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I. Definition of Basic Model? . 

a. DOE defined as product families with the same efficiency. 

i. What constitutes a Product Family 

ii. What constitutes the same efficiency 

b. Relative to "Built-To-Order" models 

While our process may start with a "basic model" it is seldom that we 

fabricate more than a few units that are identical. Therefore, the 

definition of "basic model" has a large impact on the implications 

associated with testing. 

c. Does the addition of unit options impact on what is considered a basic 

madel 

II. Definition of Commercial 'niche' product? 

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a. Subset of the main HVAC market 

b. Associated more with specific needs 

c. Niche defines product features 

d. A highly specialized market 

e. Sales volume? (Number of units produced) 

f. Configuration? (Horizontal or Vertical) 

g. Cooling Source? (Air- or Water-Cooled) 

h. Application? 

i. Power supply? 

j. Capacity? 

k. Standards 

The DOE indicated that they did not specify new standards for niche 

products due to the concern over viability for replacement 

applications. However, the definition as to what constitutes a "niche" 

product (page 7196) was so narrow and limiting that it fails to cover 

products impacted. From that point until this date there has not been 

any further clarification or definition for "niche" products, and in 

particular for those in the commercial segment, that have helped the 

small manufacturers. Not only are efficiency standards impacted, but 

also the associated testing. 
III. AEDM Development 

a. Availability of resources to develop AEDM 

Many small manufacturers may not have the talent or capabilities inhouse to create and maintain an AEDM. This means that an outside 

company would have to be utilized for the AEDM creation and 

maintenance. Again this is an expenditure of capital that must be 

passed along in the low volume unit pricing. 

b. Development of an AEDM is not just at the rating point 

An AEDM, as a mathematical model, requires decisions on where and 

to what extent accuracy is required for the multitude of calculations. 

Verification of these decisions must be made by testing of many units 

at various operating conditions, not just at the rating point. Factoring 

in the accuracy of test facility instrumentation compounds the effective 

development of an AEDM. This process would, for most small 

manufacturers, require the services of an independent third party test 

lab. This may involve from $5,000 to $12,000 per test of a basic 

model at only the rating point. If more than one facility is used there 

would be concerns as to how each facility would be rated in 

comparison to another one for the same product. This means that a 

small manufacturer would have to spend an enormous amount of 

capital to develop an AEDM. 

IV. Testing 

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a. Model Classes 

i. Small Commercial Package Air Conditioning and Heating 

Equipment 

ii. Large Commercial Package Air Conditioning and Heating 

Equipment 

iii. Very Large Commercial Package Air Conditioning and Heating 

Equipment 

iv. Packaged Terminal Air Conditioners (PTAC) and Heat Pumps 

(PTHP) 

b. AEDMs do not require prior DOE approval 

c. Intent: Establish modeling techniques to ensure products are correctly 

rated without unnecessarily burdening regulated entities 

d. Critically important to differentiate between residential and commercial 

products 

e. Market share for small business, versus the amount of testing, places a 

disproportionate burden on the small manufacturer. 
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f. Substantiation requires several basic models to validate the accuracy of 

an AEDM 

i. Manufacturer must retain any test records used to support use of 

the AEDM 

ii. Manufacturer should be able to demonstrate that an AEDM can be 

applied across a variety of product classes 

iii. At least one basic model from each DOE product class is to be 

tested 

Unlike residential units that have a relatively low cost, niche 

value-added units have a cost that may run into 5 figures. It is 

our strong belief that no small manufacturer of niche products 

can afford to provide the quantity of units required. It must be 

kept in mind that the models used for testing cannot be sold 

so there is no way to directly re-coup the capital for the test 

units. 

There is an impact on our ability to produce the test units 

while maintaining production for sales to support and sustain 

the small manufacturer. Dependent upon how a basic model 

gets defined and what statistical sample is required, it is very 

easy to realize that the quantity of test units could exceed 

20% to 30% of our capability for production of commercial 

units. 

The cost for the creation of test units and the costs for testing 

. would have to be factored into our unit pricing. Since these 

costs are spread out over a low volume of units, unlike 

residential or high volume, mass produced units, our pricing 

will have to be increased substantially. We have already been 

experiencing market pressures on pricing. Again, as a small 

manufacturer of niche products the financial impact is much 

greater than the larger companies. In fact, it may so onerous 

that small companies would have to abandon the business. 

g. AEDM versus Testing 

i. Test Mean must be within 3% of AEDM Mean 

The DOE proposal to have the Test Mean and the AEDM 

Mean fall within 3% may not be realistic. Motors are only 

required to have an individual tolerance of ten (10%) percent 

between the AEDM and tested values. Since motors 

constitute the majority of power consumed in a unit this does 

not support a closer tolerance for the air conditioners and the 

AEDM. 
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Variations in manufacturing, unit components, test lab 

instrumentation, test set up and testing procedures and from 

one lab to another may not hold the requested mean values 

to within tolerance. As a result more units would have to be 

tested in order to substantiate an AEDM. For a small 

manufacturer of niche products this gets very expensive. 

All manufacturers will have several component vendors 

approved for each of their basic models. This allows them to 

look at performance, cost and reliability when making the 

purchases. However, it must be noted that all the 

components will not operate at the same specific level. The 

power consumed by a motor from vendor "A" may not match 

what is consumed by vendor "8". In some systems this range 

of performance where there are a multitude of motors can 

mean the difference between passing and failing the specific 

efficiency levels. 

How will results be addressed if all the Test data is in the 3 to 

5% level? A 3% average cannot be obtained. How are the 

results to be handled if the AEDM is always conservative? 

ii. Test unit quantity 

Figure C.1 has been described as the minimum number of 

tests (5) needed to substantiate the AEDM. This is for when 

there are not a SUbstantial number of product classes. What 

defines a substantial number of product classes? 

The number of units to be tested was given as six (6) for 

commercial HVAC. 

DOE has proposed at leastfive (5) basic models be tested, 

with a minimum of one unit tested of each basic model. This 

could be hundreds of units for built-to-order products. 

In the proposal DOE has indicated that physical size and 

capacity can have a significant effect on efficiency. Any 

physical or mechanical change to one unit versus another will 

impact the efficiency. The proposal to test the smallest and 

the largest or a unit 25% smaller than the largest creates a 

burden for small manufacturers. The DOE further went on to 

indicate that the product class with the highest sales volume 

would be most representative since they are less likely to be 

highly customized or built-to-order and therefore would be 

less costly to test. To what extent does the term "highly" 

apply? For high volume manufacturer, such as residential 

units, this may be true; however, as a small manufacturer of 

niche products that are almost all customized or tailored and 
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are built-to-order this concept is not a valid or applicable 

position. 

One proposed requirement for validation of an AEDM is that a 

manufacturer is to use their highest selling basic models. The 

highest selling models for a small manufacturer can easily 

change from year to year. This means that the amount of 

testing and validation would be increased relative to the large 

manufacturers that have a much more consistent product 

sales mix. 

iii. Substantiation and Re-Substantiation 

United CoolAir is of the belief that an AEDM does not need to 

be substantiated or re-substantiated, in particular for built-toorder or custom units. 

If an AEDM has been developed correctly then no matter 

what the unit efficiency level is the results should still be valid. 

An AEDM is not time sensitive from one year to another. 

If an AEDM has been designed to be applied across different 

product classes then it should stand up for any products at 

any time. 

No pre-approval for an AEDM is required, but the DOE wants 

assurance that the AEDM is accurate across a range of 

products and product types. 

At one point it was stated that "However, DOE does not want 

to unduly burden manufacturers, adversely impact the ability 

of small business to compete, or otherwise impede the 

development and marketing of new and innovative compliant 

products for consumers to purchase." Unfortunately the 

whole context of testing and substantiation of an AEDM for a 

small manufacturer, especially of niche value added products, 

does just the opposite. 

At the end of Section "D-3" it was stated that "When a model 

used for SUbstantiation of the AEDM is discontinued or 

becomes obsolete, a manufacturer will need to replace that 

model with a new model and re-rate or re-certify as 

necessary." If a models test data was sufficient at the time an 

AEDM is substantiated then the discontinuance of that model 

or obsolescence of that model should not be an impact on the 

validity of the AEDM. This statement appears to dictate what 

a manufacturer can or must offer. 

h. DOE Validation 
i. Manufacturer must run tests on selected basic models on request 

Section "D -1" addressed the topic of how often an AEDM 

had to be validated, if at all. DOE has indicated that it wants 

to reserve the right to request the documentation supporting 

the AEDM and to test a basic model at any point. In fairness 

to all manufacturers there should be a minimum time period 

between a request for documentation and a subsequent 

request supporting the AEDM from anyone manufacturer. 

i;, Test Results 

1. Re-Substantiation 

Under section "D-2-a" it was indicated that "If a basic model is 

rated incorrectly, DOE proposes to require manufacturers to 

re-substantiate their AEDM within 30 days of being provided 

with test data by the Department." It takes a sufficiently long 

period of time to develop and create an AEDM, let alone all 

the testing that must be accomplished. Having only 30 days 

to adjust the AEDM and re-substantiate an AEDM is 

unreasonable if a unit takes up to 10 weeks to fabricate. 

2. Non-Compliant 

In section "D-2-b" the DOE may initiate an investigation that a 

basic model may not comply with the applicable standard. "If 

following enforcement testing, a model is determined to be 

non-compliant; all other models within that basic model are 

deemed non-compliant." In other sections up until now it 

appeared that a basic model was singular and that therefore 

there would be no other models within that basic model. 

Statistically verified results would mean that one divergence 

does not mean that the entire process or AEDM is invalid. 

Under the topic of non-compliance it was indicated that 

"Therefore, DOE is proposing to disallow the use of an AEDM 

following multiple instances of non-compliance and/or if there 

is evidence that the miss-rating was willfuL" A definition or 

expectation of "multiple instances" should be stated or 

clarified for consistency in application. 

V. Impact on Small Business 

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a. Which small business will be impacted? 

i. Diversity of small business affected 

ii. Size of small business relative to the HVAC industry 

iii. Quantity of small business impacted 
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b. What economic data was obtained? 

i. Source of the data 

ii. How was cost impact determined 

c. What are the economic implications and impacts? 

i. What rationale was used 

ii. Is the cost data significant relative to small business 

d. Regulatory Flexibility Act 

Section 111- B. Review Under the Regulatory Flexibility Act indicates 

that "DOE reviewed the AEDM and ARM requirements being 

proposed under the provisions of the Regulatory Flexibility Act and the 

procedures and policies published on February 19, 2003. As 

discussed in more detail below, DOE found that because the 

provisions of this rule will not result in increased testing and/or 

reporting burden for manufacturers already eligible to use an AEDM 

and will extend AEDM use to a number of manufacturers, thus 

reducing their testing burden, manufacturers will not experience 

increased financial burden as a result of this rule." As a small 

manufacturer of niche value added built-to-order products this 

proposed testing and the associated AEDM requirements will place a 

substantial burden on the company. 

They went on to further communicate that "Today's proposal, which 

represents voluntary methods for certifying compliance in lieu of 

conducting actual physical testing, would not increase the testing or 

reporting burden of manufacturers ... " These proposals will not only 

increase the testing and reporting, but will impose other financial and 

operational burdens on the small manufacturers. . 

At the conclusion of section B they indicated "For the reasons 

enumerated above, DOE is certifying that the proposed rule, if 

promulgated, would not have a significant impact on a substantial 

number of small entities." It is the belief of United CoolAir that the 

proposed rules will have a significant impact on all small entities. 

United CoolAir would request that a statement of factual basis be 

provided. 

e. What portion of the intent of the regulations does small business have on 

the industry as a whole? 

f. What, if any, alternatives were considered for the proposed rule to 

minimize the economic impact on small entities? 

g. Evolution of Requirements 

On the surface it appears that requirements for commercial HVAC 

equipment were developed or evolved from the earlier residential 
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programs. For residential type products and producers of high 

volume commercial products there is some degree of similarity. 

However, for a small manufacturer of "niche" or custom commercial 

units this does not necessarily follow. Statistical sampling and test 

burdens on manufacturers place the small manufacturers at a 

competitive disadvantage in the market place. 

h. Testing Practices 

In the Federal Register / Vol. 64, No. 238/ Monday, December 13, 

1999 Page 69607 it was indicated that 'The Department believes that 

any significant economic impact will fall only on those firms which do 

not now routinely test their products. The Department further believes 

that testing is a widely accepted practice and that companies that do 

not test are rare and do not represent a substantial number of small 

entities." It is one thing to have a belief and another to be able to 

support that belief. Yes, testing for performance and efficiency is a 

widely accepted practice in the HVAC industry. However, it is done 

by the larger manufacturers and those companies that make high 

volumes for any particular model. It is felt that most small companies 

do not test due to the costs and limited resources associated with the 

testing as well as the type of products being produced. Therefore, 

"".companies that do not test are rare and do not represent a 

substantial number of small entities." is not a valid conclusion or 

belief. That belief or presumption seems to have been carried 

forward to this day and continues to have a negative impact on small 

business. 

i. Disproportionate Burden 

i. Large and High Volume Producers 

On page 36387 of the Federal Register / Vol. 67, No. 100/ 

Thursday, May 23, 2002 the DOE had broached the subject of 

financial burdens associated with the new standards. At this 

point it was noted that larger "volume" manufacturers will 

benefit disproportionately versus the value-added systems (i.e. 

smaller manufacturers). 

ii. Niche Product Manufacturers 

The Department and the Department of Justice both indicated 

in the Federal Register / Vol. 67, No.1 00/ Thursday, May 23, 

2002, Pg. 36388 that small manufacturers would be 

disproportionately impacted by the efficiency standard. In 

particular those companies involved with space constrained 

type products. It would only follow that the associated testing 

would also constitute a hardship. The Department indicated 
that manufacturers of niche products would have more of a 

detrimental effect. 

VI. Conclusions 

1. The definition of "basic model" and in particular niche products are critical 

to small manufacturers. 

2. There is a substantial increase in the administration and processing of 

data for a small company. 

3. Small businesses do not have the resources available to support all the 

requirements for the creation and substantiation of an AEDM. 

4. Small entities have the highest cost to comply with the regulations. This 

cost may eclipse their ability to remain a viable company. 

5. The amount of testing required is somewhat unclear. However, it is clear 

that the amount of testing anticipated will incur a substantial financial 

burden on small manufacturers. 

6. The number of test units required for United CoolAir could be more than 

30% of our annual production. In addition to the financial impact this may 

not provide us with enough capacity to fill orders for sales. 

7. Pricing for our products will have to grow substantially in order to try and 

re-coup the expenses incurred for testing and substantiation of an AEDM. 

The higher pricing will render our units not acceptable in the market place. 

491 E. Princess Street· York, PA 17403 • 717-843-4311 • Fax: 717-854-4462 • www.unitedcooJair.com 

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