cycle Cost and Payback Period Analyses

1. Approach

2. Life-Cycle Cost Inputs

a. Equipment Prices

b. Installation Costs

c. Annual Energy Use

d. Fuel Prices

e. Maintenance Costs

f. Repair Costs

g. Equipment Lifetime

h. Discount Rate

3. Payback Period

G. National Impact Analysis—National Energy Savings and Net Present Value Analysis

1. Approach

2. Shipments Analysis

3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies

H. Other Issues

1. Effective Date of the Proposed Amended Energy Conservation Standards

VI. Analytical Results

A. Efficiency Levels Analyzed

B. Economic Justification and Energy Savings

1. Economic Impacts on Commercial Customers

a. Life-Cycle Cost and Payback Period

2. National Impact Analysis

a. Amount and Significance of Energy Savings

b. Net Present Value

C. Proposed Standards for Commercial Packaged Boilers

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

B. Review Under the National Environmental Policy Act

C. Review Under the Regulatory Flexibility Act

D. Review Under the Paperwork Reduction Act

E. Review Under the Unfunded Mandates Reform Act of 1995

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

G. Review Under Executive Order 13132

H. Review Under Executive Order 12988

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

J. Review Under Executive Order 13211

K. Review Under Executive Order 12630

L. Review Under Section 32 of the Federal Energy Administration Act of 1974

M. Review Under the Information Quality Bulletin for Peer Review

VIII. 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

IX. Approval of the Office of the Secretary

I. Summary of Proposed Rule

The Energy Policy and Conservation Act (EPCA) (42 U.S.C. 6291

et seq.

), as amended, requires DOE to consider amending the existing Federal energy conservation standard for each type of equipment listed (generally, commercial water heaters, commercial packaged boilers, commercial air conditioning and heating equipment, and packaged terminal air conditioners and heat pumps), each time ASHRAE Standard 90.1,

Energy Standard for Buildings Except Low-Rise Residential Buildings

, is amended with respect to such equipment. (42 U.S.C. 6313(a)(6)(A)) For each type of equipment, EPCA directs that if ASHRAE Standard 90.1 is amended,

1

DOE must adopt amended energy conservation standards at the new efficiency level in ASHRAE Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more-stringent efficiency level as a national

standard would produce significant additional energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) If DOE decides to adopt as a national standard the efficiency levels specified in the amended ASHRAE Standard 90.1, DOE must establish such standard not later than 18 months after publication of the amended industry standard. (42 U.S.C. 6313(a)(6)(A)(ii)(I)) If DOE determines that a more-stringent standard is appropriate, DOE must establish an amended standard not later than 30 months after publication of the revised ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(B))

1

Although EPCA does not explicitly define the term “amended” in the context of ASHRAE Standard 90.1, DOE provided its interpretation of what would constitute an “amended standard” in a final rule published in the

Federal Register

on March 7, 2007 (hereafter referred to as the March 2007 final rule). 72 FR 10038. In that rule, DOE stated that the statutory trigger requiring DOE to adopt uniform national standards based on ASHRAE action is for ASHRAE to change a standard for any of the equipment listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i)) by increasing the energy efficiency level for that equipment type.

Id

. at 10042. In other words, if the revised ASHRAE Standard 90.1 leaves the standard level unchanged or lowers the standard, as compared to the level specified by the national standard adopted pursuant to EPCA, DOE does not have the authority to conduct a rulemaking to consider a higher standard for that equipment pursuant to 42 U.S.C. 6313(a)(6)(A).

This NOPR sets forth DOE's determination of scope for consideration of amended energy conservation standards with respect to certain heating, ventilating, air-conditioning, and water-heating equipment addressed in ASHRAE Standard 90.1-2007. Such inquiry is necessary to ascertain whether the revised ASHRAE efficiency levels have become more stringent, thereby ensuring that any new amended national standard would not result in “backsliding” which is prohibited under 42 U.S.C. 6295(o)(1) and 42 U.S.C. 6316(a). For those equipment classes for which ASHRAE set more-stringent efficiency levels (

i.e.

, commercial packaged boilers), DOE analyzed the economic and energy savings potential of amended national energy conservation standards (at both the new ASHRAE Standard 90.1 efficiency levels and more-stringent efficiency levels). DOE also found that ASHRAE set a more-stringent efficiency level for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h. However, DOE did not analyze the economic and energy savings potential of amended national energy conservation standards because there is no equipment currently being manufactured in this equipment class.

In light of the above, DOE has tentatively concluded that for ten classes of commercial packaged boilers: (1) The revised efficiency levels in ASHRAE 90.1-2007

2

are more stringent than current national standards; and (2) their adoption as national standards would result in significant energy savings. DOE has also tentatively concluded that there is not clear and convincing evidence as would justify adoption of more-stringent efficiency levels for this equipment.

2

To obtain a copy of ASHRAE Standard 90.1-2007, visit

http://www.ashrae.org/technology/page/548

or contact the ASHRAE publications department by e-mail at

orders@ashrae.org

or by telephone at (800) 527-4723.

Thus, in accordance with these criteria discussed in this notice, DOE is proposing to amend the energy conservation standards for ten equipment classes of commercial packaged boilers and to adopt a new energy conservation standard for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h by adopting the efficiency levels specified by ASHRAE Standard 90.1-2007. The proposed standards for commercial packaged boilers would apply to the ten equipment classes of commercial packaged boilers manufactured on or after the date two years after the effective date specified in ASHRAE Standard 90.1-2007. (42 U.S.C. 6313(a)(6)(D)(i)) The proposed standards for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h would apply to such equipment manufactured on or after the date three years after the effective date specified in ASHRAE Standard 90.1-2007. (42 U.S.C. 6313(a)(6)(D)(ii))

In addition, DOE is proposing amendments to its test procedures for commercial packaged boilers, which manufacturers are required to use to certify compliance with energy conservation standards mandated under EPCA. Specifically, these amendments would update the citations and references to the most recent version of the industry standards already referenced in DOE's test procedures. In addition, these amendments would specify a definition and methodology to test the thermal efficiency of these boilers, which is the metric DOE is proposing for eight of the ten equipment classes of commercial packaged boilers to conform with the new energy efficiency metric adopted in ASHRAE Standard 90.1-2007. Lastly, these amendments would make a small number of technical modifications to DOE's existing test procedure for commercial packaged boilers.

II. Introduction

A. Authority

Title III of EPCA, Public Law 94-163, as amended, sets forth a variety of provisions concerning energy efficiency. Part A-1

3

of Title III created the energy conservation program for certain industrial equipment. (42 U.S.C. 6311-6317) In general, this program addresses the energy efficiency of certain types of commercial and industrial equipment. Part A-1 specifically includes definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 6314), labelling provisions (42 U.S.C. 6315), and the authority to require information and reports from manufacturers (42 U.S.C. 6316).

3

This part was originally titled Part C; however, it was redesignated Part A-1 after Part C of Title III of EPCA was repealed by Public Law 109-58.

EPCA contains mandatory energy conservation standards for commercial heating, air-conditioning, and water-heating equipment. (42 U.S.C. 6313(a)) Specifically, the statute sets standards for small, large, and very large commercial package air-conditioning and heating equipment, packaged terminal air conditioners (PTACs) and packaged terminal heat pumps (PTHPs), warm air furnaces, packaged boilers, storage water heaters, and unfired hot water storage tanks.

Id.

In doing so, EPCA established Federal energy conservation standards that generally correspond to the levels in ASHRAE Standard 90.1, as in effect on October 24, 1992 (

i.e.

, ASHRAE Standard 90.1-1989), for each type of covered equipment listed in 42 U.S.C. 6313(a).

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

establish such more-stringent standard not later than 30 months after publication of the amended ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(B))

ASHRAE officially released and made public on January 10, 2008, ASHRAE Standard 90.1-2007. This action triggered DOE's obligations under 42 U.S.C. 6313(a)(6), as outlined above.

Pertinent to any rulemaking in response to an ASHRAE revision of Standard 90.1, it is noted that EPCA contains what is commonly known as an “anti-backsliding” provision, which mandates that the Secretary shall not prescribe any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of covered equipment. (42 U.S.C. 6295(o)(1); 42 U.S.C. 6316(a)) It is a fundamental principle in EPCA's statutory scheme that DOE cannot weaken standards from those that have been published as a final rule.

See Natural Resources Defense Council

v.

Abraham

, 355 F.3d 179 (2d Cir. 2004).

When considering the possibility of a more-stringent standard, DOE's more typical rulemaking requirements under EPCA apply (

i.e.

, a determination of technological feasibility, economic justification, and significant energy savings). For example, EPCA provides that in deciding whether such a standard is economically justified, DOE must determine, after receiving comments on the proposed standard, whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, the following seven factors:

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

2. The savings in operating costs throughout the estimated average life of the product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of the products which are likely to result from the imposition of the standard;

3. The total projected amount of energy savings likely to result directly from the imposition of the standard;

4. Any lessening of the utility or the performance of the products likely to result from the imposition of the standard;

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

6. The need for national energy conservation; and

7. Other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)-(ii); 42 U.S.C. 6316(a))

Additionally, the Secretary may not prescribe an amended standard if interested persons have established by a preponderance of the evidence that the amended standard is “likely to result in the unavailability in the United States of any product type (or class)” with performance characteristics, features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States at the time of the Secretary's finding. (42 U.S.C. 6295(o)(4); 42 U.S.C. 6316(a))

Federal energy conservation requirements for commercial equipment generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316 (a) and (b)) However, DOE can grant waivers of preemption for particular State laws or regulations, in accordance with the procedures and other provisions of section 327(d) of EPCA. (42 U.S.C. 6297(d) and 6316(b)(2)(D))

When considering more stringent standards for the ASHRAE equipment under consideration here, EPCA states that there is a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard level is less than three times the value of the first-year energy (and as applicable water) savings resulting from the standard, as calculated under the applicable DOE test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a)) Generally, DOE's LCC and PBP analyses generate values that calculate the payback period for consumers of potential energy conservation standards, which includes, but is not limited to, the three-year payback period contemplated under the rebuttable presumption test discussed above. However, DOE routinely conducts a full economic analysis that considers the full range of impacts, including those to the consumer, manufacturer, Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(a). The results of this analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification).

B. Background

1. ASHRAE Standard 90.1-2007

On January 9, 2008, ASHRAE's Board of Directors gave final approval to ASHRAE Standard 90.1-2007, which ASHRAE released on January 10, 2008. The ASHRAE standard addresses efficiency levels for many types of commercial heating, ventilating, air-conditioning (HVAC), and water-heating equipment covered by EPCA. ASHRAE Standard 90.1-2007 revised the efficiency levels for certain commercial equipment, but for the remaining equipment, ASHRAE left in place the preexisting efficiency levels (

i.e.

, the efficiency levels specified in ASHRAE Standard 90.1-1999

4

).

4

DOE reviewed and adopted some of the efficiency levels in ASHRAE Standard 90.1-1999 in a Final Rule published on January 12, 2001. 66 FR 3336.

Table II.1 below shows the existing Federal energy conservation standards and the efficiency levels specified in ASHRAE Standard 90.1-2007 for equipment where ASHRAE modified its requirements. DOE is addressing this equipment in today's notice. In section IV of today's NOPR, DOE assesses these equipment types to determine whether the amendments in ASHRAE Standard 90.1-2007 constitute increased energy conservation levels, as would necessitate further analysis. This step was necessary because DOE found that while ASHRAE had made changes in ASHRAE Standard 90.1-2007, it was not immediately apparent whether such revisions to the ASHRAE Standard 90.1 level would make the equipment more or less efficient, as compared to the existing Federal energy conservation standards. For example, when setting a standard using a different efficiency metric (as is the case for several types of commercial packaged boiler equipment), ASHRAE Standard 90.1-2007 changes the standard level from that specified in EPCA, but it is not immediately clear whether a standard level will make equipment more or less efficient. Therefore, DOE is undertaking this additional threshold analysis in order to thoroughly evaluate the amendments in ASHRAE Standard 90.1-2007 in a manner consistent with its statutory mandate.

Table II.1—Federal Energy Conservation Standards and Energy Efficiency Levels in ASHRAE Standard 90.1-2007 for Specific Types of Commercial Equipment*

ASHRAE equipment class

Federal energy conservation

standards

ASHRAE standard 90.1-2007

Energy efficiency levels

Effective date

Commercial Warm Air Furnaces

Gas-Fired Commercial Warm Air Furnace

E

t

= 80%

E

c

= 80% Interrupted or intermittent ignition device, jacket losses not exceeding 0.75% of input rating, power vent, or flue damper**

1/10/2008

‡

Oil-Fired Commercial Warm Air Furnace

E

t

=81%

E

t

= 81% Interrupted or intermittent ignition device, jacket losses not exceeding 0.75% of input rating, power vent, or flue damper**

1/10/2008

‡

Commercial Package Air-Conditioning and Heating Equipment

Through-the-Wall Air Conditioners

13.0 SEER***

(Effective as of 06/19/08)

12.0 SEER

1/23/2010

Through-the-Wall Air-Cooled Heat Pumps

13.0 SEER

(Effective as of 06/19/08)

12.0 SEER

7.4 HSPF

†

1/23/2010

Small Duct, High Velocity, Air-Cooled Air Conditioners

13.0 SEER

(Effective as of 06/19/08)

10.0 SEER

1/10/2008

Small Duct, High-Velocity, Air-Cooled Heat Pumps

13.0 SEER

(Effective as of 06/19/08)

10.0 SEER

6.8 HSPF

1/10/2008

Packaged Air-Cooled Air Conditioners with Cooling Capacity ≥760,000 Btu/h

††

and with No Heating or with Electric Resistance Heating

None

9.7 EER

†††

1/1/2010

Packaged Air-Cooled Air Conditioners with Cooling Capacity ≥760,000 Btu/h and with Heating That is Other Than Electric Resistance Heating

None

9.5 EER

1/1/2010

Water-Cooled and Evaporatively-Cooled Air Conditioner with Cooling Capacity ≥135,000 and <240,000 Btu/h, and with No Heating or with Electric Resistance Heating

11.0 EER

11.0 EER

1/10/2008

‡

Water-Cooled and Evaporatively Cooled Air Conditioner with Cooling Capacity ≥135,000 and <240,000 Btu/h, and with Heating That is Other Than Electric Resistance Heating

11.0 EER

10.8 EER

1/10/2008

‡

Water-Cooled and Evaporatively Cooled Air Conditioner with Cooling Capacity ≥240,000 Btu/h and with No Heating or with Electric Resistance Heating

None

11.0 EER

1/10/2008

‡

Water-Cooled and Evaporatively Cooled Air Conditioner with Cooling Capacity ≥240,000 Btu/h and with Heating That is Other Than Electric Resistance Heating

None

10.8 EER

1/10/2008

‡

Commercial Packaged Boilers

Small Gas-Fired, Hot Water, Commercial Packaged Boilers

E

C

= 80%

E

T

= 80%

3/2/2010

Small Gas-Fired, Steam, All Except Natural Draft Commercial Packaged Boilers

E

C

= 80%

E

T

= 79%

3/2/2010

Small Gas-Fired, Steam, Natural Draft, Commercial Packaged Boilers

E

C

= 80%

E

T

= 77%

E

T

= 79%

3/2/2010

3/2/2020

Small Oil-Fired, Hot Water, Commercial Packaged Boilers

E

C

= 83%

E

T

= 82%

3/2/2010

Small Oil-Fired, Steam, Commercial Packaged Boilers

E

C

= 83%

E

T

= 81%

3/2/2010

Large Gas-Fired, Hot Water, Commercial Packaged Boilers

E

C

= 80%

E

C

= 82%

3/2/2010

Large Gas-Fired, Steam, All Except Natural Draft, Boilers

E

C

= 80%

E

T

= 79%

3/2/2010

Large Gas-Fired, Steam, Natural Draft, Commercial Packaged Boilers

E

C

= 80%

E

T

= 77%

E

T

= 79%

3/2/2010

3/2/2020

Large Oil-Fired, Hot Water, Commercial Packaged Boilers

E

C

= 83%

E

C

= 84%

3/2/2010

Large Oil-Fired, Steam, Commercial Packaged Boilers

E

C

= 83%

E

T

= 81%

3/2/2010

*All equipment classes included in this table are equipment where there is a perceived difference between the current Federal standard levels and the efficiency levels specified by ASHRAE Standard 90.1-2007. Although, in some cases, the efficiency levels in this table may appear to be equal or lower than the Federal energy conservation standards, DOE further reviewed the efficiency levels in ASHRAE Standard 90.1-2007 and presented its findings in section III.

** A vent damper is an acceptable alternative to a flue damper for those furnaces that draw combustion air from conditioned space.

*** Seasonal energy efficiency ratio

†

Heating seasonal performance factor

††

British thermal units per hour (Btu/h)

†††

Energy efficiency ratio

‡

For the purposes of this NOPR, the date shown in this column is the date of publication of ASHRAE Standard 90.1-2007 (Jan. 10, 2008) for equipment where the ASHRAE Standard 90.1-2007 initially appears to be different from the Federal energy conservation standards and where no effective date was specified by ASHRAE Standard 90.1-2007.

2. Notice of Data Availability and Request for Public Comment

On July 16, 2008, DOE published a notice of data availability (July 2008 NODA) and request for public comment in the

Federal Register

as a preliminary step pursuant to EPCA's requirements for DOE to consider amended energy conservation standards for certain types of commercial equipment covered by ASHRAE Standard 90.1. 73 FR 40770 (July 16, 2008). Specifically, the July 2008 NODA presented for public comment DOE's analysis of the potential energy savings estimates for amended national energy conservation standards for types of commercial equipment based on: (1) The modified efficiency levels contained within ASHRAE Standard 90.1-2007; and (2) more-stringent efficiency levels.

Id.

at 40772. DOE has described these analyses and preliminary conclusions and sought input from interested parties, including the submission of data and other relevant information.

Id.

In addition, DOE presented a discussion in the July 2008 NODA of the changes found in ASHRAE Standard 90.1-2007.

Id.

at 40776-86. Lastly, the July 2008 NODA includes an initial description of DOE's evaluation of each ASHRAE equipment type to determine which energy conservation standards, if any, have been set pursuant to EPCA, in order for DOE to determine whether the amendments in ASHRAE Standard 90.1-2007 have increased efficiency levels. For those types of equipment in ASHRAE Standard 90.1 for which ASHRAE increased efficiency levels, DOE subjected that equipment to the potential energy savings analysis discussed above and presented the results in the July 2008 NODA for public comment. 73 FR 40770, 40776-86 (July 16, 2008).

As a result of the preliminary determination of scope set forth in the July 2008 NODA, DOE found the only equipment type for which ASHRAE increased the efficiency levels and equipment was available on the market were commercial packaged boilers, generally. 73 FR 40770, 40776-86 (July 16, 2008). DOE presented its methodology, data, and results for the preliminary energy savings analysis developed for most of the commercial packaged boiler equipment classes in the July 2008 NODA for public comment. 73 FR 40770, 40786-91 (July 16, 2008).

III. General Discussion of Comments Regarding the ASHRAE Process and DOE's Interpretation of EPCA's Requirements With Respect to ASHRAE Equipment

In response to its request for comment on the July 2008 NODA, DOE received six comments from manufacturers, trade associations, and energy efficiency advocates. The issues raised in these comments, along with DOE's responses, are set forth below.

A. The ASHRAE Process

In response to the preliminary determination of scope and analyses set forth in the July 2008 NODA, DOE received several comments regarding the ASHRAE process for considering revised efficiency levels for certain commercial heating, ventilating, air-conditioning, and water heater equipment, including commercial packaged boilers.

Edison Electric Institute (EEI) stated its belief that DOE should make proposals for increased efficiency to ASHRAE and not perform a separate rulemaking on commercial packaged boilers. EEI asserted this would streamline DOE's efforts and provide opportunities to increase equipment efficiency through the ASHRAE consensus process. (EEI, No. 2 at p. 2)

5

5

“EEI, No. 2 at p. 2” refers to (1) a statement that was submitted by the Edison Electric Institute and is recorded in the Resource Room of the Building Technologies Program in the docket under “Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards for Commercial Heating, Air-Conditioning, and Water-Heating Equipment,” Docket Number EERE-2008-BT-STD-0013, as comment number 2; and (2) a passage that appears on page 2 of that statement.

The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) asserted that the efficiency levels for commercial packaged boilers in ASHRAE Standard 90.1-2007 are the product of a consensus agreement between AHRI boiler manufacturer members, ACEEE, and several other organizations. AHRI stated its belief these efficiency levels reflect the collective experience of the manufacturers and the knowledge of the relationship between combustion efficiency and thermal efficiency for their models that comes from practical experience of transforming design concepts to models coming off the production line. Further, AHRI asserted DOE should accept the efficiency levels in ASHRAE Standard 90.1-2007 as negotiated standards that can be processed through an expedited rulemaking. (AHRI, No. 3 at p. 4)

The American Council for an Energy-Efficient Economy (ACEEE), the Appliance Standards Awareness Project (ASAP), the Alliance to Save Energy (ASE), the California Energy Commission (CEC), the Natural Resources Defense Council (NRDC), the Northeast Energy Efficiency Partnerships (NEEP), and the Northwest Power and Conservation Council (NPCC) submitted a joint comment in response to the July 2008 NODA

(hereafter referred to as the Advocates Comment). (The Advocates Comment, No. 4 at p. 2) The Advocates Comment stated its support for the adoption of the efficiency levels in ASHRAE Standard 90.1-2007 for commercial boilers, except for any specific equipment class for which further DOE analysis shows that adoption of the ASHRAE efficiency levels would violate the anti-backsliding clause. The Advocates Comment pointed out that the efficiency levels in ASHRAE Standard 90.1-2007 for commercial packaged boilers are the result of a 2006 agreement between several efficiency advocacy groups and the trade association for commercial packaged boilers. (The Advocates Comment, No. 4 at p. 2)

Lastly, AHRI, ACEEE, ASAP, ASE, and NRDC submitted a joint letter to the Assistant Secretary (hereafter referred to as the Joint Letter) urging DOE to adopt as Federal minimum energy conservation standards the efficiency levels contained in ASHRAE Standard 90.1-2007 for commercial packaged boilers. (The Joint Letter, No. 5 at p. 1) The Joint Letter asserted that the commercial boiler efficiency levels are more stringent than the corresponding requirements in the previous version of the ASHRAE Standard.

6

In addition, the Joint Letter pointed out that the efficiency levels in ASHRAE Standard 90.1-2007 for commercial packaged boilers are the result of a consensus recommendation. Finally, the Joint Letter stated its belief that given the origin of these efficiency levels in the consensus process (both with the negotiated agreement and the ASHRAE process) and their significant potential energy savings, DOE should give these recommendations deference and move to adopt them as a final rule as expeditiously as possible. (The Joint Letter, No. 5 at p. 2)

6

DOE reviewed the previous efficiency levels for commercial packaged boilers, which were incorporated into ASHRAE Standard 90.1-1999, in a notice of document availability published on March 13, 2006. 71 FR 12634, 12639 (March 13, 2006). At that time, DOE determined it could not adopt the efficiency levels in ASHRAE Standard 90.1-1999 for small commercial packaged boilers due to backsliding concerns. 71 FR 12634, 12639-41 (March 13, 2006). In addition, DOE determined it did not have the authority to consider amended energy conservation standards for large commercial packaged boilers because ASHRAE did not change the existing energy conservation standard levels in ASHRAE Standard 90.1-1999. 71 FR 12634, 12641-42 (March 13, 2006).

While DOE acknowledges that certain efficiency levels in ASHRAE Standard 90.1-2007 are the result of consensus standards, including those for commercial packaged boilers, EPCA specifies DOE's obligations to review the amendments when ASHRAE issues revised standards. Specifically, EPCA directs that if ASHRAE Standard 90.1 is amended, DOE must adopt amended energy conservation standards at the new efficiency level in ASHRAE Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more stringent level as a national standard would produce significant additional energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) In order to determine if more-stringent efficiency levels would meet EPCA's criteria, DOE must review the efficiency levels in ASHRAE Standard 90.1-2007 and more-stringent efficiency levels for their energy savings and economic potentials irrespective of whether the efficiency levels were once part of a consensus standard. Contrary to what some commenters seem to suggest, DOE may not delegate its standard-setting authority either directly or indirectly to ASHRAE or any other party.

B. The Definition of Amendment With Respect to the Efficiency Levels in an ASHRAE Standard

DOE stated in the July 2008 NODA that EPCA does not explicitly define the term “amended” in the context of ASHRAE Standard 90.1, but the July 2008 NODA pointed out that DOE provided its interpretation of what would constitute an “amended standard” in a final rule published in the

Federal Register

on March 7, 2007 (72 FR 10038). 73 FR 40770, 40771 (July 16, 2008). In that final rule, DOE stated that the statutory trigger requiring DOE to adopt uniform national standards based on ASHRAE action is for ASHRAE to change a standard for any of the equipment listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i)) by increasing the energy efficiency level for that equipment type. 72 FR 10038, 10042 (March 7, 2007). In other words, if the revised ASHRAE Standard 90.1 leaves the standard level unchanged or lowers the standard, as compared to the level specified by the national standard adopted pursuant to EPCA, DOE does not have the authority to conduct a rulemaking to consider a higher standard for that equipment pursuant to 42 U.S.C. 6313(a)(6)(A). 73 FR 40770, 40771 (July 16, 2008).

In response to DOE's interpretation of the definition of “amendment,” the Advocates Comment argued that DOE has applied an unlawfully narrow definition to the word “amendment.” (The Advocates Comment, No. 4 at pp. 2-3) Instead, the Advocates Comment asserts that EPCA requires DOE to consider changes to the Federal minimum energy conservation standards for covered products “[i]f ASHRAE/IES Standard 90.1 is

amended

* * *” (The Advocates Comment, No. 4 at pp. 2-3 (referring to 42 U.S.C. 6313(a)(6)(A)(i)) (emphasis in original)). In other words, the Advocates Comment suggests that DOE has very broad authority to consider amended standards for any and all ASHRAE equipment, once ASHRAE acts to revise any of the levels in Standard 90.1. The Advocates Comment asserts that Congress's use of the neutral terms “amended” and “amendment” imposes no threshold requirement that before DOE can analyze the energy saving potential of revised Federal energy conservation standards it must first determine that the amended ASHRAE standard is more stringent than the prior Federal energy conservation standard. The Advocates Comment stated its belief that DOE's very limited definition of “amendment” is inconsistent with the plain language of EPCA. (The Advocates Comment, No. 4 at p. 3)

DOE does not agree with the Advocates Comment's assertions. DOE maintains its position that the statutory trigger requiring DOE to adopt uniform national standards based on ASHRAE action is for ASHRAE to change a standard for any of the equipment listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i)) by increasing the energy efficiency level for that equipment type. As described in the March 2007 final rule, the intent of section 342, generally, is for DOE to maintain uniform national standards consistent with those set in ASHRAE Standard 90.1. 72 FR 10038, 10042 (March 7, 2007). Given this intent, if ASHRAE has not amended a standard for a product subject to section 342, there is no change, which would require action by DOE to consider amending the uniform national standard to maintain consistency with ASHRAE Standard 90.1.

Id.

If ASHRAE considered amending the standards for a given equipment type but ultimately chose not to do so, the statutory trigger for DOE to adopt ASHRAE's amended standards did not occur with respect to this equipment.

Id.

The statutory language specifically links ASHRAE's action in amending standards for specific equipment to DOE's action for those same equipment.

Id.

C. Different Types of Changes in ASHRAE Standard 90.1-2007

The Advocates Comment asserted that ASHRAE Standard 90.1-2007 includes at least three different types of amendments, which must trigger DOE

review of the existing Federal energy conservation standards, including: (1) A change in the efficiency performance metric; (2) an addition of a new prescriptive or performance requirement; and (3) a possible decrease to the efficiency standard. (The Advocates Comment, No. 4 at p. 4-5) The Advocates Comment further asserted that DOE cannot reject the consideration of amendments which change the performance metric or which add new prescriptive or performance requirements on top of existing Federal requirements. The Advocates Comment further stated that even DOE's definition of “amendment” compels consideration of amendments which add energy-saving requirements since these requirements “increase” the level of energy efficiency for a given equipment type. If DOE decides it cannot adopt multiple efficiency requirements (an interpretation the Advocates Comment believes is contrary to EPCA), the Advocates Comment argued that these requirements still trigger DOE review. (The Advocates Comment, No. 4 at p. 4-5)

When reviewing the changes in ASHRAE Standard 90.1-2007, DOE stated in the July 2008 NODA that for each class of commercial equipment for which ASHRAE modified the existing standard, DOE would assess whether the change made would increase energy efficiency and, therefore, require further DOE analysis and consideration. 73 FR 40770, 40775 (July 16, 2008). DOE initially completed a comprehensive analysis of the products covered under both EPCA and ASHRAE Standard 90.1-2007 to determine which product types require further analysis. The July 2008 NODA contains a description of DOE's initial evaluation of each ASHRAE equipment type for which energy conservation standards have been set pursuant to EPCA, in order for DOE to determine whether the amendments in ASHRAE Standard 90.1-2007 have resulted in increased efficiency levels. 73 FR 40770, 40773-40786 (July 16, 2008).

DOE does not agree with the Advocates Comment's assertion that DOE is required to review changes in ASHRAE Standard 90.1-2007, which do not increase the efficiency level when compared to the current Federal energy conservation standards for a given piece of equipment. Further as DOE has previously explained, since EPCA does not explicitly define the term “amended” in the context of ASHRAE Standard 90.1, DOE provided its interpretation of what would constitute an “amended standard” in a final rule published in the

Federal Register

on March 7, 2007. 72 FR 10038. In that rule, DOE stated that the statutory trigger requiring DOE to adopt uniform national standards based on ASHRAE action is for ASHRAE to change a standard for any of the equipment listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i)) by increasing the energy efficiency level for that equipment type.

Id.

at 10042. Even though DOE realizes that these prescriptive requirements could save additional energy in addition to the energy-efficiency level, DOE does not believe adding a prescriptive requirement alone without increasing the efficiency level triggers DOE review. In addition, if ASHRAE adds a prescriptive requirement for equipment where an efficiency level is already specified, DOE does not believe it has the authority to address a dual descriptor for a single equipment type (see section IV.A.1 below for additional explanation). In light of the above, DOE maintains its position set out in the July 2008 NODA. If the revised ASHRAE Standard 90.1 leaves the standard level unchanged (even if ASHRAE adds prescriptive requirements) or lowers the standard, as compared to the level specified by the national standard adopted pursuant to EPCA, DOE does not have the authority to conduct a rulemaking to consider a higher standard for that equipment pursuant to 42 U.S.C. 6313(a)(6)(A). 73 FR 40770, 40771 (July 16, 2008).

D. DOE's Review of ASHRAE Equipment Independent of the ASHRAE Standards Process

The Advocates Comment pointed to language in EPCA (at 42 U.S.C. 6313(a)(6)(C)) that it believes triggers DOE review to determine the need to amend the energy conservation standard for a given piece of equipment, including a six-year timeframe elapsing since the last final rule “establishing or amending a standard” for that product. (The Advocates Comment, No. 4 at p. 5) The Advocates Comment also stated that the same provision of EPCA further provides that if DOE determines that the statutory criteria have not been met for amending the energy conservation standard for a product, DOE must conduct the same review process within the next three years. (The Advocates Comment, No. 4 at p. 5) The Advocates Comment stated its belief that the timeline (three or six years) has elapsed for several equipment categories, including: (1) Central water-source and evaporatively-cooled AC products; (2) warm-air furnaces; (3) gas and oil storage water heaters; (4) gas and oil instantaneous water heaters; (4) tankless oil-fired instantaneous water heaters and unfired hot water storage tanks; (5) electric water heaters; (6) tankless gas-fired instantaneous water heaters; and (7) commercial packaged boilers. (The Advocates Comment, No. 4 at p. 5-6)

In response, DOE acknowledges that section 305(b) of the Energy Independence and Security Act of 2007 (EISA 2007), Pub. L. 110-140, amended Section 342(a)(6) of EPCA to create an additional requirement that directs DOE to assess whether there is a need to update the Federal energy conservation standards for certain commercial equipment (

i.e.

, ASHRAE equipment) after a certain amount of time has elapsed. Specifically, EPCA, as amended, states that “the Secretary must publish either a notice of determination that standards for a product do not need to be amended, or a notice of proposed rulemaking including new proposed standards within 6 years after the issuance of any final rule establishing or amending a standard.” (42 U.S.C. 6313(a)(6)(C)(i)) In addition, if the Secretary chooses to publish a notice of determination that the standards for a product do not need to be amended, a new determination must be issued within 3 years of the previous determination. (42 U.S.C. 6313(a)(6)(C)(iii)(II)) These requirements are applicable to small commercial package air conditioning and heating equipment, large commercial package air conditioning and heating equipment, very large commercial package air conditioning and heating equipment, packaged terminal air conditioners, packaged terminal heat pumps, warm-air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks. (42 U.S.C. 6313(a)(6)(A)(i))

DOE believes that the commenters have misconstrued the amendments in section 305(b) of EISA 2007 by suggesting that the relevant provisions should be applied retroactively, rather than prospectively. DOE does not believe it was Congress's intention to apply these requirements retroactively, so that DOE would immediately be in violation of its legal obligations upon passage of the statute, thereby failing from its inception. DOE does not believe that the interpretation in the Advocates Comment is reasonable, nor does DOE agree with the assertion that DOE is late and should initiate an immediate review of certain commercial equipment cited by the commenters above.

E. Equipment Classes With a Two-Tier Efficiency Level Specified in ASHRAE Standard 90.1-2007

For commercial packaged boilers, ASHRAE Standard 90.1-2007 further divides the existing equipment classes (

i.e.

, gas-fired and oil-fired) into 10 different divisions. For two of the ten equipment classes specified in ASHRAE Standard 90.1-2007, ASHRAE specifies a two-tier efficiency level, with one efficiency level effective in 2010 and another more-stringent efficiency level effective in 2020. The two equipment classes where ASHRAE Standard 90.1-2007 specifies a two-tier efficiency levels are small gas-fired steam natural draft and large gas-fired steam natural draft commercial packaged boilers. In determining whether the efficiency levels in ASHRAE Standard 90.1-2007 violated EPCA's anti-backsliding clause, DOE examined only the efficiency levels with a 2010 effective date. However, DOE considers the two-tier efficiency levels to be a “package” set of potential amended energy conservation standards. DOE does not intend to adopt one efficiency level without adopting the latter efficiency level. Accordingly, in its economic and energy savings analysis DOE analyzes these two equipment classes as if both the 2010 and 2020 levels will be adopted on their respective effective dates.

IV. General Discussion of the Changes in ASHRAE Standard 90.1-2007 and Determination of Scope for Further Rulemaking Analyses

As discussed above, before beginning an analysis of economic impacts and energy savings that would result from adopting the efficiency levels specified by ASHRAE Standard 90.1-2007 or more-stringent efficiency levels, DOE first sought to determine whether or not the ASHRAE Standard 90.1-2007 efficiency levels actually represented an increase in efficiency above the current Federal standard levels. This section discusses each equipment class where the ASHRAE Standard 90.1-2007 efficiency level differs from the current Federal standard level, along with DOE's preliminary conclusion as to the action DOE would take with respect to that equipment.

A. Commercial Warm Air Furnaces

Under EPCA, a “warm air furnace” is defined as “a self-contained oil-or gas-fired furnace designed to supply heated air through ducts to spaces that require it and includes combination warm-air furnace/electric air-conditioning units but does not include unit heaters and duct furnaces.” (42 U.S.C. 6311(11)(A)) In its regulations, DOE defines a “commercial warm air furnace” as a “warm-air furnace that is industrial equipment, and that has a capacity (rated maximum input) of 225,000 Btu [British thermal units] per hour or more.” 10 CFR 431.72. The amendments in ASHRAE Standard 90.1-2007 changed the efficiency metric for gas-fired commercial warm air furnaces and added design requirements for both gas-fired and oil-fired commercial warm air furnaces, thereby triggering DOE to further review ASHRAE's changes as presented below.

1. Gas-Fired Commercial Warm Air Furnaces

Gas-fired commercial warm air furnaces are fueled by either natural gas or propane. The Federal energy conservation standard for commercial gas-fired warm air furnaces corresponds to the efficiency level in ASHRAE Standard 90.1-1999, which specifies that for equipment with a capacity of 225,000 Btu per hour (h) or more, the thermal efficiency at the maximum rated capacity (rated maximum input) must be no less than 80 percent. 10 CFR 431.77(a). The Federal energy conservation standard for gas-fired commercial warm air furnaces applies to equipment manufactured on or after January 1, 1994. 10 CFR 431.77.

ASHRAE changed the efficiency levels for gas-fired commercial warm air furnaces by changing the metric from a thermal efficiency descriptor to a combustion efficiency descriptor and adding three design requirements. Specifically, the efficiency levels in ASHRAE Standard 90.1-2007 specify a minimum combustion efficiency of 80 percent. ASHRAE Standard 90.1-2007 also specifies the following design requirements for commercial gas-fired warm air furnaces: The gas-fired commercial warm air furnace must use an interrupted or intermittent ignition device, have jacket losses no greater than 0.75 percent of the input rating, and use a power vent or flue damper.

To evaluate the change in efficiency level (if any) specified by the amended ASHRAE standard, DOE reviewed the change of metric for gas-fired commercial warm air furnaces. In general, the energy efficiency of a product is a function of the relationship between the product's output of services and its energy input. A furnace's output is largely the energy content of its output (

i.e.

, warm air delivered to the building). A furnace's energy losses consist of energy that escapes through its flue (commonly referred to as “flue losses”), and of energy that escapes into the area surrounding the furnace (commonly referred to as “jacket losses”).

In a final rule published in the

Federal Register

on October 21, 2004 (the October 2004 final rule), DOE incorporated definitions for commercial warm air furnaces and its efficiency descriptor, energy efficiency test procedures, and energy conservation standards. 69 FR 61916 (Oct. 21, 2004). In the October 2004 final rule, DOE pointed out that EPCA specifies the energy conservation standard levels for commercial warm air furnaces in terms of thermal efficiency (42 U.S.C. 6313(a)(4)(A)-(B); 10 CFR 431.77), but provides no definition for this term.

Id.

DOE proposed to interpret this term in the context of commercial warm air furnaces to mean combustion efficiency (

i.e.

, 100 percent minus percent flue loss).

Id.

Given the use of the thermal efficiency term in EPCA and its continued use as the efficiency descriptor for furnaces in ANSI Standard Z21.47, “Gas-Fired Central Furnaces” (DOE's test procedure for this equipment), DOE stated that it would be confusing to use the term “combustion efficiency” in the final rule. Accordingly, DOE defined the term “thermal efficiency” to mean 100 percent minus the percent flue loss in the October 2004 final rule for gas-fired commercial warm air furnaces.

Id.

DOE presented an initial review of the ASHRAE efficiency levels for warm-air furnaces in the July 2008 NODA. DOE stated that upon reviewing the efficiency levels and methodology specified in ASHRAE Standard 90.1-2007, DOE believed that despite changing the name of the energy efficiency descriptor from “thermal efficiency” to “combustion efficiency,” ASHRAE did not intend to change the efficiency metric for gas-fired commercial warm air furnaces. 73 FR 40770, 40776 (July 16, 2008). When ASHRAE specified a newer version of the test procedure for manufacturers' use with gas-fired commercial air furnaces (

i.e.

, ANSI Standard Z21.47-2001), the calculation of thermal efficiency did not change from the previous version. Therefore, despite that change in the name of the energy efficiency descriptor, the terms are synonymous in the present context because the calculation of that value has not changed (

i.e.

, 100 percent minus the percent flue loss). DOE sees no plausible reason why ASHRAE would have chosen to incorporate a different metric than that used in the ANSI Standard Z21.47-2001 test procedure. Consequently, because the amendments for this type of equipment set out in ASHRAE Standard 90.1-2007 do not

appear to have substantively changed the efficiency level, DOE tentatively decided to leave the existing Federal energy conservation standards in place for gas-fired commercial warm air furnaces; these standards specify a thermal efficiency of 80 percent using the definition of “thermal efficiency” established by DOE in the October 2004 final rule and presented in subpart D to 10 CFR part 431. 73 FR 40770, 40776 (July 16, 2008).

In response to the preliminary review set forth in the July 2008 NODA, the Advocates Comment noted that ASHRAE added additional energy saving requirements, including a standard limiting jacket losses, a prescriptive requirement for intermittent or interrupted ignition devices, and a requirement for power venting or flue dampers in ASHRAE Standard 90.1-2007 for commercial gas-fired warm air furnaces. (The Advocates Comment, No. 4 at p. 6) The Advocates Comment further stated that the addition of these requirements triggers DOE review, which must lead to either adoption of the new ASHRAE standards or more-stringent standards. (The Advocates Comment, No. 4 at p. 6) The Advocates Comment also asserted that ASHRAE recognized that combustion efficiency is an inadequate efficiency descriptor and added these additional efficiency requirements to capture off cycle losses, which can waste significant amounts of energy. (The Advocates Comment, No. 4 at p. 6) Even though the comments concluded DOE has asserted in other rulemakings that it lacks the authority to apply more than one efficiency metric to a given product, the commenters believe DOE's viewpoint is contrary to the language and purposes of EPCA. (The Advocates Comment, No. 4 at p. 7) Further, the Advocates Comment stated that because ASHRAE has adopted a performance standard and multiple design requirements, DOE must read the statute as permitting DOE sufficient authority to harmonize Federal and ASHRAE requirements. Lastly, the comments point out that some of the multi-part standards (

e.g.

, those for commercial storage instantaneous water heaters and commercial heat pumps) are based on equivalent multi-part requirements in ASHRAE 90.1. (The Advocates Comment, No. 4 at p. 6-7)

DOE has determined that the design requirements in ASHRAE Standard 90.1-2007 for gas-fired commercial warm air furnaces are beyond the scope of its legal authority. EPCA authorizes the Secretary to amend the energy conservation standards for specified equipment. (42 U.S.C. 6313(a)(6)) Section 340(18) of EPCA defines the term “energy conservation standard” as:

“(A) a performance standard that prescribes a minimum level of energy efficiency or a maximum quantity of energy use for a product; or

(B) a design requirement for a product.”

(42 U.S.C. 6311(18))

The language of EPCA authorizes DOE to establish a performance standard or a single design standard. As such, a standard that establishes both a performance standard and a design requirement is beyond the scope of DOE's legal authority, as would be a standard that included more than one design requirement. In this case, ASHRAE Standard 90.1-2007 recommends three design requirements, which goes beyond EPCA's limit of one design requirement for the specified covered equipment.

Therefore, DOE has not changed its preliminary review set forth in the July 2008 NODA. Because the amendments for this type of equipment set out in ASHRAE Standard 90.1-2007 do not appear to have changed the efficiency level, DOE is leaving the existing Federal energy conservation standards in place for gas-fired commercial warm air furnaces; these standards specify a thermal efficiency of 80 percent using the definition of “thermal efficiency” established by DOE in the October 2004 final rule and presented in subpart D to 10 CFR part 431. 73 FR 40770, 40776 (July 16, 2008). DOE is not conducting any further analysis on gas-fired commercial warm air furnaces.

2. Oil-Fired Commercial Warm Air Furnaces

The Federal energy conservation standard for commercial oil-fired warm air furnaces corresponds to the efficiency level in ASHRAE Standard 90.1-1999, which specifies that for equipment with a capacity of 225,000 [British thermal units per hour] (Btu/h) or more, the thermal efficiency at the maximum rated capacity (rated maximum input) must be no less than 81 percent. 10 CFR 431.77(b). The Federal energy conservation standard for oil-fired commercial warm air furnaces applies to equipment manufactured on or after January 1, 1994. 10 CFR 431.77.

The efficiency level in ASHRAE Standard 90.1-2007 specifies a minimum thermal efficiency of 81 percent. ASHRAE did not change the efficiency levels for oil-fired commercial warm air furnaces, but ASHRAE added three design requirements. ASHRAE Standard 90.1-2007 now specifies that commercial, oil-fired, warm air furnaces must use an interrupted or intermittent ignition device, have jacket losses no greater than 0.75 percent of the input rating, and use a power vent or flue damper.

DOE published a final rule in the

Federal Register

on March 7, 2007, which states that the statutory trigger that requires DOE to adopt uniform national standards based on ASHRAE action is for ASHRAE to change a standard by increasing the energy efficiency of the equipment listed in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i)). 72 FR 10038, 10042.

In practice, 42 U.S.C. 6313 generally allows ASHRAE Standard 90.1 to set energy efficiency levels for equipment as a model building code and directs DOE to use these efficiency levels as the basis for maintaining consistent, uniform national energy conservation standards for the same equipment, provided all other applicable statutory requirements are met. DOE stated in the July 2008 NODA that if ASHRAE has not changed an efficiency level for a class of equipment subject to 42 U.S.C. 6313, DOE does not have authority to consider amending the uniform national standard at the time of publication of the amended ASHRAE Standard 90.1. 73 FR 40770, 40777 (July 16, 2008). DOE also pointed out that although ASHRAE added design requirements in ASHRAE Standard 90.1-2007, it did not change the efficiency levels for oil-fired commercial warm air furnaces.

Id.

Therefore, DOE tentatively concluded that it does not have authority to amend the uniform national standard for this equipment.

Id.

In response to the preliminary review of oil-fired commercial warm air furnaces set forth in the July 2008 NODA, the Advocates Comment made the same assertion regarding the three design requirements added by ASHRAE as it did for gas-fired commercial warm air furnaces above. (The Advocates Comment, No. 4 at p. 7)

DOE does not have any reason to treat oil-fired commercial warm air furnaces any differently than gas-fired commercial warm air furnaces. The language of EPCA authorizes DOE to establish a performance standard or a single design standard. As such, DOE is concluding a standard for oil-fired commercial warm air furnaces that establishes both a performance standard and a design requirement is beyond the scope of DOE's legal authority, as it did with gas-fired commercial warm air furnaces.

Therefore, DOE has not changed its preliminary review set forth in the July 2008 NODA. Because the amendments for this equipment type set out in

ASHRAE Standard 90.1-2007 did not change the efficiency level for oil-fired commercial warm air furnaces, DOE is leaving the existing Federal energy conservation standards in place for this equipment; these standards specify a thermal efficiency of 81 percent. Accordingly, DOE is not conducting any further analysis on oil-fired commercial warm air furnaces.

B. Commercial Package Air-Conditioning and Heating Equipment

EPCA, as amended, defines “commercial package air-conditioning and heating equipment” as “air-cooled, water-cooled, evaporatively cooled, or water source (not including ground water source) electrically operated, unitary central air conditioners and central air-conditioning heat pumps for commercial application.” (42 U.S.C. 6311(8)(A); 10 CFR 431.92) EPCA also defines “small,” “large,” and “very large commercial package air-conditioning and heating equipment” based on the equipment's rated cooling capacity. (42 U.S.C. 6311(8)(B)-(D); 10 CFR 431.92) Specifically, the term “small commercial package air-conditioning and heating equipment” means “commercial package air-conditioning and heating equipment that is rated below 135,000 Btu per hour (cooling capacity).” (42 U.S.C. 6311(8)(B); 10 CFR 431.92) The term “large commercial package air-conditioning and heating equipment” means “commercial package air-conditioning and heating equipment that is rated: (i) At or above 135,000 Btu per hour and (ii) below 240,000 Btu per hour (cooling capacity).” (42 U.S.C. 6311(8)(C); 10 CFR 431.92) The term “very large commercial package air-conditioning and heating equipment” means “commercial package air-conditioning and heating equipment that is rated: (i) at or above 240,000 Btu per hour; and (ii) below 760,000 Btu per hour (cooling capacity).” (42 U.S.C. 6311(8)(D); 10 CFR 431.92)

The amendments in ASHRAE Standard 90.1-2007 include: (1) Identifying separate efficiency levels for three-phase through-the-wall air-cooled air conditioners and heat pumps and three-phase, small-duct, high-velocity air-cooled air conditioners and heat pumps; (2) adding equipment classes corresponding efficiency levels for commercial package air-cooled air conditioners with a cooling capacity at or above 760,000 Btu/h and water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h; and (3) changing the efficiency levels for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h, thereby triggering DOE to further review ASHRAE's changes as presented below.

1. Three-Phase Through-the-Wall Air-Cooled Air Conditioners and Heat Pumps

ASHRAE Standard 90.1-2007 identifies efficiency levels for three-phase through-the-wall air-cooled air conditioners and heat pumps, single-package and split systems, with a cooling capacity of no greater than 30,000 Btu/h. The efficiency levels specified by ASHRAE Standard 90.1-2007 include a seasonal energy efficiency ratio of 12.0 for cooling mode and a heating seasonal performance factor of 7.4 for equipment manufactured on or after January 23, 2010.

7

ASHRAE aligned these efficiency levels and its corresponding effective dates with the efficiency levels established in EPCA for single-phase residential versions of the same products.

7

ASHRAE provides the same requirement for single-phase and three-phase through-the-wall air-cooled air conditioners and heat pumps used in covered commercial buildings, but points out that single-phase products are regulated as residential products under 10 CFR 430.32(c)(2).

Neither EPCA nor DOE has established a specific definition for commercial “through-the-wall air-cooled air conditioners and heat pumps.” Residential through-the-wall air-cooled air conditioners and heat pumps are consumer products covered as “central air conditioners” under EPCA, as amended, which are defined at 42 U.S.C. 6291(21) and 10 CFR 430.2. Residential through-the-wall air-cooled air conditioners and heat pumps are by definition single-phase products (

Id.

), whereas the commercial through-the-wall air-cooled air conditioners and heat pumps mentioned in ASHRAE Standard 90.1-2007 are three-phase products. In DOE's regulations, a residential “[t]hrough-the-wall air conditioner and heat pump” means “a central air conditioner or heat pump that is designed to be installed totally or partially within a fixed-size opening in an exterior wall * * *” 10 CFR 430.2. Furthermore to be covered, this equipment (1) must be manufactured before January 23, 2010; (2) must not be weatherized; (3) must be clearly and permanently marked for installation only through an exterior wall; (4) have a rated cooling capacity no greater than 30,000 Btu/h; (5) exchange all of its outdoor air across a single surface of the equipment cabinet; and (6) have a combined outdoor air exchange area of less than 800 square inches (split systems) or less than 1,210 square inches (single packaged systems) as measured on the surface described in paragraph (5) of this definition.

Id

.

In terms of equipment construction, commercial and residential through-the-wall air-cooled air conditioners and heat pumps use the same components in the same configurations to provide space cooling and heating. Commercial versions of through-the-wall air-cooled air conditioners and heat pumps are essentially the same as residential versions, except that they are powered using three-phase electric power.

EPCA does not separate three-phase through-the-wall air-cooled air conditioners and heat pumps from other types of small commercial package air-conditioning and heating equipment in its definitions. Therefore, EPCA's definition of “small commercial package air-conditioning and heating equipment” would include three-phase through-the-wall air-cooled air conditioners and heat pumps. Although EPCA does not use the term “three-phase through-the-wall air-cooled air conditioners and heat pumps,” the three-phase versions of this equipment, regardless of cooling capacity, fall within the definition of “small commercial package air-conditioning and heating equipment.” (42 U.S.C. 6311(8)(A)-(B)) There is no language in EPCA to indicate that three-phase through-the-wall air-cooled air conditioners and heat pumps are a separate class of covered equipment.

The Federal energy conservation standards for three-phase commercial package air conditioners and heat pumps less than 65,000 Btu/h were established by EISA 2007 for such products manufactured on or after June 19, 2008. Specifically, section 314(b)(4)(C) of EISA 2007 amended section 342(a)(7) of EPCA (42 U.S.C. 6313(a)(7)) by adding new provisions for three-phase commercial package air conditioners with a cooling capacity of less than 65,000 Btu/h. (42 U.S.C. 6313(a)(7)(D)) These provisions in EISA 2007 mandate SEERs for cooling mode and HSPFs for heating mode of air-cooled three-phase electric central air conditioners and central air-conditioning heat pumps with a cooling capacity of less than 65,000 Btu/h.

8

Three-phase through-the-wall air-cooled air conditioners and heat pumps are a smaller subset of three-phase commercial package air conditioners with a cooling capacity of less than 65,000 Btu/h, and were not explicitly excluded from the standards in section 314(b)(4)(C) of EISA 2007. DOE noted in the July 2008 NODA that since EISA 2007 set these standards, DOE must follow them, and they are more stringent than the levels contained in ASHRAE Standard 90.1-2007 for three-phase through-the-wall air-cooled air conditioners and heat pumps. 73 FR 40770, 40778 (July 16, 2008). Accordingly, DOE affirmed that the EISA 2007 efficiency levels for small commercial package air-conditioning and heating equipment less than 65,000 Btu/h, as set forth at 42 U.S.C. 6313(a)(7)(D), apply to three-phase through-the-wall air-cooled air conditioners and heat pumps with a cooling capacity no greater than 30,000 Btu/h.

Id

.

8

Section 314(b)(4)(C) of EISA 2007 specifies for “equipment manufactured on or after the later of January 1, 2008, or the date that is 180 days after the date of enactment of the Energy Independence and Security Act of 2007—

(i) the minimum seasonal energy efficiency ratio of air-cooled 3-phase electric central air

conditioners and central air-conditioning heat pumps less than 65,000 Btu per hour (cooling capacity), split systems, shall be 13.0;

(ii) the minimum seasonal energy efficiency ratio of air-cooled 3-phase electric central air conditioners and central air-conditioning heat pumps less than 65,000 Btu per hour (cooling capacity), single package, shall be 13.0;

(iii) the minimum heating seasonal performance factor of air-cooled 3-phase electric central air-conditioning heat pumps less than 65,000 Btu per hour (cooling capacity), split systems, shall be 7.7; and

(iv) the minimum heating seasonal performance factor of air-cooled 3-phase electric central air-conditioning heat pumps less than 65,000 Btu per hour (cooling capacity), single package, shall be 7.7.” (42 U.S.C. 6313(a)(7)(D)).

In response to the preliminary conclusions set forth in the July 2008 NODA, AHRI stated that the minimum energy efficiency standards for small commercial package air conditioning and heating equipment less than 65,000 Btu/h specified in ASHRAE Standard 90.1-2007 were initially amended by addendum f to ASHRAE/IES 90.1-2004 in 2005, well before Congress enacted EISA 2007. (AHRI, No. 3 at pp. 1-2) AHRI further commented “[t]he intent behind addendum f was to harmonize the minimum energy efficiency standards, product classes and effective dates for the three-phase products covered by ASHRAE Standard 90.1 with the respective efficiency standards, product classes and effective dates established under EPCA for single-phase residential products.”

Id

. AHRI further noted that it believes the intent of Congress was very clear in EISA 2007 (

i.e.

, to harmonize the standard for three-phase commercial products with cooling capacities less than 65,000 Btu/h with that of the single-phase residential products of the same capacity). Further, AHRI commented that Congress never intended to require a minimum 13 SEER/7.7 HSPF standards for three-phase, through-the-wall, air-cooled air conditioners and heat pumps; DOE itself found it impossible to meet that efficiency level during the last rulemaking on central air conditioners and heat pumps. (AHRI, No. 3 at pp. 1-2)

AHRI also stated its belief that DOE has the authority to establish a separate product class for three-phase, through-the-wall, air-cooled air conditioners and heat pumps. (AHRI, No. 2 at p. 2) AHRI pointed out that prior to the last rulemaking on residential central air conditioners (

i.e.

, single-phase, air-cooled air conditioners and heat pumps), EPCA did not specifically address through-the-wall products. AHRI asserted it was DOE that established the product class when it determined that through-the-wall products had unique space-constraint challenges that warranted a lower minimum efficiency standard than conventional systems. (AHRI, No. 3 at p. 2) AHRI commented that DOE can and should do the same for commercial three-phase versions of these products. AHRI also stated that DOE can adopt the proposed ASHRAE 90.1-2007 efficiency levels for three-phase through-the-wall air-cooled air conditioners and heat pumps because the efficiency levels were developed and justified by DOE through a lengthy rulemaking process (

i.e.

, the 2001 rulemaking on central air conditioners and heat pumps

9

). Lastly, AHRI pointed out that due to space-constraint issues, three-phase through-the-wall air-cooled air conditioners and heat pumps cannot meet the 13 SEER/7.7 standard established by EISA 2007. AHRI stated that manufacturers of three-phase commercial through-the-wall products would have no choice but to file for a waiver if the ASHRAE Standard 90.1-2007 efficiency levels were not adopted by DOE for this equipment class. (AHRI, No. 3 at p. 2)

9

DOE published a final rule amending the energy conservation standards for residential central air conditioners and heat pumps on January 22, 2001. 66 FR 7170 (Jan. 22, 2001).

DOE does not agree with AHRI's assertions regarding three-phase through-the-wall air-cooled air conditioners and heat pumps. Specifically, while ASHRAE may have been trying to harmonize the definitions, equipment classes, and energy conservation standards for equipment classes of similar types with their residential counterparts, the energy conservation standards specified by EISA 2007 supersede the efficiency levels in ASHRAE Standard 90.1-2007. EISA 2007 did not explicitly exclude three-phase through-the-wall air-cooled air conditioners and heat pumps from its regulations for the larger class of small commercial package air conditioning and heating equipment.

As to AHRI's assertion regarding establishing a separate equipment class for these subsets of equipment, DOE agrees with AHRI that DOE has the authority to adopt a separate equipment class for this equipment when initially established by ASHRAE Standard 90.1-2007. However, DOE does not have the authority to adopt a less stringent efficiency level for a separate equipment class, including three-phase through-the-wall air-cooled air conditioners and heat pumps in contravention of the prescriptive standard levels set by EISA 2007. Effectively, the efficiency levels in ASHRAE Standard 90.1-2007 are less stringent than the energy conservation standards specified by EISA 2007 for three-phase, through-the-wall, air-cooled air conditioners and heat pumps. As DOE stated in the July 2008 NODA, DOE is affirming in today's notice that the EISA 2007 efficiency levels set forth in 42 U.S.C. 6313(a)(7)(D) for small commercial package air-conditioning and heating equipment less than 65,000 Btu/h apply to three-phase through-the-wall air-cooled air conditioners and heat pumps with a cooling capacity no greater than 30,000 Btu/h. 73 FR 40770, 40778 (July 16, 2008). DOE does not have authority to grant exception relief from the prescriptive standard levels set by EISA 2007 for three-phase commercial through-the-wall air conditioners and heat pumps, nor can it provide a waiver from the test procedure as a means of avoiding this statutory requirement.

2. Three-Phase, Small-Duct, High-Velocity Air-Cooled Air Conditioners and Heat Pumps

ASHRAE Standard 90.1-2007 identifies efficiency levels for three-phase small-duct, high-velocity (SDHV) air-cooled air conditioners and heat pumps, both single-package and split systems, with a cooling capacity less than 65,000 Btu/h.

10

The efficiency levels specified by ASHRAE Standard 90.1-2007 include a SEER of 10.0 for cooling mode and a HSPF of 6.8 for

equipment. ASHRAE aligned these efficiency levels and the corresponding effective dates with the efficiency levels established in EPCA for single-phase residential versions of the same products.

11

10

ASHRAE Standard 90.1-2007 includes efficiency levels for three-phase and single-phase SDHV air-cooled air conditioners and heat pumps used in commercial buildings. ASHRAE Standard 90.1-2007 also includes a footnote to these provisions, which indicates that the single-phase versions of this equipment are regulated as residential products under 10 CFR 430.32(c)(2).

11

DOE notes that the residential versions of SDHV are subject to an exception issued by DOE's Office of Hearing and Appeals (OHA). On October 14, 2004, OHA granted an exception to SpacePak and Unico, Inc., authorizing them to manufacture SDHV systems (as defined in 10 CFR 430.2) with a SEER of no less than 11.0 and a heating seasonal performance factor (HSPF) of 6.8. The exception relief will remain in effect until DOE modifies the general energy efficiency standard for central air conditioners and establishes a different standard for SDHV systems that complies with EPCA. However, this exception only applies to the residential single-phase SDHV systems and would, therefore, exclude three-phase SDHV equipment. (DOE's Office of Hearing and Appeals, Decision and Order: Applications for Exception (Oct. 14, 2004) (Available at:

http://www.oha.doe.gov/cases/ee/tee0010.pdf

.))

Just as with three-phase through-the-wall air-cooled air conditioners and heat pumps, neither EPCA nor DOE has established a specific definition for commercial “three-phase SDHV air conditioners and heat pumps.” In its regulations, DOE defines a residential “SDHV air-cooled air conditioner or heat pump” as “a heating and cooling product that contains a blower and indoor coil combination that: (1) Is designed for and produces at least 1.2 inches of external static pressure when operated at the certified air volume rate of 220-350 CFM [cubic feet per minute] per rated ton of cooling; and (2) When applied in the field, uses high-velocity room outlets generally greater than 1,000 fpm [feet per minute] which have less than 6.0 square inches of free area.” 10 CFR 430.2.

In terms of equipment construction, commercial and residential SDHV air conditioners and heat pumps utilize the same components in the same configurations to provide space cooling and heating. Commercial versions of SDHV systems are essentially the same as residential versions powered with single-phase electric power, except that they are powered using three-phase electric power.

EPCA does not separate three-phase SDHV air conditioners and heat pumps from other types of small commercial package air-conditioning and heating equipment in its definitions. Therefore, EPCA's definition of “small commercial package air-conditioning and heating equipment” would include three-phase SDHV air conditioners and heat pumps. Although EPCA does not use the term “three-phase SDHV air conditioners and heat pumps,” the three-phase versions of this equipment, regardless of cooling capacity, fall within the definition of “small commercial package air-conditioning and heating equipment.” (42 U.S.C. 6311(8)(A)-(B)) There is no language in EPCA to indicate that three-phase SDHV air conditioners and heat pumps are a separate type of covered equipment.

The Federal energy conservation standards for three-phase, commercial package air conditioners and heat pumps less than 65,000 Btu/h were established by EISA 2007 for products manufactured on or after June 19, 2008. Specifically, section 314(b)(4)(C) of EISA 2007 amended section 342(a) of EPCA (42 U.S.C. 6313(a)) by adding new provisions for three-phase commercial package air conditioners with a cooling capacity of less than 65,000 Btu/h. (42 U.S.C. 6313(a)(7)(D)) As mentioned previously, this provision in EISA 2007 mandates seasonal energy efficiency ratios for cooling mode and heating seasonal performance factors for heating mode of air-cooled three-phase electric central air conditioners and central air-conditioning heat pumps with a cooling capacity of less than 65,000 Btu/h. (42 U.S.C. 6313(a)(7)(D)) Three-phase SDHV air conditioners and heat pumps are a smaller subset of three-phase commercial package air conditioners with a cooling capacity of less than 65,000 Btu/h and were not explicitly excluded from the standards in section 314(b)(4)(C) of EISA 2007. Because EISA 2007 set such standards, and because they are more stringent than the levels contained in ASHRAE Standard 90.1-2007 for those products, DOE must continue to implement the EISA 2007 standards and will not consider amended standard levels based on ASHRAE's action.

Thus, manufacturers of three-phase SDHV equipment must follow the energy conservation standards in EISA 2007. DOE affirms that the EISA 2007 efficiency levels for three-phase small commercial package air-conditioning and heating equipment less than 65,000 Btu/h apply to three-phase SDHV air-cooled air conditioners and heat pumps with a cooling capacity less than 65,000 Btu/h. Accordingly, DOE is not conducting any further analysis on three-phase SDHV equipment. DOE notes that it does not have authority to grant exception relief from the prescriptive standard levels set by EISA 2007 for three-phase SDHV air-cooled air conditioners and heat pumps, nor can it provide a waiver from the test procedure as a means of avoiding this statutory requirement.

3. Commercial Package Air-Cooled Air Conditioners With a Cooling Capacity at or Above 760,000 Btu per Hour

EPCA specifies energy conservation standards for small (cooling capacities at or above 65,000 and less than 135,000 Btu/h), large (cooling capacities at or above 135,000 and less than 240,000 Btu/h), and very large (cooling capacities at or above 240,000 and less than 760,000 Btu/h) commercial package air-cooled air conditioners. (42 U.S.C. 6313(a)(1)-(2), (7)-(9); 10 CFR 431.97) However, there are no Federal energy conservation standards for commercial package air-cooled air conditioners with a cooling capacity at or above 760,000 Btu/h. In contrast, ASHRAE Standard 90.1-2007 sets the energy efficiency levels for commercial package air-cooled air conditioners with a cooling capacity at or above 760,000 Btu/h at 9.7 EER for equipment with electric resistance heating, and 9.5 EER for equipment with any other type of heating or without heating. The efficiency level in ASHRAE Standard 90.1-2007 applies to equipment manufactured on or after January 1, 2010.

Units with capacities at or above 760,000 Btu/h fall outside the definitions of the small, large, and very large commercial package air-cooled air conditioner equipment classes established in EPCA. (42 U.S.C. 6311(8)(A)-(D); 10 CFR 431.92) Therefore, DOE has concluded that it does not have the authority to review the efficiency level for that equipment. Accordingly, DOE is not conducting any further analysis on commercial package air-cooled air conditioners with a cooling capacity at or above 760,000 Btu/h.

4. Water-Cooled and Evaporatively-Cooled Commercial Package Air Conditioners and Heat Pumps With a Cooling Capacity at or Above 135,000 Btu/h and Less Than 240,000 Btu/h

The Federal energy conservation standard for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h requires an EER no less than 11.0 for equipment manufactured on or after October 29, 2004. 10 CFR 431.97, Table 1.

ASHRAE Standard 90.1-2007 includes the same efficiency level for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h that use electric

resistance heating (

i.e.

, an EER no less than 11.0). However, ASHRAE Standard 90.1-2007 specifies a different efficiency level for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h that use any type of heating other than electric resistance (

i.e.

, an EER no less than 10.8).

DOE reviewed a final rule published on January 12, 2001 (hereafter referred to as the January 2001 final rule) which considered ASHRAE Standard 90.1-1999 to determine the efficiency levels applicable to water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h. 66 FR 3336, 3340 (Jan. 12, 2001). DOE adopted the efficiency levels specified by ASHRAE Standard 90.1-1999 for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h in the January 2001 final rule.

Id

. at 33340. The January 2001 final rule did not establish different efficiency levels for different types of supplemental heating systems associated with this equipment.

Id

. All large water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps were subject to the same efficiency level of 11.0 EER regardless of heating type. ASHRAE Standard 90.1-1999 did establish different efficiency levels applicable to water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h for different types of supplemental heating systems.

DOE has concluded that the ASHRAE Standard 90.1-2007 efficiency levels for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h that utilize electric resistance heating or no heating would maintain the efficiency level in the current Federal energy conservation standard. ASHRAE Standard 90.1-2007 would effectively lower the efficiency levels (

i.e.

, EER) required by EPCA and allow increased energy consumption for equipment that utilize any type of heating other than electric resistance. Not only has ASHRAE Standard 90.1-2007 not increased the efficiency levels for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 135,000 Btu/h and less than 240,000 Btu/h, but it could result in backsliding for those products that utilize any type of heating other than electric resistance. Accordingly, DOE is not conducting any further analysis on water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a capacity at or above 135,000 Btu/h and less than 240,000 Btu/h.

5. Water-Cooled and Evaporatively-Cooled Commercial Package Air Conditioners and Heat Pumps With a Cooling Capacity at or Above 240,000 Btu/h and Below 760,000 Btu/h

Under EPCA, “commercial package air-conditioning and heating equipment” means “air-cooled, water-cooled, evaporatively cooled, or water source (not including ground water source) electrically operated, unitary central air conditioners and central air-conditioning heat pumps for commercial application.” (42 U.S.C. 6311(8)(A); 10 CFR 431.92) EPCA goes on to define “very large commercial package air-conditioning and heating equipment” as commercial package air-conditioning and heating equipment that is rated at or above 240,000 Btu per hour and below 760,000 Btu per hour (cooling capacity). (42 U.S.C. 6311(8)(D); 10 CFR 431.92) Although water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h fall within the definition of very large commercial package air-conditioning and heating equipment, EPCA does not specify Federal energy conservation standards for this equipment class. (EPCA set standards for air-cooled systems only, under 42 U.S.C. 6313(a)(7)-(9).) ASHRAE added this new equipment class to ASHRAE Standard 90.1-2007, setting efficiency levels at 11.0 EER for equipment with electric resistance heating or without heating, and at 10.8 EER for equipment with all other types of heating. Under EPCA, DOE must either adopt the efficiency level specified in ASHRAE Standard 90.1-2007 for this new class of equipment, or consider a more stringent level that would result in significant additional energy savings and is technologically feasible and economically justified. (42 U.S.C. 6313(a)(6))

For the July 2008 NODA, DOE reviewed the market for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps and found that manufacturers offer few models. 73 FR 40770, 40779-80 (July 16, 2008). For this study, DOE surveyed the AHRI Directory of Certified Product Performance, but did not identify any equipment on the market with a cooling capacity at or above 240,000 Btu/h.

Id.

DOE stated in the July 2008 NODA that there are no energy savings associated with this class because there is no equipment being manufactured in this class, and therefore, it is not possible to assess the potential for additional energy savings beyond the levels anticipated in ASHRAE Standard 90.1-2007.

Id.

Thus, DOE did not perform a potential energy-savings analysis on this equipment type. DOE specifically sought comment from interested parties on the market and energy savings potential for this equipment type in the July 2008 NODA. 73 FR 40770, 40780 and 40791 (July 16, 2008).

In response to the March 2008 NODA, DOE did not receive any comments on the market for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h. In absence of a market for water-cooled and evaporatively-cooled equipment in the given capacity range, DOE cannot perform an economic and energy savings analysis.

However, DOE is proposing to adopt the ASHRAE Standard 90.1-2007 efficiency levels for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h as required by EPCA. (42 U.S.C. 6313(a)(6)(A)(ii)) Even though ASHRAE specified efficiency levels for water-cooled and evaporatively-cooled commercial package air conditioners and heat pumps with a cooling capacity at or above 240,000 Btu/h, DOE is specifying an upper bound to the cooling capacity since DOE's authority under the very large commercial package air-conditioning and heating equipment definition only covers equipment with cooling capacities less than 760,000 Btu/h. (42 U.S.C. 6311(8)(D)(ii)) DOE is proposing to add subsection (d) to 10 CFR Part 431.97, which will specify the proposed standards and effective dates for this equipment. These standards would be applicable to any water-cooled and evaporatively-cooled commercial package air conditioner or heat pump with a cooling capacity at or above 240,000 Btu/h and less than 760,000 Btu/h manufactured on or after the effective date, which is three years after the effective date specified in ASHRAE

Standard 90.1-2007. (42 U.S.C. 6313(a)(6)(D)(ii)) Since ASHRAE Standard 90.1-2007 does not explicitly set an effective date for this equipment, DOE is interpreting the effective date of amended standards to be three years from the publication of ASHRAE Standard 90.1-2007 (

i.e.

, January 10, 2011).

C. Commercial Packaged Boilers

EPCA defines a “packaged boiler” as “a boiler that is shipped complete with heating equipment, mechanical draft equipment, and automatic controls; usually shipped in one or more sections.” (42 U.S.C. 6311(11)(B)) In its regulations, DOE further refined the “packaged boiler” definition to exclude a boiler that is custom designed and field constructed. 10 CFR 431.102. Additionally, if the boiler is shipped in more than one section, the sections may be produced by more than one manufacturer, and may be originated or shipped at different times and from more than one location.

Id.

In the marketplace, there are various different types of commercial packaged boilers, which can be distinguished based on the input capacity size (

i.e.

, small or large), fuel type (

i.e.

, oil or gas), output (

i.e.

, hot water or steam), and draft type (

i.e.

, natural draft or other).

However, the current Federal energy conservation standards separate commercial packaged boilers only by the type of fuel used by the boiler, creating two equipment classes: (1) Gas-fired, and (2) oil-fired. (42 U.S.C. 6313(a)(4)(C)-(D); 10 CFR 431.87) As set forth below, EPCA specified minimum Federal standards for commercial packaged boilers manufactured on or after January 1, 1994.

Id

. The minimum combustion efficiency at the maximum rated capacity of a gas-fired packaged boiler with capacity of 300,000 Btu/h (300 kBtu/h) or more must be 80 percent. (42 U.S.C. 6313(a)(4)(C); 10 CFR 431.87(a)) The minimum combustion efficiency at the maximum rated capacity of an oil-fired packaged boiler with capacity of 300,000 Btu/h or more must be 83 percent. (42 U.S.C. 6313 (a)(4)(D); 10 CFR 431.87(b))

In contrast, ASHRAE has adopted a different approach when considering commercial packaged boilers, as described below. ASHRAE Standard 90.1-2007 further divided these two equipment classes into the following ten classes:

• Small gas-fired hot water boilers;

• Small gas-fired steam, all except natural draft boilers;

• Small gas-fired steam, natural draft boilers;

• Small oil-fired hot water boilers;

• Small oil-fired steam boilers;

• Large gas-fired hot water boilers;

• Large gas-fired steam, all except natural draft boilers;

• Large gas-fired steam, natural draft boilers;

• Large oil-fired hot water boilers; and

• Large oil-fired steam boilers.

Table IV.1 shows the ten equipment classes and efficiency levels established by ASHRAE.

Table IV.1—ASHRAE Standard 90.1-2007 Energy Efficiency Levels for Commercial Packaged Boilers

Equipment type

Size category

(Input kBtu/h)

ASHRAE standard 90.1-2007

(effective 3/2/2010)*

ASHRAE standard 90.1-2007

(effective 3/2/2020)*

Small Gas-fired Hot Water

300-2,500

E

T

= 80%

E

T

= 80%

Small Gas-fired Steam All Except Natural Draft

300-2,500

E

T

= 79%

E

T

= 79%

Small Gas-fired Steam Natural Draft

300-2,500

E

T

= 77%

E

T

= 79%

Small Oil-fired Hot Water

300-2,500

E

T

= 82%

E

T

= 82%

Small Oil-fired Steam

300-2,500

E

T

= 81%

E

T

= 81%

Large Gas-fired Hot Water

>2,500

E

C

= 82%

E

C

= 82%

Large Gas-fired Steam All Except Natural Draft

>2,500

E

T

= 79%

E

T

= 79%

Large Gas-fired Steam Natural Draft

>2,500

E

T

= 77%

E

T

= 79%

Large Oil-fired Hot Water

>2,500

E

C

= 84%

E

C

= 84%

Large Oil-fired Steam

>2,500

E

T

= 81%

E

T

= 81%

*E

C

= combustion efficiency; E

T

= thermal efficiency.

Of particular relevance here, ASHRAE changed the metric for determining energy efficiency for five equipment classes of small commercial packaged boilers and three equipment classes of large commercial packaged boilers in ASHRAE Standard 90.1-2007. Whereas the Federal energy conservation standards for these eight equipment classes are expressed in terms of combustion efficiency (42 U.S.C. 6313(a)(4)), the efficiency levels in ASHRAE Standard 90.1-2007 are expressed in terms of thermal efficiency. ASHRAE initially attempted to transition small commercial boilers from an energy conservation standard using the combustion efficiency metric to a standard using the thermal efficiency metric the last time the efficiency levels for commercial packaged boilers in ASHRAE Standard 90.1 were revised, in 1999 (

i.e.

, ASHRAE Standard 90.1-1999). However, DOE was unable to accept those efficiency levels due to EPCA's anti-backsliding clause, which resulted in DOE leaving the existing standard levels in place in terms of combustion efficiency, as explained below. 72 FR 10038, 10043 (March 7, 2007). The sections below detail the following: (1) The differences between the thermal and combustion efficiency metrics; (2) the analysis done for DOE's review of small commercial packaged boiler efficiency levels in ASHRAE Standard 90.1-1999; (3) the market analysis developed for DOE's current review of the efficiency levels in ASHRAE Standard 90.1-2007; (4) the preliminary conclusions regarding the market analysis; and (5) DOE's conclusions regarding the efficiency levels contained in ASHRAE Standard 90.1-2007 for commercial packaged boilers.

1. Efficiency Metric Description (Combustion Efficiency and Thermal Efficiency)

In general, the energy efficiency of a product is a function of the relationship between the product's output of services and its energy input. A boiler's output of services is measured largely by the energy content of its output (steam or hot water). Consequently, its efficiency is understood to be the ratio between its energy output and its energy input, with the energy output being calculated as the energy input minus the energy lost in producing the output. A boiler's energy losses consist of energy that escapes through its flue (commonly referred to as “flue losses”), and of energy that escapes into the area

surrounding the boiler (commonly referred to as jacket losses). However, the combustion efficiency descriptor used for commercial packaged boilers in EPCA only accounts for flue losses, and is defined as “100 percent minus percent flue loss.” (42 U.S.C. 6313(a)(4)(C)-(D); 10 CFR 431.82) The thermal efficiency descriptor used in ASHRAE Standard 90.1-2007 accounts for jacket losses as well as flue losses, and can be considered combustion efficiency minus jacket loss. Because all boilers will have at least some jacket losses (even if small) and because thermal efficiency takes these losses into account, the thermal efficiency for a particular boiler, as measured under the same set of conditions, must necessarily be lower than its combustion efficiency.

While the above-described relationship exists between combustion and thermal efficiencies, there is no direct mathematical correlation between these two measures of efficiency. The factors that contribute to jacket loss (

e.g.

, the boiler's design and materials) have little or no direct bearing on combustion efficiency. The lack of correlation between combustion efficiency and thermal efficiency causes difficulties in comparing an energy conservation standard that is based on thermal efficiency to an energy conservation standard based on combustion efficiency. However, when DOE last evaluated the change in efficiency metric for commercial packaged boilers in response to ASHRAE Standard 90.1-1999, it developed a methodology to determine quantitatively whether backsliding could occur, as explained in section IV.C.2 below. DOE uses the methodology developed for determining backsliding in DOE's review of ASHRAE Standard 90.1-1999, along with the consideration of several other factors (described in detail in the sections below) to evaluate the appropriateness of the efficiency levels for commercial packaged boilers specified by ASHRAE Standard 90.1-2007.

2. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-1999

Prior to publishing ASHRAE Standard 90.1-2007, the last time ASHRAE revised the efficiency levels for commercial packaged boilers in ASHRAE Standard 90.1 occurred in 1999 (ASHRAE Standard 90.1-1999). DOE reviewed the efficiency levels in ASHRAE Standard 90.1-1999 for small commercial packaged boilers and issued a Notice of Data Availability (NODA) in March 2006 (here after referred to the March 2006 NODA) to present its findings. 71 FR 12634 (March 13, 2006). In the March 2006 NODA, DOE examined whether the thermal efficiencies for small gas-fired and small oil-fired commercial packaged boilers specified in ASHRAE Standard 90.1-1999 would result in a decrease in the required efficiency for particular piece of equipment compared to the Federal energy conservation standard established by EPCA.

Id.

For the 2006 analysis, DOE examined the average thermal efficiency of small commercial packaged boiler models that were minimally compliant with the Federal standard. Id. DOE defined “minimally compliant” as being within one percent of the minimum combustion efficiency set by EPCA. 71 FR 12634, 12684 (March 13, 2006). DOE specifically examined the minimally complying boilers because the anti-backsliding clause in EPCA mandates that DOE not prescribe a standard that “decreases the minimum required energy efficiency.” (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1))

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DOE determined that it would be appropriate to examine the boilers currently at the minimum required combustion efficiency established in EPCA to determine whether the potential adoption of the thermal efficiency levels in ASHRAE Standard 90.1, as Federal minimums, would allow for a decrease in the efficiency of those models.

12

At the time, a different anti-backsliding clause was in effect for commercial boilers, although it contained language identical to that quoted here in the text (previously, 42 U.S.C. 6313(a)(6)(B)(ii) prior to the enactment of EISA 2007).

DOE calculated the average thermal efficiency of the boilers classified as minimally compliant and compared it to the thermal efficiency specified in ASHRAE Standard 90.1-1999. DOE found that the thermal efficiency levels for small commercial packaged boilers specified in ASHRAE Standard 90.1-1999 were significantly lower (

i.e.

, 1.8 percent lower for small gas-fired boilers and 3.1 percent lower for small oil-fired boilers) than the average thermal efficiency of the minimally complying models on the market. 71 FR 12634, 12640 (March 13, 2006). DOE stated in the March 2006 NODA that this analysis did not establish directly that the small boiler efficiency levels in Standard 90.1-1999 were lower than those in EPCA because EPCA's combustion efficiency standards for this equipment set maximum amounts of flue losses, but do not regulate jacket losses.

Id.

Thermal efficiency is a function of both flue losses (

i.e.

, combustion efficiency) and jacket losses. 71 FR 12634, 12640 (March 13, 2006). Since these two losses can be independent of one another, in theory, a small boiler could meet or exceed EPCA's applicable combustion efficiency standard, but have sufficiently large jacket losses that cause it to have a thermal efficiency lower than the efficiency levels specified in ASHRAE Standard 90.1-1999.

Id.

Thus, DOE stated that adoption of ASHRAE Standard 90.1-1999 thermal efficiency levels would not have directly decreased the minimum combustion efficiencies required in EPCA for small boilers.

Id.

However, the adoption of the ASHRAE Standard 90.1-1999 thermal efficiency levels for small boilers would have had the effect of lowering minimum combustion efficiency levels required by EPCA.

Id.

DOE outlined its basis for rejecting the efficiency levels for small commercial boilers specified by ASHRAE Standard 90.1-1999 in the March 2006 NODA. The basis for DOE's decision was as follows:

The thermal efficiency of a small commercial boiler is a function of (1) the manufacturer's compliance with the applicable EPCA combustion efficiency standard and (2) decisions it makes independent of EPCA concerning the boiler's design, materials, and other features that affect jacket losses. Although EPCA does not regulate jacket losses, for both small gas-fired and oil-fired commercial packaged boilers with relatively low combustion efficiencies, manufacturers restricted jacket losses to levels that kept thermal efficiencies, within an average of 2.6 percentage points below their combustion efficiencies. [DOE] does not believe its adoption of Standard 90.1-1999's thermal efficiency levels for small commercial boilers would result in manufacturers' increasing the amount of jacket losses for this equipment. No reason is readily apparent as to why manufacturers would alter their current practices to make equipment that has greater jacket losses, even if mandatory thermal efficiency levels were set below the levels that equipment was currently achieving. However, setting thermal efficiency standards at levels lower than the thermal efficiencies of existing equipment could potentially result in equipment with lower combustion efficiencies. This allows for the possibility of equipment having lower efficiencies than permitted by EPCA, meaning that the current Federal minimum (required) efficiency would be decreased.

For these reasons, it appears to [DOE] that EPCA precludes it from prescribing as amended Federal energy conservation standards the ASHRAE Standard 90.1-1999 thermal efficiency levels (one for gas-fired and the other for oil-fired equipment) for small commercial packaged boilers because each would decrease the minimum required efficiency of the equipment. (42 U.S.C. 6313(a)(6)(B)(ii))

71 FR 12634; 12641 (March 13, 2006).

3. Analysis of Energy Efficiency Levels in ASHRAE Standard 90.1-2007

For its current analysis of the efficiency levels for commercial packaged boilers in ASHRAE Standard 90.1-2007, DOE based the preliminary market assessment and potential energy savings analysis performed for the July 2008 NODA solely on the information provided by the January 2008 edition of the I=B=R Ratings for Boilers, Baseboard Radiation, Finned Tube (Commercial) Radiation and Indirect-Fired Water Heaters

13

(referred to hereafter as the January 2008 I=B=R Directory).

13

The Hydronics Institute division of the Air Conditioning, Heating, and Refrigerating Institute, I=B=R Ratings for Boilers, Baseboard Radiation, Finned Tube (Commercial) Radiation, and Indirect-Fired Water Heaters (Jan. 2008). Available at:

http://www.gamanet.org/gama/inforesources.nsf/vAttachmentLaunch/E9E5FC7199EBB1BE85256FA100838435/$FILE/01-08_CBR.pdf.

Regarding the preliminary analysis performed in the July 2008 NODA, AHRI stated its belief that the January 2008 I=B=R Directory is incomplete because participation in the certification program and listing in the directory is voluntary and some manufacturers do not participate. (AHRI, No. 3 at p.3) Burnham Hydronics made a similar assertion, pointing out that Bryan Steam's (another Burnham Holdings subsidiary) boilers are not listed in the January 2008 I=B=R Directory (Burnham Hydronics, No. FDMS DRAFT 0003 at pp. 1-2).

In response to these comments and in an effort to enhance its analysis, DOE made further efforts to identify commercial boiler manufacturers along with commercial boiler equipment produced by these manufacturers that are not included in the January 2008 I=B=R Directory. DOE examined the Canadian Standards Association-International (CSA-International) certified product listings and the South Coast Air Quality Management District (SCAQMD) list of certified boiler equipment. For the CSA-International product listings, DOE only identified those manufacturers that certified their equipment to U.S. standards. From these two product listings, DOE went to each manufacturer's Web site and verified that they produced equipment that meets the definition of commercial packaged boilers. From this review, DOE identified 16 additional commercial boiler manufacturers, as listed in section V.B.3.b. DOE also identified manufacturers with other model offerings not included in the January 2008 I=B=R Directory. When DOE found equipment that fit the definition of “commercial packaged boiler” and found efficiency ratings reported for that equipment in manufacturer literature, DOE included the equipment in its database of commercial boiler equipment used for this analysis (hereafter referred to as DOE's commercial boiler database).

However, for today's analysis of commercial packaged boilers, DOE did not use all of the models in the January 2008 I=B=R Directory or in its own database. DOE filtered out any boiler models that did not contain all of the information needed for DOE's analysis or that appeared to have erroneous efficiency ratings before analyzing commercial packaged boiler data for its market analysis. DOE divided the boilers into the equipment classes in which they would be classified to apply ASHRAE Standard 90.1-2007. Then, for the eight equipment classes where ASHRAE Standard 90.1-2007 specifies an efficiency level in thermal efficiency, DOE filtered out boilers that did not contain a thermal efficiency rating. DOE did not filter out models without a thermal efficiency rating for the two equipment classes where ASHRAE Standard 90.1-2007 specifies an efficiency level in combustion efficiency. Next, for all equipment classes, DOE eliminated any boilers where both thermal and combustion efficiency were provided, but the thermal efficiency was higher than the combustion efficiency. DOE eliminated those boilers because it is physically impossible for a boiler to have a thermal efficiency that is higher than its combustion efficiency, which led DOE to conclude that the efficiency ratings for those boilers may be inaccurate.

14

See chapter 2 of the NOPR Technical Support Document (TSD)

15

for other market data regarding DOE's commercial packaged boiler database of equipment.

14

These anomalous ratings are likely due to Hydronics Institute's (HI) de-rating procedures, manufacturers' interpolation of results, varying test chambers and instrument calibration among manufacturers, or submittal of erroneous ratings.

15

Available at:

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_meeting.html.

To review the commercial packaged boiler efficiency levels specified in ASHRAE Standard 90.1-2007, DOE first developed a quantitative analysis similar to that conducted for the March 2006 NODA for the commercial boiler equipment classes specified in ASHRAE Standard 90.1-2007. DOE analyzed the available market data to estimate the percentage of the market held by each equipment class. DOE also examined the percentage of models available on the market below the efficiency levels in ASHRAE Standard 90.1-2007, the average efficiency of models currently available on the market, and the range of efficiencies currently on the market for each equipment class. In addition, for each equipment class with an efficiency metric change, DOE separated out the models that minimally comply with the existing EPCA standard levels (

i.e.

, models with 80 ≤ E

C

< 81 for gas-fired boilers and 83 ≤ E

C

< 84 for oil-fired boilers), and then calculated the average thermal efficiency of those models for each equipment class based on the thermal efficiencies in DOE's database of market data. Table IV.2 shows the results of DOE's quantitative market analysis for the eight equipment classes where ASHRAE Standard 90.1-2007 specifies a thermal efficiency level, as well as for the two equipment classes where ASHRAE Standard 90.1-2007 specifies a combustion efficiency level.

Table IV.2—Results of DOE's Commercial Packaged Boiler Quantitative Market Analysis *

Equipment class

Market share**

Current federal energy

conservation standard

ASHRAE standard 90.1-2007 efficiency level

Average

thermal

efficiency of minimally

complying

boilers

Range of

thermal

efficiencies of minimally

complying

boilers

Percentage of market below ASHRAE standard 90.1-2007 efficiency level

Average

efficiency of equipment class

Small Gas-fired Hot Water

24.2%

80% E

C

80% E

T

78.3% E

T

77.0%-80.0%

8.9%

84.9% E

T

Small Gas-fired Steam All Except Natural Draft

8.2%

80% E

C

79% E

T

79.6% E

T

79.3%-79.9%

9.0%

80.5% E

T

Small Gas-fired Steam Natural Draft

12.6%

80% E

C

77% E

T

(2010)

79% E

T

(2020)

76.7% E

T

75.4%-78.6%

26.5% (2010)

77.6% (2020)

77.4% E

T

Small Oil-fired Hot Water

6.8%

83% E

C

82% E

T

80.7% E

T

79.2%-81.8%

29.3%

83.8% E

T

Small Oil-fired Steam

11.4%

83% E

C

81% E

T

81.6% E

T

79.7%-83.6%

17.5%

82.2% E

T

Large Gas-fired Hot Water

3.9%

80% E

C

82% E

C

17.0%

83.6% E

C

Large Gas-fired Steam All Except Natural Draft

7.1%

80% E

C

79% E

T

79.4% E

T

78.8%-79.9%

17.7%

80.6% E

T

Large Gas-fired Steam Natural Draft

9.1%

80% E

C

77% E

T

(2010)

79% E

T

(2020)

78.1% E

T

75.4%-79.4%

3.3% (2010)

57.7% (2020)

78.9% E

T

Large Oil-fired Hot Water

1.9%

83% E

C

84% E

C

0%

86.5% E

C

Large Oil-fired Steam

15.0%

83% E

C

81% E

T

81.9% E

T

81.1%-83.5%

0%

82.8% E

T

* E

C

is combustion efficiency and E

T

is thermal efficiency.

** DOE calculated the percentage of boilers in each equipment class based on the number of models it analyzed for that equipment class divided by the total number of models it analyzed in all equipment classes. These totals were taken after all filters and modifications to DOE's commercial packaged boiler database, described in section 3, were applied.

4. Preliminary Conclusions From Market Analysis for Commercial Packaged Boilers

Based solely on the quantitative analysis, DOE found that the average thermal efficiency of the minimally compliant equipment was higher than the efficiency level specified by ASHRAE Standard 90.1-2007 for five of the commercial packaged boiler equipment classes, as shown in Table IV.2. This indicates that it would be theoretically possible for backsliding to occur for those equipment classes. As explained below, several interested parties commented on DOE's method for determining backsliding in response to the preliminary analysis presented in the July 2008 NODA. However, when DOE also evaluated a number of other considerations (including accuracy of the thermal efficiency ratings), it tentatively concluded that backsliding is unlikely to occur for any of the classes in question. This topic is discussed in further detail below.

Burnham Hydronics stated that DOE could not use the least efficient boiler on the market as the

de facto

standard for determining whether a standard is backsliding. (Burnham Hydronics, No. FDMS DRAFT 0003 at p. 2) Burnham Hydronics asserted that “DOE's legal framework defines backsliding in terms of ‘maximum

allowable

energy use,’ not ‘maximum energy actually used by an individual product on the market at a particular moment in time.’ ” (Burnham Hydronics, No. FDMS DRAFT 0003 at p. 2) To determine that an efficiency level is backsliding, Burnham Hydronics stated that DOE must “prove that a less efficient boiler could not be built under the current [F]ederal standards [than could be built if the efficiency levels in ASHRAE Standard 90.1-2007 were adopted as Federal energy conservation standards].” (Burnham Hydronics, No. FDMS DRAFT 0003 at pp. 2)

In response, DOE does not agree with Burnham's assertion that to determine backsliding DOE must prove that a less efficient boiler could not be built under the Federal standards than could be built if the efficiency levels in ASHRAE Standard 90.1-2007 were adopted as Federal energy conservation standards. EPCA's anti-backsliding clause states, “[t]he Secretary may not prescribe any amended standard which increases the maximum allowable energy use * * * or decreases the minimum required energy efficiency of a covered product.” (42 U.S.C. 6295(o)(1); 42 U.S.C. 6316(a)) Because the Federal standard levels for commercial packaged boilers are specified in terms of an energy efficiency requirement rather than an allowable energy use requirement, DOE believes that the applicable part of EPCA's anti-backsliding clause here is the requirement that the Secretary may not prescribe any amended standard that “decreases the minimum required efficiency” of this equipment. DOE believes that to determine backsliding it must prove that the efficiency levels in ASHRAE Standard 90.1-2007 would allow for the construction of equipment with lower combustion efficiencies than the current Federal standards require, thereby decreasing the minimum required energy efficiency. Therefore, to determine backsliding, DOE examined whether the thermal efficiency levels in ASHRAE Standard 90.1-2007 would effectively result in a decrease in the required combustion efficiencies currently specified in EPCA (

i.e.

, 80 percent combustion efficiency for gas-fired equipment and 83 percent combustion efficiency for oil-fired equipment).

Further, Federal standards currently do not regulate the thermal efficiency or the jacket losses of commercial packaged boilers. Consequently, although it is not practical, a boiler could theoretically be constructed with 100 percent jacket losses under the Federal standards, resulting in an infinite amount of energy use. If DOE were to examine “the maximum allowable energy use,” as Burnham suggests, then any thermal efficiency level would not constitute backsliding because there are no existing Federal energy conservation standards regulating the jacket losses. Therefore, DOE has investigated the potential for backsliding with respect to the energy efficiency of the equipment rather than the allowable energy use (as noted above).

DOE does note, however, that models currently being manufactured with the highest jacket losses (

i.e.

, the models

with the lowest thermal efficiencies) represent the practical limit to the amount of jacket losses that occur in commercial boilers. DOE also notes that there is equipment manufactured with thermal efficiencies lower than the thermal efficiency levels specified by ASHRAE Standard 90.1-2007, which would create the need for manufacturers to discontinue or redesign certain models to meet the efficiency levels in ASHRAE Standard 90.1-2007 if those levels are adopted as Federal minimums. Because certain models manufactured under the current Federal standards would be discontinued or replaced with higher-efficiency models if the ASHRAE Standard 90.1-2007 levels were adopted as Federal minimums, DOE recognizes that the ASHRAE Standard 90.1-2007 efficiency levels represent an increase in efficiency and a decrease in energy use when compared to the EPCA levels.

AHRI stated that the criterion to determine backsliding (where a specific minimum thermal efficiency requirement is considered less stringent if it might theoretically allow a model to have a combustion efficiency lower than the current minimum combustion efficiency requirement) is overly stringent because there is no direct mathematical correlation between combustion and thermal efficiency. (AHRI, No. 3 at p. 2)

DOE considered both Burnham Hydronics' and AHRI's comments when determining whether the efficiency levels for commercial packaged boilers are in violation of EPCA's anti-backsliding clause. DOE considered the difference between the average thermal efficiency of minimally-complying models and the efficiency levels specified in ASHRAE Standard 90.1-2007. DOE used the average thermal efficiency because DOE found there was a range of thermal efficiencies that correspond to the minimally-complying models. DOE found that the difference is very small (between 0.4 and 0.9 percent) for those equipment classes where it is believed that backsliding could potentially occur. Therefore, there are several other important issues to consider in determining whether the efficiency levels specified in ASHRAE Standard 90.1-2007 are, in fact, backsliding. DOE also considered the uncertainty of the reported thermal efficiency ratings, the benefit of switching to an energy conservation standard using a thermal efficiency metric, and the overall energy savings that could result from adopting the ASHRAE Standard 90.1-2007 efficiency levels for commercial packaged boilers. Each of these considerations is discussed below.

a. Accuracy of Thermal Efficiency Ratings

The Federal energy conservation standards for commercial packaged boilers are expressed only using the combustion efficiency metric. 10 CFR 431.86. Although the industry standard incorporated by reference in the applicable DOE test procedure also contains a test for thermal efficiency, DOE's test procedures only specify that manufacturers need to conduct the combustion efficiency test for determining the energy efficiency of commercial packaged boilers.

Id.

Consequently, all manufacturers test for combustion efficiency, but only some of the manufacturers test for thermal efficiency. Of the manufacturers that report results for thermal efficiency, only some actually test for thermal efficiency, while the others estimate it. The method of estimation can vary from one manufacturer to another and is not described in manufacturer literature. The fact that a requirement to test and rate the thermal efficiency of commercial packaged boilers in accordance with an approved DOE test procedure does not exist brings into question the validity of the reported values for thermal efficiency. The reported thermal efficiency ratings are the basis for the vast majority of DOE's quantitative analysis for this equipment. Since DOE has no way of determining which thermal efficiency ratings are the result of actual testing and which are simply manufacturer estimates, DOE cannot be absolutely certain of the accuracy and validity of the thermal efficiency ratings used in its analyses. In fact, when performing an analysis of its data, DOE had to exclude nearly one-fifth of the ratings because they appeared to be erroneous.

16

However, with the exclusion of the models with erroneous ratings and the uncertainties in accuracy of the considered ratings, DOE believes that it has adequately controlled for the potential sources of error and that the 2008 I=B=R Directory and manufacturer catalogs represent the best available sources of information that could be used for the analyses that DOE must conduct in this rulemaking.

16

These boiler models list a thermal efficiency rating greater than its combustion efficiency rating, which is physically impossible. These anomalous ratings are likely due to Hydronics Institute's (HI's) de-rating procedures, manufacturers' interpolation of results, variances in test chambers and instrument calibration among manufacturers, or submittal of erroneous ratings.

As mentioned previously, AHRI stated that DOE's analysis relied too heavily on the information presented in the 2008 I=B=R Directory. AHRI stated that the directory is incomplete because participation in the certification program and listing in the directory is voluntary and some manufacturers do not participate. Because the program does not require a manufacturer to list all the models that come within the scope of the program, AHRI asserted that the commercial boiler listings are incomplete, and stated that it can be assumed manufacturers do not list their least-efficient offerings. Further, AHRI stated that due to anomalous combustion and thermal listings caused by a variety of testing issues, the values from the tests cannot be used definitively to evaluate the true relationship between combustion and thermal efficiency for a specific listing. (AHRI, No. 3 at pp. 3-4)

Burnham Hydronics also stated that the I=B=R Directory is unsuitable for use as the basis for DOE's analysis. Burnham Hydronics stated that the I=B=R Directory does not consistently represent the relationship between thermal and combustion efficiency. (Burnham Hydronics, No. FDMS DRAFT 0003 at pp. 1-2)

DOE agrees with the comments made by AHRI and Burnham Hydronics, and recognizes the inconsistent relationship between combustion and thermal efficiencies listed in the January 2008 I=B=R Directory. However, because no other widely-recognized source for commercial packaged boiler ratings exists, DOE relied on the January 2008 I=B=R Directory and manufacturers' catalogs as its primary sources for its analysis. Whenever possible, DOE checked the efficiency ratings in the January 2008 I=B=R Directory against manufacturers' literature for consistency. Also, although manufacturers are not required to test for thermal efficiency and report it to the I=B=R Directory, DOE believes the majority of the ratings in the I=B=R Directory are valid. DOE believes the I=B=R Directory, with the addition of boiler models from manufacturers that are not included from the directory, provides a good proxy of what the thermal efficiency ratings would be if all commercial boiler models were tested and rated according to the Hydronics Institute (HI) BTS-2000 test procedure for thermal efficiency (

i.e.

, the industry standard incorporated by reference in the DOE test procedure for these products).

Once DOE has determined the efficiency levels in ASHRAE Standard 90.1-2007 for commercial packaged boilers represent, on average, an increase in energy efficiency when

compared to the Federal energy conservation standards for this equipment, DOE will further consider amended energy conservation standards at the ASHRAE Standard 90.1-2007 efficiency levels as presented in section V. The limited confidence in the thermal efficiency data being reported for commercial packaged boilers and the lack of a mathematical conversion between thermal and combustion efficiency (explained in section IV.A.1) become an issue when deciding whether efficiency levels in ASHRAE Standard 90.1-2007 are comparable to Federal energy conservation standards, which would be based solely on the average thermal efficiency of minimally-complying equipment. In addition, even if all commercial packaged boilers were tested for thermal efficiency, there would be some margin of error inherent to the testing and measurement of thermal efficiency. For these reasons, DOE believes the difference between the listed thermal efficiencies of the minimally-complying models and the efficiency levels in ASHRAE Standard 90.1-2007 is within the margin of error of this analysis. (See chapter 2 of the NOPR TSD for more details about thermal efficiency of minimally-complying models.)

This identified problem would be mitigated if DOE migrates to a thermal efficiency metric, because DOE would amend its test procedure to require manufacturers to verify their equipment's thermal efficiency ratings through testing in accordance with a DOE-mandated test procedure. A Federal energy conservation standard based on thermal efficiency, rather than combustion efficiency, would also require manufacturers to rate the thermal efficiency of their equipment, thereby resolving the issue of uncertainty in the reporting of the thermal efficiency metric.

b. Benefits of the Thermal Efficiency Metric

In the March 2006 NODA, DOE stated that the thermal efficiency metric provides a preferred method for measuring the efficiency of commercial boilers because it is more inclusive and better reflects the total energy losses of the equipment, as compared to the combustion efficiency metric prescribed by EPCA. 71 FR 12634, 12641 (March 13, 2006). In addition, the thermal efficiency metric is more consistent with EPCA's definition of “energy efficiency”

17

for commercial equipment.

Id.

Interested parties agree that thermal efficiency is superior to combustion efficiency as a metric for rating boilers because it is a more complete measure of efficiency. (AHRI, No. 3 at p. 3) Although DOE preferred the thermal efficiency approach expressed in ASHRAE Standard 90.1-1999, DOE was prevented from adopting those standard levels due to the backsliding concerns discussed above. ASHRAE Standard 90.1-2007, for the reasons discussed below, has largely resolved such concerns. Not adopting the efficiency levels in ASHRAE Standard 90.1-2007 for several of the equipment classes would prevent the efficiency metric change (from combustion efficiency to thermal efficiency) that DOE has recognized in the past and continues to recognize as beneficial in the regulation of commercial packaged boilers.

17

For commercial equipment, “[t]he term `energy efficiency' means the ratio of the useful output of services from an article of industrial equipment to the energy use by such article, determined in accordance with test procedures under section 6314 of [title 42 of the United States Code].” (42 U.S.C. 6311(3))

In a written comment to DOE, AHRI stated that there are several key aspects that support rating commercial boilers using the thermal efficiency metric. These key factors include: (1) Thermal efficiency provides more useful information since it indicates the energy being put into the water; (2) in many cases the specified minimum thermal efficiency will require models to have a combustion efficiency higher than the current minimum combustion efficiency, and the current combustion efficiency requirements allow models to have significantly lower thermal efficiency values; and (3) even if the thermal efficiency is two or three points less than the corresponding combustion efficiency, it is still more stringent than a combustion efficiency standard because it focuses on energy transferred rather than energy not lost through the flue. (AHRI, No. 3 at p. 2)

DOE agrees with AHRI that the thermal efficiency metric does provide key benefits over the current combustion efficiency metric for commercial packaged boilers used in EPCA. As stated in the March 2006 NODA, the thermal efficiency metric provides a preferred method for measuring the efficiency of commercial boilers because it is more inclusive and better reflects the total energy losses in the equipment than the combustion efficiency metric prescribed by EPCA. 71 FR 12634, 12641 (March 13, 2006). In addition, because ASHRAE Standard 90.1 has switched to a thermal efficiency metric for certain commercial packaged boiler equipment classes, a one-time conversion in the DOE efficiency metric will be required at some point. Once the issue of differing efficiency metrics is resolved, DOE will again be able to make direct comparisons with future versions of ASHRAE Standard 90.1.

c. Overall Energy Savings

As a further consideration, the efficiency levels specified in ASHRAE Standard 90.1-2007, taken together, when compared to the Federal energy conservation standards, would result in increased energy savings to the Nation. Conversely, a decision by DOE not to adopt the efficiency levels in ASHRAE Standard 90.1-2007 for the equipment classes where it believes backsliding could possibly occur would result in a loss of potential energy savings by not adopting the thermal efficiency levels provided in ASHRAE Standard 90.1-2007 for those five equipment classes (See chapter 7 of the NOPR TSD for details on the potential energy savings). Although not controlling on the issue of determining backsliding, it does carry some weight in terms of how DOE acts in resolving the uncertainties associated with conversions and calculations between the two different metrics.

5. Conclusions Regarding the Efficiency Levels in ASHRAE Standard 90.1-2007 for Commercial Packaged Boilers

When considering if adopting ASHRAE Standard 90.1-2007's efficiency levels would violate EPCA's anti-backsliding provision, DOE considered the uncertainty in the reporting of the thermal efficiency metric, the benefits of rating the efficiency of commercial packaged boilers with a thermal efficiency metric, and the overall energy savings that would result from the adoption of ASHRAE Standard 90.1-2007. When viewed comprehensively, DOE has tentatively concluded that these considerations justify analyzing and proposing adoption of the efficiency levels in ASHRAE Standard 90.1-2007 as Federal energy conservation standards (see section V for a discussion of the commercial packaged boiler analysis methodology and section VI for the analytical results of the commercial packaged boiler analysis). Although the average thermal efficiency of minimally-compliant

18

models on the market is slightly higher than the levels specified in ASHRAE Standard 90.1-2007 for 5 of the 10 equipment classes, the difference

between the two values are small, which is within the margin of error of the analysis.

19

The current situation is unlike the boiler analysis conducted for the March 2006 NODA, which reviewed the commercial packaged boiler efficiency levels in ASHRAE Standard 90.1-1999 and found the differences between the ASHRAE Standard 90.1-1999 efficiency levels and the average thermal efficiency of minimally-compliant models to be relatively large (

i.e.,

significantly greater than a percentage point).

18

It is noted here that in the selection of “minimally compliant” boilers, DOE included boilers whose combustion efficiency was up to 0.9 percentage point above the EPCA minimum level.

19

DOE believes the small differences between the two efficiency metrics attributing to the margin of error could arise from a number of factors including manufacturing tolerances, testing tolerances, and equipment design differences.

Therefore, based upon this analysis of the efficiency levels in ASHRAE Standard 90.1-2007, DOE has tentatively concluded that the qualitative considerations outweigh the slight differences revealed by the quantitative analysis of the ASHRAE Standard 90.1-2007 efficiency levels for the five equipment classes at issue. In light of the foregoing, DOE has determined that the efficiency levels for all ten equipment classes identified in ASHRAE Standard 90.1-2007 represent an increase in efficiency for commercial packaged boilers as compared to the current Federal energy conservation standards. Consequently, DOE performed a market analysis, economic analysis, and energy savings analysis for all of the identified commercial packaged boiler equipment classes to consider energy conservation standards at the ASHRAE Standard 90.1-2007 efficiency levels, as well as levels more stringent than those found in ASHRAE Standard 90.1-2007, in accordance with EPCA. (42 U.S.C. 6313 (a)(6)(A)(ii)(II))

V. Methodology and Discussion of Comments for Commercial Packaged Boilers

This section addresses the analyses DOE has performed for this rulemaking with respect to commercial packaged boilers. A separate subsection addresses each analysis. DOE used a spreadsheet to calculate the life-cycle cost (LCC) and payback periods (PBPs) of potential amended energy conservation standards. DOE used another spreadsheet to provide shipments forecasts and then calculate national energy savings and net present value impacts of potential amended energy conservation standards.

This section also proposes amendments to the DOE test procedure for commercial packaged boilers to require testing in terms of thermal efficiency, consistent with the amended efficiency levels in ASHRAE Standard 90.1-2007. In addition, DOE is proposing to remove certain outdated provisions from the test procedure (

e.g.,

references to an alternate test procedure that has been phased out).

A. Test Procedures

Section 343(a) of EPCA requires the Secretary to amend the test procedures for packaged boilers to the latest version generally accepted by industry or the rating procedures developed or recognized by the Air-Conditioning and Refrigeration Institute (ARI)

20

or by ASHRAE, as referenced by ASHRAE/IES Standard 90.1, unless the Secretary determines by clear and convincing evidence that the latest version of the industry test procedure does not meet the requirements for test procedures described in paragraphs (2) and (3) of section 343(a). (42 U.S.C. 6314(a)(4)(B)) DOE published a final rule on October 21, 2004 that amended its test procedure for commercial packaged boilers to incorporate by reference the industry test procedure for commercial packaged boilers, the Hydronics Institute (HI) division of the Gas Appliance Manufacturer's Association (GAMA) Boiler Testing Standard BTS-2000, “Method to Determine the Efficiency of Commercial Space Heating Boilers” (HI BTS-2000). 69 FR 61949. This rulemaking responded to ASHRAE's action in ASHRAE Standard 90.1-1999 to revise the test procedures for certain commercial equipment, including commercial packaged boilers.

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The Air-Conditioning and Refrigeration Institute (ARI) and the Gas Appliance Manufacturers Association (GAMA) announced on December 17, 2007, that their members voted to approve the merger of the two trade associations to represent the interests of cooling, heating, and commercial refrigeration equipment manufacturers. The merged association became AHRI on January 1, 2008.

In 2007, AHRI made several changes to BTS-2000 and reaffirmed BTS-2000 (Rev06.07) as the testing standard for commercial boilers. The changes include updating the numbering of the subsections and a change to the tolerance of the inlet temperature for condensing boilers (from ±5 °F to ±10 °F). DOE compared the two versions and found that the only changes were to the inlet temperature tolerances and there were no other changes to the testing method. Furthermore, DOE believes the changes to the test tolerances do not significantly affect the measure of energy efficiency. Therefore, DOE is proposing to update the uniform test procedure for commercial packaged boilers to incorporate by reference the version of HI BTS-2000 (Rev06.07) that AHRI reaffirmed in 2007.

In the October 2004 test procedure final rule for commercial packaged boilers, DOE also incorporated by reference the American Society of Mechanical Engineers (ASME) Power Test Codes for Steam Generating Units, ASME PTC 4.1-1964, reaffirmed 1991 (including 1968 and 1969 addenda) (ASME PTC 4.1) as an alternate test method for rating the efficiency of steel commercial packaged boilers only. 69 FR 61956 (Oct. 21, 2004). DOE provided ASME PTC 4.1, with modifications, as an alternate test procedure for steel commercial packaged boilers because many manufacturers of steel boilers were unfamiliar with HI BTS-2000 and its predecessor, HI-1989, and typically tested their boilers using the ASME PTC 4.1 test procedure.

Id

at 61951. DOE designated a transition period for manufacturers to convert from using the ASME PTC 4.1 test procedure to the HI BTS-2000 test procedure.

Id

. This would allow manufacturers of steel boilers an opportunity to become familiar with HI BTS-2000 and ensure that their equipment would be able to comply with EPCA standards using that procedure.

Id

. at 61956. DOE stated that it would allow the use of ASME PTC 4.1 as an alternate test procedure for two years after the publication of the October 2004 final rule.

Id

. The transition period ended on October 23, 2006, and now all commercial boilers are required to be tested using the HI BTS-2000 test procedure. 10 CFR 431.86

Because DOE no longer accepts the ASME PTC 4.1 as a method for testing steel commercial packaged boilers, DOE is proposing to remove item (b)(2) of 10 CFR 431.85, which listed ASME PTC 4.1 as a material incorporated by reference. Further, DOE proposes to delete item (d) of 10 CFR 431.86, which describes use of ASME PTC 4.1 as an alternative test method for commercial packaged boilers. Finally, in item (c) of 10 CFR 431.86, DOE proposes to remove the sentence instructing manufacturers to follow either the provisions in (c) or (d) of that part for steel commercial packaged boilers because part (d) will be removed. Manufacturers are required to use the provisions in part (c) for all commercial packaged boilers. Eliminating the references to ASME PTC 4.1 in the CFR does not introduce any changes to the test procedure for this equipment; it simply removes obsolete references. Manufacturers are still required to test all steel boilers using the method that references the HI BTS-2000 test procedure, as they have been since October 23, 2006.

Currently, the uniform test method for the measurement of energy efficiency of commercial packaged boilers requires that only the combustion efficiency be tested and calculated in accordance with the HI BTS-2000. 10 CFR 431.86(c)(1)(ii). In this notice, DOE is proposing to adopt as Federal energy conservation standards several thermal efficiency levels described in ASHRAE Standard 90.1-2007. For this reason, DOE intends to amend the definitions in 10 CFR 431.82 to incorporate the definition of “thermal efficiency” as written in section 3.0 of the HI BTS-2000 (Rev06.07) test procedure. Thus, DOE is proposing to add the definition of “thermal efficiency” to 10 CFR 431.82 as follows: “Thermal efficiency for a commercial packaged boiler is determined using test procedures prescribed under § 431.86 and is the ratio of the heat absorbed by the water or the water and steam to the higher heating value in the fuel burned.”

In addition to adding the definition of “thermal efficiency” to its regulations, DOE is proposing to amend the definition of “combustion efficiency” to remove the statement describing it as “the efficiency descriptor for packaged boilers.” DOE is proposing this change because after the effective date of the final rule amending the energy conservation standards for commercial packaged boilers to include efficiency levels based on those specified in ASHRAE Standard 90.1-2007 (

i.e.,

March 2, 2012), combustion efficiency would no longer be the efficiency descriptor for all commercial packaged boiler equipment classes. Thus, DOE proposes to amend the definition of “combustion efficiency” in 10 CFR 431.82 to read: “Combustion efficiency for a commercial packaged boiler is determined using the test procedures prescribed under § 431.86 and equals to 100 percent minus percent flue loss (percent flue loss is based on input fuel energy).” DOE is seeking input from interested parties about its proposed definitions for “thermal efficiency” and “combustion efficiency.” This is identified as Issue 1 under “Issues on Which DOE Seeks Comment” in section VIII.E of today's NOPR.

In addition, DOE is proposing to modify 10 CFR 431.86 (Uniform test method for measurement of energy efficiency of commercial packaged boilers) to include requirements for the measurement of thermal efficiency for those commercial packaged boiler classes where the thermal efficiency metric is being proposed in today's notice. In 10 CFR 431.86(a),

Scope,

DOE is proposing to modify the scope to state that in addition to procedures for measuring combustion efficiency of commercial packaged boilers, that section also contains procedures for measuring the thermal efficiency of commercial packaged boilers. Under 10 CFR 431.86(c), “Test Method for Commercial Packaged Boilers—General,” DOE is proposing to update several items. DOE proposes to amend subparagraph (c)(1)(ii), the test setup requirements, to require manufacturers to perform the thermal efficiency test in section 5.1 (thermal efficiency test) of the HI BTS-2000 (Rev06.07) for the following eight commercial packaged boiler equipment classes, if the ASHRAE Standard 90.1-2007 efficiency levels go into effect as Federal energy conservation standards, as proposed:

• Small gas-fired hot water;

• Small gas-fired steam all except natural draft;

• Small gas-fired steam natural draft;

• Small oil-fired hot water;

• Small oil-fired steam;

• Large gas-fired steam all except natural draft;

• Large gas-fired steam, natural draft;

• Large oil-fired steam.

DOE proposes to direct manufacturers rating their commercial packaged boilers before March 2, 2012 (the effective date of a final rule for amended energy conservation standards) to use the test setup requirements in section 5.2 (Combustion Efficiency Test) of the HI BTS-2000 (Rev06.07) for all commercial packaged boiler equipment classes in accordance with the Federal energy conservation standards in 10 CFR 431.86. 69 FR 61961 (Oct. 21, 2004). DOE is proposing that manufacturers use the revised version of the test procedure (

i.e.,

HI BTS-2000 (Rev06.07) effective thirty days from the publication of the final rule in the

Federal Register

to represent their model's energy efficiency and compliance with the current Federal energy conservation standards. DOE is also proposing to revise the requirement to conduct the combustion efficiency test to specify that beginning on March 2, 2012 (the effective date if DOE were to adopt the ASHRAE Standard 90.1-2007 efficiency levels as Federal energy conservation standards) the combustion efficiency test will only be required for large gas-fired hot water and large oil-fired hot water boilers.

In 10 CFR 431.86(c)(1)(iv), “Test Conditions,” DOE proposes to add a requirement to use the test conditions from section 8.0 of HI BTS-2000 (Rev06.07) for testing the thermal efficiency, in addition to the combustion efficiency (which is already provided, along with certain exclusions). DOE proposes to update the exclusions for the combustion efficiency test conditions to exclude only section 8.6.2 to reflect the changes made to HI BTS-2000 (Rev06.07) when it was reaffirmed in 2007. In addition, DOE proposes to delete 10 CFR 431.86(c)(1)(iv)(A). DOE is proposing to eliminate 10 CFR 431.86(c)(1)(iv)(A) from the test procedure, because in the HI BTS-2000 (Rev06.07) (reaffirmed 2007), the test procedures for condensing boilers were amended to be identical to those listed in 10 CFR 431.86(c)(1)(iv)(A). Therefore, paragraph (c)(1)(iv)(A) and any provisions referring to it are no longer necessary. Eliminating this paragraph and replacing it with a reference to the applicable HI BTS-2000 (Rev06.07) section (section 8.5.2 for test conditions and section 9.1.2.1.4 for test procedures) would not introduce any changes to the test procedure because the requirements in HI BTS-2000 (Rev06.07) are now the same as the requirements that had been set forth in 10 CFR 431.86(c)(1)(iv)(A).

In 10 CFR 431.86(c)(2), “Test Measurements,” DOE is proposing to include an additional provision to measure thermal efficiency according to sections 9.1 and 10.1 of the HI BTS-2000 (Rev06.07) for the commercial packaged boiler equipment classes in cases where the Federal standard would be specified in thermal efficiency. DOE is proposing that manufacturers should continue to measure the combustion efficiency of equipment in those eight equipment classes until proposed amended energy conservation standards based on the ASHRAE Standard 90.1-2007 efficiency levels would become effective on March 2, 2012. At such time, manufacturers would be expected to begin measuring the thermal efficiency for the applicable equipment classes. Also, DOE proposes to update the instructions for measuring combustion efficiency in the Test Measurements section to specify that combustion efficiency only needs to be measured for the two equipment classes where the Federal standard will be specified in combustion efficiency (

i.e.,

large gas-fired hot water and large oil-fired hot water commercial packaged boilers) after the effective date of a final rule for amended national standards.

DOE also proposes to update the instructions for measuring combustion efficiency in 10 CFR 431.86(c)(2). DOE proposes to remove the provision in 10 CFR 431.86(c)(2) that excludes section 9.1.2.1.4 of HI-BTS 2000 and replaces it with the requirements in 10 CFR 431.86(c)(1)(iv)(A) for condensing boiler tests. DOE is proposing to allow for the use of section 9.1.2.1.4 because in HI BTS-2000 (Rev06.07), the requirements

in that section were modified to be the same as those in 10 CFR 431.86(c)(1)(iv)(A). Such modification would not introduce any substantive changes to the test procedure because the requirements in HI BTS-2000 are now the same as the requirements in 10 CFR 431.86(c)(1)(iv)(A).

Under 10 CFR 431.86(c)(2)(iii), “Test Measurements for a Boiler Capable of Supplying Either Steam or Water,” DOE is proposing to update the provision that allows manufacturers to measure and rate the combustion efficiency of these boilers only as steam boilers. DOE proposes to change that provision to require the testing and measurement of thermal efficiency in addition to combustion efficiency for any boiler capable of producing steam and hot water that is being tested only as a steam boiler for equipment manufactured on and after March 2, 2012. Prior to that date, DOE proposes to instruct manufacturers to continue testing only for combustion efficiency of those boilers being tested in steam mode only. DOE must require manufacturers to test for both the combustion and thermal efficiencies in steam mode for units capable of producing both steam and hot water because, due to the new efficiency levels specified in ASHRAE Standard 90.1-2007, the boilers would be required to meet an efficiency level using both metrics under any amended energy conservation standard based upon ASHRAE Standard 90.1-2007. In other words, DOE is proposing to allow manufacturers to test dual output boilers (

i.e.

, those capable of producing both steam and hot water) in only steam mode. However, DOE is modifying its existing provisions to require manufacturers to conduct both the combustion efficiency and the thermal efficiency test for these dual output boilers. This will ensure that a dual output boiler is meeting the thermal efficiency requirement when operated in steam mode and the combustion efficiency requirement when operated in hot water mode, because achieving compliance in steam mode is generally more challenging. Thus, a boiler that complies with the standard in steam mode would be presumed to meet the standard in hot water mode. In essence, manufacturers will be required to rate dual output boilers using both the thermal and combustion efficiency metrics. DOE points out that the only other alternative for testing dual output boilers would be for manufacturers to separately run the combustion efficiency test in hot water mode and the thermal efficiency test in steam mode on or after March 2, 2012. Because DOE believes running two independent tests on the same boiler could be burdensome and that testing only in steam mode would suffice for compliance purposes, DOE is proposing to allow manufacturers to only test in steam mode for both metrics to mitigate this additional testing burden to manufacturers.

In addition to allowing boilers capable of producing both steam and hot water to be tested only in steam mode, the test procedure at 10 CFR 431.86(c)(2)(iii) also allows boilers capable of producing steam and hot water to be tested and rated in both steam mode and hot water mode separately. DOE proposes to amend 10 CFR 431.86(c)(2)(iii) of the test procedure to specify that when testing a large gas-fired or oil-fired boiler in hot water mode on or after March 2, 2012, combustion efficiency must be tested for and rated; however, for large gas- or oil-fired boilers in steam mode or for any other boiler equipment class, the thermal efficiency must be tested and rated.

Finally, DOE proposes to amend 10 CFR 431.86(c), “Test Method for Commercial Packaged Boilers—General,” by adding a provision to calculate the thermal efficiency using the calculation procedure described in section 11.1 of HI BTS-2000. DOE proposes to note in this provision that thermal efficiency should be calculated only for the eight equipment classes of commercial packaged boilers for which DOE is proposing to adopt a Federal energy conservation standard using a thermal efficiency metric. In addition, DOE proposes to specify this should only be done on or after March 2, 2012, the anticipated effective date of the corresponding amended energy conservation standards for this equipment.

In addition, DOE proposes to modify the “Calculation of Combustion Efficiency” under 10 CFR 431.86(c)(3) to specify that on or after March 2, 2012, combustion efficiency only needs to be calculated when rating commercial packaged boiler equipment classes with a Federal energy conservation standard specified in combustion efficiency (

i.e.

, large gas-fired hot water a

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