1

- i CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUM ENT

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- 1

1.2 OVERVIEW OF STANDARD S FOR BOILERS

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1.3 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS

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1.4 STRUCTURE OF THE DOC UMENT

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LIST OF TABLES

Table 1.3.1 Analyses Under the Process Rule

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- 41-1 CHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUM ENT

This document is a stand

- alone report that provides the technical analyses and results supporting the information presented in the notice of data availability (NO DA ) for residential

boilers . This document reports on the activities and analyses conducted in the period preceding the notice of proposed rulemaking (NOPR) of this rulemaking.

1.2 OVERVIEW OF STANDARD S FOR BOILERS

The U.S. Department of Energy ( DOE ) is initiating a rulemaking to consider amending

the e nergy conservation standards for residential boi lers , as required under the Energy Policy and

Conservation Act

.

Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94

- 163 (42 U.S.C. 6291

- 6309, as codified), sets forth a variety of provisions designed to improve energy efficiency and established the Energy Conservation Program for Consumer Products

Other Than Automobiles, a program covering most major household appliances and certain

indust rial and commercial equipment. The National Appliance Energy Conservation Act of 1987 (NAECA), Pub. L. 100

- 12, amended EPCA to establish energy conservation standards fo r residential furnaces and boilers, as well as requirements to conduct two cycles of rulemaking to determine whether these standards should be amended. (42 U.S.C. 6295(f))

On November 19, 2007, DOE published a final rule revising the energy conservatio n standards for furnaces and boilers, which addressed the first required review of minimum standards for boilers under 42 U.S.C. 6295(f)(4)(B). 72 FR 65136. O n December 19, 2007, the Energy Independence and Security Act of 2007 (EISA 2007), Pub. L. No. 1 10

- 140, was signed into law, which further revised the energy conservation standards for residential boilers. More specifically, EISA 2007 revised the minimum AFUE requirements for residential boilers and set several design requirements for each product c lass (42 U.S.C. 6295(f)(3)). EISA 2007 required compliance with the amended energy conservation standards for residential boilers beginning on September 1, 2012.

On July 28 , 2008, DOE published a final rule technical amendment to the 2007 furnaces

and boilers final rule to codify the energy conservation standard levels, the design requirements, and compliance dates for residential boilers outlined EISA 2007. 73 FR 43611. For gas

- fired hot water boilers, oil

- fired hot water boilers, and electric hot wa ter boilers, EISA 2007 requires that residential boilers manufactured after September 2012 have an automatic means for adjusting water temperature. 10 CFR 430.32(e)(2)(ii)

- (iv). The automatic means for adjusting water temperature must automatically adjus t the water temperature of the water supplied by the1-2 boiler to ensure that an incremental change in the inferred heat load produces a corresponding incremental change in the temperature of the water supplied. EISA 2007 also disallows the use

of constant

- b urning pilot lights in gas

- fired hot water boilers and gas

- fired steam boilers.

1.3 PROCESS FOR SETTING ENERGY CON S ERVATION STANDARDS

Under EPCA, when DOE is studying new or amended standards, it must consider, to the greatest extent practicable, the followin g seven factors (42 U.S.C. 6295 (o)(2)(B)(i)):

1) the economic impact of the standard on the manufacturers and consumers of the affected products;

2) the savings in operating costs throughout the estimated average life of the product compared to any increases in the initial cost or maintenance expense;

3) the total projected amount of energy savings likely to result directly from the imposition

of the st andard;

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 th e imposition of the standard;

6) the need for national energy conservation; and

7) other factors the Secretary considers relevant.

Other statutory requirements are set forth in 42 U.S.C. 6295 (o)(1)

– (2)(A), (2)(B)(ii)

– (iii), and (3)

– (4) and 42 U.S.C. 6316(e ).

DOE considers interested party participation to be a very important part of the process for setting energy conservation standards. Through formal public notifications ( i.e.

, Federal Register notices) , DOE actively encourages the participation and inte raction of all interested partie s during the comment period in each stage of the rulemaking. Beginning with the f ramework

d ocument and during subsequent comment periods, interactions among interested partie s provide

a balanced discussion of the information that is required for the standards rulemaking.

B efore DOE determines whether or not to adopt a proposed energy conservation standard, it must first solicit comments on the proposed standard. (42 U.S.C. 6313(a)(6)(B)(i)) Any new or amended standard must be designed to achieve significant additional conservation of energy and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)) To1-3 determine whether economic justification exists, DOE must review comments on the proposal

and dete rmine that the benefits of the proposed standard exceed its burdens to the greatest extent practicable, weighing the seven factors listed above. (42 U.S.C. 6295 (o)(2)(B)(i))

After the publication of the framework document, th is energy conservation stand ards rulemaking process will involve three additional, formal public notices, which DOE publishes in

the Federal Register . The first of the rulemaking notices is a Notice of Data Availability ( NO DA ) , which is designed to publicly vet the models and tools u sed in the rulemaking and to facilitate public participation before the Notice of Proposed Rule ( NOPR ) stage. The second notice is the NOPR, which presents a discussion of : (1) c omments received in response to the

NO DA analyses ; (2) analyses of the impacts of potential amended energy conservation standards on consumers, manufacturers, and the Nation; (3) DOE’s weighting of these impacts of amended energy conservation standards; and (4) the proposed energy conservation standards for each product. The third n otice is the final rule, which presents a discussion of : (1) the comments received in response to the NOPR; (2) the revised analyses; (3) DOE’s weighting of these impacts; (4) the amended energy conservation standards DOE is adopting for each product; and (5) the effective dates of the amended energy conservation standards.

On February 11, 2013 , DOE published a notice of public meeting and availability of the

framework document. 78 FR 9631

. The framework document, Rulemaking Framework

Document for Residential Boilers , describes the procedural and analytical approaches DOE anticipated using to evaluate the establishment of amended energy conservation standards for these products. This document is available at: http://www.regulations.gov/#!documentDetail;D=EERE

- 2012

- BT

- STD

- 0047

- 0001

.

Subsequently, DOE held a public meeting on March 13

, 2013 (“ March 2013 public meeting”) to discuss procedural and analytical approaches to the rulemaking. In addition, DOE used the public meeting to inform and facilitate involvement of interested parties in the rulemaking process. The analytical framework presented at the public meeting described the different analyse s, such as the engineering analysis and the consumer economic analyses ( i.e.

, the life

- cycle cost (LCC) and payback period (PBB) analyses), the methods proposed for conducting them, and the relationships among the various analyses.1-4 Table 1.3.1 Analyses Under the Proc ess Rule

NODA NOPR Final Rule

Market and technology assessment Revised analyses Revised NOPR analyses

Screening analysis Life

- cycle cost sub

- group analysis

Engineering analysis Manufacturer impact analysis

Energy use determination Utility impact analysis

Markups for equipment price

determination Emissions analysis

Life

- cycle cost and payback period analysis Employment impact analysis

Shipments analysis Regulatory impact analysis

National impact analysis

During the March 13 public meeting, interested parties commented about issues relating

to some of the analyses listed in Table 1.3.1 . Comments from interested parties submitted during

the fr amework document comment period elaborated on the issues raised during the public meeting. DOE address ed these issues during its analyses and summarized the comments and DOE’s responses in chapter 2.

As part of the information gathering and sharing proce ss, DOE organized and held

interviews with manufacturers of the residential boilers considered in this rulemaking as part of the engineering analysis. DOE selected companies that represented production of all types of products, ranging from small to large manufacturers, and included the Air

- Conditioning, Heating and Refrigeration Institute (AHRI) member companies. DOE had four objectives for these interviews: (1) solicit manufacturer feedback on the draft inputs to the engineering analysis; (2)

solicit init ial feedback on topics related to the manufacturer impact analysis performed for the

NOPR ; (3) provide an opportunity, early in the rulemaking process, to express manufacturers’ concerns to DOE; and (4) foster cooperation between manufacturers and DOE.

D OE incorporated the information gathered during the engineering interviews with manufacturers into its engineering analysis ( chapter 5). Following the publication of the analyses

and the NODA , DOE intends to hold additional meetings with manufacturers as p art of the consultative process for the manufacturer impact analysis conducted during the NOPR phase of the rulemaking.

DOE developed an LCC spreadsheet that calculates the LCC and PBP at various energy efficiency levels. DOE also developed a national im pact analysis spreadsheet that calculates the national energy savings (NES) and national net present values (NPVs) at various energy efficiency levels. This spreadsheet includes a model that projects the impacts of amended energy

conservation standards at various levels on product shipments. All of these spreadsheets are1-5 available on the DOE website for residential boilers : ( http://www1.eere.energ y.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=62 ).

1.4 STRUCTURE OF THE DOCUMENT

This document outlines the analytical approaches used in this rulemaking. This document

consists of ten chapters and seventeen appendices.

Chapter 1 Introduction: provides an overview of the appliance standards pr ogram and how it applies to this rulemaking and outlines the structure of the

document.

Chapter 2 Analytical Framework: describ es the rulemaking process and addresses

comments from interested partie s on t he issues raised during the public meeting.

Chapter 3 Market and Technology Assessment: characterizes the market for the considered products and the technologies available for increasing product efficiency.

Chapter 4 Screening Analysis: identifies all the design options that improve efficiency of the considered products and determines which technology options are viable for consideration in the engineering analysis.

Chapter 5 Engineering Analysis: discusses the methods used for developing the

relation ship between manufacturer production cost and increased product efficiency.

Chapter 6 Markups Analysis : discusses the methods used for establishing markups for converting manufacturer prices to customer product cost s

.

Chapter 7 Energy Use Analysis : dis cusses the pro cess used for generating energy

use estimates for the considered products as a function of standard

levels.

Chapter 8 Life

- Cycle Cost and Payback Period Analysis: discusses the methods used to analyze effects of standards on individual cust omers and users of

the products and compares the LCC and PBP of products with and without higher efficiency standards.

Chapter 9 Shipments Analysis: estimate s shipments of the products over the 30

- year analysis period that i s used in performing the national impact1-6 analysis (NIA) , including how shipments may vary under alternative

standard levels

.

Chapter 10 National Impact Analysis: assesse s the national energy savings, and the national net present value of total consumer c osts and savings, expected to result from specific, potential energy conservation standards

.

Appendix 6 A Detailed Data for Equipment Price Markups

Appendix 7A Building Variables

Appendix 7B Determination of Boiler Energy Use in the LCC Analysis

Appendix 7 C Weather Station D ata Mapping to RECS a nd CBECS B uildings

Appendix 7 D Reduced Set of Boiler Models and Characteristics

Appendix 8A User Instructions for Life

- Cycle Cost Analysis Spreadsheet for Boilers

Appendix 8B Uncertainty and Variability in the LCC Analysis for Boilers

Appendix 8C Energy Price Calculations for Boilers

Appendix 8D Installation Cost Determination for Boilers

Appendix 8E Maintenance and Repair Cost Determination for Boilers

Appendix 8 F Boiler Lifetime Determination

Appendix 8 G Distributions Used for Discount Rates

Appendix 8H Base

- case Efficiency Distributions

Appendix 9A Relative Price Elasticity of Demand for Appliances

Appendix 9B Historical Shipments of Residential Boilers

Appendix 10A User Instructions National Impact Analysis Spreadsheet Model

Appendix 1 0B Full Fuel Cycle Multipliers