```

[Federal Register Volume 77, Number 10 (Tuesday, January 17, 2012)]
[Proposed Rules]
[Pages 2356-2433]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-327]

[[Page 2355]]

Vol. 77

Tuesday,

No. 10

January 17, 2012

Part II

Department of Energy

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10 CFR Part 431

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

Federal Register / Vol. 77 , No. 10 / Tuesday, January 17, 2012 / 
Proposed Rules

[[Page 2356]]

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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2011-BT-STD-0029]
RIN 1904-AC47

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 announcement of public 
meeting.

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SUMMARY: The U.S. Department of Energy (DOE) is proposing to amend its 
energy conservation standards for several classes of commercial 
heating, air-conditioning, and water-heating equipment. Pursuant to the 
Energy Policy and Conservation Act of 1975 (EPCA), as amended, DOE must 
assess whether the uniform national standards for these covered 
equipment need to be updated each time the corresponding industry 
standard--the American National Standards Institute (ANSI)/American 
Society of Heating, Refrigerating, and Air-Conditioning Engineers 
(ASHRAE)/Illuminating Engineering Society of North America (IESNA) 
Standard 90.1 (ASHRAE Standard 90.1)--is amended, which most recently 
occurred on October 29, 2010. Based upon its analysis of the energy 
savings potential of amended energy conservation standards and the lack 
of clear and convincing evidence to support more-stringent standards, 
DOE is proposing to adopt the amended standards in ASHRAE Standard 90.1 
for small, large, and very large water-cooled and evaporatively-cooled 
commercial package air conditioners; variable refrigerant flow (VRF) 
water-source heat pumps less than 17,000 Btu/h; VRF water-source heat 
pumps at or greater than 135,000 Btu/h; and computer room air 
conditioners. DOE is also proposing updates to the current Federal test 
procedures to incorporate by reference the most current versions of the 
following relevant industry test procedures specified in ASHRAE 
Standard 90.1: Air-conditioning, Heating, and Refrigeration Institute 
(AHRI) 210/240 (small commercial package air conditioning and heating 
equipment); AHRI 340/360 (large and very large commercial package air 
conditioning and heating equipment); Underwriters Laboratories (UL) 727 
and ANSI Z21.47 (commercial warm-air furnaces); and ANSI Z21.10.3 
(commercial water heaters). Furthermore, DOE is proposing to adopt AHRI 
1230 for newly-created classes of variable refrigerant flow air 
conditioners and heat pumps, ASHRAE 127 for computer room air 
conditioners, and AHRI 390 for single package vertical air conditioners 
and single package vertical heat pumps. In addition, DOE is announcing 
a public meeting to receive comment on its proposal and related issues.

DATES: Meeting: DOE will hold a public meeting on February 14, 2012, 
from 9 a.m. to 4 p.m., in Washington, DC. The meeting will also be 
broadcast as a webinar. See section X, ``Public Participation,'' for 
webinar information, participant instructions, and information about 
the capabilities available to webinar participants.
    Comments: DOE will accept comments, data, and information regarding 
this notice of proposed rulemaking (NOPR) before and after the public 
meeting, but no later than April 2, 2012. For details, see section X, 
``Public Participation,'' of this NOPR.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., 
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at 
(202) 586-2945. Please note that foreign nationals visiting DOE 
Headquarters are subject to advance security screening procedures. Any 
foreign national wishing to participate in the meeting, should advise 
DOE as soon as possible by contacting Ms. Edwards at the phone number 
above to initiate the necessary procedures. Please also note that any 
person wishing to bring a laptop computer into the Forrestal Building 
will be required to obtain a property pass. Visitors should avoid 
bringing laptops, or allow an extra 45 minutes. Persons may also attend 
the public meeting via webinar. For more information, refer to section 
X, ``Public Participation,'' of this NOPR.
    Any comments submitted must identify the NOPR on Energy 
Conservation Standards and Test Procedures for ASHRAE Standard 90.1 
Products, and provide docket number EERE-2011-BT-STD-0029 and/or 
Regulatory Information Number (RIN) 1904-AC47. Comments may be 
submitted using any of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: ASHRAE90.1-2011-STD-0029@ee.doe.gov. Include docket 
number EERE-2011-BT-STD-0029 and/or RIN 1904-AC47 in the subject line 
of the message.
    3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building 
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., 
Washington, DC 20585-0121. If possible, please submit all items on a 
compact disc (CD), in which case it is not necessary to include printed 
copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD, in which case it is not necessary to 
include printed copies.
    No telefacsimilies (faxes) will be accepted. For detailed 
instructions on submitting comments and additional information on the 
rulemaking process, see section X of this document (Public 
Participation).
    Docket: The docket is available for review at www.regulations.gov, 
including Federal Register notices, public meeting attendee lists and 
transcripts, comments, and other supporting documents/materials. All 
documents in the docket are listed in the www.regulations.gov index. 
However, not all documents listed in the index may be publicly 
available, such as information that is exempt from public disclosure.
    A link to the docket web page can be found at: www.regulations.gov. 
This web page contains a link to the docket for this notice, along with 
simple instructions on how to access all documents, including public 
comments, in the docket. See section X, ``Public Participation,'' for 
further information on how to submit comments through 
www.regulations.gov.
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact Ms. Brenda Edwards at (202) 586-2945 or by email: 
Brenda.Edwards@ee.doe.gov.

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. Email: 
Mohammed.Khan@ee.doe.gov.
    Mr. Eric Stas, U.S. Department of Energy, Office of the General 
Counsel, Mailstop GC-71, 1000 Independence Avenue SW., Washington, DC 
20585-0121. Telephone: (202) 586-9507. Email: Eric.Stas@hq.doe.gov.

[[Page 2357]]

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Proposed Rule
II. Introduction
    A. Authority
    B. Background
    1. ASHRAE Standard 90.1-2010
    2. Notice of Data Availability
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 ASHRAE Standard 90.1
    C. DOE's Review of ASHRAE Equipment Independent of the ASHRAE 
Standards Process
IV. General Discussion of the Changes in ASHRAE Standard 90.1-2010 
and Determination of Scope for Further Rulemaking Activity
    A. Commercial Warm-Air Furnaces
    B. Commercial Package Air-conditioning and Heating Equipment
    1. Water-Cooled Equipment
    2. Evaporatively-Cooled Equipment
    3. Variable Refrigerant Flow Equipment
    4. Packaged Terminal Air Conditioners and Heat Pumps
    5. Small-Duct, High-Velocity, and Through-The-Wall Equipment
    6. Single-Package Vertical Air Conditioners and Single-Package 
Vertical Heat Pumps
    C. Air Conditioners and Condensing Units Serving Computer Rooms
    D. Coverage of Commercial Package Air Conditioning and Heating 
Equipment That Are Exclusively Used as Part of Industrial or 
Manufacturing Processes
    E. Test Procedures
    1. Small (h Cooling Capacity) Commercial Package Air 
Conditioners and Heating Equipment
    2. Small (>=65,000 and h Cooling Capacity), Large 
(>=135,000 and h Cooling Capacity) and Very Large 
(>=240,000 and h Cooling Capacity) Commercial Package 
Air Conditioners and Heating Equipment
    3. Commercial Oil-Fired Warm-Air Furnaces
    4. Commercial Gas-Fired Warm-Air Furnaces
    5. Commercial Water Heaters
    6. Air Conditioners and Condensing Units Serving Computer Rooms
    7. Variable Refrigerant Flow Systems
    8. Single Package Vertical Air Conditioners and Single Package 
Vertical Heat Pumps
    9. Additional Specifications for Testing of Commercial Package 
Air Conditioning and Heating Equipment, Including VRF Systems
    10. Sampling Plans for Commercial Heating, Ventilating, and Air-
Conditioning Equipment
    F. Definitional Changes
V. Methodology for VRF Water-Source Heat Pumps
    A. Definitions of ``VRF Multi-Split Air Conditioners'' and ``VRF 
Multi-Split Heat Pumps''
    B. Annual Energy Use
    C. Shipments
    D. Other Analytical Inputs
    1. Site-to-Source Conversion
    2. Product Lifetime
    3. Compliance Date and Analysis Period
VI. Methodology for Computer Room Air Conditioners
    A. Market Assessment
    1. Definitions of ``Computer Room Air Conditioners''
    2. Equipment Classes
    3. Review of Current Market for Computer Room Air Conditioners
    a. Trade Association Information
    b. Manufacturer Information
    c. Market Data
    B. Engineering Analysis
    1. Approach
    2. Representative Input Capacities for Analysis
    3. Baseline Equipment
    4. Identification of Efficiency Information and Efficiency 
Levels for Analysis
    5. Pricing Data
    6. Equipment Classes for Analysis and Extrapolation to 
Unanalyzed Equipment Classes
    7. Engineering Analysis Results
    C. Markups To Determine Equipment Price
    D. Energy Use Characterization
    E. 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. Electricity Prices
    e. Maintenance Costs
    f. Repair Costs
    g. Equipment Lifetime
    h. Discount Rate
    3. Payback Period
    F. 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
    4. National Energy Savings and Net Present Value
    G. Other Issues
    1. Compliance Date of the Proposed Amended Energy Conservation 
Standards
VII. Methodology for Emissions Analysis and Monetizing Carbon 
Dioxide and Other Emissions Impacts
    A. Emissions Analysis
    B. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
VIII. Analytical Results
    A. Efficiency Levels Analyzed
    1. Water-Cooled and Evaporatively-Cooled Products
    2. VRF Water-Source Heat Pumps
    3. Computer Room Air Conditioners
    B. Energy Savings and Economic Justification
    1. Water-Cooled and Evaporatively-Cooled Equipment
    2. VRF Water-Source Heat Pumps
    3. Computer Room Air Conditioners
    a. Economic Impacts on Commercial Customers
    b. National Impact Analysis
    C. Need of the Nation To Conserve Energy
    D. Proposed Standards
    1. Water-Cooled and Evaporatively-Cooled Equipment
    2. VRF Water-Source Heat Pumps
    3. Computer Room Air Conditioners
IX. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act of 1995
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
X. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Request To Speak and Prepared 
General Statements for Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
XI. Approval of the Office of the Secretary

I. Summary of the 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 certain types of listed 
commercial and industrial equipment (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

[[Page 2358]]

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 under the 
statutory criteria, DOE must establish such more-stringent standard not 
later than 30 months after publication of the revised ASHRAE Standard 
90.1. (42 U.S.C. 6313(a)(6)(B)) ASHRAE officially released ASHRAE 
Standard 90.1-2010 on October 29, 2010, thereby triggering DOE's above-
referenced obligations pursuant to EPCA to determine for those 
equipment with efficiency level changes beyond the current Federal 
standard, whether: (1) the amended industry standard should be adopted; 
or (2) clear and convincing evidence exists to justify more-stringent 
standard levels.
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    \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). DOE subsequently reiterated this position in a final 
rule published in the Federal Register on July 22, 2009. 74 FR 
36312, 36313.
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    Accordingly, 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 90.1-2010. 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 prohibited ``backsliding.'' For 
those equipment classes for which ASHRAE set more-stringent or new 
efficiency levels (i.e., small, large, and very large water-cooled and 
evaporatively-cooled air conditioners; variable refrigerant flow water-
source heat pumps with a cooling capacity either less than 17,000 Btu/h 
or equal to or greater than 135,000 Btu/h with and without heat 
recovery; and computer room air conditioners), where possible,\2\ DOE 
analyzed the energy savings potential of amended national energy 
conservation standards (at both the new ASHRAE Standard 90.1 efficiency 
levels and more-stringent efficiency levels). For the classes of water-
cooled and evaporatively-cooled air conditioning and heating equipment, 
as well as the VRF equipment classes, DOE determined that the potential 
for energy savings from adopting more stringent levels than the ASHRAE 
Standard 90.1 levels was not significant, and, thus, DOE is proposing 
to adopt the ASHRAE Standard 90.1 levels without further analysis. (See 
section IV.B for further details.) For computer room air conditioners, 
DOE also analyzed the economic justification of amended national energy 
conservation standards at more-stringent efficiency levels, in addition 
to the energy savings potential. DOE did not identify any equipment on 
the market for evaporatively-cooled air conditioners with a capacity 
less than 240,000 Btu/h (small and large product classes) or VRF water-
source heat pumps with a cooling capacity less than 17,000 Btu/h. As a 
result, DOE did not analyze the economic or energy savings potential of 
these amended national energy conservation standards, because there are 
currently no energy savings associated with these product classes, nor 
is there any available equipment information.
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    \2\ If DOE found there were no models available on the market 
for any equipment class, DOE did not perform an analysis of the 
energy savings potential of that equipment class.
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    In light of the above, DOE has tentatively concluded that for 
twelve classes of water-cooled and evaporatively-cooled air 
conditioners, four classes of VRF water-source heat pumps, and thirty 
classes of computer room air conditioners: (1) The revised efficiency 
levels in ASHRAE 90.1-2010 \3\ are more stringent than current national 
standards or represent new standards; and (2) their adoption as Federal 
energy conservation standards would result in energy savings where 
models exist below the revised efficiency levels. 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.
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    \3\ To obtain a copy of ASHRAE Standard 90.1-2010, visit 
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.
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    Thus, in accordance with the criteria discussed elsewhere in this 
notice, DOE is proposing to amend its existing energy conservation 
standards for twelve equipment classes of water-cooled and 
evaporatively-cooled equipment and VRF water-source heat pumps less 
than 17,000 Btu/h (with and without heat recovery), and to establish 
new energy conservation standards for VRF water-source heat pumps at or 
greater than 135,000 Btu/h (with and without heat recovery) and thirty 
classes of computer room air conditioners by adopting the efficiency 
levels specified by ASHRAE Standard 90.1-2010.
    The proposed standards for small water-cooled and evaporatively-
cooled commercial package air conditioners, VRF water-source heat pumps 
less than 17,000 Btu/h, and computer room air conditioners less than 
65,000 Btu/h would apply to equipment manufactured on or after the date 
two years after the effective date specified in ASHRAE Standard 90.1-
2010 (i.e., by June 1, 2013 for small water-cooled and evaporatively-
cooled commercial package air conditioners, and by October 29, 2012 for 
VRF water-source heat pump less than 17,000 Btu/h and computer room air 
conditioners less than 65,000 Btu/h). (42 U.S.C. 6313(a)(6)(D)(i)) The 
proposed standards for large and very large water-cooled and 
evaporatively-cooled commercial package air conditioners, VRF water-
source heat pumps equal to or greater than 135,000 Btu/h, and computer 
room air conditioners equal to or greater than 65,000 Btu/h would apply 
to such equipment manufactured on or after the date three years after 
the effective date specified in ASHRAE Standard 90.1-2010 (i.e., by 
June 1, 2014 for large and very large water-cooled and evaporatively-
cooled commercial package air conditioners, and by October 29, 2013 for 
VRF water-source heat pumps equal to or greater than 135,000 Btu/h and 
computer room air conditioners equal to or greater than 65,000 Btu/h). 
(42 U.S.C. 6313(a)(6)(D)(ii))
    In addition, when the test procedures referenced in ASHRAE Standard 
90.1 are updated, EPCA requires DOE to amend the test procedures for 
those ASHRAE equipment (which manufacturers are required to use in 
order to certify compliance with energy conservation standards mandated 
under EPCA) to be consistent with the amended industry test procedure. 
(42 U.S.C. 6314(a)(4)(B)) Specifically, these amendments would update 
the citations and incorporations by reference in

[[Page 2359]]

DOE's regulations to the most recent version of the following industry 
standards: (1) AHRI 210/240-2008 (Performance Rating of Unitary Air-
Conditioning & Air-Source Heat Pump Equipment); (2) AHRI 340/360-2007 
(Performance Rating of Unitary Commercial and Industrial Unitary Air-
Conditioning and Heat Pump Equipment); (3) UL 727-2006 (Standard for 
Safety for Oil-Fired Central Furnaces); (4) ANSI Z21.47-2006 (Standard 
for Gas-Fried Central Furnaces); and (5) ANSI Z21.10.3-2006 (Gas Water 
Heaters, Volume III, Storage Water Heaters with Input Ratings Above 
75,000 Btu Per Hour, Circulating and Instantaneous). DOE is also 
proposing to adopt three new test procedures for VRF equipment (AHRI 
1230-2010), computer room air conditioners (ASHRAE 127-2007), and 
single package vertical units (AHRI 390-2003). In addition to 
harmonizing the test procedures with the latest versions in ASHRAE 
Standard 90.1, DOE also reviewed each of these test procedures in their 
totality as part of DOE's seven-year review required by EPCA.
    DOE is also proposing to include an optional ``break-in'' provision 
in its test procedures for commercial air conditioning and heating 
equipment, in order to provide the manufacturer with the option of 
running the test unit for a set amount of time prior to testing the 
equipment. Such a provision could allow components within the unit to 
warm-up to conditions that are more characteristic of typical operation 
and more accurately reflect efficiencies achieved in the field. Lastly, 
DOE has identified a number of issues associated with its test 
procedures for which it is seeking comments from interested parties.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's proposal, as well as some of the relevant historical 
background related to the establishment of standards for water-cooled 
and evaporatively-cooled air conditioners, variable refrigerant flow 
water-source heat pump systems, and computer room air conditioners.

A. Authority

    Title III, Part C \4\ of the Energy Policy and Conservation Act of 
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6311-6317, as 
codified), added by Public Law 95-619, Title IV, Sec.  441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, which includes the commercial heating, air-conditioning, and 
water-heating equipment that is the subject of this rulemaking.\5\ In 
general, this program addresses the energy efficiency of certain types 
of commercial and industrial equipment. Relevant provisions of the Act 
specifically include 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).
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    \4\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
    \5\ All references to EPCA in this document refer to the statute 
as amended through the Energy Independence and Security Act of 2007, 
Public Law 110-140.
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    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, instantaneous 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). The Energy Independence and Security Act of 2007 (EISA 
2007) amended EPCA by adding definitions and setting minimum energy 
conservation standards for single-package vertical air conditioners 
(SPVACs) and single-package vertical heat pumps (SPVHPs). (42 U.S.C. 
6313(a)(10)(A)) The efficiency standards for SPVACs and SPVHPs 
established by EISA 2007 correspond to the levels contained in ASHRAE 
Standard 90.1-2004, which originated as addendum ``d'' to ASHRAE 
Standard 90.1-2001.
    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 publish in the Federal Register an analysis of the 
energy savings potential of amended energy efficiency standards within 
180 days of the amendment of ASHRAE Standard 90.1. (42 U.S.C. 
6313(a)(6)(A)(i)) EPCA further directs that 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)) (In addition, DOE notes that pursuant to the EISA 2007 
amendments to EPCA, under 42 U.S.C. 6313(a)(6)(C), the agency must 
periodically review its already-established energy conservation 
standards for ASHRAE products. Under this requirement, the next review 
that DOE would need to conduct must occur no later than six years from 
the issuance of a final rule establishing or amending a standard for a 
covered product.)
    EISA 2007 also amended EPCA to require that DOE review the most 
recently published ASHRAE Standard 90.1 (i.e., ASHRAE Standard 90.1-
2010) with respect to SPVACs and SPVHPs in accordance with the 
procedures established for ASHRAE equipment under 42 U.S.C. 6313(a)(6). 
(42 U.S.C. 6313(a)(10)(B)) However, DOE believes that this one-time 
requirement is separate and independent from the requirement described 
in the paragraph above for all ASHRAE products and that it requires DOE 
to evaluate potential standards higher than the ASHRAE Standard 90.1-
2010 level for single-package vertical air conditioners and heat pumps, 
even if the efficiency levels for SPVACs and SPVHPs have not changed 
since the last version of ASHRAE Standard 90.1.\6\ DOE is conducting a 
separate rulemaking to further evaluate the efficiency levels for this 
equipment class.
---------------------------------------------------------------------------

    \6\ Once DOE has completed its rulemaking obligations under 42 
U.S.C. 6313(a)(10)(B), SPVACs and SPVHPs will be treated similar to 
other ASHRAE equipment going forward.

---------------------------------------------------------------------------

[[Page 2360]]

    EPCA also requires that if a test procedure referenced in ASHRAE 
Standard 90.1 is updated, DOE must update its test procedure to be 
consistent with the amended test procedure in ASHRAE Standard 90.1, 
unless DOE determines that the amended test procedure is not reasonably 
designed to produce test results which reflect the energy efficiency, 
energy use, or estimated operating costs of the ASHRAE product during a 
representative average use cycle. In addition, DOE must determine that 
the amended test procedure is not unduly burdensome to conduct. (42 
U.S.C. 6314(a)(2) and (4))
    Additionally, EISA 2007 amended EPCA to require that at least once 
every 7 years, DOE must conduct an evaluation of the test procedures 
for all covered equipment and either amend test procedures (if the 
Secretary determines that amended test procedures would more accurately 
or fully comply with the requirements of 42 U.S.C. 6314(a)(2)-(3)) or 
publish notice in the Federal Register of any determination not to 
amend a test procedure. (42 U.S.C. 6314(a)(1)(A)) Under this 
requirement, DOE must review the test procedures for the various types 
of ASHRAE equipment not later than December 19, 2014 (i.e., 7 years 
after the enactment of EISA 2007). Thus, the final rule resulting from 
this rulemaking will satisfy the requirement to review the test 
procedures for the certain types of ASHRAE equipment included in this 
rule (i.e., those equipment for which DOE has been triggered) within 
seven years.
    On October 29, 2010, ASHRAE officially released and made public 
ASHRAE Standard 90.1-2010. This action triggered DOE's obligations 
under 42 U.S.C. 6313(a)(6), as outlined above.
    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, initial charges, or maintenance expenses of the products 
likely to result from the standard;
    (3) The total projected amount of energy savings likely to result 
directly from the standard;
    (4) Any lessening of the utility or the performance of the products 
likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy 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))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of a covered 
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe 
an amended or new standard if interested persons have established by a 
preponderance of the evidence that such standard would likely result in 
the unavailability in the United States of any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States at the time of 
the Secretary's finding. (42 U.S.C. 6295(o)(4))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing a product complying 
with an energy conservation standard level will be less than three 
times the value of the energy (and, as applicable, water) savings 
during the first year that the consumer will receive as a result of the 
standard, as calculated under the applicable test procedure. (42 U.S.C. 
6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a))
    Additionally, when a type or class of covered equipment such as 
ASHRAE equipment, has two or more subcategories, DOE often specifies 
more than one standard level. DOE generally will adopt a different 
standard level than that which applies generally to such type or class 
of products for any group of covered products that have the same 
function or intended use if DOE determines that products within such 
group: (A) Consume a different kind of energy from that consumed by 
other covered products within such type (or class); or (B) have a 
capacity or other performance-related feature which other products 
within such type (or class) do not have and which justifies a higher or 
lower standard. (42 U.S.C. 6295(q)(1); 42 U.S.C. 6316(a)) In 
determining whether a performance-related feature justifies a different 
standard for a group of products, DOE generally considers such factors 
as the utility to the consumer of the feature and other factors DOE 
deems appropriate. In a rule prescribing such a standard, DOE includes 
an explanation of the basis on which such higher or lower level was 
established. (42 U.S.C. 6295(q)(2); 6316(a)) DOE plans to follow a 
similar process in the context of today's rulemaking.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). 
Executive Order 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. To the extent permitted by law, 
agencies are required by Executive Order 13563 to: (1) Propose or adopt 
a regulation only upon a reasoned determination that its benefits 
justify its costs (recognizing that some benefits and costs are 
difficult to quantify); (2) tailor regulations to impose the least 
burden on society, consistent with obtaining regulatory objectives, 
taking into account, among other things, and to the extent practicable, 
the costs of cumulative regulations; (3) select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity); 
(4) to the extent feasible, specify performance objectives, rather than 
specifying the behavior or manner of compliance that regulated entities 
must adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from

[[Page 2361]]

technological innovation or anticipated behavioral changes. For the 
reasons stated in the preamble, DOE believes that today's NOPR is 
consistent with these principles, including the requirement that, to 
the extent permitted by law, benefits justify costs and that net 
benefits are maximized.
    Consistent with EO 13563, and the range of impacts analyzed in this 
rulemaking, the energy efficiency standard proposed herein by DOE 
achieves maximum net benefits.

B. Background

1. ASHRAE Standard 90.1-2010
    As noted above, ASHRAE released a new version of ASHRAE Standard 
90.1 on October 29, 2010. 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 90.1-2010 revised its efficiency levels for certain 
commercial equipment and revised its scope to include additional 
equipment, but for the remaining equipment, ASHRAE left in place the 
preexisting levels (i.e., the efficiency levels specified in EPCA or 
the efficiency levels in ASHRAE Standard 90.1-2007).
    Table II.1 below presents the equipment classes for which ASHRAE 
Standard 90.1-2010 efficiency levels differed from those in the 
previous version of ASHRAE Standard 90.1 (i.e., ASHRAE Standard 90.1- 
2007). Table II.1 also presents the existing Federal energy 
conservation standards and the corresponding standard levels in both 
ASHRAE Standard 90.1-2007 and ASHRAE Standard 90.1-2010 for those 
equipment classes. Section IV of this document assesses each of these 
equipment types to determine whether the amendments in ASHRAE Standard 
90.1-2010 constitute increased energy efficiency levels, as would 
necessitate further analysis of the potential energy savings from 
amended Federal energy conservation standards, the conclusions of which 
are presented in the final column of Table II.1.

 Table II.1--Federal Energy Conservation Standards and Energy Efficiency Levels in ASHRAE Standard 90.1-2007 and
                     ASHRAE Standard 90.1-2010 for Specific Types of Commercial Equipment *
----------------------------------------------------------------------------------------------------------------
                                  Energy efficiency    Energy efficiency    Federal energy
    ASHRAE equipment class**       levels in ASHRAE    levels in ASHRAE      conservation         DOE review
                                  standard 90.1-2007  standard 90.1-2010       standards          triggered?
----------------------------------------------------------------------------------------------------------------
                                          Commercial Warm-Air Furnaces
----------------------------------------------------------------------------------------------------------------
Gas-Fired Commercial Warm-Air    Ec = 80%             Et = 80%            Et = 80%            No
 furnace.                         Interrupted or       Interrupted or
                                  intermittent         intermittent
                                  ignition device,     ignition device,
                                  jacket losses not    jacket losses not
                                  exceeding 0.75% of   exceeding 0.75%
                                  input rating,        of input rating,
                                  power vent or flue   power vent or
                                  damper***            flue damper***
----------------------------------------------------------------------------------------------------------------
                     Commercial Package Air-Conditioning and Heating Equipment--Water-Cooled
----------------------------------------------------------------------------------------------------------------
Water-cooled Air Conditioner,    11.5 EER             12.1 EER (as of 6/  11.5 EER            Yes
 >=65,000 and h,                          1/11)
 Electric Resistance Heating or
 No Heating.
Water-cooled Air Conditioner,    11.3 EER             11.9 EER (as of 6/  11.3 EER            Yes
 >=65,000 and h,                          1/11)
 All Other Heating.
Water-cooled Air Conditioner,    11.0 EER             12.5 EER (as of 6/  11.0 EER            Yes
 >=135,000 and h,                         1/11)
 Electric Resistance Heating or
 No Heating.
Water-cooled Air Conditioner,    10.8 EER             12.3 EER (as of 6/  11.0 EER            Yes
 >=135,000 and h,                         1/11)
 All Other Heating.
Water-cooled Air Conditioner,    11.0 EER             12.4 EER (as of 6/  11.0 EER            Yes
 >=240,000 Btu/h, Electric                             1/11)
 Resistance Heating or No
 Heating.
Water-cooled Air Conditioner,    10.8 EER             12.2 EER (as of 6/  10.8 EER            Yes
 >=240,000 Btu/h, All Other                            1/11)
 Heating.
----------------------------------------------------------------------------------------------------------------
                 Commercial Package Air-Conditioning and Heating Equipment--Evaporatively-Cooled
----------------------------------------------------------------------------------------------------------------
Evaporatively-cooled Air         11.5 EER             12.1 EER (as of 6/  11.5 EER            Yes
 Conditioner, >=65,000 and                             1/11)
 h, Electric
 Resistance Heating or No
 Heating.
Evaporatively-cooled Air         11.3 EER             11.9 EER (as of 6/  11.3 EER            Yes
 Conditioner, >=65,000 and                             1/11)
 h, All Other
 Heating.
Evaporatively-cooled Air         11.0 EER             12.0 EER (as of 6/  11.0 EER            Yes
 Conditioner, >=135,000 and                            1/11)
 h, Electric
 Resistance Heating or No
 Heating.
Evaporatively-cooled Air         10.8 EER             11.8 EER (as of 6/  11.0 EER            Yes
 Conditioner, >=135,000 and                            1/11)
 h, All Other
 Heating.
Evaporatively-cooled Air         11.0 EER             11.9 EER (as of 6/  11.0 EER            Yes
 Conditioner, >=240,000 and                            1/11)
 h, Electric
 Resistance Heating or No
 Heating.
Evaporatively-cooled Air         10.8 EER             11.7 EER[dagger]    10.8 EER            Yes
 Conditioner, >=240,000 and                            (as of 6/1/11)
 h, All Other
 Heating.
----------------------------------------------------------------------------------------------------------------
             Commercial Package Air-Conditioning and Heating Equipment--VRF Systems[dagger][dagger]
----------------------------------------------------------------------------------------------------------------
VRF Air Conditioners, Air-       N/A                  13.0 SEER           13.0 SEER           No
 cooled, h.
VRF Air Conditioners, Air-       N/A                  11.2 EER            11.2 EER            No
 cooled, >=65,000 and h, Electric Resistance or
 No Heating.
VRF Air Conditioners, Air-       N/A                  11.0 EER            11.0 EER            No
 cooled, >=135,000 and h, Electric Resistance or
 No Heating.
VRF Air Conditioners, Air-       N/A                  10.0 EER            10.0 EER            No
 cooled, >=240,000 Btu/h,
 Electric Resistance or No
 Heating.
VRF Heat Pumps, Air-cooled,      N/A                  13.0 SEER           13.0 SEER           No
 h.                                       7.7 HSPF            7.7 HSPF

[[Page 2362]]

 
VRF Heat Pumps, Air-cooled,      N/A                  11.0 EER            11.0 EER            No
 >=65,000 and h,                         3.3 COP             3.3 COP
 without heat recovery,
 Electric Resistance or No
 Heating.
VRF Heat Pumps, Air-cooled,      N/A                  10.8 EER            11.0 EER (electric  No
 >=65,000 and h,                         3.3 COP              resistance
 with heat recovery, Electric                                              heating)
 Resistance or No Heating.                                                10.8 EER (no
                                                                           electric
                                                                           resistance
                                                                           heating)[dagger][
                                                                           dagger][dagger]
                                                                          3.3 COP
VRF Heat Pumps, Air-cooled,      N/A                  10.6 EER            10.6 EER            No
 >=135,000 and h,                        3.2 COP             3.2 COP
 without heat recovery,
 Electric Resistance or No
 Heating.
VRF Heat Pumps, Air-cooled,      N/A                  10.4 EER            10.6 EER (electric  No
 >=135,000 and h,                        3.2 COP              resistance
 with heat recovery, Electric                                              heating)
 Resistance or No Heating.                                                10.4 (no electric
                                                                           resistance
                                                                           heating)[dagger][
                                                                           dagger][dagger]
                                                                          3.2 COP
VRF Heat Pumps, Air-cooled,      N/A                  9.5 EER             9.5 EER             No
 >=240,000 Btu/h, without heat                        3.2 COP             3.2 COP
 recovery, Electric Resistance
 or No Heating.
VRF Heat Pumps, Air-cooled,      N/A                  9.3 EER             9.5 EER (electric   No
 >=240,000 Btu/h, with heat                           3.2 COP              resistance
 recovery, Electric Resistance                                             heating)
 or No Heating.                                                           9.3 EER (no
                                                                           electric
                                                                           resistance
                                                                           heating)[dagger][
                                                                           dagger][dagger]
                                                                          3.2 COP
VRF Heat Pumps, Water-source,    N/A                  12.0 EER            11.2 EER (h, without heat                          4.2 COP              Btu/h)[Dagger]     for =17,000  No
                                                                           Btu/h and =17,000 Btu/h
                                                                           Btu/h)              and h
                                                                          4.2 COP
VRF Heat Pumps, Water-source,    N/A                  11.8 EER            11.2 EER (h, with heat                             4.2 COP              Btu/h)[Dagger]     for =17,000  No
                                                                           Btu/h and =17,000 Btu/h
                                                                           Btu/h)              and h
                                                                          4.2 COP
VRF Heat Pumps, Water-source,    N/A                  12.0 EER            12.0 EER            No
 >=65,000 and h,                         4.2 COP             4.2 COP
 without heat recovery.
VRF Heat Pumps, Water-source,    N/A                  11.8 EER            12.0 EER            No
 >=65,000 and h,                         4.2 COP             4.2 COP
 with heat recovery.
VRF Heat Pumps, Water-source,    N/A                  10.0 EER            N/A                 Yes[loz][loz][loz]
 >=135,000 Btu/h, without heat                        3.9 COP
 recovery.
VRF Heat Pumps, Water-source,    N/A                  9.8 EER             N/A                 Yes[loz][loz][loz]
 >=135,000 Btu/h, with heat                           3.9 COP
 recovery.
----------------------------------------------------------------------------------------------------------------
           Commercial Package Air-Conditioning and Heating Equipment--PTACs and PTHPs[Dagger][Dagger]
----------------------------------------------------------------------------------------------------------------
Package Terminal Air             EER = 11.0           EER = 11.7          EER = 11.7          No
 Conditioner, h,                           (as of 10/8/12)
 Standard Size (New
 Construction)[Dagger][Dagger][
 Dagger].
Package Terminal Air             EER = 12.5--(0.213   EER = 13.8--(0.300  EER = 13.8--(0.300  No
 Conditioner, >=7,000 and         x Cap[loz])          x Cap[loz])         x Cap[loz])
 h, Standard Size                         (as of 10/8/12)
 (New
 Construction)[Dagger][Dagger][
 Dagger].
Package Terminal Air             EER = 9.3            EER = 9.3           EER = 9.3           No
 Conditioner, >15,000 Btu/h,
 Standard Size (New
 Construction)[Dagger][Dagger][
 Dagger].
Package Terminal Heat Pump,      EER = 10.8           EER = 11.9          EER = 11.9          No
 h, Standard Size     COP = 3.0            COP = 3.3           COP = 3.3
 (New                                                 (as of 10/8/12)
 Construction)[Dagger][Dagger][
 Dagger].
Package Terminal Heat Pump,      EER = 12.3--(0.213   EER = 14.0--(0.300  EER = 14.0--(0.300  No
 >=7,000 and h,       x Cap[loz])          x Cap[loz])         x Cap[loz])
 Standard Size (New              COP = 3.2--(0.026 x  COP = 3.7--(0.052   COP = 3.7--(0.052
 Construction)[Dagger][Dagger][   Cap[loz])            x Cap[loz])         x Cap[loz])
 Dagger].                                             (as of 10/8/12)
Package Terminal Heat Pump,      EER = 9.1            EER = 9.5           EER = 9.5           No
 >15,000 Btu/h, Standard Size    COP = 2.8            COP = 2.9           COP = 2.9
 (New
 Construction)[Dagger][Dagger][
 Dagger].
----------------------------------------------------------------------------------------------------------------
                     Commercial Package Air-Conditioning and Heating Equipment--SDHV and TTW
----------------------------------------------------------------------------------------------------------------
Through-the-Wall, Air-cooled     12.0 SEER            13.0 SEER           13.0 SEER           No
 Heat Pumps, h.     7.4 HSPF             7.4 HSPF            7.7 HSPF
Small-Duct, High-Velocity, Air-  10.0 SEER            N/A[loz][loz]       13.0 SEER           No
 cooled Heat Pumps,  6.8 HSPF                                 7.7 HSPF
 h.
----------------------------------------------------------------------------------------------------------------
                          Air Conditioners and Condensing Units Serving Computer Rooms
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled,    N/A                  2.20 SCOP           N/A                 Yes[loz][loz][loz]
 h.                                        (downflow)
                                                      2.09 SCOP (upflow)
Air conditioners, air-cooled,    N/A                  2.10 SCOP           N/A                 Yes[loz][loz][loz]
 >=65,000 and h.                          (downflow)
                                                      1.99 SCOP (upflow)
Air conditioners, air-cooled,    N/A                  1.90 SCOP           N/A                 Yes[loz][loz][loz]
 >=240,000 Btu/h.                                      (downflow)
                                                      1.79 SCOP (upflow)

[[Page 2363]]

 
Air conditioners, water-cooled,  N/A                  2.60 SCOP           N/A                 Yes[loz][loz][loz]
 h.                                        (downflow)
                                                      2.49 SCOP (upflow)
Air conditioners, water-cooled,  N/A                  2.50 SCOP           N/A                 Yes[loz][loz][loz]
 >=65,000 and h.                          (downflow)
                                                      2.39 SCOP (upflow)
Air conditioners, water-cooled,  N/A                  2.40 SCOP           N/A                 Yes[loz][loz][loz]
 >=240,000 Btu/h.                                      (downflow)
                                                      2.29 SCOP (upflow)
Air conditioners, water-cooled   N/A                  2.55 SCOP           N/A                 Yes[loz][loz][loz]
 with fluid economizer, h.                                               2.44 SCOP (upflow)
Air conditioners, water-cooled   N/A                  2.45 SCOP           N/A                 Yes[loz][loz][loz]
 with fluid economizer,                                (downflow)
 >=65,000 and h.                         2.34 SCOP (upflow)
Air conditioners, water-cooled   N/A                  2.35 SCOP           N/A                 Yes[loz][loz][loz]
 with fluid economizer,                                (downflow)
 >=240,000 Btu/h.                                     2.24 SCOP (upflow)
Air conditioners, glycol-        N/A                  2.50 SCOP           N/A                 Yes[loz][loz][loz]
 cooled, h.                                (downflow)
                                                      2.39 SCOP (upflow)
Air conditioners, glycol-        N/A                  2.15 SCOP           N/A                 Yes[loz][loz][loz]
 cooled, >=65,000 and h.                                               2.04 SCOP (upflow)
Air conditioners, glycol-        N/A                  2.10 SCOP           N/A                 Yes[loz][loz][loz]
 cooled, >=240,000 Btu/h.                              (downflow)
                                                      1.99 SCOP (upflow)
Air conditioners, glycol-cooled  N/A                  2.45 SCOP           N/A                 Yes[loz][loz][loz]
 with fluid economizer, h.                                               2.34 SCOP (upflow)
Air conditioners, glycol-cooled  N/A                  2.10 SCOP           N/A                 Yes[loz][loz][loz]
 with fluid economizer,                                (downflow)
 >=65,000 and h.                         1.99 SCOP (upflow)
Air conditioners, glycol-cooled  N/A                  2.05 SCOP           N/A                 Yes[loz][loz][loz]
 with fluid economizer,                                (downflow)
 >=240,000 Btu/h.                                     1.94 SCOP (upflow)
----------------------------------------------------------------------------------------------------------------
* ``Ec'' means combustion efficiency; ``Et'' means thermal efficiency; ``EER'' means energy efficiency ratio;
  ``SEER'' means seasonal energy efficiency ratio; ``HSPF'' means heating seasonal performance factor; ``COP''
  means coefficient of performance; ``Btu/h'' means British thermal units per hour; and ``SCOP'' means sensible
  coefficient of performance.
** ASHRAE Standard 90.1-2010 equipment classes may differ from the equipment classes defined in DOE's
  regulations, but no loss of coverage will occur (i.e., all previously covered DOE equipment classes remained
  covered equipment).
*** A vent damper is an acceptable alternative to a flue damper for those furnaces that draw combustion air from
  conditioned space.
[dagger]ASHRAE Standard 90.1-2010 specifies this efficiency level as 12.2 EER. However, as explained in section
  IV.B.2 of this NOPR, DOE believes this level was a mistake and that the correct level is 11.7 EER.
[dagger][dagger] Variable Refrigerant Flow (VRF) systems are newly defined equipment classes in ASHRAE Standard
  90.1-2010. As discussed in section IV.B.3 of this NOPR, DOE believes these systems are currently covered by
  Federal energy conservation standards for commercial package air conditioning and heating equipment.
[dagger][dagger][dagger] For these equipment classes, ASHRAE sets lower efficiency requirements for equipment
  with heat recovery systems. DOE believes systems with heat recovery and electric resistance heating would be
  required to meet the current Federal standard for equipment with electric resistance heating (i.e., the
  Federal standard level shown in the table). However, for equipment with heat recovery and no electric
  resistance heating, DOE believes heat recovery would be an ``other'' heating type allowing for a 0.2 EER
  reduction in the Federal minimum requirement.
[Dagger] The Federal energy conservation standards for this equipment class are specified differently for
  equipment with cooling capacity h. However, ASHRAE Standard 90.1-2010 does not distinguish this
  equipment class.
[Dagger][Dagger] For equipment rated according to the DOE test procedure, all EER values must be rated at
  95[ordm] F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products, and at
  85[ordm] F entering water temperature for water-cooled products. All COP values must be rated at 47[ordm] F
  outdoor dry-bulb temperature for air-cooled products, and at 70[ordm] F entering water temperature for water-
  source heat pumps.
[Dagger][Dagger][Dagger] ``Standard size'' refers to PTAC or PTHP equipment with wall sleeve dimensions >=16
  inches high, or >=42 inches wide.
[loz] ``Cap'' means cooling capacity in kBtu/h at 95[ordm] F outdoor dry-bulb temperature.
[loz][loz] ASHRAE Standard 90.1-2010 includes an efficiency level of 10.0 SEER for these products. However, as
  explained in section IV.B.5 of this NOPR, DOE believes that ASHRAE did not intend to set an efficiency level
  for these products.
[loz][loz][loz] An energy-savings analysis for this class of equipment was not conducted for the notice of data
  availability published on May 5, 2011 due to either a lack of data or because there is no equipment on the
  market that would fall into this equipment class.

2. Notice of Data Availability
    On May 5, 2011, DOE published a notice of data availability (May 
2011 NODA) in the Federal Register and requested public comment as a 
preliminary step required pursuant to EPCA when DOE considers amended 
energy conservation standards for certain types of commercial equipment 
covered by ASHRAE Standard 90.1. 76 FR 25622. Specifically, the May 
2011 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 90.1-2010; and (2) 
more-stringent efficiency levels. Id. at 25637. 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 May 2011 NODA of the 
changes found in ASHRAE Standard 90.1-2010. Id. at 25630-37. The May 
2011 NODA includes a description of DOE's evaluation of each ASHRAE 
equipment type in order for DOE to determine whether the amendments in 
ASHRAE Standard 90.1-2010 have increased efficiency levels. As an 
initial matter, DOE sought to determine which requirements for covered 
equipment in ASHRAE Standard 90.1, if any, have been revised solely to 
reflect the level of the current Federal energy conservation standard 
(where ASHRAE is merely ``catching up'' to the current national 
standard), have been revised but lowered, have been revised to include 
design requirements without changes to the efficiency level, or have 
had any other revisions made that do not increase the standard level, 
in which case, DOE is not triggered to act under 42 U.S.C. 6313(a)(6) 
for that particular product type. For those types of equipment in 
ASHRAE Standard 90.1 for which ASHRAE actually increased efficiency 
levels above the current Federal standard, DOE subjected that equipment 
to the potential energy savings analysis discussed above and presented 
the results in the May 2011 NODA for public comment. 76 FR 25622, 
25644-47 (May 5, 2011). Additionally, for single package vertical air 
conditioners and heat pumps, although the levels in ASHRAE Standard 
90.1-2010 were unchanged, DOE performed an analysis of their potential 
energy savings as required by 42 U.S.C. 6313(a)(10)(B). Lastly, DOE 
presented an initial assessment of the

[[Page 2364]]

test procedure changes included in ASHRAE Standard 90.1-2010.
    As a result of the preliminary determination of scope set forth in 
the May 2011 NODA, DOE found that there were equipment types for which 
ASHRAE increased the efficiency levels (thereby triggering further 
analysis) including: (1) Water-cooled and evaporatively-cooled air 
conditioners; (2) two classes of VRF water-source heat pumps with and 
without heat recovery; and (3) computer room air conditioners (which 
were not previously covered). 76 FR 25622, 25644-47 (May 5, 2011). DOE 
presented its methodology, data, and results for the preliminary energy 
savings analysis developed for the water-cooled and evaporatively-
cooled equipment classes in the May 2011 NODA for public comment. 76 FR 
25622, 25637-46 (May 5, 2011). For the remaining equipment classes, DOE 
requested data and information that would allow it to accurately assess 
the energy savings potential of those equipment classes.

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 May 2011 NODA, DOE 
received seven comments from manufacturers, trade associations, 
utilities, and energy efficiency advocates. As discussed above, these 
comments are available in the docket for this rulemaking and are 
available for review by following the instructions in the ADDRESSES 
section. The following section summarizes the issues raised in these 
comments, along with DOE's responses.

A. The ASHRAE Process

    In response to the preliminary determination of scope and analyses 
set forth in the May 2011 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.
    Edison Electric Institute (EEI) stated that it supported the 
efficiency levels for equipment shown in ASHRAE Standard 90.1-2010, 
because the efficiency levels were created through a consensus-based 
process, DOE's analysis shows energy savings for all ASHRAE values 
analyzed, and adopting ASHRAE values would ensure a streamlined 
approach. (EEI, No. 7 at p. 1-2) \7\ The Air-Conditioning, Heating, and 
Refrigeration Institute (AHRI) stated that AHRI and its members were 
participants in the development of ASHRAE Standard 90.1-2010, and that 
revisions to ASHRAE Standard 90.1 are developed through a consensus 
process. AHRI encouraged DOE to adopt the efficiency levels in ASHRAE 
Standard 90.1-2010 as Federal minimum efficiency standards. (AHRI, No. 
11 at p. 1, 3)
---------------------------------------------------------------------------

    \7\ ``EEI, No. 7 at p. 2'' refers to: (1) To a statement that 
was submitted by the Edison Electric Institute and is recorded 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-2011-BT-STD-0029, as comment number 7; and (2) a passage 
that appears on pages 1-2 of that statement.
---------------------------------------------------------------------------

    DOE maintains its position expressed in the March 20, 2009 NOPR, as 
restated below. While DOE recognizes that efficiency levels in ASHRAE 
Standard 90.1-2010 are the result of a consensus process, EPCA clearly 
sets forth DOE's obligations in terms of considering amendments when 
ASHRAE revises Standard 90.1. 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 
90.1-2010 and more-stringent efficiency levels for their energy savings 
and economic potentials irrespective of whether the efficiency levels 
were part of a consensus standard. 74 FR 12000, 12006.

B. The Definition of ``Amendment'' With Respect to the Efficiency 
Levels in ASHRAE Standard 90.1

    The Appliance Standards Awareness Project (ASAP), the Natural 
Resources Defense Council (NRDC), the Northwest Energy Efficiency 
Alliance (NEEA), and the Northwest Power and Conservation Council 
(NPCC) submitted a joint comment (hereafter referred to as ``The 
Advocates'' comment), which argued that although efficiency levels did 
not change for warm-air furnaces, ASHRAE 90.1-2010 contains design 
requirements (interrupted or intermittent ignition device, jacket 
losses not exceeding 0.75 percent of the input rating, and either power 
venting or a flue damper) that qualify as an amendment that triggers 
DOE's review. (The Advocates, No. 8 at p. 2-3) The Advocates stated in 
previous comments attached as Exhibit B, ``The plain language of EPCA 
ties DOE's duty to review and update Federal standards to ASHRAE's 
amendment of its own standards regardless of the direction or nature of 
the ASHRAE change.'' (The Advocates, No. 8 at Exhibit B, p. 3) The 
Advocates further note that the prescriptive requirements for warm-air 
furnaces meet DOE's own definition of ``amendment,'' because it 
increases the level of efficiency for this equipment type. (The 
Advocates, No. 8 at Exhibit B p. 4, referring to 73 FR 40771) Even if 
DOE decides it cannot adopt multi-metric standards, the Advocates 
believe that ASHRAE's action triggers a DOE review of the warm-air 
furnaces standard. (The Advocates, No. 8 at Exhibit B p. 4)
    DOE does not agree with the Advocates' assertion that DOE is 
required to review changes in ASHRAE Standard 90.1-2010 that do not 
increase the efficiency level when compared to the current Federal 
energy conservation standards for a given type of equipment. As it did 
in the July 2009 Final Rule, DOE views the trigger as attached to an 
increased efficiency level. 74 FR 36312, 36320 (July 22, 2009). 
Further, 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)) by increasing the energy 
efficiency level for that equipment type. Id. at 10042. The section 
cited above refers to ``the minimum level * * * specified in the 
amended ASHRAE standard,'' which DOE interprets as referring to an 
energy efficiency level.
    The Advocates also argued that EPCA authorizes DOE to adopt a 
multi-metric standard. (The Advocates, No. 8 at p. 3) DOE has 
previously noted that Congress intended 42 U.S.C. 6313 to result in DOE 
``maintain[ing] uniform national standards consistent with those set in 
ASHRAE/IESNA Standard 90.1.'' (The Advocates, No. 8 at p. 3, referring 
to 72 FR 10038, 10042 (March 7, 2007)) The Advocates, therefore, 
contend that DOE must read the statute as permitting sufficient 
authority to harmonize standards with ASHRAE Standard 90.1. (The 
Advocates, No. 8 at p. 3) The

[[Page 2365]]

Advocates also state that several products (commercial storage water 
heaters, instantaneous water heaters, and commercial heat pumps) are 
already subject to multiple efficiency requirements, some of which are 
based on multi-part requirements in ASHRAE Standard 90.1. (The 
Advocates Comment, No. 8 at p. 3) The Advocates asserted that DOE's 
position that it lacks legal authority to apply more than one 
requirement in a standard for a given product was developed by DOE 
during the Bush administration in the residential furnaces rulemaking, 
and that it reversed the agency position taken previously in the 
central air conditioner docket. Therefore, the Advocates urged DOE to 
reconsider the policy. (The Advocates, No. 8 at Exhibit C p. 2)
    In response, if ASHRAE adds a prescriptive requirement for 
equipment where an efficiency level is already specified, DOE does not 
believe it has the authority to use a dual descriptor for a single 
equipment type. EPCA authorizes the Secretary to amend the energy 
conservation standards for specified equipment. (42 U.S.C. 6313(a)(6)), 
but under 42 U.S.C. 6311(18), the statute's definition of the term 
``energy conservation standard'' is limited to: (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.
    The language of EPCA authorizes DOE to establish a performance 
standard or a single design standard. As such, DOE maintains its 
position stated in the July 2009 Final Rule that 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. 74 FR 36312, 36322 (July 22, 
2009). In this case, ASHRAE Standard 90.1-2010 recommends three design 
requirements, which goes beyond EPCA's limit of one design requirement 
for the specified covered equipment.
    In light of the above, DOE maintains its position (stated in the 
July 2008 notice of data availability) that 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).

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

    Pacific Gas and Electric Company, Southern California Gas Company, 
and San Diego Gas and Electric submitted a joint comment in response to 
the May 2011 NODA, with Southern California Edison (SCE) submitting an 
identical comment (hereafter referred to together as the CA IOU 
comment). Both the CA IOU comment and the Advocates comment argued that 
DOE should expand the scope of the rulemaking to include additional 
product classes. (CA IOU, Nos. 10 and 12 at p. 1; The Advocates, No. 8 
at p. 1) Both comments specifically recommended considering amended 
standards for commercial air-cooled unitary air conditioners and heat 
pumps and commercial water heaters, arguing that higher efficiency 
levels would be technologically feasible and that potential national 
energy savings would be significant (commercial air-cooled unitary air 
conditioners and heat pumps) or would likely be significant (commercial 
water heaters). (CA IOU, Nos. 10 and 12 at p. 2; The Advocates, No. 8 
at p. 5, 9) The Advocates also requested that DOE evaluate whether 
there are potentially significant savings for unitary water-source heat 
pumps. (The Advocates, No. 8 at p. 6) In addition, EEI recommended that 
if DOE reviews products for higher efficiency standards, it should take 
a fuel-neutral approach and analyze the energy savings potential from 
increasing energy efficiency standards for gas and oil-fired furnaces 
and boilers in addition to the electric products triggered by ASHRAE 
90.1-2010. (EEI, No. 7 at p. 2)
    The Advocates also argued that the six-year look back provision in 
the Energy Independence and Security Act of 2007 (EISA 2007) \8\ 
compels DOE to review standards for all product classes, including 
those specifically mentioned above, that are more than five years old. 
(The Advocates, No. 8 at p. 1, 5-6, 9) The Advocates stated that the 
plain language of the provision applies to all final rules setting 
standards, including those issued prior to EISA 2007. (The Advocates, 
No. 8 at p. 2) These commenters also stated that it would be 
unreasonable to read the provision to exclude the most out-of-date 
standards, because the purpose of the provision is to keep standards 
up-to-date. (The Advocates, No. 8 at p. 2) Further, it was noted that 
the U.S. Department of Energy May 2011 Strategic Plan commits the 
Department to reviewing minimum appliance efficiency standards at least 
every 5 years. (The Advocates, No. 8 at p. 1)
---------------------------------------------------------------------------

    \8\ The Energy Independence and Security Act of 2007 
incorporated a provision commonly known as the ``six-year look 
back,'' requiring DOE to review ``any final rule establishing or 
amending a standard'' every six years and either publish a notice 
indicating that new standards are not required or begin a rulemaking 
proposing new standards. (42 U.S.C. 6313(a)(6)(C))
---------------------------------------------------------------------------

    The Advocates argued that EISA 2007 does not provide a temporal 
limitation on what is included in the ``any final rule'' language used. 
(The Advocates, No. 8 at Exhibit A p. 7) The Advocates also cited 
several Supreme Court cases in which ``any'' is interpreted to have an 
expansive meaning encompassing all species of the category in question. 
(The Advocates, No. 8 at Exhibit A p. 6-7) Therefore, the Advocates 
contend that the six-year review must be applied to all products that 
have a final rule regardless of when it was issued (i.e., including 
those issued prior to December 19, 2007, the enactment date of EISA 
2007). (The Advocates, No. 8 at Exhibit A p. 7) These commenters use 
this rationale to support their recommendation above for DOE to expand 
the scope of the present rulemaking to include additional product 
classes.
    In response, DOE previously addressed similar comments in a March 
20, 2009 Notice of Proposed Rulemaking related to ASHRAE products. 74 
FR 12000. In that document, DOE acknowledged that EISA 2007 directs DOE 
to assess whether there is a need to update Federal energy conservation 
standards for certain commercial equipment (i.e., ASHRAE equipment) 
after a certain amount of time has elapsed. However, DOE also noted 
that it did 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 did not agree that it was late or that 
it should immediately initiate review of certain commercial equipment. 
Id. at 12007.
    DOE largely reiterated its position in the July 22, 2009 Final Rule 
related to ASHRAE products. 74 FR 36312, 36321. In response to DOE's 
previously stated position, the Advocates acknowledged that the 
provision is not retroactive, but rather is prospective as it requires 
reviews going forward. (The Advocates, No. 8 at Exhibit A p. 8-9) The 
Advocates also acknowledged that some final rules were already more 
than six years old when the amendment was enacted, and that Congress 
did not specifically provide a transition period. (The Advocates, No. 8 
at Exhibit A p. 9) However, the Advocates contend that this does not 
mean DOE was out of

[[Page 2366]]

compliance at the time of enactment, but rather that DOE must begin the 
process of reviewing standards more than six years old. (The Advocates, 
No. 8 at Exhibit A p. 9)
    In response, DOE notes that it has determined previously that it 
plans to implement the six-year look back provision prospectively and 
believes that the clock for the six-year look back does not commence 
until a final rule is published for a given product or equipment after 
the enactment of EISA 2007 (which occurred on December 19, 2007). As 
the products in question (i.e., commercial air-cooled unitary air 
conditioners and heat pumps, commercial water heaters, and unitary 
water-source heat pumps) have not been the subject of a final rule 
since before the enactment of EISA 2007, review under the look back 
provision will not be required until after the next update of standards 
is completed following a trigger by updates to the corresponding ASHRAE 
Standard 90.1 efficiency levels. After that point, if ASHRAE does not 
update standards within six years, DOE will be compelled to review the 
standards under the six-year look back provision. However, as a matter 
of policy, DOE's May 2011 Strategic Plan expressed a goal of reviewing 
appliance standards at least every five years, and, accordingly, DOE 
will make an effort to review standards for ASHRAE products on a 
similar schedule, consistent with statutory mandates and available 
resources.

IV. General Discussion of the Changes in ASHRAE Standard 90.1-2010 and 
Determination of Scope for Further Rulemaking Activity

    As discussed above, before beginning an analysis of the potential 
economic impacts and energy savings that would result from adopting the 
efficiency levels specified by ASHRAE Standard 90.1-2010 or more-
stringent efficiency levels, DOE first sought to determine whether or 
not the ASHRAE Standard 90.1-2010 efficiency levels actually 
represented an increase in efficiency above the current Federal 
standard levels. This section discusses each equipment class where the 
ASHRAE Standard 90.1-2010 efficiency level differs from the current 
Federal standard level, along with DOE's preliminary conclusion as to 
the action DOE is taking with respect to that equipment.

A. Commercial Warm-Air Furnaces

    Under 42 U.S.C. 6311(11)(A), 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.'' 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 per hour or more.'' 10 CFR 431.72.
    Gas-fired commercial warm-air furnaces are fueled by either natural 
gas or propane. The Federal minimum energy conservation standard for 
gas-fired commercial warm-air furnaces corresponds to the efficiency 
level in ASHRAE Standard 90.1-1989, which specifies for equipment with 
a capacity of 225,000 Btu/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 minimum energy conservation 
standard for gas-fired commercial warm-air furnaces applies to 
equipment manufactured on or after January 1, 1994. 10 CFR 431.77.
    The current Federal standard for gas-fired commercial warm-air 
furnaces is in terms of ``thermal efficiency,'' which is defined as 
``100 percent minus percent flue loss.'' 10 CFR 431.72. The previous 
version of ASHRAE Standard 90.1 (i.e., ASHRAE Standard 90.1-2007) 
specified a minimum efficiency level of 80 percent combustion 
efficiency, but it defined ``combustion efficiency'' as ``100 percent 
minus flue losses'' in the footnote to the efficiency table for 
commercial warm-air gas-fired furnaces, which references ANSI Z21.47-
2001, ``Standard for Gas-Fired Central Furnaces,'' as the test 
procedure. In its analysis for the 2009 NOPR regarding standards for 
ASHRAE equipment in which DOE considered the updates in ASHRAE Standard 
90.1-2007, DOE noted that upon reviewing the efficiency levels and 
methodology specified in ASHRAE Standard 90.1-2007, ASHRAE changed the 
efficiency metric for gas-fired commercial warm-air furnaces in name 
only, and not in the actual test or calculation method. 74 FR 12000, 
12008-09 (March 20, 2009). Therefore, DOE stated its understanding that 
despite using the term ``combustion efficiency'' rather than ``thermal 
efficiency,'' ASHRAE did not intend to change the substance of the 
metric. Consequently, DOE left the existing Federal energy conservation 
standards in place for gas-fired commercial warm-air furnaces, which 
specify a ``thermal efficiency'' of 80 percent using the definition of 
``thermal efficiency'' presented at 10 CFR 431.72.
    ASHRAE Standard 90.1-2010 updated the tabulated requirements for 
gas-fired commercial warm-air furnaces to specify a minimum efficiency 
level of 80 percent ``thermal efficiency'' and references ANSI Z21.47-
2006, ``Standard for Gas-Fired Central Furnaces,'' as the test 
procedure. ANSI Z21.47-2006 defines ``thermal efficiency'' as ``100 
percent minus flue losses,'' which is the same as DOE's definition of 
``thermal efficiency'' for this equipment. Because of this, DOE 
believes that the purpose of the ASHRAE metric change to ``thermal 
efficiency'' was to clarify the alignment to the existing Federal 
standards and the ANSI Z21.47-2006 test procedure. As a result, DOE 
tentatively concluded in the May 2011 NODA that this change does not 
constitute a revision to the actual efficiency level for gas-fired 
commercial warm-air furnaces and that no further action by the 
Department is required.
    In response to the preliminary review set forth in the May 2011 
NODA, the Advocates commented that DOE must review requirements for 
warm-air furnaces because ASHRAE Standard 90.1-2010 contains new design 
requirements that are not included in the Federal standards, which they 
view as constituting an amendment that triggers DOE review. (The 
Advocates, No. 8 at p. 2-3) Further, the Advocates urged DOE to adopt 
all the requirements for gas-fired and oil-fired warm-air furnaces 
included in ASHRAE 90.1-2010 (i.e., efficiency level and design 
requirements) as Federal standards, as these requirements are included 
as part of the Implementation of National Consensus Appliance 
Agreements Act (INCAAA, S. 398). (The Advocates, No. 8 at p. 2) In 
addition, the CA IOUs urged DOE to adopt all requirements, including 
prescriptive (design) requirements, for warm-air furnaces. (CA IOU, 
Nos. 10 and 12, at p. 2)
    For the reasons explained in section III.B, DOE does not view the 
ASHRAE Standard 90.1 design requirements for warm-air furnaces as 
triggering DOE review of the efficiency levels for those products. 
Further, DOE has determined that incorporation of the design 
requirements in ASHRAE Standard 90.1-2010 for commercial warm-air 
furnaces is beyond the scope of its legal authority, because the 
language of EPCA authorizes DOE to establish a performance standard or 
a single design standard and does not permit DOE to adopt both a 
performance standard and design standard. The fact that pending 
legislation, if passed, may convey such authority does not have any 
bearing on DOE's current authority. Thus, DOE has not changed its 
preliminary view set

[[Page 2367]]

forth in the May 2011 NODA, and consequently, DOE proposes to leave the 
existing Federal energy conservation standards in place for 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, evaporatively-cooled, water-cooled, 
or water-source (not including ground water-source) electrically 
operated, unitary central air conditioners and central air conditioning 
heat pumps for commercial use. (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 6311(8)(B)-(D); 10 CFR 431.92) ``Small 
commercial package air conditioning and heating equipment'' means 
equipment rated less than 135,000 Btu per hour (cooling capacity). (42 
6311(8)(B); 10 CFR 431.92) ``Large commercial package air conditioning 
and heating equipment'' means equipment rated at or above 135,000 Btu 
per hour and less than 240,000 Btu per hour (cooling capacity). (42 
U.S.C. 6311(8)(C); 10 CFR 431.92) ``Very large commercial package air 
conditioning and heating equipment'' means equipment rated at or above 
240,000 Btu per hour and less than 760,000 Btu per hour (cooling 
capacity). (42 U.S.C. 6311(8)(D); 10 CFR 431.92)
1. Water-Cooled Equipment
    The current Federal energy conservation standards for the six 
classes of water-cooled commercial package air conditioners for which 
ASHRAE Standard 90.1-2010 amended efficiency levels are shown in Table 
II.1. The Federal energy conservation standards for water-cooled 
equipment are differentiated based on the cooling capacity (i.e., 
small, large, or very large) and heating type (i.e., electric 
resistance heating/no heating or some other type of heating). ASHRAE 
Standard 90.1-2010 increased the energy efficiency levels for all six 
equipment classes to efficiency levels that surpass the current Federal 
energy conservation standard levels. Therefore, the Department 
conducted an analysis of the potential energy savings due to amended 
standards for these products in the May 2011 NODA.
    In response to the May 2011 NODA, the Advocates, the CA IOUs, and 
EEI recommended that DOE adopt the ASHRAE Standard 90.1-2010 efficiency 
levels for water-cooled equipment, given that the potential national 
energy savings from efficiency levels above those in ASHRAE Standard 
90.1-2010 are very small. (The Advocates, No. 8 at p. 5; CA IOU, Nos. 
10 and 12 at p. 1; EEI, No. 7 at p. 2) Upon reviewing the results of 
the potential energy savings analysis in the May 2011 NODA, DOE agrees 
with the submitted comments. Because of the minimal energy savings 
available from this equipment (see section VIII.B.1), DOE has not 
conducted further analyses on these products and is proposing in 
today's NOPR to adopt the energy efficiency levels contained in ASHRAE 
Standard 90.1-2010 for water-cooled commercial package air conditioning 
and heating equipment.
2. Evaporatively-Cooled Equipment
    The current Federal energy conservation standards for the six 
classes of evaporatively-cooled commercial package air conditioners for 
which ASHRAE Standard 90.1-2010 amended efficiency levels are shown in 
Table II.1 above. Similar to water-cooled equipment, Federal energy 
conservation standards divide evaporatively-cooled equipment based on 
the cooling capacity (i.e., small, large, or very large) and heating 
type (i.e., electric resistance heating/no heating or some other type 
of heating). ASHRAE Standard 90.1-2010 increased the energy efficiency 
levels for all six equipment classes to efficiency levels that surpass 
the current Federal energy conservation standard levels.
    DOE reviewed the market for evaporatively-cooled equipment and 
could not identify any models available on the market in the ``small'' 
unit product class (i.e., cooling capacity h) and the 
``large'' unit product class (i.e., cooling capacity >=135,000 and 
h). Because there is currently no equipment in these 
classes being manufactured, DOE believes there are no energy savings 
associated with these classes at this time. Therefore, it is not 
possible to assess the potential for additional energy savings at the 
levels in ASHRAE Standard 90.1-2010 or more-stringent levels. Thus, DOE 
did not perform a potential energy-savings analysis for the small and 
large equipment classes of evaporatively-cooled commercial package air 
conditioners.
    For very large (i.e., cooling capacity >=240,000 Btu/h) 
evaporatively-cooled air conditioners, DOE was able to identify a 
number of models on the market, and, therefore, DOE conducted an 
analysis of the potential energy savings for these products in the May 
2011 NODA. For very large evaporatively-cooled air conditioners, ASHRAE 
Standard 90.1-2010 set the efficiency level for equipment with electric 
resistance or no heating at 11.9 EER and for equipment with all other 
heating at 12.2 EER. However, ASHRAE historically has set the levels 
for equipment with other heating at 0.2 EER points below the efficiency 
levels for equipment with electric heating or no heating, which would 
make the expected efficiency level for very large evaporatively-cooled 
equipment with other heating 11.7 EER. In February 2011, the Department 
received a letter from AHRI indicating that the ASHRAE Standard 90.1-
2010 efficiency level for very large evaporatively-cooled equipment 
with other heating is incorrect, and that the correct minimum energy 
efficiency standard for this category is 11.7 EER, as would be expected 
given the historical ASHRAE Standard 90.1 efficiency levels for these 
products. (AHRI, No. 0001 at p. 1) Further, AHRI indicated that at the 
winter 2011 ASHRAE meeting, the ASHRAE 90.1 committee approved an 
addendum for public review that corrects this error. In March 2011, 
ASHRAE released Proposed Addendum j to ASHRAE Standard 90.1-2010, which 
corrects the value from 12.2 to 11.7 EER. Based on release of the 
public review draft of this addendum, the Department tentatively 
decided in the May 2011 NODA to analyze the potential energy savings 
for this category at an ASHRAE Standard 90.1 level of 11.7 EER.
    In response to the May 2011 NODA, the Advocates, CA IOUs, and EEI 
recommended that DOE adopt the ASHRAE Standard 90.1-2010 levels for 
evaporatively-cooled equipment, given that the potential national 
energy savings from efficiency levels above those in ASHRAE Standard 
90.1-2010 are very small. (The Advocates, No. 8 at p. 5; CA IOU, Nos. 
10 and 12 at p. 1; EEI, No. 7 at p. 2) In addition, AHRI agreed that 
overall energy savings for evaporatively-cooled units less than 240,000 
Btu/h cannot be estimated because none exist on the market, but that 
DOE should still adopt ASHRAE Standard 90.1-2010 levels for those 
product classes. (AHRI, No. 11 at p. 2) AHRI also agreed with DOE's 
recognition of Proposed Addendum j in regards to the EER correction for 
very large evaporatively-cooled equipment. (AHRI, No. 11 at p. 1)
    DOE agrees with these comments, and because of the minimal energy 
savings associated with more-stringent levels for very large equipment 
(see section VIII.B.1) and the lack of models on the market for small 
and large equipment,

[[Page 2368]]

DOE has not conducted further analyses on these products. Accordingly, 
DOE is proposing to adopt the energy efficiency levels contained in 
ASHRAE Standard 90.1-2010 for evaporatively-cooled commercial package 
air conditioning and heating equipment.
3. Variable Refrigerant Flow Equipment
    ASHRAE Standard 90.1-2010 created a separate product class for 
variable refrigerant flow (VRF) air-conditioning and heating equipment. 
These products are currently covered under DOE's standards for 
commercial air conditioners and heat pumps, but they are not broken out 
as a separate product class.
    In general, a VRF system will have a single condensing unit serving 
multiple evaporator coils within a building. Specific ``subclasses'' of 
variable refrigerant flow heat pumps equipped with heat recovery 
capability have been specified in ASHRAE Standard 90.1-2010 with less-
stringent efficiency requirements than specified for VRF systems 
without heat recovery. (Heat recovery capability provides for shuttling 
of heat from one part of the building to another and allows for 
simultaneous cooling and heating of different zones within a building.) 
Specifically, the efficiency requirements in ASHRAE Standard 90.1-2010 
for air-cooled VRF heat pumps with heat recovery are equivalent to the 
Federal minimum energy conservation standards defined for air-cooled 
heat pumps with ``all other heating system types that are integrated 
into the equipment,'' and the efficiency requirements for air-cooled 
VRF heat pumps without heat recovery are equivalent to the Federal 
minimum standards for air-cooled heat pumps with electric resistance or 
no heating.\9\ The VRF systems with heat recovery specified by ASHRAE 
may also be provided with electric resistance heating systems as a 
back-up. For air-cooled VRF heat pump systems that have both electric 
resistance heating and heat recovery heating capability, the Department 
has tentatively concluded that these systems must meet the efficiency 
requirements contained in EPCA for small, large, and very large air-
cooled central air-conditioning heat pumps with electric resistance 
heating, which are codified at 10 CFR 431.97(b). (42 U.S.C. 6313(a)(7)-
(9)) In addition, the Department has tentatively concluded that air-
cooled VRF systems without electric resistance heating but with heat 
recovery can qualify as having an ``other'' means of heating, and that 
these systems must meet the efficiency requirements contained in EPCA 
for small, large, and very large air-cooled central air-conditioning 
heat pumps with other heating, which are codified at 10 CFR 431.97(b). 
(42 U.S.C. 6313(a)(7)-(9)) The proposed changes to the Code of Federal 
Regulations can be found at the end of this NOPR.
---------------------------------------------------------------------------

    \9\ Section 136 of the Energy Policy Act of 2005 (EPACT 2005; 
Pub. L. 109-58) amended EPCA to include separate minimum efficiency 
requirements for commercial package air-cooled air conditioners and 
heating equipment with ``all other heating system types that are 
integrated into the equipment'' and with electric resistance or no 
heating.
---------------------------------------------------------------------------

    Table IV.1 shows the ASHRAE Standard 90.1-2010 efficiency levels 
for VRF water-source heat pumps in comparison to the current Federal 
minimum energy conservation standards for water-source heat pumps, 
which DOE has preliminarily determined would apply to VRF systems. For 
water-source VRF heat pumps, ASHRAE Standard 90.1-2010 generally 
maintains the existing energy efficiency requirements that apply to 
commercial package air-conditioning and heating equipment (water-
source) for the VRF systems, with several notable exceptions. For VRF 
water-source heat pumps under 17,000 Btu/h, ASHRAE Standard 90.1-2010 
raises the efficiency levels above current Federal energy conservation 
standards. For VRF water-source heat pumps over 135,000 Btu/h, ASHRAE 
sets standards for products where DOE did not previously have 
standards. As a result, the Department conducted further analysis for 
these classes in the May 2011 NODA. DOE began by reviewing the current 
market for VRF water-source heat pumps with cooling capacities either 
less than 17,000 Btu/h or equal to or greater than 135,000 Btu/h and 
less than 760,000 Btu/h. The Department did not identify any models 
under 17,000 Btu/h on the market. DOE did identify 19 models greater 
than 135,000 Btu/h on the market and attempted to contact the 
manufacturer producing most of these models, but DOE was unable to 
obtain EER information for most of the models and had no shipment 
information for this product class. Because DOE could not identify any 
VRF water-source heat pumps being manufactured with cooling capacities 
less than 17,000 Btu/h, DOE believes that there are no energy savings 
associated with this equipment class. Therefore, DOE did not perform a 
potential energy-savings analysis for this equipment. Due to the lack 
of information and data on VRF water-source heat pumps with cooling 
capacities greater than 135,000 Btu/h available at the time of the 
NODA, the Department did not conduct a preliminary energy saving 
estimate for the additional energy savings beyond the levels 
anticipated in ASHRAE Standard 90.1-2010 for these VRF water-source 
heat pumps.

 Table IV.1--Comparison of Federal Energy Conservation Standards for Water-Source Heat Pumps to ASHRAE Standard
                             90.1-2010 Requirements for VRF Water-Source Heat Pumps
----------------------------------------------------------------------------------------------------------------
                                           Federal minimum energy     ASHRAE standard 90.1-2010 Efficiency level
    Existing federal equipment class        conservation standard     for newly-established VRF equipment class
----------------------------------------------------------------------------------------------------------------
Water-source Heat Pump h...  11.2 EER                    12.0 EER (without heat recovery)
                                                                     11.8 EER (with heat recovery)
                                         4.2 COP                     4.2 COP
Water-source Heat Pump >=17,000 and      12.0 EER                    12.0 EER (without heat recovery)
 h.
                                                                     11.8 EER (with heat recovery)
                                         4.2 COP                     4.2 COP
Water-source Heat Pump >=65,000 and      12.0 EER                    12.0 EER (without heat recovery)
 h.
                                                                     11.8 EER (with heat recovery)
                                         4.2 COP                     4.2 COP
Water-source Heat Pump >=135,000 and     N/A                         10.0 EER (without heat recovery)
 h.
                                                                     9.8 EER (with heat recovery)
                                                                     3.9 COP
----------------------------------------------------------------------------------------------------------------

[[Page 2369]]

    In addition to the changes for the equipment classes discussed 
above, ASHRAE Standard 90.1-2010 includes efficiency levels for VRF 
water-source heat pumps that provide for a 0.2 EER reduction in the 
efficiency requirement for systems with heat recovery. However, the 
current Federal minimum standards for water-source heat pumps do not 
provide for any reduction in the EER requirements for equipment with 
``other'' heating types. Therefore, the 0.2 EER reduction below the 
current Federal standard levels for the VRF water-source heat pump 
equipment classes in which ASHRAE did not raise the standard from the 
existing Federal minimum for water-source heat pumps (i.e., water-
source heat pumps with cooling capacities greater than or equal to 
17,000 Btu/h and less than 65,000 Btu/h and for water-source heat pumps 
with cooling capacities greater than or equal to 65,000 Btu/h and less 
than 135,000 Btu/h) would result in a decrease in stringency in 
comparison to current standards. As noted in section III.B, if ASHRAE 
Standard 90.1 lowers its efficiency level as compared to the Federal 
minimum standard level, 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). Therefore, DOE did not consider the lower EER 
requirements for systems with heat recovery and will not perform an 
analysis of those product classes. The proposed changes to the Code of 
Federal Regulations to clarify which energy conservation standards VRF 
water-source heat pumps must meet can be found at the end of this NOPR.
    In response to the May 2011 NODA, AHRI agreed that there are no 
products available on the market in the category of less than 17,000 
Btu/h water-source VRF heat pumps. (AHRI, No. 11 at p. 3) AHRI also 
commented that VRF water-source heat pumps with a cooling capacity 
greater than 135,000 Btu/h comprise a new equipment class, and as such, 
DOE should accept that an analysis to estimate energy savings cannot be 
done because of the unavailability of data. (AHRI, No. 11 at p. 3) AHRI 
encouraged DOE to adopt the efficiency standards for these products in 
ASHRAE Standard 90.1-2010. (AHRI, No. 11 at p. 3)
    With regard to the 0.2 EER reduction for systems with heat 
recovery, AHRI noted that DOE should consider this requirement because 
non-VRF water-source heat pumps are not a proper comparative product 
for determining appropriate VRF water-source heat pump efficiency 
levels (in regard to backsliding) because: (1) Non-VRF water-source 
heat pumps do not use the type of heating components used by VRF 
systems, and (2) the components that require the 0.2 EER reduction 
provide overall energy savings in the system that are not reflected in 
EER calculations. (AHRI, No. 11 at p. 5) Mitsubishi also submitted a 
comment in which it also noted that DOE's comparison of VRF water-
source heat pumps to non-VRF water-source heat pumps is not appropriate 
because the non-VRF water-source heat pumps do not contain gas-fired 
heat exchangers like the unitary systems, which Mitsubishi believes 
would be a better comparison to the VRF system. (Mitsubishi, No. 13 at 
p. 3) Mitsubishi further noted that regardless of the comparison, DOE 
should adopt the 0.2 EER reduction because DOE is not legally 
prohibited from adopting an amendment that is a reduction of EER 
levels. (Mitsubishi, No. 13 at p. 2, referring to 42 USC 6313(a)(6)(A)) 
Mitsubishi stated that the 0.2 EER reduction is necessary due to the 
increased pressure drop in the refrigerant levels due to the BC (branch 
circuit) controller, which works in unison with the outdoor unit to 
provide simultaneous cooling and heating needs. (Mitsubishi, No. 13 at 
p. 2)
    In response to comments from AHRI and from Mitsubishi regarding the 
0.2 EER deduction for water-source heat pumps with heat recovery, DOE 
has determined that while there may be certain additional efficiency 
penalties for the incorporation of heat recovery in VRF water-source 
heat pumps, DOE believes that under the statutory scheme for commercial 
equipment standards, the corresponding existing product class is a 
water-source heat pump in which condenser heat is rejected to water, 
not air. As such, DOE is prohibited from adopting an efficiency level 
lower than the current Federal standards for water-source heat pumps 
less than 135,000 Btu/h cooling capacity under 42 U.S.C. 6295(o)(1) and 
42 U.S.C. 6316(a), regardless of the provision in 42 U.S.C. 
6313(a)(6)(A)) providing for adoption of ASHRAE Standard 90.1 
efficiency levels. For VRF water-source heat pumps less than 17,000 
Btu/h, the ASHRAE Standard 90.1-2010 levels with or without heat 
recovery exceed the current Federal standards. For VRF water-source 
heat pumps at or greater than 135,000 Btu/h, no current Federal 
standards exist. In both cases, DOE may adopt the ASHRAE 90.1-2010 
efficiency levels for VRF water-source heat pumps with and without heat 
recovery.
    Since the May 2011 NODA, AHRI released a certified product 
directory for VRF water-source heat pumps, thereby allowing DOE to 
perform an energy use analysis for VRF water-source heat pumps equal to 
or greater than 135,000 Btu/h similar to those presented for other 
products in the May 2011 NODA. This analysis is discussed in detail in 
section V. The preliminary analysis showed that only minimal energy 
savings are available for surpassing ASHRAE efficiency levels for these 
products (see section VIII.B.2), so DOE did not conduct any further 
energy or economic analysis for these products. DOE agrees with AHRI's 
suggestion to adopt the ASHRAE Standard 90.1-2010 level for these 
products and is proposing to do so for VRF water-source heat pumps 
either less than 17,000 Btu/h or equal to or greater than 135,000 Btu/h 
with and without heat recovery.
4. Packaged Terminal Air Conditioners and Heat Pumps
    EPCA defines a ``packaged terminal air conditioner'' as ``a wall 
sleeve and a separate unencased combination of heating and cooling 
assemblies specified by the builder and intended for mounting through 
the wall. It includes a prime source of refrigeration, separable 
outdoor louvers, forced ventilation, and heating availability by 
builder's choice of hot water, steam, or electricity.'' (42 U.S.C. 
6311(10)(A)) EPCA defines a ``packaged terminal heat pump'' as ``a 
packaged terminal air conditioner that utilizes reverse cycle 
refrigeration as its prime heat source and should have supplementary 
heat source available to builders with the choice of hot water, steam, 
or electric resistant heat.'' (42 U.S.C. 6311(10)(B)) DOE codified 
these definitions at 10 CFR 431.92 in a final rule published in the 
Federal Register on October 21, 2004. 69 FR 61962, 61970.
    DOE adopted amended energy conservation standards for this class of 
equipment in a final rule published in the Federal Register on October 
7, 2008. 73 FR 58772, 58828-30. The adopted Federal standards exceeded 
the standards in ASHRAE Standard 90.1- 2007. These Federal standards 
apply to standard size equipment manufactured on or after October 8, 
2012, and to non-standard size equipment manufactured on or after 
October 7, 2010. The CFR currently states that the compliance dates are 
September 30, 2012, and September 30, 2010, for standard size and non-
standard size equipment, respectively. 10 CFR 431.97(c). The compliance 
dates currently included in the CFR for package terminal air 
conditioners and heat pumps were calculated from the date of issuance 
of the final rule for those products (i.e., September 29, 2008), but 
should have

[[Page 2370]]

been calculated from the publication date in the Federal Register 
(i.e., October 7, 2008). Therefore, DOE is proposing in today's notice 
to correct the compliance dates to October 8, 2012 and October 7, 2010 
for compliance with standards for standard size and non-standard size 
package terminal air conditioners and heat pumps, respectively.
    ASHRAE Standard 90.1-2010 increased the efficiency levels for 
standard size equipment in comparison to the efficiency levels in 
ASHRAE Standard 90.1-2007. However, the efficiency levels specified by 
ASHRAE Standard 90.1-2010 for these equipment classes meet but do not 
exceed the Federal standards established by DOE in the October 2008 
final rule. Because ASHRAE seems to be harmonizing the levels in ASHRAE 
Standard 90.1-2010 with the Federal levels rather than increasing the 
minimum efficiency, DOE tentatively concluded in the May 2011 NODA that 
it is not required to take action on these products at this time. DOE 
did not receive any comments on this subject and is maintaining its 
position in this NOPR.
5. Small-Duct, High-Velocity, and Through-the-Wall Equipment
    EPCA does not separate small-duct high-velocity (SDHV) or through-
the-wall (TTW) heat pumps from other types of small commercial package 
air-conditioning and heating equipment in its definitions. (42 U.S.C. 
6311(8)) Therefore, EPCA's definition of ``small commercial package air 
conditioning and heating equipment'' would include SDHV and TTW heat 
pumps. (42 U.S.C. 6311(8)(B))
    ASHRAE Standard 90.1-2010 increased some of the efficiency levels 
for these classes of equipment. Specifically, ASHRAE Standard 90.1- 
2010 increased the efficiency requirements for TTW heat pumps to 13.0 
SEER and 7.4 HSPF in comparison to the efficiency levels of 12.0 SEER 
and 7.4 HSPF in ASHRAE Standard 90.1- 2007. However, in March 2011, 
ASHRAE issued Proposed Addendum h for public review that would correct 
the minimum SEER for these products to 12.0 SEER.\10\ For SDHV heat 
pumps, ASHRAE Standard 90.1-2010 did not increase the cooling 
efficiency requirement of 10.0 SEER beyond that in ASHRAE 90.1-2007. In 
addition, although ASHRAE 90.1-2007 specified a heating efficiency 
requirement of 6.8 HSPF, ASHRAE 90.1-2010 did not specify any heating 
efficiency level for SDHV heat pumps.
---------------------------------------------------------------------------

    \10\ Proposed Addendum h to Standard 90.1-2010, Energy Standard 
for Buildings Except Low-Rise Residential Buildings (First Public 
Review, March 2011) (Last accessed March 2011) (Available at : 
https://osr.ashrae.org/default.aspx).
---------------------------------------------------------------------------

    In the May 2011 NODA, DOE noted that Proposed Addendum h and 
another Proposed Addendum j,\11\ would both remove the SDHV product 
class from the standards tables entirely, with Addendum j stating: ``In 
addition the small duct high velocity requirements have been dropped by 
DOE and they are only allowing such systems under waiver clause so the 
addendum has also made a change to remove the small duct high velocity 
systems from table 6.8.1a and table 6.8.1b.'' 76 FR 25622, 25633 (May 
5, 2011) (quoting ASHRAE Addenda h and j). Therefore, DOE concluded 
that ASHRAE did not intend to specify any efficiency levels for these 
products in ASHRAE Standard 90.1-2010. Id.
---------------------------------------------------------------------------

    \11\ Proposed Addendum j to Standard 90.1-2010, Energy Standard 
for Buildings Except Low-Rise Residential Buildings (First Public 
Review, March 2011) (Last accessed March 2011) (Available at: 
https://osr.ashrae.org/default.aspx).
---------------------------------------------------------------------------

    In response, DOE notes that the Federal energy conservation 
standards for commercial types of TTW and SDHV heat pumps, which are 
13.0 SEER and 7.7 HSPF, were established for the overall equipment 
category of small commercial package air-conditioning and heating 
equipment by EISA 2007, which amended EPCA. (42 U.S.C. 6313(a)(7)(D)) 
Because the ASHRAE Standard 90.1-2010 efficiency levels for TTW 
equipment meet or do not exceed the DOE standards and because DOE 
believed that through the issuance of Addenda h and j, ASHRAE was 
removing requirements for this equipment from within ASHRAE 90.1 (and 
thus also not proposing new, higher efficiency requirements), DOE 
tentatively concluded in the May 2011 NODA that it was not required to 
take action on these products at this time. 76 FR 25622, 25633 (May 5, 
2011).
    In response to the May 2011 NODA, AHRI commented that DOE is 
incorrect in assuming that Addendum j removes SDHV systems from the 
scope of coverage of ASHRAE Standard 90.1. (AHRI, No. 11 at p. 2) It 
stated that the current minimum SEER requirement for SDHV units in 
ASHRAE Standard 90.1-2010 applies to all models, both single-phase and 
three-phase electrical power with a cooling capacity less than 65,000 
Btu/h. (AHRI, No. 11 at p. 2) AHRI stated that three-phase SDHV with a 
cooling capacity less than 65,000 Btu/h are still covered by ASHRAE 
Standard 90.1-2010 despite the omission in Addendum j (which AHRI 
believed deals only with single-phase SDHV systems covered under the 
National Appliance Energy Conservation Act (NAECA)). (AHRI, No. 11 at 
p. 2) AHRI stated that DOE must consider the ASHRAE Standard 90.1 SEER 
requirement for three-phase SDHVs and adopt it as the Federal standard 
or propose an alternate requirement. AHRI recommended that DOE consider 
establishing the minimum requirements for three-phase SDHV models at 11 
SEER and 6.8 HSPF. (AHRI, No. 11 at p. 2)
    In addition, Unico requested that SDHV be retained as a product 
class with a minimum efficiency of 11 SEER/6.8 HSPF and that the 
product manufacturer must have an exception for this as granted by DOE. 
(Unico, No. 14 at p. 2) (Currently, three manufacturers of SDHV 
products have been granted exception relief by DOE's Office of Hearings 
and Appeals (OHA) allowing for the sale of SDHV products meeting 
efficiency of 11 SEER and 6.8 HSPF.\12\) Unico recommended that DOE 
create a commercial SDHV product class that mirrors the consumer 
single-phase product class due to similar operating conditions. (Unico, 
No. 14 at p. 2)
---------------------------------------------------------------------------

    \12\ Department of Energy: Office of Hearings and Appeals, 
Decision and Order, Case TEE 0010 (2004) (Available at: 
http://www.oha.doe.gov/cases/ee/tee0010.pdf) and Case TEE 
0026 (2005) (Available at: http://www.oha.doe.gov/cases/ee/tee0026.pdf).
---------------------------------------------------------------------------

    In response to the AHRI and Unico comments, DOE did not intend to 
imply that SDHV are removed from the scope of ASHRAE Standard 90.1, but 
notes that the removal of an efficiency requirement for a covered 
product within ASHRAE Standard 90.1 is indicative that ASHRAE is not 
proposing a higher standards for the equipment and that DOE, thus, has 
no requirement or legal ability to react to ASHRAE Standard 90.1 
efficiency levels for the equipment. In both the case of the published 
ASHRAE Standard 90.1-2010 efficiency levels for SDHV, or the removal of 
published values as a result of Addendum j, the minimum Federal 
efficiency standards for three-phase, less than 65,000 Btu/h small 
commercial package air conditioning and heating equipment, at 13 SEER 
and 7.7 HSPF, are higher than the levels originally proposed for SDHV 
in ASHRAE Standard 90.1-2010. DOE cannot adopt lower efficiency levels 
due to the prohibition against ``backsliding'' found in 42 U.S.C. 
6295(o)(1) and 42 U.S.C. 6316(a). As such, DOE is prohibited from 
adopting the original ASHRAE Standard 90.1-2007 SEER requirement for 
three-phase SDHVs as the Federal standard, and DOE has no requirement 
to consider higher levels for three-phase SDHV equipment.

[[Page 2371]]

    DOE did not receive any comments regarding TTW heat pumps and is 
maintaining its position in today's NOPR. The efficiency levels shown 
in ASHRAE Standard 90.1-2010 or in Addendum h, meet or do not exceed 
the current Federal standard for 3-phase, less than 65,000 Btu/h small 
package cooling and heating equipment, and, thus, DOE is not required 
to take action on these products at this time. DOE has no authority to 
set standards for any products of this type lower than the current 
Federal minimum.
6. Single-Package Vertical Air Conditioners and Single-Package Vertical 
Heat Pumps
    DOE issued standards for single-package vertical air conditioner 
and heat pump units (SPVUs) as part of the March 23, 2009 final rule 
technical amendment in response to mandated efficiency levels for SPVUs 
established in the EISA 2007 legislation. 74 FR 12058, 12073-74. 
However, SPVUs are subject to a provision established by EISA 2007, 
which amended the applicable provisions of EPCA such that not later 
than three years after the date of this statutory provision's enactment 
(i.e., December 19, 2007), the Secretary must review the most recently 
published ASHRAE Standard 90.1 with respect to single-package vertical 
air conditioners and single-package vertical heat pumps using the 
procedures established under 42 U.S.C. 6313(a)(6). (42 U.S.C. 
6313(a)(10)(B))
    The Department interprets the provision at 42 U.S.C. 6313(a)(10)(B) 
as constituting a separate trigger to evaluate standards higher than 
the ASHRAE Standard 90.1 level. SPVUs are considered classes within the 
broader scope of small, large, and very large commercial package air-
conditioning and heating equipment. EPCA, as amended, directs DOE to 
conduct a review of the energy savings potential sometime in the three-
year interval, and DOE believes this separate trigger is a one-time 
mechanism, after which SPVUs revert to the normal ``ASHRAE trigger.'' 
Accordingly, DOE commenced analytical work on these products along with 
the other equipment that is subject to the current ``ASHRAE trigger'' 
in the May 2011 NODA.
    Upon review of the SPVU market, DOE identified several models of 
SPVUs in the small equipment class. However, DOE did not identify any 
models of SPVUs in the very large category or any models of single 
package vertical heat pumps (SPVHPs) in the large category. The 
Department identified only five models of single package vertical air 
conditioners (SPVACs) in the large category, and these were all close 
to the upper size limit of the small category, at 70,000 Btu/h or less. 
As a result of the apparent lack of a market for very large SPVUs and 
large SPVHPs (as demonstrated by the small size of the market (five 
models) and accompanying lack of shipment estimates for the large 
SPVACs), for the May 2011 NODA, DOE conducted complete preliminary 
energy saving estimates for only the small equipment classes. 
Additionally, DOE used the energy saving results for small SPVACs to 
derive an estimate of the potential energy savings for large SPVACs.
    In response to the May 2011 NODA, the CA IOUs encouraged DOE to 
conduct additional analysis for SPVUs above the current ASHRAE levels 
due to DOE's preliminary analysis of higher levels showing potential 
reduction of national energy consumption of 0.5 quads over 30 years. 
(CA IOU, Nos. 10 and 12 at p. 2) The Advocates also agreed that the 
amendments to EISA 2007 compel review of the existing standards for 
SPVUs and consideration of levels above those contained in ASHRAE 90.1-
2010. (The Advocates, No. 8 at p. 7)
    DOE concurs with these comments. As a result of the potential for 
high energy savings from increasing the efficiency levels for SPVUs, 
and the fact that any of these levels would be higher than the ASHRAE 
levels, DOE is conducting additional analysis for these products along 
the 30-month timeline for more-stringent standards, as allowed by EPCA. 
(42 U.S.C. 6313(a)(6)(B)) No further results regarding these products' 
efficiency are presented in today's NOPR, and the results of the 
additional analysis for SPVUs will be presented in a separate NOPR in 
the future, consistent with that timeline. However, DOE is proposing to 
adopt AHRI 390 as the DOE test procedure for this equipment.

C. Air Conditioners and Condensing Units Serving Computer Rooms

    Air conditioners and condensing units serving computer rooms 
operate similarly to other types of commercial packaged air 
conditioners in that they provide space conditioning using a 
refrigeration cycle consisting of a compressor, condenser, expansion 
valve, and evaporator. However, air conditioners and condensing units 
serving computer rooms are typically designed to maintain the 
temperature in the conditioned space within a narrow range (i.e., 
minimizing temperature swings) and to maintain a specific relative 
humidity. This equipment is commonly capable of humidifying or 
dehumidifying the air and then, if necessary, reheating it to maintain 
a specific humidity.
    ASHRAE Standard 90.1-2010 created a separate product class for 
``air conditioners and condensing units serving computer rooms,'' and 
set efficiency levels using the sensible coefficient of performance 
(SCOP) metric, as measured using the test method in ASHRAE Standard 
127-2007, ``Method of Testing for Rating Computer and Data Processing 
Room Unitary Air Conditioners.'' The product classes and efficiency 
levels established in ASHRAE Standard 90.1-2010 are set forth in Table 
II.1 above.
    Prior to this equipment having separate efficiency levels and test 
procedures specified in ASHRAE Standard 90.1, DOE discussed such units 
using the terminology ``computer room air conditioners'' in an August 
9, 2000 NOPR (65 FR 48828, 48830-31) and an October 21, 2004 direct 
final rule (69 FR 61962, 61967). In the August 2000 NOPR, DOE 
determined that computer room air conditioners were not covered as part 
of the commercial packaged air conditioning and heating equipment 
classes in EPCA and subsequently upheld this position in the October 
2004 direct final rule. DOE made this determination because at the time 
of passage of the Energy Policy Act of 1992 (EPACT 1992, Pub. L. 102-
486, which gave DOE the authority to cover commercial package air-
conditioning and heating equipment), the statute excluded this 
equipment, and as a result, DOE concluded that it lacked the authority 
to regulate this equipment. The basis for DOE's decision stemmed from 
the scope of ASHRAE Standard 90.1, which at the time specified that the 
standard did not cover ``equipment and portions of building systems 
that use energy primarily to provide for industrial, manufacturing, or 
commercial processes.'' (See section 2.3(c) of ASHRAE 90.1 standards 
prior to ASHRAE Standard 90.1-2010; cited at 65 FR 48828, 48830 (August 
9, 2000)). Further, the House Report on EPACT 1992 (H.R. Rep. No. 474, 
102d Cong., 2d Sess., pt. 1 at 175 (1992)) pointed out that the 
efficiency standards contained in the bill were developed by ASHRAE in 
ASHRAE Standard 90.1. DOE concluded that this indicated that the 
efficiency standards for commercial products in EPACT 1992 would have 
the same scope as the version of ASHRAE Standard 90.1 current at the 
time of the legislation's enactment (i.e., ASHRAE Standard 90.1-89), 
which did not cover computer room air conditioners. As a result, DOE

[[Page 2372]]

concluded at the time that it did not have the authority to cover 
computer room air conditioners. However, DOE stated in both the NOPR 
and direct final rule that ``if some of the relevant circumstances were 
to change--if, for example, ASHRAE Standard 90.1 were to incorporate 
efficiency standards and test procedures for this equipment or the 
equipment was to become widely used for conventional air conditioning 
applications--the Department might revisit this issue.'' 65 FR 48828, 
48831 (August 9, 2000) (supporting this point); 69 FR 61962, 61967 
(Oct. 21, 2004) (making the quotation).
    ASHRAE Standard 90.1-2010 experienced expanded scope as compared to 
previous versions of ASHRAE Standard 90.1, including process loads 
(e.g., computer rooms) and creation of a separate product class for 
``air conditioners and condensing units serving computer rooms.'' EPCA 
generally directs DOE to follow ASHRAE Standard 90.1 when it is amended 
with respect to certain equipment types, including commercial package 
air conditioning and heating equipment. Thus, DOE has tentatively 
concluded that because ASHRAE has expanded the scope of Standard 90.1 
to include air conditioners and condensing units serving computer 
rooms, the scope of DOE's obligations pursuant to EPCA with regard to 
ASHRAE products has similarly expanded to encompass these products. As 
such, DOE tentatively concluded in the May 2011 NODA that it had the 
authority to review the ASHRAE Standard 90.1-2010 efficiency levels for 
air conditioners and condensing units serving computer rooms and to 
establish minimum energy conservation standard levels for this 
equipment. 76 FR 25622, 25634 (May 5, 2011). However, DOE did not 
perform a potential energy savings analysis for this equipment as a 
part of the NODA due to the lack of available data, and instead, DOE 
requested data and information from interested parties that would allow 
it to conduct a potential energy savings analysis as part of this 
proceeding.
    Lastly, although DOE addressed computer room air conditioners in 
the August 2000 NOPR and October 2004 direct final rule, DOE never 
formally defined this term. In reviewing ASHRAE Standard 90.1-2010, DOE 
noted that ASHRAE does not define a class of equipment in terms of 
physical characteristics, but rather an application (i.e., ``serving 
computer rooms''). Because air conditioners and condensing units 
serving computer rooms have the same basic components as conventional 
air conditioners, there is some difficulty in defining ``air 
conditioners and condensing units serving computer rooms'' such that 
they can be clearly differentiated from conventional commercial 
packaged air conditioners and heat pumps. DOE reviewed the definitions 
in both ASHRAE 127-2007, Method of Testing for Rating Computer and Data 
Processing Room Unitary Air Conditioners, (the test procedure specified 
in ASHRAE Standard 90.1- 2010 for air conditioners and condensing units 
serving computer rooms) and Title 20 in the California Code of 
Regulations (which establishes California's requirements for this 
equipment), and found in the May 2011 NODA that the definitions in each 
of the above sources do not contain criteria that would allow DOE to 
clearly differentiate this type of equipment from conventional 
equipment, without overlapping. 76 FR 25622, 25634 (May 5, 2011). DOE 
revisited the issue of defining ``computer room air conditioners'' for 
this NOPR, and it is discussed further in section VI.A.1 below.
    In response to the May 2011 NODA, the Advocates supported DOE's 
determination that it has the authority to review the ASHRAE Standard 
90.1-2010 efficiency levels for computer room air conditioners and 
establish energy conservation standards. (The Advocates, No. 8 at p. 7) 
AHRI suggested that DOE should adopt the ASHRAE Standard 90.1 approach 
for computer room air conditioners. (AHRI, No. 11 at p. 3) The 
Advocates stated that potential energy savings for computer room air 
conditioners may be significant, and the CA IOUs also noted that 
computer room air conditioners have high potential energy savings, 
particularly given their market penetration. (The Advocates, No. 8 at 
p. 7; CA IOU, Nos. 10 and 12 at p. 3-4) The Advocates and the CA IOUs 
recommended that DOE ensure that any standards established for computer 
room air conditioners be at least as stringent as the current 
California standards. (The Advocates, No. 8 at p. 7; CA IOU, Nos. 10 
and 12 at p. 3-4)
    In response to the suggestions from stakeholders, DOE undertook an 
analysis to estimate the potential energy savings associated with 
computer room air conditioners, and to perform a cost-benefit analysis 
of standard levels above the ASHRAE Standard 90.1-2010 levels. DOE has 
obtained additional information for this equipment and conducted an 
energy and economic savings analysis, which is discussed in Section VI. 
However, as discussed in that section, DOE believes that clear and 
convincing evidence does not exist as would justify standards beyond 
those in ASHRAE Standard 90.1-2010. As a result, DOE is proposing to 
adopt energy efficiency standards for computer room air conditioners at 
the levels set forth in ASHRAE Standard 90.1-2010. See sections VI and 
VIII for a summary of DOE's analysis, results, and conclusions for 
computer room air conditioners.

D. Coverage of Commercial Package Air Conditioning and Heating 
Equipment That Are Exclusively Used as Part of Industrial or 
Manufacturing Processes

    DOE received an inquiry from an interested party regarding the 
applicability of DOE's regulatory program for commercial package air 
conditioning and heating equipment in terms of equipment that is used 
exclusively for industrial or manufacturing processes. Specifically, 
Engineered Air asked the Department to clarify it's position on the 
following three issues: (1) In units where centrifugal condenser fans 
are required, the specified EERs cannot be met due to the motor 
horsepower required on the condenser fan; (2) applicability of the 
regulatory program in applications where the DX unit functions without 
ANY regard to the comfort of the occupants, the EERs may not be met; 
and (3) DOE's position on enforcing its regulations since DOE's 
regulations are broader than the scope of ASHRAE Standard 90.1. 
(Engineered Air, No. 15 at p. 1)
    As mentioned above with regard to air conditioners and condensing 
units serving computer rooms, ASHRAE Standard 90.1-2010 expanded the 
scope of its coverage as compared to previous versions of ASHRAE 
Standard 90.1. Previous versions of ASHRAE Standard 90.1 did not apply 
to equipment and portions of building systems that use energy primarily 
to provide for industrial, manufacturing, or commercial processes (see 
ASHRAE Standard 90.1-2007, section 2.3(c)). While DOE still believes it 
is ASHRAE's intent to continue to exclude most of those equipment types 
that are used solely for manufacturing and industrial processes, ASHRAE 
Standard 90.1-2010 now applies to new equipment or building systems 
used in manufacturing or industrial processes that are specifically 
identified in the standard.
    In order to aid regulated entities in determining whether their 
equipment falls within the scope of DOE's definition of ``commercial 
package air conditioning and heating equipment'' and, thus, is subject 
to DOE's regulatory requirements, DOE is providing the following 
guidance. If the equipment

[[Page 2373]]

meets the definition of ``commercial package air conditioning and 
heating equipment'' in 10 CFR 431.92, is used exclusively for 
manufacturing and/or industrial processes, and is not listed as one of 
the equipment types specifically added to ASHRAE Standard 90.1, then 
DOE also believes it is not covered under DOE's regulatory program. 
Just like manufacturers, DOE will make this determination on a case-by-
case basis after considering the facts of the particular model in 
question. In making such a determination, DOE will consider factors 
such as how the model is advertised, marketed, and/or sold for use in 
buildings, the extent to which the equipment provides comfort 
conditioning to occupants, and how the equipment is designed and 
manufactured. For equipment that is used in commercial or industrial 
buildings, that has a design similar to that of equipment used in 
manufacturing processes, but provides comfort conditioning, DOE 
considers such equipment to meet the definition of ``commercial package 
air conditioning and heating equipment'' and consequently to be covered 
under ASHRAE Standard 90.1-2010. DOE notes that the fact that equipment 
may be advertised, marketed, and/or sold as part of industrial or 
manufacturing processes is not a mutually exclusive determination that 
the models are exempt them from coverage by DOE's standards for 
equipment in buildings. DOE seeks comments on ways manufacturers 
currently differentiate commercial package air conditioning and heating 
equipment used solely for manufacturing and industrial processes from 
that equipment of the same type that is used in buildings. This is 
identified as issue 1 in section X.E, ``Issues on Which DOE Seeks 
Comment.''
    With respect to Engineered Air's specific questions, DOE believes 
the above guidance will help manufacturers like Engineered Air evaluate 
the applicability of the Department's regulatory equipment to the 
specific basic models it manufactures. All equipment distributed in 
commerce in the U.S. that meets DOE's definition of commercial package 
air conditioning and heating equipment that is not subject to the 
Department's exclusion guidance set forth above must meet the Federal 
energy conservation standards regardless of technology or design. DOE 
actively enforces all of its energy conservation standards for all 
covered products and equipment.

E. Test Procedures

    EPCA requires DOE to amend any test procedures for ASHRAE products 
to the latest version generally accepted by the industry or the rating 
procedures developed or recognized by industry, as referenced in 
ASHRAE/IES Standard 90.1, unless the Secretary determines that clear 
and convincing evidence exists that the latest version of the industry 
test procedure does not meet the requirements for test procedures 
described under 42 U.S.C. 6314(a)(2)-(3).\13\ (42 U.S.C. 6314(a)(4)(A)-
(B)) The latest version of the ASHRAE Standard 90.1, ASHRAE Standard 
90.1-2010, updated its referenced test procedures to the latest 
generally accepted industry test procedures for small commercial 
package air conditioners and heating equipment (AHRI 210/240-2008, 
Performance Rating of Unitary Air-Conditioning & Air-Source Heat Pump 
Equipment), large and very large commercial package air conditioners 
and heating equipment (AHRI 340/360-2007, Performance Rating of 
Commercial and Industrial Unitary Air-Conditioning and Heat Pump 
Equipment), commercial warm-air furnaces (UL 727-2006, Standard for 
Safety for Oil-Fired Central Furnaces, and ANSI Z21.47-2006, Standard 
for Gas-Fired Central Furnaces), and commercial water heaters (ANSI 
Z21.10.3-2004, Gas Water Heaters, Volume III, Storage Water Heaters 
with Input Ratings Above 75,000 Btu Per Hour, Circulating and 
Instantaneous). In the May 2011 NODA, DOE reviewed each of these test 
procedures and described the changes in comparison to the previous 
version of the test procedure. 76 FR 25622, 25634-37 (May 5, 2011). 
These changes are described further in the sections below.
---------------------------------------------------------------------------

    \13\ The relevant statutory provisions at 42 U.S.C. 6314(a)(2)-
(3) state that test procedure shall be reasonably designed to 
produce test results which reflect energy efficiency, energy use, 
and estimated operating costs of a type of industrial equipment and 
shall not be unduly burdensome to conduct. If the test procedure is 
a procedure for determining estimated annual operating costs, such 
costs shall be calculated from measurements of energy use in a 
representative average-use cycle.
---------------------------------------------------------------------------

    Additionally, ASHRAE Standard 90.1-2010 adopts new test procedures 
for measuring the efficiency of variable refrigerant flow equipment 
(AHRI 1230-2010, Performance Rating of Variable Refrigerant Flow (VRF) 
Multi-Split Air-Conditioning and Heat Pump Equipment) and air 
conditioners and condensing units serving computer rooms (ASHRAE 127-
2007, Method of Testing for Rating Computer and Data Processing Room 
Unitary Air Conditioners). ASHRAE Standard 90.1-2010 also lists AHRI 
390-2003, Performance Rating of Single Package Vertical Air-
Conditioners and Heat Pumps, as the test procedure for SPVACs and 
SPVHPs, for which there are currently no DOE test procedures. An 
initial assessment of these test procedures is presented below.
    Lastly, DOE is required to review the test procedures for covered 
ASHRAE equipment at least once every seven years. (42 U.S.C. 
6314(a)(1)(A)) In addition to the updates to the referenced standards 
(which are discussed in the subsections below), DOE is seeking comments 
on any other relevant issues that would affect the test procedures for 
the ASHRAE equipment addressed in today's NOPR (i.e., those equipment 
for which DOE has been triggered). Interested parties are welcome to 
comment on any aspect of these test procedures as part of this 
comprehensive 7-year-review. This is identified as issue 2 in section 
X.E, ``Issues on Which DOE Seeks Comment.''
1. Small \14\ (h Cooling Capacity) Commercial Package Air 
Conditioners and Heating Equipment
---------------------------------------------------------------------------

    \14\ EPCA defines ``small commercial package air conditioning 
and heating equipment'' as commercial package air conditioning and 
heating equipment that are rated below 135,000 Btu/h (cooling 
capacity). (42 U.S.C. 6311(8)(B)) ASHRAE 90.1-2010 generally divides 
covered commercial package air conditioners into the following class 
sizes: (1) h; (2) >=65,000 and h; (3) 
>=135,000 and h; and (4) >=240,000 Btu/h and h. Thus, ``small'' commercial package air conditioners, as 
defined by EPCA, are split into two size classes in ASHRAE Standard 
90.1-2010: (1) h and (2) >=65,000 and h.
---------------------------------------------------------------------------

    For small commercial package air conditioners and heating 
equipment, ASHRAE Standard 90.1-2010 updated its referenced test 
procedure from AHRI 210/240-2003 to AHRI 210/240-2008. Between the 2003 
and 2008 versions of AHRI 210/240, AHRI made several updates, which are 
summarized here and discussed in further detail in the May 2011 NODA. 
76 FR 25622, 25635 (May 5, 2011). AHRI 210/240-2008 references DOE's 
test procedure for residential central air conditioners and heat pumps 
contained at 10 CFR part 430, subpart B, Appendix M. AHRI updated the 
210/240 test procedure for small commercial air conditioners and air-
source heat pumps with a cooling capacity less than 65,000 Btu/h to 
reflect the recent updates the DOE made to its test procedure for 
residential central air conditioners and heat pumps at 10 CFR part 430, 
subpart B, Appendix M. In doing so, AHRI updated the definitions for 
``heating seasonal

[[Page 2374]]

performance factor'' and ``seasonal energy efficiency ratio'' to match 
the definitions for those terms in DOE's residential central air 
conditioner and heat pump test procedure. AHRI also added definitions 
for ``tested combination, ``small duct, high velocity system,'' 
``space-constrained product,'' and ``through-the-wall air conditioner 
and heat pump,'' that match the DOE's definitions at 10 CFR 430.2. 
Further, AHRI reorganized and added tables specifying the criteria for 
the standard rating conditions for the various types of equipment to be 
identical to those contained in the DOE test procedure for residential 
central air conditioners and heat pumps at 10 CFR part 430, subpart B, 
Appendix M.
    In the NODA, DOE tentatively concluded that these changes did not 
significantly impact the energy efficiency metric of small commercial 
air conditioners and heat pumps with a cooling capacity less than 
65,000 Btu/h. In response, DOE received comment from AHRI agreeing with 
DOE's tentative conclusion in the NODA. (AHRI, No. 11 at p. 4) DOE did 
not receive any comments or information that would cause it to 
reconsider the adoption of the updated AHRI 210/240-2008 test method. 
As a result, DOE is proposing to incorporate by reference AHRI 210/240-
2008 into the Federal test procedure for small commercial air 
conditioners and heat pumps with a cooling capacity less than 65,000 
Btu/h.
    Additionally, through review of the AHRI certification program for 
commercial unitary equipment, DOE has discovered that the use of a 
compressor ``break-in'' period is common when testing commercial 
unitary equipment. By way of explanation, the AHRI certification 
program provides for an optional ``break-in'' period, which allows a 
manufacturer to have the testing laboratory run the equipment for a 
period of time before beginning the test. This break-in period is 
particularly important for scroll compressors, which may be less 
efficient when first started and may require time to warm up to achieve 
optimal performance. Once the compressor is broken in, the performance 
should be more representative of the actual field performance. EPCA 
requires that test procedures be reasonably designed to produce test 
results which reflect energy efficiency, energy use, and estimated 
operating costs for a typical type of equipment (or class thereof) 
during a representative use cycle, and shall not be unduly burdensome 
to conduct. (42 U.S.C. 6314(a)(2))
    DOE believes that allowing for an optional break-in period will 
provide manufacturers more flexibility to produce test results that 
reflect energy efficiency of their units in a manner that is 
representative of their average use. At the same time, DOE recognizes 
that requiring the break-in period may add significant testing costs 
and burden, and, thus, DOE believes the break-in period should be 
optional to allow manufacturers to use this period at their discretion. 
Therefore, DOE is proposing to create a provision in its test 
procedures at 10 CFR 431.96 that would allow manufacturers the option 
of a ``break-in'' period not to exceed 16 hours to warm up the 
equipment's compressor and components. This 16-hour time limit of the 
``break-in'' period that DOE is proposing matches the period used by 
AHRI in its Operations Manual for Unitary Large Equipment Certification 
Program.\15\ DOE believes that this limit is likely common practice in 
industry. Lastly, if manufacturers choose to use a break-in period when 
testing their equipment, DOE will be proposing to require that in 
addition to reporting to DOE the efficiency rating for their products, 
manufacturers must also report the amount of time (up to 16 hours) used 
to break in their equipment to achieve the efficiency being 
represented. Note, DOE will update the certification provisions pending 
the outcome of this proposal in the upcoming certification, compliance, 
and enforcement rulemaking. DOE seeks comments on all aspects of this 
proposal, including the need for an optional break-in period and the 
length of time that should be allowed for such a period. This is 
identified as issue 3 in section X.E, ``Issues on Which DOE Seeks 
Comment.''
---------------------------------------------------------------------------

    \15\ See: http://www.ahrinet.org/App_Content/ahri/files/Certification/OM%20pdfs/ULE%20OM%20December%202010.pdf.
---------------------------------------------------------------------------

2. Small (>=65,000 and h Cooling Capacity), Large 
(>=135,000 and h Cooling Capacity) and Very Large 
(>=240,000 and h Cooling Capacity) Commercial Package Air 
Conditioners and Heating Equipment
    ASHRAE Standard 90.1-2010 updated its referenced test procedure for 
small, large, and very large commercial package air conditioners and 
heating equipment with a cooling capacity greater than or equal to 
65,000 Btu/h (AHRI 340/360) from the 2004 version (currently referenced 
in DOE's test procedures) to the 2007 version. Between these two 
versions of AHRI 340/360, AHRI expanded the scope of the standard to 
include air-cooled packaged unitary air-conditioners with a cooling 
capacity from 250,000 Btu/h to less than 760,000 Btu/h. AHRI also added 
a tolerance to the minimum external static pressure measurement (from 
0.0 inches of H2O to 0.05 inches of H2O).
    In the May 2011 NODA, DOE concluded that these changes did not 
significantly impact the measurement of energy efficiency of small 
(>=65,000 Btu/h), large, and very large commercial package air 
conditioners and heat pumps. 76 FR 25622, 25636 (May 5, 2011). In 
response to this conclusion, DOE received comment from AHRI agreeing 
with DOE's position in the NODA. (AHRI, No. 11 at p. 4) DOE did not 
receive any other comments on this topic. As a result, DOE is proposing 
to incorporate by reference AHRI 340/360-2007 into the DOE test 
procedure for small, large, and very large commercial air conditioners 
and heat pumps with a cooling capacity greater than or equal to 65,000 
Btu/h but less than 760,000 Btu/h.
    For small (>=65,000 Btu/h), large, and very large commercial 
package air conditioning and heating equipment, DOE is also proposing 
to add the optional ``break-in'' time of no more than 16 hours, as 
discussed in the small (h) commercial package air 
conditioners and heating equipment subsection above (section IV.E.1). 
DOE believes that adding this option will allow the test procedure to 
be more representative of the actual performance characteristics of 
small (>=65,000 Btu/h), large, and very large commercial package air 
conditioners and heating equipment, while not increasing the burden on 
manufacturers. Note, DOE will update the certification provisions 
pending the outcome of this proposal in the upcoming certification, 
compliance, and enforcement rulemaking. DOE seeks comment on the need 
for an optional break-in period for small, large, and very large 
commercial package air conditioning and heating equipment, and the 
length of time that should be allowed for such a period. This is 
identified as issue 4 in section X.E, ``Issues on Which DOE Seeks 
Comment.''
3. Commercial Oil-Fired Warm-Air Furnaces
    ASHRAE Standard 90.1-2010 updated its reference test procedure for 
commercial oil-fired warm-air furnaces (UL 727) from the 1994 version 
of the standard to the 2006 version of the standard. The DOE test 
procedure for determining the energy efficiency of commercial warm-air 
furnaces

[[Page 2375]]

references part of UL 727 for commercial oil-fired warm-air furnaces. 
10 CFR 431.76. Within the sections of UL 727 referenced by the DOE test 
procedure, the only substantive change from the 1994 version to the 
2006 version of UL 727 was the removal of a passage from the scope 
section that allowed manufacturers to propose alternate revisions to 
the requirements of UL 727 if their product's features, components, 
materials, or systems are unsafe when used with the UL 727 test 
procedure.
    In the May 2011 NODA, DOE concluded that this change did not 
significantly impact the energy efficiency metric for commercial oil-
fired warm-air furnaces. 76 FR 25622, 25636 (May 5, 2011). In response, 
DOE received comment from AHRI agreeing with DOE's tentative 
conclusion. (AHRI, No. 11 at p. 4) DOE did not receive any other 
comments on this topic. Thus, DOE is proposing to amend its test 
procedures at 10 CFR 431.76 to reference UL 727-2006 for commercial 
oil-fired warm-air furnaces.
4. Commercial Gas-Fired Warm-Air Furnaces
    ASHRAE Standard 90.1-2010 updated its referenced test procedure for 
commercial gas-fired warm-air furnaces (ANSI Z21.47) from the 1998 
version (currently referenced in DOE's test procedure) to the 2006 
version. Between the two versions of ANSI Z21.47, ANSI updated the 
sections that DOE references in its test procedure for determining the 
energy efficiency of commercial gas-fired warm-air furnaces. In the 
relevant sections, ANSI expanded the scope to include optional special 
construction provisions for furnaces designed to operate at altitudes 
over 2000 feet. ANSI also added a new section, which is not part of the 
referenced DOE test procedure but caused the Thermal Efficiency section 
(which is relevant) to move from section 2.38 to section 2.39. In the 
May 2010 NODA, DOE summarized these updates and stated its tentative 
conclusion that they do not substantively impact the measurement of 
energy efficiency for commercial gas-fired warm-air furnaces. 76 FR 
25622, 25636 (May 5, 2011).
    In response, DOE received comment from AHRI agreeing with DOE's 
conclusion in the NODA. (AHRI, No. 11 at p. 4) DOE did not receive any 
other comments from interested parties pertaining to this issue. Thus, 
DOE is proposing to amend its test procedure at 10 CFR 431.76 to 
reference ANSI Z21.47-2006 for commercial gas-fired furnaces warm-air 
furnaces.
5. Commercial Water Heaters
    ASHRAE Standard 90.1-2010 updated its referenced test procedure for 
commercial gas-fired water heaters (ANSI Z21.10.3) from the 1998 
version to the 2004 version. Between these two versions, ANSI moved the 
relevant sections for thermal efficiency test and standby loss test to 
Exhibit G and added a provision to limit the duration of the standby 
loss test to a maximum of 48 hours if there is no cutout (i.e., the 
thermostat acts to shut off the burner) after the 24-hour mark. This 
addition closely matches the additional stipulation in DOE's test 
procedure for commercial gas-fired water heaters at 10 CFR 431.106, 
which references the ANSI Z21.10.3-1998 test procedure, but adds that 
the maximum duration of the test should be 48 hours if the water heater 
is not in heating mode at that time. The difference between the two 
tests is the ANSI version ends the test immediately at the 48-hour 
mark, whereas the DOE test procedure would allow time after the 48-hour 
mark for the water heater to finish its heating cycle. Because DOE's 
test procedure already includes a provision regarding the duration of 
the standby test, the provision will supersede this update to ANSI 
Z21.10.3.
    In the May 2010 NODA, DOE tentatively concluded that these updates 
would not significantly affect the measurement of energy efficiency for 
commercial gas-fired water heaters. 76 FR 25622, 25636 (May 5, 2011). 
In response, DOE received comment from AHRI agreeing with DOE's 
conclusion in the NODA. (AHRI, No. 11 at p. 4) However, the American 
Gas Association (AGA) expressed concern that water heaters that comply 
with the version of ANSI Z21.10.3 currently referenced by DOE's test 
procedure may be found in non-compliance under the revised test method 
and suggested that DOE do testing in order to provide data on the 
impact of this change. (AGA, No. 9 at p. 1)
    In response, DOE again reviewed the changes to the ANSI Z21.10.3 
test procedure for commercial water heating equipment. DOE notes that 
the only change in the relevant sections of the ANSI Z21.10.3-1998 test 
procedure is the duration limit for the standby loss test in the event 
that a cutout does not occur. As noted above, this duration limit is 
superseded by DOE's duration limit specified in 10 CFR 431.106, which 
has been in place since the October 21, 2004 direct final rule. 69 FR 
61974, 61984. As a result, the standby loss test changes in ANSI 
Z21.10.3-2004 would similarly be superseded by DOE's requirements for 
the standby loss test; and for all practical purposes, the test will 
continue to be required to be conducted in the same manner as before 
this proposed rule. Thus, DOE does not believe that the new changes to 
the test procedure will cause any currently-compliant water heaters to 
be found in noncompliance. Because DOE believes that the incorporated 
provisions of the water heater test procedure in ANSI Z21.10.3-2004 
will be conducted in the same manner as those referenced in the 
previous test procedure, DOE does not believe that testing is required 
to support its tentative conclusion that there will be no difference in 
equipment efficiency as determined by the updated test procedure.
    AGA also requested clarification on the current DOE efficiency 
requirement for electric and oil-fired commercial storage water heaters 
and was concerned that the standby loss test changes in ANSI Z21.10.3-
2004 would also affect the ratings for these equipment classes. AGA 
stated its interpretation that the current standby loss requirements 
for these products stem from the 1989 version of ASHRAE Standard 90.1 
and that editions of the ASHRAE Standard 90.1 since then contain 
standby loss requirements that are less stringent for commercial 
electric water heaters and, accordingly, are not adoptable by DOE. 
(AGA, No. 9 at p.1) In response, the efficiency requirements for 
electric and oil-fired commercial storage water heaters are listed at 
10 CFR 431.110. Oil-fired storage water heaters must have a minimum 
thermal efficiency of 78 percent and a maximum standby loss of Q/
800+110(Vr)1/2 (Btu/h), where Q is the nameplate 
input rate in Btu/h and Vr is the rated volume. Electric 
water heaters do not currently have a minimum thermal efficiency but 
have a maximum standby loss of 0.30+27/Vm (%/hr), where 
Vm is the measured storage volume. The standards for oil-
fired commercial storage water heaters were promulgated in a final rule 
published in the Federal Register on January 12, 2001, which adopted 
the efficiency levels in ASHRAE Standard 90.1-1999 (66 FR 3336), and 
the Energy Policy Act of 1992 (EPACT 1992) set the standards for 
electric commercial water heaters (EPACT 1992, Pub. L. 102-486, Oct. 
24, 1992). ASHRAE Standard 90.1-1999 did revise the efficiency level 
for electric water heaters; however, DOE determined that the revised 
level was a less stringent standard than the current Federal standard 
(66 FR 3336, 3350 (Jan. 12, 2001)). Subsequent editions of ASHRAE 
Standard 90.1 still contain this

[[Page 2376]]

revised efficiency level, but DOE still maintains that the current 
Federal standard set by EPACT 1992 is more stringent than the ASHRAE 
efficiency level.
    DOE is proposing to amend its test procedure at 10 CFR 431.106 to 
incorporate by reference ANSI Z21.10.3-2006 for commercial gas-fired 
water heaters. DOE seeks additional comment on this proposal to adopt 
ANSI Z21.10.3-2006, which is identified as issue 5 in section X.E, 
``Issues on Which DOE Seeks Comment.''
6. Air Conditioners and Condensing Units Serving Computer Rooms
    ASHRAE Standard 90.1-2010 specifies ASHRAE 127-2007, Method of 
Testing for Rating Computer and Data Processing Room Unitary Air 
Conditioners, as the test procedure for determining the sensible 
coefficient of performance (SCOP) of air conditioners and condensing 
units serving computer rooms. ASHRAE 127-2007 defines and establishes a 
test method for computer room air conditioners. As noted above, EPCA 
directs DOE to prescribe the generally accepted industry testing 
procedures or rating procedures developed or recognized by ASHRAE, as 
referenced in ASHRAE Standard 90.1, unless there is clear and 
convincing evidence that to do so would not produce test results which 
reflect the energy efficiency or energy use during an representative 
average use cycle or that the test procedure would be unduly burdensome 
to conduct. (42 U.S.C. 6314(a)(2)-(4) DOE reviewed ASHRAE 127-2007 to 
determine whether it meets the requirements of EPCA for incorporation 
by reference as part of the Federal test method for determining 
compliance with minimum energy conservation standards.
    ASHRAE 127-2007 contains provisions that make it better suited for 
computer room air conditioners than the current commercial packaged air 
conditioner test procedures (i.e., AHRI 210/240 and AHRI 340/360). The 
ASHRAE 127-2007 test procedure places an emphasis on sensible cooling 
\16\ by establishing the SCOP metric, which is a measure of the 
sensible cooling output divided by the electrical input of all 
components, excluding reheaters and humidifiers (e.g., the input of the 
compressors, fans, controls, air-cooled condenser, or air-cooled 
fluidcooler fans if used). Sensible cooling is important in computer 
room air conditioners because the cooling load in most server and 
computer rooms deals almost exclusively with a sensible heat load, 
meaning that there is very little moisture removed from the air inside 
the room. There is a very low latent heat load (i.e., heat load 
associated with the removal of moisture in the air) because very little 
outside air actually reaches the room, and there is almost no outside 
water in the room, which would alter the humidity of the computer room. 
A typical air conditioner used for space conditioning will encounter 
both a latent load and a sensible load. However, unlike other types of 
air conditioners, a computer room air conditioner will have an almost 
exclusively sensible cooling load, so it is reasonable that the metric 
for measuring energy efficiency would place an emphasis on sensible 
cooling. DOE believes that the SCOP metric under ASHRAE 127-2007 is a 
useful metric for measuring the energy efficiency of computer rooms and 
data rooms due to its emphasis on sensible cooling.
---------------------------------------------------------------------------

    \16\ ``Sensible cooling'' is the cooling effect that causes a 
decrease in the dry-bulb temperature, which is the actual 
temperature of the air. ``Latent cooling'' is the cooling effect 
that causes a decrease in the wet-bulb temperature or the moisture 
content of the air, which is similar to the temperature one feels.
---------------------------------------------------------------------------

    In addition, ASHRAE 127-2007 contains a standard rating test for 
reheating/dehumidification/humidification systems, which are important 
functions of computer room air conditioners. The humidity of a computer 
room is an important aspect to control, as too much humidity can cause 
condensation on the electronic equipment (which has the potential to 
render the equipment inoperable) and too little humidity may cause 
potentially hazardous static discharges.
    Because ASHRAE 127-2007 is tailored to computer room air 
conditioners, DOE believes it will provide a more representative 
efficiency rating, which is more reflective of the actual efficiency of 
the unit. DOE believes that ASHRAE 127-2007 is reasonably designed to 
produce test results that reflect the energy efficiency, energy use, 
and estimated operating costs during a representative average use cycle 
and is not unduly burdensome to conduct, as outlined in EPCA. (42 
U.S.C. 6314(a)(2)). In response to the May 2011 NODA, AHRI encouraged 
DOE to adopt ASHRAE 127 as the test procedure for air conditioners and 
condensing units serving computer rooms. (AHRI, No. 11 at p. 4) DOE did 
not receive any other comments from interested parties pertaining to 
this issue. For the reasons above, DOE is proposing to adopt ASHRAE 
127-2007 as the test method for computer room air conditioners; 
however, DOE notes several possible issues with the test procedure in 
the paragraphs below. DOE seeks comment on this proposal, as well as 
the need for potential modifications for the computer room air 
conditioner test procedures, and this is identified as issue 6 in 
section X.E, ``Issues on Which DOE Seeks Comment.''
    DOE notes that on July 14, 2011, ASHRAE published a public draft 
review of a revision to ASHRAE 127. A preliminary review of this draft 
revealed that ASHRAE created four different application classes to meet 
the industry need to modify equipment to accept higher return 
temperatures. Each application class has a different standard rating 
condition. ASHRAE also changed the water temperature conditions for 
water-cooled direct expansion units to match the conditions in AHRI 
340/360 plus a typical cooling tower approach. This update also renames 
the SCOP and adjusted sensible coefficient of performance (ASCOP) 
metrics as Net Sensible Coefficient of Performance Rating (NSenCOP) and 
Integrated Net Sensible Rating (iNSenCOP), respectively. The NSenCOP is 
to be published at five rating conditions as opposed to four for SCOP 
(the four rating test conditions A-D in addition to iNSenCOP). The 
public comment period for the review of this draft has closed. DOE is 
not proposing to adopt the draft revisions to ASHRAE 127 because they 
have not been finalized yet, but DOE seeks comments about how to treat 
the revisions. This is identified as issue 6 in section X.E, ``Issues 
on Which DOE Seeks Comment.''
    Lastly, DOE notes that the SCOP metric in ASHRAE 127-2007 does not 
measure part-load performance, and may not properly account for 
efficiency features that improve the part-load performance, such as 
variable speed fan motors and multi-stage compressors. Computer room 
air conditioners operate virtually all year round with a varying load, 
depending on how active the computer room is and the outdoor 
conditions. DOE requests comments on the shortcomings of this test 
procedure and the SCOP metric, and further improvements that could be 
made. See Section X.E, ``Issues on Which DOE Seeks Comment.''
    For computer room air conditioners, DOE is also requesting comment 
on the appropriateness of allowing an optional ``break-in'' time of no 
more than 16 hours, similar to those being proposed for other 
commercial air conditioning and heating equipment in this notice (as 
discussed in section IV.E.1). DOE believes that adding this option 
could

[[Page 2377]]

allow the test procedure to be more representative of the actual 
performance characteristics of computer room air conditioners, while 
not increasing the burden on manufacturers. DOE seeks comment on the 
need for an optional break-in period for computer room air 
conditioners, and the length of time that should be allowed for such a 
period, if it is needed. This is identified as issue 17 in section X.E, 
``Issues on Which DOE Seeks Comment.''
7. Variable Refrigerant Flow Systems
    ASHRAE Standard 90.1-2010 specifies AHRI 1230, Performance Rating 
of Variable Refrigerant Flow (VRF) Multi-Split Air-Conditioning and 
Heat Pump Equipment, as the test procedure for variable refrigerant 
flow systems. As noted previously, EPCA directs DOE to prescribe the 
``generally accepted industry testing procedures or rating procedures 
developed or recognized by the Air-Conditioning and Refrigeration 
Institute or by the American Society of Heating, Refrigeration and Air 
Conditioning Engineers, as referenced in ASHRAE/IES Standard 90.1'' 
unless there is clear and convincing evidence that to do so would not 
produce test results which reflect the energy efficiency or energy use 
during an representative average use cycle or that the test procedure 
would be unduly burdensome to conduct. (42 U.S.C. 6314(a)(2)-(4)) DOE 
reviewed AHRI 1230-2010 to determine whether it meets the requirements 
of EPCA for incorporation by reference as part of the Federal test 
method for determining compliance with minimum energy conservation 
standards.
    DOE first addressed the issue of AHRI 1230 in the October 22, 2007 
test procedure final rule for residential air conditioners and heat 
pumps. 72 FR 59906. In that final rule, DOE decided not to adopt ARI 
1230 at the time for residential VRF products, because ARI 1230 had not 
been finalized yet. DOE also noted that the draft test procedure lacked 
information on: (1) How to conduct intermediate speed tests; (2) 
whether any indoor units are to be turned off for part-load test; and 
(3) how to interpolate EER and COP in the intermediate speed range. Id. 
at 59909.
    Since 2008, DOE has issued 13 waivers to 5 different manufacturers 
exempting them from the commercial air conditioning and heat pump test 
procedures (AHRI 210/240 or AHRI 340/360).\17\ In all 13 cases, the 
equipment in question was a multi-split variable refrigerant flow air 
conditioner or heat pump. For these types of equipment, there are 
multiple indoor units that are paired with a single outdoor unit, and 
the indoor and outdoor units can be mixed and matched to create 
different systems with a wide array of possible combinations. For 
example, one major manufacturer has a product line that can have as 
many as 38 different interior units connected to a single outdoor unit. 
Those 38 interior units can be selected in any combination from a pool 
of 43 unique indoor models. Then, when considering that the indoor 
units in the system could also be paired with any one of 7 unique 
outdoor models, the number of possible combinations becomes 
astronomical. DOE recognized that the vast number of combinations of 
units that would need to be tested would overwhelm any testing 
laboratory, so it granted test procedure waivers for these units and 
required these units to be tested using an alternative test procedure 
that DOE developed. The only restriction in terms of the number of 
interior units is that the total capacity of all the indoor units must 
be comparable to the capacity of the outdoor unit. This alternate test 
procedure (which is outlined in each test procedure waiver granted by 
DOE for this equipment) permits the manufacturer to designate a 
``tested combination'' for each outdoor unit. Each ``tested 
combination'' must have between two and five indoor units and must be 
tested using according to the applicable DOE test procedure. 
Manufacturers must release the test results for those ``tested 
combinations,'' and for the non-tested combinations, manufacturers can 
represent the energy use as equal to the tested combination, provided 
that the outdoor units are the same.
---------------------------------------------------------------------------

    \17\ Daikin AC (Americas) Inc. (73 FR 39680 (July 10, 2008); 74 
FR 15955 (April 8, 2009); 74 FR 16373 (April 10, 2009); 75 FR 22581 
(April 29, 2010); 75 FR 25224 (May 7, 2010); 76 FR 34685 (June 14, 
2011)).
    Mitsubishi Electric and Electronics USA, Inc. (74 FR 35860 (July 
21, 2009); 74 FR 66311 (Dec. 15, 2009); 74 FR 66315 (Dec. 15, 2009); 
76 FR 40714 (July 11, 2011)).
    LG (74 FR 66330 (Dec. 15, 2009)).
    Sanyo North America Corporation (75 FR 41845 (July 19, 2010)).
    Carrier Corporation (76 FR 31951 (June 2, 2011)).
---------------------------------------------------------------------------

    In addition, manufacturers brought up several other issues in the 
petitions for test procedure waivers that related to applying the 
commercial air conditioning test procedure to VRF systems. 
Manufacturers asserted that: (1) There is no provision to accommodate 
having indoor units operating at different static pressures; (2) there 
is no precise number of part-load tests for fully variable speed; and 
(3) it does not account for simultaneous heating and cooling. DOE notes 
that the fact that multi-split systems can simultaneously heat and cool 
a building does not impact the efficiency rating, because the 
efficiency metric (i.e., EER) is a single point rating metric and does 
not measure seasonal energy use.
    AHRI 1230-2010 contains the same definition and procedures for 
rating the efficiency of a ``tested combination'' as the alternative 
DOE test procedure that DOE developed in response to the waivers. AHRI 
1230-2010 also contains specific language on how to test multiple 
indoor units, the number of tests for variable speed compressors, and 
how to test for simultaneous cooling and heating efficiency, which 
should mitigate manufacturer complaints regarding the existing DOE test 
procedure for commercial package air conditioning and heating equipment 
as it applies to VRF systems. AHRI 1230-2010 also tests for EER and COP 
at the same rating conditions as AHRI 210/240 and AHRI 340/360. Thus, 
these systems should test for EER in the same way as other commercial 
air conditioners and heat pumps once the systems are set up according 
to AHRI 1230-2010.
    In February 2011, AHRI amended the test procedure in Addendum 1 to 
AHRI 1230 to modify the definition of ``tested combination'' to contain 
between 2 and 12 indoor units as opposed to between 2 and 5 indoor 
units. DOE believes this change merely extends the range of a tested 
combination and has no effect on the efficiency metric of the system. 
DOE believes this test procedure properly addresses all the concerns of 
testing VRF systems, results in a rating that reasonably reflects the 
energy efficiency of these systems, and would not be unduly burdensome 
to conduct.
    In response, DOE received a comment from AHRI which encouraged DOE 
to adopt AHRI 1230-2010, stating that a deliberate and open process was 
used to develop this test procedure and that it incorporates the 
alternative test procedure initially developed by DOE to cover VRF 
equipment. (AHRI, No. 11 at p. 4) The Advocates and CA IOUs, however, 
encouraged DOE to conduct a test procedure rulemaking for VRF equipment 
in order to eliminate the need for manufacturers to seek test procedure 
waivers for this equipment. (Advocates, No. 8 at p. 5, CA IOUs, No. 
10,12 at p. 3) DOE believes that AHRI 1230-2010 incorporates all of the 
alternative test procedure that DOE developed through its waiver 
process, is a comprehensive test procedure for VRF systems, and would 
not be unduly burdensome to conduct. Manufacturers of VRF systems 
should not need to seek a test procedure waiver from AHRI

[[Page 2378]]

1230-2010 with Addendum 1. Further, DOE notes that EPCA generally 
directs DOE to prescribe the industry testing procedures as referenced 
in ASHRAE Standard 90.1, unless there is clear and convincing evidence 
that to do so would not produce test results consistent with the 
requirements of EPCA. (42 U.S.C. 6314(a)(2)-(4)). DOE believes AHRI 
1230 meets the requirements of EPCA, and, therefore, is proposing to 
adopt AHRI 1230-2010 with Addendum 1 as the test procedure for VRF 
systems. DOE seeks comment on this proposal, and this issue is 
identified as issue 7 in section X.E, ``Issues on Which DOE Seeks 
Comment.''
    For VRF systems, DOE is also proposing to add the optional ``break-
in'' time of no more than 16 hours, as discussed in the small (h) commercial package air conditioners and heating equipment 
subsection above (section IV.E.1). DOE believes that adding this option 
will allow the test procedure to be more representative of the actual 
performance characteristics of VRF systems, while not increasing the 
burden on manufacturers. Note, DOE will update the certification 
provisions pending the outcome of this proposal in the upcoming 
certification, compliance, and enforcement rulemaking. DOE seeks 
comment on the need for an optional break-in period for VRF systems, 
and the length of time that should be allowed for such a period. This 
is identified as issue 7 in section X.E, ``Issues on Which DOE Seeks 
Comment.''
8. Single Package Vertical Air Conditioners and Single Package Vertical 
Heat Pumps
    For single package vertical air conditioners and single package 
vertical heat pumps, ASHRAE Standard 90.1-2010 lists AHRI 390-2003, 
``Performance Rating of Single Packaged Vertical Air-Conditioners and 
Heat Pumps,'' as the referenced test procedure. Commercial SPVACs and 
SPVHPs were not distinguished as separate classes of commercial air 
conditioning and heating equipment in DOE's regulations until EISA 2007 
amended EPCA to set efficiency standards specifically for this 
equipment (codified at 42 U.S.C. 6313(a)(10)), which DOE subsequently 
codified in its regulations through a final rule published on March 23, 
2009. 74 FR 12058. Although EISA 2007 specified minimum energy 
conservation standards for SPVACs and SPVHPs, it did not specify the 
applicable test procedure for measuring the energy efficiency of SPVACs 
and SPVHPs. As discussed previously, according to EPCA, the test 
procedures for ASHRAE products shall be those generally accepted 
industry testing procedures or rating procedures developed or 
recognized by AHRI or ASHRAE, as referenced in ASHRAE Standard 90.1, 
and shall be reasonably designed to product test results which reflect 
energy efficiency or energy use of those products. Further, when a test 
procedure in ASHRAE Standard 90.1 is amended, EPCA directs DOE to amend 
its test procedure for the product as necessary to be consistent with 
the amended industry test procedure, unless doing so would not meet the 
requirements for test procedures described in 42 U.S.C. 6314(a)(2) and 
(3). (42 U.S.C. 6314(a)(4)(A)-(B))
    DOE reviewed AHRI 390-2003 and believes the procedure is reasonably 
designed to produce test results which reflect energy efficiency of 
SPVACs and SPVHPs. In the May 2011 NODA, DOE requested comment about 
the adoption of AHRI 390-2003 as the test method for SPVACs and SPVHPs. 
76 FR 25622, 25635 (May 5, 2011). DOE received a comment from AHRI 
encouraging DOE to adopt AHRI 390-2003, in which AHRI remarked that 
this test procedure was developed with input from DOE. (AHRI, No. 11 at 
p. 4) DOE did not receive any other comments on this topic. As a 
result, DOE is proposing to adopt AHRI 390-2003 as its test procedure 
for SPVACs and SPVHPs.
    In addition, for this equipment DOE is proposing to add the 
optional ``break-in'' time of no more than 16 hours, as discussed in 
the small (h) commercial package air conditioners and 
heating equipment subsection above (section IV.E.1). DOE believes that 
adding this option will allow the test procedure to be more 
representative of the actual performance characteristics of SPVACs and 
SPVHPs, while not increasing the burden on manufacturers. Note, DOE 
will update the certification provisions pending the outcome of this 
proposal in the upcoming certification, compliance, and enforcement 
rulemaking. DOE seeks comment on the need for an optional break-in 
period for small, large, and very large commercial package air 
conditioning and heating equipment, and the length of time that should 
be allowed for such a period. This is identified as issue 8 in section 
X.E, ``Issues on Which DOE Seeks Comment.''
9. Additional Specifications for Testing of Commercial Package Air 
Conditioning and Heating Equipment, Including VRF Systems
    As part of its ongoing testing efforts in support of DOE's 
regulatory program, DOE has encountered situations where the Department 
has received ad hoc requests from manufacturers regarding the need for 
tailored modifications to the testing set-up or operating conditions 
for a basic model. The Department is reiterating that DOE will use only 
the conditions specified in the DOE test procedure for a given covered 
equipment, along with any additional guidance that is presented in the 
installation and/or operating manuals shipped with those units for any 
DOE-initiated testing. For example, the Department typically uses the 
optimal charge settings in the installation manuals of commercial 
package air conditioning and heating equipment when they are specified 
for a given basic model. No additional information (i.e., additional 
specificity for the placement or types of specific testing sensors) 
will be used for any DOE verification or enforcement testing that are 
not part of the aforementioned documents.
    DOE does not intend for this clarification to change the way 
manufacturers currently test their products for the purposes of 
determining their certified ratings for each basic model. Instead, DOE 
wishes to harmonize the way it conducts its testing with the testing 
done by manufacturers. Consequently, DOE seeks comments generally on 
whether there are additional settings beyond the tolerances in the test 
procedure or additional specifications for the test set-up that DOE 
should consider for testing of all types of commercial air conditioning 
and heating equipment as part of this rulemaking. If such settings are 
basic-model specific, DOE could, for example, come up with a way for 
manufacturers to disclose these instructions as part of their initial 
certifications for a given basic model. With the separation of VRF 
systems as a separate equipment class and the complexity inherent in 
testing this type of equipment, DOE specifically seeks comment on the 
testing conditions, the basic model operating points, and set-up for 
this equipment. This is identified as issue 9 in section X.E, ``Issues 
on Which DOE Seeks Comment.''
10. Sampling Plans for Commercial Heating, Ventilating, and Air-
Conditioning Equipment
    For purposes of certification testing, the determination that a 
basic model complies with the applicable conservation standard must be 
based on testing conducted using DOE's testing procedures and the 
sampling procedures, which are found in 10 CFR Part 429.43 for 
commercial heating, ventilating, and air conditioning

[[Page 2379]]

equipment. The sampling procedures provide that ``a sample of 
sufficient size shall be tested to insure [compliance].'' A minimum of 
two units must be tested to certify a basic model as compliant. This 
minimum is implicit in the requirement to calculate a mean--an 
average--which requires at least two values. Under no circumstances is 
a sample size of one (1) authorized. Manufacturers may need to test 
more than two samples depending on the variability of their sample. 
Therefore, the sample size can be an important element when evaluating 
the compliance of a basic model.
    DOE uses statistically meaningful sampling procedures for selecting 
test specimens of commercial and industrial equipment, which would 
require the manufacturer to select a sample at random from a production 
line and, after each unit or group of units is tested, either accept 
the sample or continue sampling and testing additional units until a 
rating determination can be made. DOE did not propose a specific sample 
size for each product because the sample size is determined by the 
validity of the sample and how the mean compares to the standard, 
factors which cannot be determined in advance.
    In this proposed rule, DOE is proposing that the existing sampling 
procedures in 10 CFR part 429.43 be applied to any new covered 
equipment being addressed by testing procedures in this NOPR, including 
VRF systems, SPVUs, and CRACs. DOE believes this type of equipment is 
similar to the other types of commercial heating, ventilating, and air-
conditioning equipment subject to DOE's existing sampling procedures 
for certification testing and does not warrant differential treatment.

F. Definitional Changes

    As discussed in the preceding sections, DOE is proposing to include 
in its regulations separate standards and test procedures for VRF 
systems, and new standards and test procedures for computer room air 
conditioners. Additionally, after the enactment of EISA 2007, DOE 
created separate standards for single package vertical air conditioners 
and heat pumps in its regulations at 10 CFR 431.97 (74 FR 12058, 12073-
74 (March 23, 2009)), and is proposing to adopt a test procedure for 
those equipment in today's notice. Further, DOE's regulations at 10 CFR 
431.97 also include ``very large'' commercial package air conditioning 
and heating equipment. To be consistent with the treatment of other 
commercial HVAC equipment and to reduce ambiguity, DOE is proposing to 
modify the definition of ``Commercial HVAC & WH product'' that was 
added to 10 CFR 431.2 by a March 7, 2011 final rule for certification, 
compliance, and enforcement for consumer products and commercial and 
industrial equipment. 76 FR 12422, 12503. DOE proposes to modify the 
definition so that it explicitly includes very large commercial package 
air conditioners and heating equipment, single package vertical air 
conditioners, single package vertical heat pumps, computer room air 
conditioners, variable refrigerant flow multi-split air conditioners, 
and variable refrigerant flow multi-split heat pumps.

V. Methodology for VRF Water-Source Heat Pumps

    This section addresses the analysis DOE has performed for this 
rulemaking with respect to VRF water-source heat pumps. As mentioned in 
section IV.B.3, DOE performed a preliminary National Energy Savings 
analysis for VRF water-source heat pumps greater than 135,000 Btu/h, 
equivalent to that performed for the May 2011 NODA for other product 
categories. DOE was unable to perform this analysis at the time of the 
NODA because AHRI had not yet released a database of efficiency 
information for these products, and DOE was unable to obtain sufficient 
EER information from a review of manufacturer Web sites. As a result of 
the minimal energy savings demonstrated by DOE's analysis for the NOPR 
(the results of which are summarized in section VIII.B.2), DOE did not 
conduct further energy savings or economic analyses. In addition, in 
response to the May 2011 NODA, AHRI confirmed that there are no VRF 
water-source heat pumps being manufactured with cooling capacities 
below 17,000 Btu/h, so DOE did not perform a potential energy-savings 
analysis for this product class.

A. Definitions of ``VRF Multi-Split Air Conditioners'' and ``VRF Multi-
Split Heat Pumps''

    VRF water-source heat pumps are part of the larger VRF system 
equipment class. VRF systems are a subset of commercial air 
conditioning and heating equipment, which ASHRAE Standard 90.1-2010 
placed into separate equipment classes. As a result, in today's NOPR, 
DOE is proposing to separate the VRF equipment classes from the other 
classes of commercial package air conditioning and heating equipment. 
Neither EPCA nor DOE's regulations in the CFR define ``variable 
refrigerant flow system.'' DOE examined the definitions for VRF systems 
in ASHRAE Standard 90.1-2010 and AHRI Standard 1230, the proposed test 
procedure for this equipment.
    ASHRAE Standard 90.1-2010 defines a ``variable refrigerant flow 
system'' as ``an engineered direct expansion (DX) multi-split system 
incorporating at least one variable capacity compressor distributing 
refrigerant through a piping network to multiple indoor fan coil units 
each capable of individual zone temperature control, through integral 
zone temperature control devices and common communications network. 
Variable refrigerant flow utilizes three or more steps of control on 
common, interconnecting piping.'' AHRI Standard 1230, the test 
procedure cited by ASHRAE Standard 90.1-2010 for use with this 
equipment, uses the term ``variable refrigerant flow multi-split 
system'' and defines it as ``a split system air-conditioner or heat 
pump incorporating a single refrigerant circuit, with one or more 
outdoor units, at least one variable speed compressor or an alternative 
compressor combination for varying the capacity of the system by three 
or more steps, multiple indoor fan coil units, each of which is 
individually metered and individually controlled by a proprietary 
control device and common communications network. The system shall be 
capable of operating as an air conditioner or a heat pump. Variable 
refrigerant flow implies three or more steps of control on common, 
inter-connecting piping.''
    In both cases, the definitions use the term ``multi-split'' to 
distinguish such units from ``mini-split,'' with the indoor units of 
the latter systems only being able to be controlled by one thermostat 
(as opposed to multi-split, which can be controlled by multiple 
thermostats). Because DOE believes that it is important to distinguish 
VRF systems as multi-split systems, DOE is proposing to formulate these 
definitions with the term ``multi-split'' in the title for this 
equipment class based on the definitions above. DOE believes that these 
proposed definitions incorporate all the unique features of this 
equipment class, most notably the individually-controlled indoor units 
which operate independently from other indoor units. DOE proposes the 
definitions of ``variable refrigerant flow multi-split air 
conditioner'' and ``variable refrigerant flow multi-split heat pump'' 
to read as follows:

    Variable refrigerant flow multi-split air conditioner means a 
unit of commercial package air conditioning and heating equipment 
that is configured as a split system air-conditioner incorporating a 
single refrigerant circuit, with one or more outdoor units, at least 
one variable-speed compressor or an alternate compressor combination 
for

[[Page 2380]]

varying the capacity of the system by three or more steps, and 
multiple indoor fan coil units, each of which is individually 
metered and individually controlled by an integral control device 
and common communications network and which can operate 
independently in response to multiple indoor thermostats. Variable 
refrigerant flow implies three or more steps of capacity control on 
common, inter-connecting piping.
    Variable refrigerant flow multi-split heat pump means a unit of 
commercial package air conditioning and heating equipment that is 
configured as a split system heat pump that uses reverse cycle 
refrigeration as its primary heating source and which may include 
secondary supplemental heating by means of electrical resistance, 
steam, hot water, or gas. The equipment incorporates a single 
refrigerant circuit, with one or more outdoor units, at least one 
variable-speed compressor or an alternate compressor combination for 
varying the capacity of the system by three or more steps, and 
multiple indoor fan coil units, each of which is individually 
metered and individually controlled by a control device and common 
communications network and which can operate independently in 
response to multiple indoor thermostats. Variable refrigerant flow 
implies three or more steps of capacity control on common, inter-
connecting piping.

    These definitions clearly delineate VRF air conditioners and heat 
pumps as a sub-category of commercial package air conditioning and 
heating equipment and are structured in such a way to ensure that there 
are no overlaps with any other covered equipment class. There is also a 
subcategory of VRF systems that have heat recovery; therefore, DOE is 
also proposing to define ``heat recovery'' in the context of variable 
refrigerant flow multi-split air conditioners or variable refrigerant 
flow multi-split heat pumps to read as follows:

    Heat recovery (in the context of variable refrigerant flow 
multi-split air conditioners or variable refrigerant flow multi-
split heat pumps) means that the air conditioner or heat pump is 
also capable of providing simultaneous heating and cooling 
operation, where recovered energy from the indoor units operating in 
one mode can be transferred to one or more other indoor units 
operating in the other mode. A variable refrigerant flow multi-split 
heat recovery heat pump is a variable refrigerant flow multi-split 
heat pump with the addition of heat recovery capability.

    DOE is requesting comment on its proposed definitions of ``variable 
refrigerant flow multi-split air conditioner,'' ``variable refrigerant 
flow multi-split heat pump,'' and ``heat recovery.'' This is identified 
as issue 10 in section X.E, ``Issues on Which DOE Seeks Comment.''

B. Annual Energy Use

    Annual per-unit energy use estimates for VRF water-source heat 
pumps at or greater than 135,000 Btu/h cooling capacity were developed 
based on whole building energy simulation of a medium-sized prototype 
office building in 15 locations around the U.S, with each location 
representing one of 15 unique climate zones within the U.S.\18\ The 
prototype office building model used two water-source VRF systems in 
conjunction with a gas-fired boiler and a single cooling tower to serve 
the condensing water loop for the VRF systems. The simulation tool was 
a commercial version of the DOE2.1E building simulation tool, with the 
capability to model water-source VRF equipment using custom DOE2.1E 
functions. This simulation tool also provides actual performance curves 
obtained from equipment manufacturers for a number of specific 
equipment models, including many water-source VRF condensing units and 
indoor sections.
---------------------------------------------------------------------------

    \18\ Briggs, R.L., R.G. Lucas, and Z.T. Taylor, Climate 
Classification for Building Energy Codes and Standards: Part 1--
Development Process and Part 2--Zone Definitions, Maps, and 
Comparisons, ASHRAE Transactions (2003) (1) pp. 4610-4611.
---------------------------------------------------------------------------

    DOE simulated the medium office building using actual equipment 
selections corresponding to three different efficiency levels 
identified in the AHRI certified product directory for VRF multi-split 
air conditioners and heat pumps.\19\ These efficiency levels 
corresponded to: (1) The lowest efficiency level identified in the 
directory and close to the ASHRAE baseline; (2) an efficiency level 
corresponding to the highest efficiency level identified for ducted 
systems; and (3) an efficiency level near the highest efficiency 
identified for ductless systems. The AHRI 1230-2010 test procedure 
provides that each condensing unit be tested as both a ducted system 
(representing equipment using indoor units that are connected to short 
distribution ducts) and as a ductless system (representing equipment 
using ductless indoor sections that provide conditioned air directly to 
the building space served). Because of a higher external static 
pressure when testing ducted units, the rated efficiency (EER and COP) 
of a given condensing unit is lower when tested as a ducted system than 
when tested as a ductless system. The two higher efficiency levels 
simulated utilized the same condensing unit but represent ratings as a 
ducted and as a ductless system respectively. The lowest EER level 
simulated was represented by a lower-performing condensing unit in a 
ducted system configuration.
---------------------------------------------------------------------------

    \19\ Directory of Certified Variable Refrigerant Flow (VRF) 
Multi-Split Air Conditioning and Heat Pump Equipment: 2011 Edition 
(Effective Date: Sept. 16, 2011) (Last accessed on Sept. 26, 2011) 
(Available at: http://www.ahridirectory.org/ahridirectory/pages/home.aspx).
---------------------------------------------------------------------------

    DOE performed simulations of the prototype office building at these 
three VRF efficiency levels in each climate for systems with and 
without heat recovery. As the ratings data do not identify the indoor 
units used, DOE selected a representative ducted indoor section and 
developed supply fan power estimates based on that unit for ducted 
systems representing the first two efficiency levels simulated. For 
non-ducted systems where there was a large variety of indoor sections 
available, DOE developed an average fan power estimate based on average 
supply fan power data for five different ductless indoor section 
designs. DOE then used that average ductless fan power estimate in 
simulating the building with VRF systems at this third, highest, 
efficiency level.
    The annual electrical energy use for the VRF equipment, including 
each condensing unit and all associated evaporator units, was extracted 
from the simulation results for each building simulated and normalized 
by cooling capacity to provide estimates of annual VRF cooling, 
heating, and fan energy consumption at the average cooling capacities 
estimated by DOE for the two VRF product classes. For water-source VRF 
systems greater than 135,000 Btu/h without heat recovery, DOE estimated 
the average cooling capacity at 216,000 Btu/h based on the average for 
available equipment found in the 2011 AHRI certified products 
directory.\20\ For water-source VRF systems with heat recovery, DOE 
estimated the average cooling capacity at 192,000 Btu/h using the same 
data source.
---------------------------------------------------------------------------

    \20\ See: http://www.ahridirectory.org/ahridirectory/pages/vrf/VRFDirectory_20110916.pdf.
---------------------------------------------------------------------------

    DOE calculated the national average energy use for VRF systems with 
and without heat recovery at each efficiency level using commercial 
building construction weights previously developed by DOE and assigned 
to each of the 15 U.S. climate zones. For each equipment class, DOE 
developed linear relationship between the national average cooling 
energy use and the reciprocal of the cooling EER for each consecutive 
pair of three efficiencies modeled. DOE also developed a linear 
relationship between the national average heating energy use and the

[[Page 2381]]

reciprocal of the heating COP for each consecutive pair of efficiencies 
modeled. DOE then used these relationships to estimate the annual 
average cooling and heating energy use at the ASHRAE baseline 
efficiency level and at four higher efficiency levels, including the 
highest EER and COP levels found in the AHRI certified product 
directory for each product class (identified as max-tech levels for 
this analysis). Level 2 corresponded to the highest efficiency found 
for ducted VRF equipment in the AHRI directory. DOE held the fan energy 
use constant for levels at and below level 2 to that estimated based on 
the ducted VRF simulations. DOE determined that the max-tech level 
corresponded to a ductless system and estimated the energy use at the 
max-tech level using the linear relationship between the higher two 
efficiencies simulated. Annual energy use at level 3 was calculated 
based on interpolation between level 2 and the max-tech level. In all, 
DOE developed annual energy consumption estimates for efficiency levels 
at EER values of 10.0, 11.0, 12.0, 13.0, and 14.5 for water-source VRF 
heat pumps without heat recovery. DOE developed annual energy 
consumption estimates for efficiency levels at EER values of 9.8, 11.0, 
12.0, 13.0, and 14.5 for water-source VRF heat pumps with heat 
recovery.

C. Shipments

    DOE obtained historical (1989-2009) water-source heat pump shipment 
data from the U.S. Census.\21\ Table V.1 exhibits the shipment data 
provided for a selection of years, while the full data set can be found 
in chapter 7 of the NOPR TSD.\22\ DOE used these shipment data to 
extrapolate shipments into the future based on the historical trend.
---------------------------------------------------------------------------

    \21\ http://www.census.gov/manufacturing/cir/historical_data/ma333m/index.html, http://permanent.access.gpo.gov/lps38720/.
    \22\ http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_meeting.html.

          Table V.1--Total Shipments of Water-Source Heat Pumps
------------------------------------------------------------------------
                                                                 Units
                            Year                                shipped
------------------------------------------------------------------------
1990........................................................     139,864
1994........................................................      99,321
2000........................................................     133,654
2005........................................................     141,410
2009........................................................     180,101
------------------------------------------------------------------------

    As these shipment data represent water-source heat pumps generally 
and not VRF water-source heat pumps specifically, DOE undertook 
research to ascertain the number of models of water-source heat pumps 
in total, and VRF water-source heat pumps specifically. DOE used AHRI's 
Directories of Certified Product Performance for Water-to-Air and 
Water-to-Water Heat Pumps (excluding groundwater loop and ground loop) 
and VRF Multi-Split Water-to-Air Heat Pumps for this purpose.\23\ DOE 
supplemented the AHRI Directory for VRF systems with information from 
manufacturers' Web sites to capture as much of the market as possible. 
DOE used the ratio of VRF water-source heat pump greater than 135,000 
Btu/h models to all water-source heat pump models on the market 
(164:4277) to estimate VRF water-source heat pump shipments. DOE also 
used the ratio of VRF water-source heat pumps greater than 135,000 Btu/
h without heat recovery to all VRF water-source heat pumps greater than 
135,000 Btu/h to allocate shipments into the two product classes 
(106:164). The complete historical data set and the projected shipments 
can be found in chapter 7 of the NOPR TSD.
---------------------------------------------------------------------------

    \23\ See: www.ahridirectory.org.
---------------------------------------------------------------------------

    DOE then reviewed the AHRI Certified Product Directory to determine 
the distribution of efficiency levels for commercially-available models 
of VRF water-source heat pumps greater than 135,000 Btu/h. DOE bundled 
the efficiency levels into ``efficiency ranges'' and determined the 
percentage of models within each range. The distribution of 
efficiencies in the base case can be found in chapter 8 of the NOPR 
TSD. It is important to note that DOE did not identify any models on 
the market for either class of equipment with an EER below those 
specified in ASHRAE Standard 90.1-2010.
    For the standards case, DOE assumed shipments at lower efficiencies 
were most likely to roll up into higher efficiency levels in response 
to more-stringent energy conservation standards. For each efficiency 
level analyzed within a given equipment class, DOE used a ``roll-up'' 
scenario to establish the market shares by efficiency level for the 
year in which compliance with amended standards is required (i.e., 
2013). DOE estimated that the efficiencies of equipment in the base 
case that did not meet the standard level under consideration would 
roll up to meet the standard level. Available information also suggests 
that all equipment efficiencies in the base case that were above the 
standard level under consideration would not be affected. As an 
example, Table V.2 shows the distribution of efficiencies within the 
base-case and the roll-up scenarios to establish the distribution of 
efficiencies in the standards cases for VRF water-source heat pumps 
without heat recovery.

  Table V.2--Distribution of Efficiencies in the Base Case and Standards Cases for VRF Water-Source Heat Pumps
                                         >135 kBtu Without Heat Recovery
----------------------------------------------------------------------------------------------------------------
                                                                 Efficiency ranges (EER)*
            Efficiency level             -----------------------------------------------------------------------
                                            9.5-9.7    9.8-10.4    10.5-11.5   11.6-12.5   12.6-13.4     13.5+
----------------------------------------------------------------------------------------------------------------
Market Baseline.........................          0%          3%         73%         15%          3%          5%
Efficiency Level 1--ASHRAE (10.0 EER)...  ..........          3%         73%         15%          3%          5%
Efficiency Level 2--(11.0 EER)..........  ..........  ..........         76%         15%          3%          5%
Efficiency Level 3--(12.0 EER)..........  ..........  ..........  ..........         92%          3%          5%
Efficiency Level 4--(13.0 EER)..........  ..........  ..........  ..........  ..........         95%          5%
Efficiency Level 5--``Max-Tech''--(14.5   ..........  ..........  ..........  ..........  ..........        100%
 EER)...................................
----------------------------------------------------------------------------------------------------------------
* DOE binned models into efficiency ranges surrounding the EER of each efficiency level; the specific bins were
  chosen to maintain the same market average efficiency (when the number of models in each range is multiplied
  by the efficiency level EER) as calculated using the full distribution of models.

    Using the distribution of efficiencies in the base case and in the 
standards cases, as well as the unit energy consumption (UEC) for each 
specified EER (discussed previously), DOE calculated market-weighted 
average

[[Page 2382]]

efficiency values. The market-weighted average efficiency value 
represents the average efficiency of the total units shipped at a 
specified amended standard level. The market-weighted average 
efficiency values for the base case and the standards cases for each 
efficiency level analyzed are provided in chapter 8 of the ASHRAE NOPR 
TSD.

D. Other Analytical Inputs

1. Site-to-Source Conversion
    DOE converted the annual site energy savings into the annual amount 
of energy saved at the source of electric generation (i.e., primary 
energy), using site-to-source conversion factors over the analysis 
period (calculated from the Energy Information Agency's (EIA's) Annual 
Energy Outlook 2011 (AEO2011) projections).\24\ DOE derived the annual 
conversion factors by dividing the delivered electricity to the 
commercial sector plus loss for each forecast year in the United 
States, as indicated in AEO2011, by the delivered electricity to the 
commercial sector for each forecasted year.
---------------------------------------------------------------------------

    \24\ AEO2011 can be accessed at: http://www.eia.gov/forecasts/aeo/.
---------------------------------------------------------------------------

2. Product Lifetime
    DOE used a product lifetime of 19 years for VRF water-source heat 
pumps based on the ASHRAE 2011 HVAC Applications Handbook.\25\
---------------------------------------------------------------------------

    \25\ 2011 ASHRAE Handbook HVAC Applications. ASHRAE, 2011. 
Atlanta GA (Available at www.ashrae.org). ASHRAE's handbook does not 
list a service life for VRF equipment specifically, but it does 
provide service life estimates for water-source heat pumps 
generally. In this regard, ASHRAE cites two different studies for 
equipment service life. The first study of this type of equipment 
reported a service life of 19 years. The second, more-recent study 
cited suggests a service life of 24 years for all classes of direct 
expansion cooling systems. This second study relies heavily on 
extrapolation of a survival curve based on a sample of 1907 DX 
equipment observations from various equipment classes from which 284 
units had actually been replaced and most were still in service. 
(ASHRAE Research Project 1237-TRP Interactive Web-based Owning and 
Operating Cost Database Final Report, July 2005. Available at 
www.ashrae.org) However, as VRF products are new to the U.S. with 
relatively little data on lifetime, DOE has relied on the older, 
more conservative, 19-year service life estimate for its analysis.
---------------------------------------------------------------------------

3. Compliance Date and Analysis Period
    For purposes of calculating the national energy savings (NES), DOE 
used an analysis period of 2013 (the assumed compliance date if DOE 
were to adopt the ASHRAE levels as Federal standards for large and very 
large products) through 2042. This is the standard analysis period of 
30 years that DOE typically uses in its NES analysis. While the 
analysis period remains the same for assessing the energy savings of 
Federal standard levels higher than the ASHRAE levels, those energy 
savings would not begin accumulating until 2017 (the assumed compliance 
date if DOE were to determine that standard levels more stringent than 
the ASHRAE levels are justified).
    If DOE were to propose a rule prescribing energy conservation 
standards at the efficiency levels contained in ASHRAE Standard 90.1- 
2010, EPCA states that any such standards shall become effective on or 
after a date which is two or three years (depending on equipment size) 
after the effective date of the applicable minimum energy efficiency 
requirement in the amended ASHRAE standard (i.e., ASHRAE Standard 90.1-
2010). (42 U.S.C. 6313(a)(6)(D)) For VRF water-source heat pumps in 
this rulemaking, ASHRAE Standard 90.1-2010 does not specify an 
effective date; therefore, the effective date is assumed to be the 
publication date of ASHRAE Standard 90.1-2010, or October 29, 2010. 
Thus, if DOE decides to adopt the levels in ASHRAE Standard 90.1-2010, 
the rule would apply to large and very large equipment (the product 
class analyzed here) manufactured on or after October 29, 2013, which 
is three years from the effective date specified in ASHRAE Standard 
90.1-2010.
    If DOE were to propose a rule prescribing energy conservation 
standards higher than the efficiency levels contained in ASHRAE 
Standard 90.1-2010, under EPCA, any such standard would apply to for 
products manufactured four years after the date of publication of the 
final rule in the Federal Register. (42 U.S.C. 6313(a)(6)(D)) Thus, for 
products for which DOE might adopt a level more stringent than the 
ASHRAE efficiency level, the rule would apply to products manufactured 
on or after a date which is four years from the date of publication of 
the final rule adopting standards higher than the ASHRAE efficiency 
levels (30 months after publication of the revised ASHRAE Standard 
90.1, which was October 29, 2010). Under this timeline, compliance with 
such more-stringent standards would be required no later than April 29, 
2017.

VI. Methodology for Computer Room Air Conditioners

    This section addresses the analyses DOE has performed for this 
rulemaking with respect to computer room air conditioners. A separate 
subsection addresses each analysis. In overview, DOE used a spreadsheet 
to calculate the life-cycle cost (LCC) and payback periods (PBPs) of 
potential 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.

A. Market Assessment

    To begin its review of the ASHRAE Standard 90.1-2010 efficiency 
levels, DOE developed information that provides an overall picture of 
the market for the equipment concerned, including the purpose of the 
equipment, the industry structure, and market characteristics. This 
activity included both quantitative and qualitative assessments based 
primarily on publicly-available information. The subjects addressed in 
the market assessment for this rulemaking include equipment classes, 
manufacturers, quantities, and types of equipment sold and offered for 
sale. The key findings of DOE's market assessment are summarized below. 
For additional detail, see chapter 2 of the NOPR TSD.
1. Definitions of ``Computer Room Air Conditioners''
    As discussed in the May 2011 NODA, the 2010 version of ASHRAE 
Standard 90.1 modified the scope of the standard to include air 
conditioning equipment used for process cooling and set efficiency 
levels for computer room air conditioners. 76 FR 25622, 25633-34 (May 
5, 2011). Given this expansion of scope, DOE tentatively determined 
that it has the authority to consider and adopt standards for this 
equipment. Id. However, DOE currently does not have a definition for 
``computer room air conditioner,'' because DOE's regulations do not 
currently cover this equipment class. Because ASHRAE Standard 90.1-2010 
expanded its scope to include air conditioners and condensing units 
serving computer rooms and DOE has decided to consider standards for 
this equipment, DOE must now define this equipment.
    As noted in section IV.C, computer room air conditioners operate in 
a similar manner to other commercial air conditioners, in that they 
provide space conditioning using a refrigeration cycle with a 
compressor, condenser, expansion valve, and an evaporator. However, 
computer room air conditioners are designed to maintain the temperature 
in a narrow range, to minimize temperature swings, and to maintain a 
specific relative humidity (usually between 40 and 55 percent). The 
equipment usually must be able to both humidify and dehumidify the air 
to maintain humidity at desired levels, and they are sometimes called 
``precision air

[[Page 2383]]

conditioners'' because of this requirement. However, although the 
characteristics listed above are common among computer room air 
conditioners, not all computer room air conditioners are equipped with 
humidity control options; DOE found that typically, such features are 
optional, as much of the equipment is custom-built for a specific 
application.
    DOE is not aware of any components in computer room air 
conditioners that are exclusive to only computer room air conditioners 
and not to commercial air conditioners used for comfort conditioning 
(or vice versa) that could be used to effectively differentiate the two 
types of units on the basis of their construction. Further, DOE notes 
that the class of computer room air conditioners is defined in ASHRAE 
Standard 90.1 as an application (i.e., units that serve computer 
rooms), rather than based on a specific physical characteristic or 
component that differentiates the equipment from other commercial 
package air conditioning equipment. DOE also examined the definitions 
in ASHRAE Standard 127-2007 (Method of Testing for Rating Computer and 
Data Processing Room Unitary Air Conditioners). Specifically, DOE 
reviewed the definition of ``computer and data processing room (CDPR) 
unitary air conditioner'' contained in that standard and found that 
there are no distinct physical characteristics used to differentiate 
computer room air conditioners from other commercial air conditioning 
and heating equipment. DOE believes, therefore, that this equipment is 
typically identified in the marketplace based on its intended 
application (i.e., how the equipment is marketed), rather than on 
differentiating physical components.
    In the NODA, DOE requested comment on an appropriate approach for 
establishing a definition for ``computer room air conditioner.'' 76 FR 
25622, 25634 (May 5, 2011). In response, AHRI suggested that DOE use 
the product's rated performance and the relevant rating standard (SCOP 
and ASHRAE 127, respectively) to distinguish air conditioners and 
condensing units designed for serving computer rooms from other types 
of commercial packaged air conditioning and heating equipment covered 
by EPCA. (AHRI, No. 11 at p. 4) DOE did not receive any other comments 
on this issue.
    As noted above, DOE found that the operating conditions for 
computer room air conditioners are different from those for air 
conditioners used for comfort conditioning. Different humidity and 
temperature conditions and a higher sensible load could lead 
manufacturers of computer room air conditioners to optimize their 
equipment to perform best at the rating conditions found in ASHRAE 
Standard 127 (a test method specifically for computer and data 
processing room air conditioners), rather than AHRI Standard 210/240 or 
340/360 (test methods for commercial package air conditioning equipment 
used for comfort conditioning). Because of this, DOE believes that 
manufacturers of computer room air conditioners would likely test those 
units according to ASHRAE Standard 127, while manufacturers of 
commercial package air conditioners intended for use in comfort 
conditioning applications would test those units according to either 
AHRI Standard 210/240 or AHRI Standard 340/360, depending on the 
cooling capacity of the unit.
    As a result, DOE is proposing in today's NOPR to define a 
``computer room air conditioner'' based on how the equipment is 
marketed exclusively for use and which test standard is used to rate 
the performance of the equipment. DOE proposes the following definition 
of ``computer room air conditioner'':

    Computer room air conditioner means a unit of commercial package 
air conditioning and heating equipment that is advertised, marketed, 
and/or sold specifically for use in computer rooms, data processing 
rooms, or other precision cooling applications, and is rated for 
performance using ASHRAE Standard 127. Such equipment may not be 
marketed or advertised as equipment for any other space conditioning 
applications, and may not be rated for performance using AHRI 
Standard 210/240 or AHRI Standard 340/360.

    DOE seeks comment on its proposed definition of ``computer room air 
conditioner,'' as well as on alternatives to this proposed definition. 
DOE is particularly interested in information on physical 
characteristics or features that could possibly be used to 
differentiate between computer room air conditioners and other types of 
commercial package air conditioners. This is identified as issue 11 in 
Section X.E, ``Issues on Which DOE Seeks Comment.''
2. Equipment Classes
    As noted above, there are currently no Federal energy conservation 
standards for computer room air conditioners. Different classes of 
computer room air conditioners are distinguished by several factors in 
ASHRAE Standard 90.1-2010, which include the net sensible cooling 
capacity (i.e., small, large, or very large), orientation of airflow 
through the equipment (i.e., upflow or downflow), heat rejection method 
(i.e., air-cooled, water-cooled, or glycol-cooled), and whether a fluid 
economizer is used.\26\ Using these characteristics, ASHRAE Standard 
90.1-2010 divided computer room air conditioners into thirty equipment 
classes and set the efficiency levels shown in Table VI.1.
---------------------------------------------------------------------------

    \26\ A ``fluid economizer'' is a system configuration 
potentially available where an external fluid cooler is utilized for 
heat rejection (i.e., for glycol-cooled or water-cooled equipment). 
The fluid economizer utilizes a separate liquid-to-air cooling coil 
within the CRAC unit and the cooled water or glycol fluid returning 
from the external fluid cooler to cool return air directly, much 
like a chilled water air handling unit (i.e., without the use of 
compressors). The ``economizer'' cooling can either augment or can 
take the place of compressor cooling, but only when returning water 
or glycol fluid temperatures are low enough to provide for 
significant direct coiling from the liquid-to-air cooling coil
---------------------------------------------------------------------------

  Table VI.1--ASHRAE Standard 90.1-2010 Computer Room Air Conditioners
                            Efficiency Levels
------------------------------------------------------------------------
                                                        Minimum SCOP
                                                         efficiency
         Equipment type             Net sensible   ---------------------
                                  cooling capacity   Downflow    Upflow
                                                      units      units
------------------------------------------------------------------------
Air Conditioners, Air-Cooled...  h....       2.20       2.09
                                 >=65,000 Btu/h          2.10       1.99
                                  and 
                                  h.
                                 >=240,000 Btu/h..       1.90       1.79
------------------------------------------------------------------------
Air Conditioners, Water-Cooled.  h....       2.60       2.49
                                 >=65,000 Btu/h          2.50       2.39
                                  and 
                                  h.

[[Page 2384]]

 
                                 >=240,000 Btu/h..       2.40       2.29
------------------------------------------------------------------------
Air Conditioners, Water-Cooled   h....       2.55       2.44
 with a Fluid Economizer.
                                 >=65,000 Btu/h          2.45       2.34
                                  and 
                                  h.
                                 >=240,000 Btu/h..       2.35       2.24
------------------------------------------------------------------------
Air Conditioners, Glycol-Cooled  h....       2.50       2.39
 (rated at 40% propylene
 glycol).
                                 >=65,000 Btu/h          2.15       2.04
                                  and 
                                  h.
                                 >=240,000 Btu/h..       2.10       1.99
------------------------------------------------------------------------
Air Conditioner, Glycol-Cooled   h....       2.45       2.34
 (rated at 40% propylene
 glycol) with a Fluid
 Economizer.
                                 >=65,000 Btu/h          2.10       1.99
                                  and 
                                  h.
                                 >=240,000 Btu/h..       2.05       1.94
------------------------------------------------------------------------

    In general, DOE divides equipment classes by the type of energy 
used or by capacity or other performance-related features that affect 
efficiency. Different energy conservation standards may apply to 
different equipment classes. (42 U.S.C. 6295(q)) In the context of the 
present rulemaking, DOE believes net sensible cooling capacity (i.e., 
small, large, or very large), orientation (i.e., upflow or downflow), 
heat rejection method (i.e., air-cooled, water-cooled, or glycol-
cooled), and use of a fluid economizer are all performance-related 
features that affect computer room air conditioner efficiency (i.e., 
SCOP). By examining the characteristics of equipment available on the 
market, DOE found computer room air conditioners in a wide range of 
efficiencies depending on their design and features. Consequently, DOE 
is proposing to use the same thirty equipment classes in ASHRAE 
Standard 90.1-2010 to differentiate between types of computer room air 
conditioners.
3. Review of Current Market for Computer Room Air Conditioners
    In order to obtain the information needed for the market assessment 
for this rulemaking, DOE consulted a variety of sources, including 
manufacturer literature, manufacturer Web sites, and the California 
Energy Commission (CEC) Appliance Efficiency Database. The information 
DOE gathered serves as resource material throughout the rulemaking. The 
sections below provide an overview of the computer room air conditioner 
market assessment, and chapter 2 of the NOPR TSD provides additional 
detail on the market assessment, including citations to relevant 
sources.
a. Trade Association Information
    There is no trade association that represents computer room air 
conditioner manufacturers. AHRI is the trade association representing 
most manufacturers of commercial air conditioning and heating 
equipment; however, AHRI does not have a subsection for computer room 
air conditioners, and the major manufacturers of computer room air 
conditioners that DOE identified are not AHRI members.\27\
---------------------------------------------------------------------------

    \27\ For more information see: http://www.ahrinet.org/
ahri+members.aspx.
---------------------------------------------------------------------------

b. Manufacturer Information
    DOE initially identified manufacturers of computer room air 
conditioners through conversations with industry experts and by 
examining the California Energy Commission (CEC) appliance efficiency 
database.\28\ Manufacturers that DOE identified include American Power 
Conversion, Compu-Aire, Data Aire, Liebert, and Stulz. DOE reviewed 
manufacturer literature to gain insight into product availability, 
technologies used to improve efficiency, and product characteristics 
(e.g., cooling capacities) of the models in each equipment class.
---------------------------------------------------------------------------

    \28\ See: http://www.appliances.energy.ca.gov/.
---------------------------------------------------------------------------

c. Market Data
    Using the CEC database and manufacturer literature gathered from 
manufacturer Web sites, DOE compiled a database of 1,364 computer room 
air conditioner models from the five manufacturers it identified. These 
units included 452 air-cooled units, 248 water-cooled units without a 
fluid economizer, 174 water-cooled units with a fluid economizer, 237 
glycol-cooled units without a fluid economizer, and 253 glycol-cooled 
units with a fluid economizer. These units can also be divided by size 
categories and orientation, and a full breakdown of the number of units 
in each equipment class can be found in chapter 2 of the NOPR TSD. Of 
the 1,364 computer room air conditioners in DOE's database, DOE was 
only able to obtain efficiency data for 208 units, which accounts for 
approximately 15 percent of the database (see section VI.B.4 of this 
NOPR for information about how DOE estimated efficiency data). Because 
computer room air conditioner manufacturers are not currently required 
to report efficiency information to DOE, most manufacturers do not 
publish efficiency information in their product literature. DOE 
gathered available efficiency information for two manufacturers from 
the CEC database (where manufacturers are required to report efficiency 
information in if they sell models in California) and one other 
manufacturer's product literature (which was the only manufacturer that 
provided efficiency information in their product literature). DOE did 
not find any efficiency information for equipment from two of the five 
manufacturers of computer room air conditioners.
    The average SCOP for each equipment class where DOE had adequate 
data is shown in the Table VI.2.

[[Page 2385]]

                  Table VI.2--Average SCOP for Computer Room Air Conditioner Equipment Classes
----------------------------------------------------------------------------------------------------------------
                                                                                      Upflow         Downflow
                Equipment class                           Size category             orientation     orientation
                                                                                   average SCOP    average SCOP
----------------------------------------------------------------------------------------------------------------
Air-Cooled....................................  h...................            2.49            2.61
                                                >=65,000 Btu/h and             2.64            2.64
                                                 h.
                                                >=240,000 Btu/h.................           (\1\)            2.25
----------------------------------------------------------------------------------------------------------------
Water-Cooled..................................  h...................            2.76            2.90
                                                >=65,000 Btu/h and             2.76            2.78
                                                 h.
                                                >=240,000 Btu/h.................           (\1\)            2.45
----------------------------------------------------------------------------------------------------------------
Water-Cooled with a Fluid Economizer..........  h...................           (\1\)           (\1\)
                                                >=65,000 Btu/h and            (\1\)           (\1\)
                                                 h.
                                                >=240,000 Btu/h.................           (\1\)           (\1\)
----------------------------------------------------------------------------------------------------------------
Glycol-Cooled.................................  h...................            2.66            2.71
                                                >=65,000 Btu/h and            (\1\)            2.62
                                                 h.
                                                >=240,000 Btu/h.................           (\1\)            2.49
----------------------------------------------------------------------------------------------------------------
Glycol-Cooled with a Fluid Economizer.........  h...................           (\1\)            2.43
                                                >=65,000 Btu/h and            (\1\)            2.48
                                                 h.
                                                >=240,000 Btu/h.................           (\1\)            2.38
----------------------------------------------------------------------------------------------------------------
\1\ No information.

    Chapter 2 of the NOPR TSD contains additional information drawn 
from the data that was used to inform DOE's analysis, such as the 
average sensible capacities for each equipment class. DOE used the 
information gathered in the market assessment as the foundation for 
developing the price-efficiency relationship in the engineering 
analysis. Additionally, DOE used the market data, along with other 
sources, to estimate the shipments of computer room air conditioners. 
Further details regarding the development of shipments estimates and 
forecasts can be found in section VI.F of this NOPR.

B. Engineering Analysis

    The engineering analysis establishes the relationship between the 
cost and efficiency of a piece of equipment DOE is evaluating for 
potential amended energy conservation standards. This relationship 
serves as the basis for cost-benefit calculations for individual 
consumers and the Nation. The engineering analysis identifies 
representative baseline equipment, which is the starting point for 
analyzing possible energy efficiency improvements. For covered ASHRAE 
equipment, DOE sets the baseline at the ASHRAE Standard 90.1 efficiency 
level, because by statute, DOE cannot adopt any level below the revised 
ASHRAE level. The engineering analysis then identifies higher 
efficiency levels and the incremental increase in product cost 
associated with achieving the higher efficiency levels. After 
identifying the baseline models and cost of achieving increased 
efficiency, DOE estimates the additional costs to the customer through 
an analysis of contractor costs and markups, and uses that information 
in the downstream analyses to examine the costs and benefits associated 
with increased equipment efficiency.
    DOE typically structures its engineering analysis around one of 
three methodologies: (1) The design-option approach, which calculates 
the incremental costs of adding specific design options to a baseline 
model; (2) the efficiency-level approach, which calculates the relative 
costs of achieving increases in energy efficiency levels without regard 
to the particular design options used to achieve such increases; and/or 
(3) the reverse-engineering or cost-assessment approach, which involves 
a ``bottom-up'' manufacturing cost assessment based on a detailed bill 
of materials derived from tear-downs of the product being analyzed.
1. Approach
    For this analysis, DOE used an efficiency-level approach in 
conjunction with a pricing survey to develop the price-efficiency 
relationships for the various classes of computer room air 
conditioners. An efficiency-level approach allowed DOE to estimate the 
cost of achieving different SCOP levels in a timely manner (which was 
necessary to allow DOE to meet the statutorily-required deadlines for 
ASHRAE equipment in EPCA). The efficiency-level approach allowed DOE to 
capture a variety of designs available on the market and focused on the 
price of units at different SCOP ratings. The efficiency levels that 
DOE considered in the engineering analysis were representative of 
computer room air conditioners currently produced by manufacturers at 
the time the engineering analysis was developed. DOE relied on data 
collected from equipment distributors of three large computer room air 
conditioner manufacturers to develop its cost-efficiency relationship 
for computer room air conditioners. (See chapter 3 of the NOPR TSD for 
further detail.)
    Although there are certain benefits to using an efficiency-level 
approach with a pricing survey (namely the ability to conduct an 
analysis in a limited amount of time that spans a variety of equipment 
and technologies), DOE notes there are also drawbacks to this approach. 
The most significant drawback of such an approach is that equipment 
pricing is not always based solely on equipment cost and is often 
influenced by a variety of other factors. Factors such as whether the 
unit is a high-volume seller, whether the unit has premium features 
(such as more sophisticated controls or a longer warranty), and the 
differences in markup between different manufacturers all have an 
effect on the prices of computer room air conditioners. In certain 
instances, this can make it difficult to compare prices across 
manufacturers because of the number of different ways that 
manufacturers can decide to set pricing based on features that are not 
part of the basic equipment costs. As a result, the relationship 
between price and efficiency could be different from the relationship 
between manufacturer cost

[[Page 2386]]

and efficiency that might be revealed through other engineering methods 
such as a design-option approach or using reverse-engineering. However, 
given the limited analysis time allowed by EPCA, DOE proceeded with an 
efficiency-level approach in which it gathered the price of equipment 
at various efficiency levels. Nonetheless, DOE believes this approach 
provides a reasonable approximation of the cost increases associated 
with efficiency increases and could be conducted in a timely manner 
that would allow DOE to meet the deadlines specified in EPCA for ASHRAE 
products. The approach allowed DOE to provide an estimate of equipment 
prices at different efficiencies and spanned a range of technologies 
currently on the market that are used to achieve the increased 
efficiency levels.
2. Representative Input Capacities for Analysis
    Computer room air conditioners are separated into three size 
categories based upon the equipment's net sensible cooling capacity: 
(1) h; (2) >=65,000 Btu/h and h; and (3) 
>=240,000 Btu/h and h. For each equipment size category, 
DOE chose a representative capacity for analysis. The representative 
capacity chosen was the average sensible capacity (rounded to the 
nearest ton \29\) of all models that DOE found on the market in a given 
product class. DOE collected pricing data as close to the 
representative capacity as possible; however, given the limited amount 
of data available, it was not always possible for DOE to obtain pricing 
information for models exactly at the representative capacity. 
Consequently, DOE obtained pricing for units as close as possible to 
the representative capacity (generally within 15 percent of the 
representative capacity) and then normalized the price in order to 
estimate the price at the representative capacity by calculating the 
price based on the price per Btu per hour and adjusting it accordingly.
---------------------------------------------------------------------------

    \29\ One ton of cooling capacity is equivalent to 12,000 Btu/h.
---------------------------------------------------------------------------

    For computer room air conditioners with a sensible cooling capacity 
less than 65,000 Btu/h, DOE collected data at the representative size 
of 36,000 Btu/h and normalized the cost to that capacity. For computer 
room air conditioners with a sensible cooling capacity greater than 
65,000 Btu/h and less than 240,000 Btu/h, DOE collected data at the 
representative size of 132,000 Btu/h and normalized the cost to that 
capacity. For computer room air conditioners with a sensible cooling 
capacity greater than 240,000 Btu/h, DOE collected data for five total 
units with efficiency data in these equipment classes and normalized it 
to a representative capacity of 288,000 Btu/h. See chapter 2 of the 
NOPR TSD for information about the capacity information that DOE found 
for equipment on the market and chapter 3 of the TSD for more detail 
about the representative capacities selected.
3. Baseline Equipment
    DOE selected baseline efficiency levels as reference points for 
each equipment class, against which it measured changes resulting from 
potential amended energy conservation standards. DOE defined the 
baseline efficiency levels in the engineering analysis and the LCC and 
PBP analyses as reference points to compare the technology, energy 
savings, and cost of equipment with higher energy efficiency levels. A 
baseline piece of equipment refers to a model having features and 
technologies typically found in equipment currently offered for sale. 
The baseline model in each equipment class represents the typical 
characteristics of equipment in that class. Typically, units at the 
baseline efficiency level just meet Federal energy conservation 
standards and provide basic consumer utility. However, since computer 
room air conditioners are a new equipment class, there are no current 
Federal standards for these units. Further, EPCA requires that DOE must 
adopt either the ASHRAE Standard 90.1-2010 levels or more stringent 
levels. Therefore, because the ASHRAE Standard 90.1-2010 levels were 
the lowest levels that DOE could adopt, DOE used those levels as the 
baseline efficiency level for the purposes of its analysis. Table VI.3 
shows the baseline efficiency level for each computer room air 
conditioner equipment class in the downflow orientation.\30\
---------------------------------------------------------------------------

    \30\ As discussed in section VI.B.6, DOE focused its analysis on 
downflow models to reduce the total number of product classes 
requiring analysis. The SCOP for upflow models were reduced by 0.11 
SCOP, and the upflow class was combined with the downflow class.

               Table VI.3--Baseline SCOP Efficiency Level
------------------------------------------------------------------------
                                                             Downflow
          Equipment class               Size category       orientation
                                                           baseline SCOP
------------------------------------------------------------------------
Air-Cooled........................  h.......             2.2
                                    >=65,000 Btu/h and               2.1
                                     h.
                                    >=240,000 Btu/h.....             1.9
------------------------------------------------------------------------
Water-Cooled......................  h.......             2.6
                                    >=65,000 Btu/h and               2.5
                                     h.
                                    >=240,000 Btu/h.....             2.4
------------------------------------------------------------------------
Water-Cooled with a Fluid           h.......            2.55
 Economizer.
                                    >=65,000 Btu/h and              2.45
                                     h.
                                    >=240,000 Btu/h.....            2.35
------------------------------------------------------------------------
Glycol-Cooled.....................  h.......             2.5
                                    >=65,000 Btu/h and              2.15
                                     h.
                                    >=240,000 Btu/h.....             2.1
------------------------------------------------------------------------
Glycol-Cooled with a Fluid          h.......            2.45
 Economizer.
                                    >=65,000 Btu/h and               2.1
                                     h.
                                    >=240,000 Btu/h.....            2.05
------------------------------------------------------------------------

[[Page 2387]]

4. Identification of Efficiency Information and Efficiency Levels for 
Analysis
    Since DOE does not currently regulate computer room air 
conditioners, manufacturers are not required to report or rate the 
efficiency of their equipment. Therefore, DOE relied on efficiency 
information found in manufacturer literature (for those manufacturers 
who voluntarily rate their equipment efficiency) and in the CEC 
database (as CEC does require manufacturers to certify the efficiency 
ratings for their computer room air conditioners being sold in 
California). Because SCOP is a new efficiency metric in ASHRAE 127-
2007, all efficiency data DOE gathered were in the form of EER, as 
measured by the previous version of ASHRAE 127 (i.e., ASHRAE 127-2001). 
DOE only found EER data for three of the five manufacturers. ASHRAE 
127-2007 contains a ``rule-of-thumb'' method for determining SCOP using 
the EER as measured by ASHRAE 127-2001 and the sensible heat ratio 
(SHR).\31\ DOE used the ``rule-of-thumb'' method to approximate SCOP 
ratings based on EER information contained in the CEC database and 
manufacturer literature, as well as SHR information found in 
manufacturer specification sheets. As noted above, this method allowed 
DOE to estimate SCOP ratings for 15 percent of the total units in its 
database, for which this information was available. Upon examining the 
market, DOE concluded that only four equipment classes contained enough 
models with efficiency information to adequately select efficiency 
levels based on the efficiency of models on the market. For the 
equipment classes where DOE did not have enough SCOP data to select 
efficiency levels, DOE translated the efficiency levels from one of the 
four previously mentioned equipment classes based on the SCOP 
differences between the different equipment classes as specified by 
ASHRAE Standard 90.1-2010. The efficiency levels selected for analysis 
for each equipment class are shown in Table VI.4. Chapter 3 of the NOPR 
TSD shows additional details on the efficiency levels selected for 
analysis.
---------------------------------------------------------------------------

    \31\ ``Sensible heat ratio'' is the ratio of a unit's sensible 
cooling capacity to its total (i.e., sensible and latent) cooling 
capacity.

                  Table VI.4--Efficiency Levels for Analysis of Computer Room Air Conditioners
----------------------------------------------------------------------------------------------------------------
                                                                          Efficiency levels (SCOP)
                                                          ------------------------------------------------------
                        Equipment                           Baseline
                                                             level     Level 1    Level 2    Level 3    Level 4
----------------------------------------------------------------------------------------------------------------
Air-Cooled, h................................       2.20       2.40       2.60       2.80       3.00
Air-Cooled, >=65,000 Btu/h and h............       2.10       2.35       2.60       2.85       3.10
Air-Cooled, >=240,000 Btu/h and h...........       1.90       2.15       2.40       2.65       2.90
Water-Cooled, h..............................       2.60       2.80       3.00       3.20       3.40
Water-Cooled, >=65,000 Btu/h and h..........       2.50       2.70       2.90       3.10       3.30
Water-Cooled, >=240,000 Btu/h and h.........       2.40       2.60       2.80       3.00       3.20
Water-Cooled with a Fluid Economizer, h......       2.55       2.75       2.95       3.15       3.35
Water-Cooled with a Fluid Economizer, >=65,000 Btu/h and        2.45       2.65       2.85       3.05       3.25
 h..........................................
Water-Cooled with a Fluid Economizer, >=240,000 Btu/h and       2.35       2.55       2.75       2.95       3.15
 h..........................................
Glycol-Cooled, h.............................       2.50       2.70       2.90       3.10       3.30
Glycol-Cooled, >=65,000 Btu/h and h.........       2.15       2.35       2.55       2.75       2.95
Glycol-Cooled, >=240,000 Btu/h and h........       2.10       2.30       2.50       2.70       2.90
Glycol-Cooled with a Fluid Economizer, h.....       2.45       2.65       2.85       3.05       3.25
Glycol-Cooled with a Fluid Economizer, >=65,000 Btu/h and       2.10       2.30       2.50       2.70       2.90
 h..........................................
Glycol-Cooled with a Fluid Economizer, >=240,000 Btu/h          2.05       2.25       2.45       2.65       2.85
 and h......................................
----------------------------------------------------------------------------------------------------------------

5. Pricing Data
    Once DOE identified representative capacities and baseline units, 
and selected equipment classes and efficiency levels to analyze, DOE 
contacted three of the manufacturers of computer room air conditioners 
\32\ to obtain pricing information for individual models in quantities 
of 10 units. DOE used 10 as a standard request that would be typical of 
a contractor installing the units in an office space. DOE received 
pricing information for 32 models total. DOE then used the pricing 
information in conjunction with the SCOP data (estimated from EER data) 
to build price-efficiency curves. See chapter 3 of the NOPR TSD for 
additional details about the pricing data DOE received.
---------------------------------------------------------------------------

    \32\ As noted in section VI.B.4, only three manufacturers 
provided efficiency data. DOE obtained pricing from all 
manufacturers for which it had efficiency data.
---------------------------------------------------------------------------

6. Equipment Classes for Analysis and Extrapolation to Unanalyzed 
Equipment Classes
    Due to a lack of efficiency data and small number of models on the 
market for certain equipment classes, DOE did not analyze each of the 
30 equipment classes created by ASHRAE Standard 90.1 separately. 
Rather, DOE analyzed the equipment classes with the largest numbers of 
models on the market (and as a result the most data available) and used 
a variety of assumptions to extrapolate that analysis to the equipment 
classes with less information available.
    DOE only considered downflow units in its engineering analysis. In 
reviewing the models available in its database, DOE found that each 
given equipment model (characterized by a product line and model 
number) was generally available in both an upflow and downflow 
configuration, and review of specific equipment indicated that the 
internal components could be optionally arranged by the manufacturer 
for either an upflow or downflow orientation. Therefore, DOE assumed 
that downflow units and upflow units generally have the same major 
components, but that those components are arranged differently. DOE 
assumed that the price of the units would likely be nearly the same and 
that the incremental cost of increasing efficiency would also be the 
same. However, DOE observed the 0.11 SCOP reduction in the ASHRAE 
Standard 90.1-2010 efficiency levels for upflow units as compared to 
downflow units. DOE believes this difference is a result of the 
additional static pressure that the blower fan must overcome in the 
upflow orientation, as required in the ASHRAE 127 test

[[Page 2388]]

procedure. By assuming that the results of a cost-benefit analysis for 
the upflow classes for a given incremental change in SCOP would have 
the same results as the downflow class (because the incremental cost 
and efficiency gains would be the same), DOE was able to focus on the 
downflow equipment classes where more data were available.
    Among the downflow equipment classes, DOE found there was only 
enough efficiency information to analyze four equipment classes: (1) 
Small (i.e., sensible capacity less than 65,000 Btu/h) air-cooled; (2) 
large (i.e., sensible capacity greater than or equal to 65,000 Btu/h 
but less than 240,000 Btu/h) air-cooled; (3) small (i.e., sensible 
capacity less than 65,000 Btu/h) water-cooled; and (4) large (i.e., 
sensible capacity greater than or equal to 65,000 Btu/h but less than 
240,000 Btu/h) water-cooled. For the other 11 downflow equipment 
classes, DOE had to extrapolate the analysis based on these four 
primary equipment classes due to a lack of efficiency and pricing data 
for those equipment classes.
    To extrapolate the data and generate a price-efficiency 
relationship for the very large (i.e., sensible capacity greater than 
or equal to 240,000 Btu/h but less than 760,000 Btu/h) air-cooled and 
very large water-cooled equipment classes, DOE modified the price-
efficiency curves for the large air-cooled and large water-cooled 
equipment classes, respectively. In each case, DOE shifted the 
relationship down by the difference in SCOP specified between the 
equipment classes in ASHRAE Standard 90.1-2010. Then, using the limited 
pricing data collected in the very large equipment classes, DOE found 
the percent difference between a large unit and very large unit for a 
given manufacturer (or manufacturers if multiple points were 
available). DOE multiplied the prices by the average percentage 
difference between a very large unit and a large unit of the same model 
line to estimate the price-efficiency relationship for the very large 
equipment classes.
    For the three glycol-cooled equipment classes (i.e., small, large, 
and very large), DOE was able to collect a limited amount of pricing 
data, and DOE found that the prices of glycol-cooled units were 
identical to those for water-cooled units in the same product line. 
Therefore, DOE modeled the cost-efficiency curves for glycol-cooled 
units after the water-cooled equipment by maintaining the same pricing, 
but shifting the curves to account for the decrease in SCOP that DOE 
believes results from a decrease in heat transfer for glycol-cooled 
units as compared to water-cooled units. DOE shifted the curves by the 
same amount as the difference in the ASHRAE Standard 90.1-2010 
efficiency levels between each respective equipment class.
    For the six computer room air conditioner equipment classes with a 
fluid economizer (i.e., small, large, and very large water-cooled, and 
small, large, and very large glycol-cooled), DOE translated the 
efficiency data and prices from the corresponding water-cooled or 
glycol-cooled equipment classes. Because a fluid economizer adds 
additional external static pressure that must be overcome by the blower 
fan, DOE believes these units generally will require more fan power and 
have lower SCOP ratings than equivalent models without an economizer. 
Therefore, DOE shifted the efficiency down 0.05 SCOP, which was the 
efficiency difference for computer room air conditioners with fluid 
economizers versus those without an economizer in ASHRAE Standard 90.1-
2010. From the limited pricing data that DOE was able to collect for 
units with fluid economizers, DOE found the percentage difference in 
price for equipment with a fluid economizer compared to the same model 
without a fluid economizer. DOE then increased the pricing in the 
price-efficiency relationships for each equipment class by the 
percentage difference found for adding a fluid economizer to generate 
the price-efficiency relationship for the equipment classes with fluid 
economizers.
7. Engineering Analysis Results
    The result of the engineering analysis is a set of price-efficiency 
curves. Creating the price-efficiency curves involved plotting the 
manufacturer price versus efficiency and using an exponential 
regression analysis to fit a curve that best defines the aggregated 
data. When DOE examined the pricing data for each individual 
manufacturer, DOE found there was no correlation between pricing and 
efficiency. Only when the manufacturer data points were aggregated 
across all manufacturers for each equipment class did a correlation 
appear. Generally, there were manufacturers who sold lower-priced, 
lower-SCOP equipment and those who sold higher-priced, higher-SCOP 
equipment. DOE used an exponential regression to determine the 
relationship between price and efficiency across the three 
manufacturers. Table VI.5 and Table VI.6 below show the price-
efficiency data for the four primary equipment classes, for which DOE 
had enough information to do a regression analysis. The results for the 
equipment classes where DOE had to extrapolate the price-efficiency 
relationship are contained in chapter 3 of the NOPR TSD.

                   Table VI.5--Air-Cooled Computer Room Air Conditioners Price-Efficiency Data
----------------------------------------------------------------------------------------------------------------
                         h                                  >=65,000 Btu/h and h
----------------------------------------------------------------------------------------------------------------
                    SCOP                           Price                     SCOP                    Price
----------------------------------------------------------------------------------------------------------------
2.20.......................................          $6,681.09  2.10.........................         $22,621.45
2.40.......................................           7,853.51  2.35.........................          24,383.30
2.60.......................................           9,231.68  2.60.........................          26,282.38
2.80.......................................          10,851.69  2.85.........................          28,329.36
3.00.......................................          12,755.99  3.10.........................          30,535.77
----------------------------------------------------------------------------------------------------------------

                    Table VI.6--Water-Cooled Computer Air Conditioners Price-Efficiency Data
----------------------------------------------------------------------------------------------------------------
                         h                                  >=65,000 Btu/h and h
----------------------------------------------------------------------------------------------------------------
                    SCOP                           Price                     SCOP                    Price
----------------------------------------------------------------------------------------------------------------
2.60.......................................         $14,232.84  2.50.........................         $12,883.01
2.80.......................................          11,527.69  2.70.........................          17,315.28
3.00.......................................           9,336.69  2.90.........................          23,272.43

[[Page 2389]]

 
3.20.......................................           7,562.12  3.10.........................          31,279.07
3.40.......................................           6,124.84  3.30.........................          42,040.32
----------------------------------------------------------------------------------------------------------------

    DOE notes that the results for the small (h) water-
cooled equipment class are counter-intuitive, because the correlation 
between price and efficiency showed a decrease in price for increased 
efficiency for that equipment class. This result is likely the result 
of not having enough data points to develop a statistically significant 
trend between price and efficiency. In addition, as discussed above, 
manufacturers might have different reasons for pricing the different 
features other than equipment efficiency, and, thus, there would be no 
correlation between efficiency and price for individual manufacturers. 
In DOE's experience, an inverse correlation between price and 
efficiency is not typical, and thus, DOE believes additional data and 
analysis would possibly reveal a different relationship than the 
pricing analysis. DOE seeks comment on the results of the pricing 
analysis and requests information and data regarding price-efficiency 
trends for computer room air conditioners. This is identified as issue 
12 in section X.E, ``Issues on Which DOE Seeks Comments.''
C. Markups To Determine Equipment Price
    DOE understands that the price of CRAC equipment depends on the 
distribution channel the customer uses to purchase the equipment. 
Typical distribution channels for most commercial HVAC equipment 
include shipments which may pass through manufacturers' national 
accounts, or through entities including wholesalers, mechanical 
contractors, and/or general contractors; however, DOE understands that 
the typical distribution channel for CRAC equipment for either new 
construction or replacement is that a mechanical contractor orders the 
equipment from a manufacturer or distributor who provides the equipment 
at a price delivered to the job site. The mechanical contractor then 
adds his own markup and provides installation services. Because of the 
specialized nature of the equipment, general contractors are not 
involved in the transaction, nor did DOE find any evidence of 
wholesaler involvement or national accounts for distribution of this 
specialized CRAC equipment. DOE developed equipment costs for 
mechanical contractors directly in the engineering analysis and 
estimated cost to customers using a markup chain beginning with the 
mechanical contractor cost. Because of the complexity of installation, 
DOE estimated most sales of CRAC equipment involved mechanical 
contractors. Consequently, DOE did not develop separate markups for 
other distribution chains.
    DOE developed supply chain markups in the form of multipliers that 
represent increases above the mechanical contractor cost. DOE applied 
these markups (or multipliers) to the mechanical contractor costs it 
developed from the engineering analysis. DOE then added sales taxes and 
installation costs to arrive at the final installed equipment prices 
for baseline and higher-efficiency equipment. See chapter 5 of the 
ASHRAE NOPR TSD for additional details on markups. DOE identified two 
separate distribution channels for CRAC equipment to describe how the 
equipment passes from the mechanical contractor to the customer (Table 
VI.7).

          Table VI.7--Distribution Channels for CRAC Equipment
------------------------------------------------------------------------
         Channel 1 (replacements)           Channel 2 (New construction)
------------------------------------------------------------------------
Mechanical Contractor.....................  Mechanical Contractor
Customer..................................  Customer
------------------------------------------------------------------------

    DOE estimated a baseline markup and an incremental markup. DOE 
defined a ``baseline markup'' as a multiplier that converts the 
mechanical contractor cost of equipment with baseline efficiency to the 
customer purchase price for the equipment at the same baseline 
efficiency level. An ``incremental markup'' is defined as the 
multiplier to convert the incremental increase in mechanical contractor 
cost of higher-efficiency equipment to the customer purchase price for 
the same equipment. Both baseline and incremental markups are 
independent of the CRAC equipment efficiency levels.
    DOE developed the markups based on available financial data. DOE 
based the mechanical contractor markups on data from the 2007 U.S. 
Census Bureau financial data \33\ for the plumbing, heating, and air 
conditioning industry.
---------------------------------------------------------------------------

    \33\ The 2007 U.S. Census Bureau financial data for the 
plumbing, heating, and air conditioning industry is the latest 
version data set and was issued in August 2009. Available at: http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-ds_name=EC0723I1&-_lang=en.
---------------------------------------------------------------------------

    The overall markup is the product of all the markups (baseline or 
incremental) for the different steps within a distribution channel plus 
sales tax. DOE calculated sales taxes based on 2010 State-by-State 
sales tax data reported by the Sales Tax Clearinghouse.\34\ Because 
both contractor costs and sales tax vary by State, DOE developed 
distributions of markups within each distribution channel by State. No 
information was available to develop State-by-State distribution of 
CRAC equipment by building type or business type, so the percentage 
distribution of sales by business type are assumed to be the same in 
all States. The National distribution of the markups varies among 
business types. Chapter 5 of the ASHRAE NOPR TSD provides additional 
detail on markups.
---------------------------------------------------------------------------

    \34\ The Sales Tax Clearinghouse. Table of State sales tax rates 
along with combined city and county rates. (Last accessed Nov. 2, 
2011) (Available at: https://thestc.com/STRates.stm).
---------------------------------------------------------------------------

D. Energy Use Characterization

    DOE's building energy use characterization assesses the annual 
energy use for each of the 15 classes of computer room air conditioners 
at the efficiency levels established in the engineering analysis. 
Because of the fixed 0.11 EER difference between upflow and downflow 
CRAC units established in ASHRAE Standard 90.1-2010 and presumed in the 
engineering analysis for all higher efficiency levels, DOE determined 
that the per-unit energy savings benefits for corresponding upflow 
computer room air conditioners at higher efficiency levels could be 
adequately represented using these 15 downflow equipment classes. The 
energy use characterization assessed the energy use of computer room 
air conditioners using a purpose-built spreadsheet which estimates the 
annual energy consumption for each

[[Page 2390]]

equipment class at each efficiency level. The spreadsheet uses a 
modified outside temperature bin analysis. For each air-cooled 
equipment class, the spreadsheet calculates fan energy and condensing 
unit power consumption at each 5[emsp14][deg]F outdoor air dry bulb 
temperature bin. For water-cooled and glycol-cooled equipment, the 
spreadsheet first estimates the condensing water supply temperature 
from either an evaporative cooling tower or a dry cooler for water-
cooled and for glycol-cooled CRAC equipment, respectively, based on 
binned weather data. Using these results, DOE then estimates the 
condensing unit power consumption and adds to this the estimated fan 
power. The sum of the CRAC condensing unit power and the CRAC fan power 
is the estimated average CRAC total power consumption for each 
temperature bin. Annual estimates of energy use are developed by 
multiplying the power consumption at each temperature bin by the number 
of hours in that bin for each climate analyzed.
    To implement DOE's analysis methodology, DOE estimated the average 
heat load on each type and size of CRAC equipment based on an average 
thermal load set at 65 percent of the nominal sensible capacity based 
on an estimate provided in an Australian energy performance standards 
report.\35\ As CRAC equipment is used to cool internally-generated 
thermal loads and is generally not climate dependent, DOE believes that 
this figure would also apply to CRAC equipment in the U.S. DOE did not 
have manufacturer efficiency or performance data as a function of the 
outdoor temperature or the fraction of full load. Accordingly, DOE used 
an example of the variation in full-load performance as a function of 
ambient air temperature (for air-cooled equipment) or entering fluid 
temperature (for water-cooled and glycol-cooled equipment) provided in 
the ASHRAE 127-2007 test procedure and based on computer simulations to 
adjust full-load performance from the SCOP rating condition. A part-
load performance degradation was also included, based on the 
methodology outlined for unitary direct-expansion air conditioning 
equipment presented in the DOE EnergyPlus simulation tool 
documentation.\36\ For water-cooled and glycol-cooled equipment with 
economizer coils, DOE reduced the thermal load on the condensing unit 
during hours when the economizer would be expected to meet some or all 
of the sensible cooling load. Because the primary heat load met for 
computer room air conditioners is a sensible load and because DOE did 
not have data to adequately estimate the relative sensible load versus 
latent load during the year for computer rooms, DOE did not separately 
examine the latent load on the equipment as a function of conditions, 
but determined that the total energy use could be based on the SCOP 
performance.
---------------------------------------------------------------------------

    \35\ EnergyConsult Pty Ltd., Equipment Energy Efficiency 
Committee Regulatory Impact Statement Consultation Draft: Minimum 
Energy Performance Standards and Alternative Strategies for Close 
Control Air Conditioners, Report No 2008/11 (Sept. 2008) (Available 
at: www.energyrating.gov.au).
    \36\ EnergyPlus Engineering Reference included with EnergyPlus 
simulation software version 6.0 (Available at: http://apps1.eere.energy.gov/buildings/energyplus).
---------------------------------------------------------------------------

    DOE estimated the annual energy consumption for each equipment 
class at each efficiency level for 239 climate locations using typical 
meteorological year (TMY3) weather data.\37\ DOE relied on population-
based climate location weights to map the results for individual TMY 
locations to State-level annual energy consumption estimates for each 
U.S. State. DOE used the resulting State-by-State annual energy 
consumption estimates for each efficiency level in the subsequent life-
cycle cost analysis.
---------------------------------------------------------------------------

    \37\ S. Wilcox and W. Marion, Users Manual for TMY3 Data Sets, 
NREL/TP-581-43156 (May 2008).
---------------------------------------------------------------------------

E. Life-Cycle Cost and Payback Period Analyses

    DOE conducted the life-cycle cost (LCC) and payback period (PBP) 
analyses to estimate the economic impacts of potential standards on 
individual customers of CRAC equipment. DOE first analyzed these 
impacts for CRAC equipment by calculating the change in customers' LCCs 
likely to result from higher efficiency levels compared with the ASHRAE 
baseline efficiency levels for the 15 downflow CRAC classes discussed 
in the engineering analysis. DOE determined that the LCC benefits for 
higher efficiency levels for each downflow class of CRAC equipment 
would adequately represent LCC benefits for the corresponding upflow 
class. The LCC calculation considers total installed cost (contractor 
cost, sales taxes, distribution chain markups, and installation cost), 
operating expenses (energy, repair, and maintenance costs), equipment 
lifetime, and discount rate. DOE calculated the LCC for all customers 
as if each would purchase a new CRAC unit in the year the standard 
takes effect. Since DOE is considering both the efficiency levels in 
ASHRAE Standard 90.1-2007 and more-stringent efficiency levels, the 
compliance date for a new DOE energy conservation standard for any 
equipment class would depend upon the efficiency level adopted. This is 
because the statutory lead times for DOE adoption of the ASHRAE 
Standard 90.1-2010 efficiency levels and the adoption of more-stringent 
efficiency levels are different. (See section V.H.1 below for 
additional explanation regarding compliance dates.) However, the LCC 
benefits to the customer of standards higher than those in ASHRAE 
Standard 90.1-2010 can only begin to accrue after the compliance date 
for such higher standard once adopted by DOE. To account for this 
difference and to facilitate comparison, DOE presumes that the purchase 
year for all CRAC equipment for purposes of the LCC calculation is 
2017, the earliest year in which DOE can establish an amended energy 
conservation level at an efficiency level more stringent than the 
ASHRAE efficiency level. To compute LCCs, DOE discounted future 
operating costs to the time of purchase and summed them over the 
lifetime of the equipment.
    Next, DOE analyzed the effect of changes in installed costs and 
operating expenses by calculating the PBP of potential standards 
relative to baseline efficiency levels. The PBP estimates the amount of 
time it would take the customer to recover the incremental increase in 
the purchase price of more-efficient equipment through lower operating 
costs. The PBP is the change in purchase price divided by the change in 
annual operating cost that results from the energy conservation 
standard. DOE expresses this period in years. Similar to the LCC, the 
PBP is based on the total installed cost and the operating expenses. 
However, unlike the LCC, DOE only considers the first year's operating 
expenses in the PBP calculation. Because the PBP does not account for 
changes in operating expense over time or the time value of money, it 
is also referred to as a simple PBP.
    DOE conducted the LCC and PBP analyses using a commercially-
available spreadsheet tool and a purpose-built spreadsheet model, 
available online.\38\ This spreadsheet model developed by DOE accounts 
for variability in energy use and prices, installation costs, repair 
and maintenance costs, and energy costs. It uses weighting factors to 
account for distributions of shipments

[[Page 2391]]

to different building types and States to generate national LCC savings 
by efficiency level. The results of DOE's LCC and PBP analyses are 
summarized in section VI and described in detail in chapter 6 of the 
ASHRAE NOPR TSD.
---------------------------------------------------------------------------

    \38\ DOE's Life-Cycle Cost spreadsheet model can be found on the 
DOE's ASHRAE Products Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_meeting.html.
---------------------------------------------------------------------------

1. Approach
    Recognizing that each business that uses CRAC equipment is unique, 
DOE analyzed variability and uncertainty by performing the LCC and PBP 
calculations assuming a correspondence between business types and 
market segments (characterized as building types) for customers located 
in three types of commercial buildings (health care, education, and 
office). DOE developed financial data appropriate for the customers in 
each building type. Each type of building has typical customers who 
have different costs of financing because of the nature of the 
business. DOE derived the financing costs based on data from the 
Damodaran Online site.\39\
---------------------------------------------------------------------------

    \39\ Damodaran Online, Leonard N. Stern School of Business, New 
York University (Jan. 2011) (Available at: www.stern.nyu.edu/
~adamodar/New--Home--Page/data.html).
---------------------------------------------------------------------------

    The LCC analysis used the estimated annual energy use for each CRAC 
equipment unit described in section V.D. Because energy use of CRAC 
equipment is sensitive to climate, energy use varies by State. Aside 
from energy use, other important factors influencing the LCC and PBP 
analyses are energy prices, installation costs, equipment distribution 
markups, and sales tax. All of these are assumed to vary by State. At 
the national level, the LCC spreadsheets explicitly modeled both the 
uncertainty and the variability in the model's inputs, using 
probability distributions based on the shipment of CRAC equipment to 
different States.
    As mentioned above, DOE generated LCC and PBP results by building 
type and State and used developed weighting factors to generate 
national average LCC savings and PBP for each efficiency level. As 
there is a unique LCC and PBP for each calculated value at the building 
type and State level, the outcomes of the analysis can also be 
expressed as probability distributions with a range of LCC and PBP 
results. A distinct advantage of this type of approach is that DOE can 
identify the percentage of customers achieving LCC savings or attaining 
certain PBP values due to an increased efficiency level, in addition to 
the average LCC savings or average PBP for that efficiency level.
2. Life-Cycle Cost Inputs
    For each efficiency level DOE analyzed, the LCC analysis required 
input data for the total installed cost of the equipment, its operating 
cost, and the discount rate. Table VI.8 summarizes the inputs and key 
assumptions DOE used to calculate the customer economic impacts of all 
energy efficiency levels analyzed in this rulemaking. A more detailed 
discussion of the inputs follows.

  Table VI.8--Summary of Inputs and Key Assumptions Used in the LCC and
                              PBP Analyses
------------------------------------------------------------------------
                 Inputs                            Description
------------------------------------------------------------------------
                        Affecting Installed Costs
------------------------------------------------------------------------
Equipment Price........................  Equipment price was derived by
                                          multiplying manufacturer sales
                                          price or MSP (distributor's
                                          price delivered to a
                                          mechanical contractor at the
                                          job site, calculated in the
                                          engineering analysis) by
                                          mechanical contractor markups,
                                          as needed, plus sales tax from
                                          the markups analysis.
Installation Cost......................  Installation cost includes
                                          installation labor, installer
                                          overhead, and any
                                          miscellaneous materials and
                                          parts, derived from RS Means
                                          CostWorks 2011.\40\
------------------------------------------------------------------------
                        Affecting Operating Costs
------------------------------------------------------------------------
Annual Energy Use......................  Annual unit energy consumption
                                          for each class of equipment at
                                          each efficiency level
                                          estimated in a per-State basis
                                          using a spreadsheet model and
                                          a population-based mapping of
                                          climate locations to States.
Electricity Prices.....................  DOE developed average
                                          electricity prices based on
                                          EIA's Form 861 data for
                                          2010.\41\
Maintenance Cost.......................  DOE estimated annual
                                          maintenance costs based on RS
                                          Means CostWorks 2011 for CRAC
                                          equipment. Annual maintenance
                                          cost did not vary as a
                                          function of efficiency.
Repair Cost............................  DOE estimated the annualized
                                          repair cost for baseline
                                          efficiency CRAC equipment
                                          based on cost data from RS
                                          Means CostWorks 2011 (2010
                                          data). DOE assumed that the
                                          materials components portion
                                          of the repair costs would vary
                                          in direct proportion with the
                                          MSP at higher efficiency
                                          levels because it generally
                                          costs more to replace
                                          components that are more
                                          efficient.
------------------------------------------------------------------------
        Affecting Present Value of Annual Operating Cost Savings
------------------------------------------------------------------------
Equipment Lifetime.....................  DOE estimated CRAC equipment
                                          lifetime ranged between 10 and
                                          25 years, with an average
                                          lifespan of 15 years, based on
                                          estimates cited in available
                                          CRAC literature.
Discount Rate..........................  Mean real discount rates for
                                          all buildings range from 2.7
                                          percent for education
                                          buildings to 4.5 percent for
                                          office building owners.

[[Page 2392]]

 
Analysis Start Year....................  Start year for LCC is 2017,
                                          which is the earliest
                                          compliance date that DOE can
                                          set for new standards if it
                                          adopts any efficiency level
                                          for energy conservation
                                          standards higher than that
                                          shown in ASHRAE Standard 90.1-
                                          2010.
------------------------------------------------------------------------
                       Analyzed Efficiency Levels
------------------------------------------------------------------------
Analyzed Efficiency Levels.............  DOE analyzed the baseline
                                          efficiency levels (ASHRAE
                                          Standard 90.1-2010) and four
                                          higher efficiency levels for
                                          all 15 equipment classes. See
                                          the engineering analysis for
                                          additional details on
                                          selections of efficiency
                                          levels and cost.
------------------------------------------------------------------------
\40\ RS Means CostWorks 2011, R.S. Means Company, Inc. (2011) (Available
  at: http://www.meanscostworks.com/).
\41\ Electric Sales, Revenue, and Average Price 2009 (Data accessed on
  May 10, 2011 at http://www.eia.doe.gov/cneaf/electricity/esr/esr_sum.html). Inflator--2009 to 2010 dollars from EIA AEO 2011 GDP Price
  Index (Accessed on 4/27/2011 at http://www.eia.doe.gov/oiaf/aeo/tablebrowser/#release=AEO2011&subject=0-AEO2011&table=18-AEO2011®ion=0-0&cases=ref2011-d020911a).

a. Equipment Prices
    The price of CRAC equipment reflects the application of 
distribution channel markups (mechanical contractor markups) and sales 
tax to the manufacturer sales price (distributor's price, delivered to 
the job site), which is the cost established in the engineering 
analysis. As described in section VI.B, DOE determined mechanical 
contractor costs and markup for air conditioning equipment. For each 
equipment class, the engineering analysis provided contractor costs for 
the baseline equipment and up to four higher equipment efficiencies.
    The markup is the percentage increase in price as the CRAC 
equipment passes through the distribution channel. As explained in 
section VI.C, all CRAC equipment is assumed to be delivered by the 
manufacturer through a distributor to the mechanical contractor at the 
job site for installation without the involvement of a general 
contractor. This is assumed to happen whether the equipment is being 
purchased for the new construction market or to replace existing 
equipment.
    To forecast a price trend for the NOPR, DOE derived an inflation-
adjusted index of the PPI for miscellaneous refrigeration and air-
conditioning equipment over 1990-2010. These data show a general price 
index decline from 1990 to 2004, followed by a sharp increase, 
primarily due to rising prices of copper and steel products that go 
into this equipment. Given the slowdown in global economic activity in 
2011, DOE believes that the extent to which the trends of the past 
couple of years will continue is very uncertain and that the observed 
data provide a firm basis for projecting future costs trends for CRAC 
equipment. Therefore DOE used a constant price assumption as the 
default price factor index to project future computer room air 
conditioner prices in 2017. Thus, prices forecast for the LCC and PBP 
analysis are equal to the 2011 values for each efficiency level in each 
equipment class. Appendix 8-D of the NOPR TSD describes the historic 
data and the derivation of the price forecast.
    DOE requests comments on the most appropriate trend to use for real 
(inflation-adjusted) computer room air conditioner prices.
b. Installation Costs
    DOE derived national average installation costs for CRAC equipment 
from data provided in RS Means CostWorks 2011 (RS Means) specifically 
for CRAC equipment.\42\ RS Means provides estimates for installation 
costs for CRAC units by equipment capacity, as well as cost indices 
that reflect the variation in installation costs for 295 cities in the 
United States. The RS Means data identifies several cities in all 50 
States and the District of Columbia. DOE incorporated location-based 
cost indices into the analysis to capture variation in installation 
cost, depending on the location of the customer.
---------------------------------------------------------------------------

    \42\ RS Means CostWorks 2011, R.S. Means Company, Inc. 2011, 
Kingston, Massachusetts (Available at: http://www.meanscostworks.com/).
---------------------------------------------------------------------------

    For more-stringent efficiency levels, DOE recognized that 
installation costs could potentially be higher with larger units and 
higher-efficiency CRAC equipment due to larger sizes and more complex 
setup requirements. DOE utilized RS Means installation cost data from 
RS Means CostWorks 2011 to derive installation cost curves by size of 
unit for the base-efficiency unit. DOE did not have data to calibrate 
the extent to which installation cost might change as efficiency 
increased. For purposes of the NOPR LCC analysis, DOE assumed that 
installation cost would not increase as a function of increased 
efficiency. This is identified as Issue 13 under ``Issues on Which DOE 
Seeks Comment'' in section X.E of today's NOPR.
c. Annual Energy Use
    DOE estimated the annual electricity consumed by each class of CRAC 
equipment, by efficiency level, based on the energy use 
characterization described in section V.D and in chapter 4 of the NOPR 
TSD.
d. Electricity Prices
    Electricity prices are used to convert the electric energy savings 
from higher-efficiency equipment into energy cost savings. Because of 
the variation in annual electricity consumption savings and equipment 
costs across the country, it is important to consider regional 
differences in electricity prices. DOE used average effective 
commercial electricity prices at the State level from Energy 
Information Administration (EIA) data for 2010. This approach captured 
a wide range of commercial electricity prices across the United States. 
Furthermore, different kinds of businesses typically use electricity in 
different amounts at different times of the day, week, and year, and 
therefore, face different effective prices. To make this adjustment, 
DOE used EIA's 2003 CBECS \43\ data set to identify the average prices 
the three building types paid and compared them with the average prices 
all commercial customers paid.\44\ DOE used the ratios of prices paid 
by the three types of businesses to the national average commercial 
prices seen in the 2003 CBECS as multipliers to adjust the

[[Page 2393]]

average commercial 2010 State price data.
---------------------------------------------------------------------------

    \43\ EIA's Commercial Buildings Energy Consumption Survey, 
Energy Information Agency (Public use microdata available at: http://www.eia.doe.gov/emeu/cbecs/cbecs2003/public_use_2003/cbecs_pudata2003.html).
    \44\ EIA's 2003 CBECS is the most recent version of the data 
set.
---------------------------------------------------------------------------

    DOE weighted the prices each building type paid in each State by 
the estimated sales of CRAC equipment to each building type to obtain a 
weighted-average national electricity price for 2010. The State/
building type weights reflect the probabilities that a given unit of 
CRAC equipment shipped will operate with a given fuel price. The 
original State-by-State average commercial prices (adjusted to 2011$) 
range from approximately $0.066 per kWh to approximately $0.216 per 
kWh. (See chapter 6 of the ASHRAE NOPR TSD for further details.)
    The electricity price trends provide the relative change in 
electricity costs for future years. DOE applied the AEO2011 reference 
case as the default scenario and extrapolated the trend in values at 
the Census Division level from 2025 to 2035 of the forecast to 
establish prices in 2030 to 2060. This method of extrapolation is in 
line with methods the EIA uses to forecast fuel prices for the Federal 
Energy Management Program. DOE provides a sensitivity analysis of the 
LCC savings and PBP results to different fuel price scenarios using 
both the AEO2011 high-price and low-price forecasts in the ASHRAE NOPR 
TSD.
e. Maintenance Costs
    Maintenance costs are the costs to the customer of maintaining 
equipment operation. Maintenance costs include services such as 
cleaning heat-exchanger coils and changing air filters. DOE estimated 
annual routine maintenance costs for CRAC equipment as $84 per year for 
capacities up to 288 kBtu per hr and $102 per year for larger 
capacities, reported in the RS Means CostWorks 2011 database. Because 
data were not available to indicate how maintenance costs vary with 
equipment efficiency, DOE decided to use preventive maintenance costs 
that remain constant as equipment efficiency increases.
f. Repair Costs
    The repair cost is the cost to the customer of replacing or 
repairing components that have failed in the CRAC equipment. DOE 
estimated the one-time repair cost in RS Means CostWorks 2011 as a 
percentage of MSP for capacities between 5 tons (T) (60,000 Btu/hr) and 
15 T (180,000 Btu/hr), with the curve flattening at the 15 T percentage 
thereafter. DOE applied the percentage to the MSP for more-efficient 
equipment at each capacity for the one-time repair, then annualized the 
resulting repair costs. DOE determined that annualized repair costs 
would increase in direct proportion with increases in equipment prices. 
Because the price of CRAC equipment increases with efficiency, the cost 
for component repair will also increase as the efficiency of equipment 
increases. See chapter 6 of the ASHRAE NOPR TSD for details on the 
development of repair costs.
g. Equipment Lifetime
    DOE defines ``equipment lifetime'' as the age when a unit of CRAC 
equipment is retired from service. DOE reviewed available literature to 
establish typical equipment lifetimes. The literature offered a wide 
range of typical equipment lifetimes ranging from 10 years to 25 years. 
The data did not distinguish between classes of CRAC equipment. 
Consequently, DOE used a distribution of lifetimes between 10 and 25 
years, with an average of 15 years based on review of a range of CRAC 
lifetime estimates found in published studies and online documents and 
applied this distribution to all classes of CRAC equipment analyzed. 
Chapter 6 of the ASHRAE NOPR TSD contains a discussion of equipment 
lifetime.
h. Discount Rate
    The discount rate is the rate at which future expenditures are 
discounted to establish their present value. DOE determined the 
discount rate by estimating the cost of capital for purchasers of CRAC 
equipment. Most purchasers use both debt and equity capital to fund 
investments. Therefore, for most purchasers, the discount rate is the 
weighted-average cost of debt and equity financing, or the weighted-
average cost of capital (WACC), less the expected inflation.
    To estimate the WACC of CRAC equipment purchasers, DOE used a 
sample of over 2000 companies grouped to be representative of operators 
of each of three commercial building types (health care, education, and 
office) drawn from a database of 7,369 U.S. companies presented on the 
Damodaran Online Web site.\45\ This database includes most of the 
publicly-traded companies in the United States. For most educational 
buildings and a portion of the office buildings occupied by public 
schools, universities, and State and local government agencies, DOE 
estimated the cost of capital based on composite tax exempt bond rates 
for AA-rated municipal bonds. Federal office space was assumed to use 
the Federal bond rate, derived as the 40-year geometric average of long 
term (> 10 years) U.S. government securities. When one or more of the 
variables needed to estimate the discount rate in the Damodaran dataset 
were missing or could not be obtained, DOE discarded the firm from the 
analysis. DOE further reduced the sample to exclude firms that were 
unlikely to use the computer rooms served by CRAC equipment. The WACC 
approach for determining discount rates accounts for the current tax 
status of individual firms on an overall corporate basis. DOE did not 
evaluate the marginal effects of increased costs, and, thus, 
depreciation due to more expensive equipment, on the overall tax 
status.
---------------------------------------------------------------------------

    \45\ Damodaran financial data used for determining cost of 
capital available at: http://pages.stern.nyu.edu/~adamodar/ for 
commercial businesses. Data for determining financing for public 
buildings available at: http://finance.yahoo.com/bonds/composite_bond_rates.
---------------------------------------------------------------------------

    DOE used the final sample of companies to represent purchasers of 
CRAC equipment. For each company in the sample, DOE derived the cost of 
debt, percent debt financing, and systematic company risk from 
information on the Damodaran Online Web site. Damodaran estimated the 
cost of debt financing from the long-term Federal government bond rate 
(6.74 percent) and the standard deviation of the stock price. DOE then 
determined the weighted average values for the cost of debt, range of 
values, and standard deviation of WACC for each category of the sample 
companies. Deducting expected inflation from the cost of capital 
provided estimates of real discount rate by ownership category. Based 
on this database, DOE calculated the weighted average after-tax 
discount rate for CRAC equipment purchases, adjusted for inflation, in 
each of the three building types used in the analysis. Chapter 6 of the 
ASHRAE NOPR TSD contains the detailed calculations on the discount 
rate.
3. Payback Period
    DOE also determined the economic impact of potential amended energy 
conservation standards on customers by calculating the PBP of more-
stringent efficiency levels relative to a baseline efficiency level. 
The PBP measures the amount of time it takes the commercial customer to 
recover the assumed higher purchase expense of more-efficient equipment 
through lower operating costs. Similar to the LCC, the PBP is based on 
the total installed cost and the operating expenses for each building 
type and State, weighted on the probability of shipment to each market. 
Because the simple PBP does not take into account changes in operating 
expense over time or the time value of money, DOE considered only the 
first

[[Page 2394]]

year's operating expenses to calculate the PBP, unlike the LCC which is 
calculated over the lifetime of the equipment. Chapter 6 of the ASHRAE 
NOPR TSD provides additional details about the PBP.

F. National Impact Analysis--National Energy Savings and Net Present 
Value Analysis

    The national impact analysis (NIA) evaluates the effects of a 
proposed energy conservation standard from a national perspective 
rather than from the customer perspective represented by the LCC. This 
analysis assesses the net present value (NPV) (future amounts 
discounted to the present) and the National Energy Savings (NES) of 
total commercial customer costs and savings, which are expected to 
result from amended standards at specific efficiency levels. For each 
efficiency level analyzed, DOE calculated the NPV and NES for adopting 
more-stringent standards than the efficiency levels specified in ASHRAE 
Standard 90.1-2010. The NES refers to cumulative energy savings from 
2012 through 2041 or 2013 through 2042, depending on the product class. 
DOE calculated new energy savings in each year relative to a base case, 
defined as DOE adoption of the efficiency levels specified by ASHRAE 
Standard 90.1-2010. DOE also calculated energy savings from adopting 
efficiency levels specified by ASHRAE Standard 90.1-2010 compared to 
the current market base case. The NPV refers to cumulative monetary 
savings. DOE calculated net monetary savings in each year relative to 
the base case (ASHRAE Standard 90.1-2010) as the difference between 
total operating cost savings and increases in total installed cost. 
Cumulative savings are the sum of the annual NPV over the specified 
period. DOE accounted for operating cost savings until 2055 or 2056, 
when the equipment installed in the 30th year after the compliance date 
of the amended standards should be retired.
1. Approach
    The NES and NPV are a function of the total number of units in use 
and their efficiencies. Both the NES and NPV depend on annual shipments 
and equipment lifetime. Both calculations start by using the shipments 
estimate and the quantity of units in service derived from the 
shipments model.
    With regard to estimating the NES, because more-efficient computer 
room air conditioners are expected to gradually replace less-efficient 
ones, the energy per unit of capacity used by the computer room air 
conditioners in service gradually decreases in the standards case 
relative to the base case. DOE calculated the NES by subtracting energy 
use under a standards-case scenario from energy use in a base-case 
scenario.
    Unit energy savings for each equipment class are taken from the LCC 
spreadsheet for each efficiency level and weighted based on market 
efficiency distributions. To estimate the total energy savings for each 
efficiency level, DOE first calculated the national site energy 
consumption (i.e., the energy directly consumed by the units of 
equipment in operation) for each class of computer room air 
conditioners for each year of the analysis period. The NES and NPV 
analysis periods begin with the earliest expected compliance date of 
amended Federal energy conservation standards (i.e., 2012 or 2013), 
assuming DOE adoption of the baseline ASHRAE Standard 90.1-2010 
efficiency levels. For the analysis of DOE's potential adoption of 
more-stringent efficiency levels, the earliest compliance date would be 
2017, four years after DOE would likely issue a final rule requiring 
such standards. Second, DOE determined the annual site energy savings, 
consisting of the difference in site energy consumption between the 
base case and the standards case for each class of computer room air 
conditioner. Third, DOE converted the annual site energy savings into 
the annual amount of energy saved at the source of electricity 
generation (the source energy), using a site-to-source conversion 
factor. Finally, DOE summed the annual source energy savings from 2012 
to 2041 or 2013 to 2042 to calculate the total NES for that period. DOE 
performed these calculations for each efficiency level considered for 
computer room air conditioners in this rulemaking.
    DOE considered whether a rebound effect is applicable in its NES 
analysis. A rebound effect occurs when an increase in equipment 
efficiency leads to an increased demand for its service. EIA in its 
National Energy Modeling System (NEMS) model assumes a certain 
elasticity factor to account for an increased demand for service due to 
the increase in cooling (or heating) efficiency.\46\ EIA refers to this 
as an efficiency rebound. For the computer room air conditioning 
equipment market, there are two ways that a rebound effect could occur: 
(1) increased use of the air conditioning equipment within the 
commercial buildings they are installed in; and (2) additional 
instances of air conditioning computer rooms where it was not being 
cooled before.
---------------------------------------------------------------------------

    \46\ An overview of the NEMS model and documentation is found at 
http://www.eia.doe.gov/oiaf/aeo/overview/index.html.
---------------------------------------------------------------------------

    The first instance does not occur often because computer rooms are 
generally cooled to the level required for safe operation of the 
servers and other equipment. As inanimate objects, computers have no 
desire for further cooling, and persons maintaining the equipment have 
no reason to deviate from the optimal range of environmental 
conditions. With regard to the second instance, computer room air 
conditioners are unlikely to be installed in previously uncooled 
computer rooms, because servers and other equipment that need to be 
cooled or otherwise space conditioned to the degree of precision that 
requires a computer room air conditioner already would be. Given the 
potential for computer equipment damage or diminished performance, 
running a computer room without the appropriate environmental controls 
from the outset is highly unlikely. Therefore, DOE did not assume a 
rebound effect in the present NOPR analysis. DOE seeks input from 
interested parties on whether there will be a rebound effect for 
improvements in the efficiency of computer room air conditioners. If 
interested parties believe a rebound effect would occur, DOE is 
interested in receiving data quantifying the effects, as well as input 
regarding how should DOE quantify this in its analysis. This is 
identified as Issue 14 under ``Issues on Which DOE Seeks Comment'' in 
section X.E of today's NOPR.
    To estimate NPV, DOE calculated the net impact as the difference 
between total operating cost savings (including electricity cost 
savings) and increases in total installed costs (including customer 
prices). DOE calculated the NPV of each considered standard level over 
the life of the equipment using the following three steps. First, DOE 
determined the difference between the equipment costs under the 
standard-level case and the base case in order to obtain the net 
equipment cost increase resulting from the higher standard level. As 
noted in section VI.E.2.a, DOE used a constant price assumption as the 
default price forecast. Second, DOE determined the difference between 
the base-case operating costs and the standard-level operating costs in 
order to obtain the net operating cost savings from each higher 
efficiency level. Third, DOE determined the difference between the net 
operating cost savings and the net equipment cost increase in order to 
obtain the net savings (or expense) for each year. DOE then discounted 
the annual net savings (or expenses) to 2012 for computer room

[[Page 2395]]

air conditioners bought on or after 2012 or 2013, depending on product 
class, and summed the discounted values to provide the NPV of an 
efficiency level. An NPV greater than zero shows net savings (i.e., the 
efficiency level would reduce customer expenditures relative to the 
base case in present value terms). An NPV that is less than zero 
indicates that the efficiency level would result in a net increase in 
customer expenditures in present value terms.
    To make the analysis more transparent to all interested parties, 
DOE used a commercially-available spreadsheet tool to calculate the 
energy savings and the national economic costs and savings from 
potential amended standards. Chapter 8 of the NOPR TSD explains the 
models and how to use them. Interested parties can review DOE's 
analyses by changing various input quantities within the spreadsheet.
    Unlike the LCC analysis, the NES spreadsheet does not use 
distributions for inputs or outputs, but relies on national average 
first costs and energy costs developed from the LCC spreadsheet. DOE 
used the NES spreadsheet to perform calculations of energy savings and 
NPV using the annual energy consumption and total installed cost data 
from the LCC analysis. DOE forecasted the energy savings, energy cost 
savings, equipment costs, and NPV of benefits for equipment sold in 
each computer room air conditioner class from 2012 through 2041 or 2013 
through 2042, depending on the product class. The forecasts provided 
annual and cumulative values for all four output parameters described 
above.
2. Shipments Analysis
    Equipment shipments are an important element in the estimate of the 
future impact of a potential standard. DOE developed shipment 
projections and, in turn, calculated equipment stock by assuming that 
in each year, each existing computer room air conditioner either ages 
by one year or breaks down after a 15-year equipment life. DOE used the 
shipments projection and the equipment stock to determine the NES. The 
shipments portion of the spreadsheet model forecasts computer room air 
conditioner shipments from 2012 or 2013 to 2041 or 2042, depending on 
the product class.
    Data on computer room air conditioner shipments in the U.S. were 
not available. To estimate U.S. shipments, DOE obtained historical and 
projected (2000-2020) computer room air conditioner shipment data from 
an Australian energy performance standards report.\47\ DOE then used 
the ratio of business establishments in the United States compared to 
Australia to inflate Australia shipments to the U.S. market. The 
inflator used was 13.2. Table VI.9 exhibits the shipment data provided 
for a selection of years, while the full data set and the complete 
discussion of energy use indicators can be found in chapter 7 of the 
NOPR TSD. DOE used these shipments data to extend a shipments trend 
into the future.
---------------------------------------------------------------------------

    \47\ EnergyConsult Pty Ltd., Equipment Energy Efficiency 
Committee Regulatory Impact Statement Consultation Draft: Minimum 
Energy Performance Standards and Alternative Strategies for Close 
Control Air Conditioners, Report No 2008/11 (Sept. 2008) (Available 
at: www.energyrating.gov.au).

  Table VI.9--Total Shipments of Computer Room Air Conditioners (Units)
------------------------------------------------------------------------
                                      Units shipped      Units shipped
               Year                 (Australian data)   (U.S. estimate)
------------------------------------------------------------------------
2000..............................                850             11,228
2005..............................                985             13,011
2010..............................               1140             15,058
2015..............................               1320             17,436
2020..............................               1526             20,157
------------------------------------------------------------------------

    DOE allocated overall shipments into product classes using a two-
step process. First, DOE used Australian market share to allocate 
shipments to six broad product classes. DOE then used the relative 
fraction of models for each equipment class reflected in DOE's market 
database to allocate shipments further into the 15 product classes 
analyzed. The complete discussion of shipment allocation can be found 
in chapter 7 of the ASHRAE NOPR TSD.
    Table VI.10 shows the forecasted shipments for the different 
equipment classes of computer room air conditioners for selected years 
from 2012 to 2042 (with start and end years dependent on the product 
class), as well as the cumulative shipments. As equipment purchase 
price and repair costs increase with efficiency, DOE recognizes that 
higher first costs and repair costs can result in a drop in shipments. 
However, DOE had no basis for estimating the elasticity of shipments 
for computer room air conditioners as a function of first costs, repair 
costs, or operating costs. In addition, because computer room air 
conditioners are necessary for their application, DOE believes 
shipments would not change as a result of higher first costs and repair 
costs. Therefore, DOE presumed that the shipments projection does not 
change with higher standard levels. DOE seeks input on this assumption. 
This is identified as Issue 15 under ``Issues on Which DOE Seeks 
Comment'' in section X.E of today's NOPR. Chapter 7 of the NOPR TSD 
provides additional details on the shipments forecasts.

                                           Table VI.10--Shipments Forecast for Computer Room Air Conditioners
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Units shipped by year and equipment class
                                                                 ---------------------------------------------------------------------------------------
                                                                                                                                            Cumulative
                            Equipment                                                                                                        shipments
                                                                   2012/     2015     2020     2025     2030     2035     2040    2041/     (2012/2013-
                                                                    2013                                                           2042     2041/2042)
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, h.....................      671      732      847      922    1,015    1,109    1,202    1,221          28,518
Air conditioners, air-cooled, >=65,000 to h........    7,499    7,951    9,192   10,009   11,023   12,038   13,052   13,457         315,793

[[Page 2396]]

 
Air conditioners, air-cooled, >=240,000 Btu/h...................    1,677    1,778    2,056    2,239    2,466    2,693    2,919    3,010          70,636
Air conditioners, water-cooled, h...................       74       81       94      102      112      122      133      135           3,152
Air conditioners, water-cooled, >=65,000 to h......    1,233    1,308    1,512    1,646    1,813    1,980    2,147    2,213          51,940
Air conditioners, water-cooled, >=240,000 Btu/h.................      470      498      576      627      690      754      817      843          19,780
Air conditioners, water-cooled with fluid economizers, h..........................................................
Air conditioners, water-cooled with fluid economizers, >=65,000     1,036    1,098    1,270    1,383    1,523    1,663    1,803    1,859          43,628
 to h..............................................
Air conditioners, water-cooled with fluid economizers, >=240,000      180      190      220      240      264      288      313      322           7,563
 Btu/h..........................................................
Air conditioners, glycol-cooled, h..................       69       75       87       95      104      114      124      126           2,935
Air conditioners, glycol-cooled, >=65,000 to h.....    1,233    1,308    1,512    1,646    1,813    1,980    2,147    2,213          51,940
Air conditioners, glycol-cooled, >=240,000 Btu/h................      387      410      474      516      569      621      673      694          16,288
Air conditioners, glycol-cooled with fluid economizers, h..........................................................
Air conditioners, glycol-cooled with fluid economizers, >=65,000    1,431    1,517    1,754    1,910    2,103    2,297    2,490    2,567          60,250
 to h..............................................
Air conditioners, glycol-cooled with fluid economizers,               345      366      423      461      508      554      601      620          14,542
 >=240,000 Btu/h................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total.......................................................   16,420   17,437   20,162   21,954   24,177   26,403   28,627   29,490         691,854
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Total shipments shown in this table may not exactly match those in Table VI.9 as a result of rounding during allocation to product classes.

3. Base-Case and Standards-Case Forecasted Distribution of Efficiencies
    DOE reviewed the distribution of efficiency levels for 
commercially-available models within each equipment class in order to 
develop base-case efficiency distributions. DOE bundled the efficiency 
levels into ``efficiency ranges'' and determined the percentage of 
models within each range. DOE applied the percentages of models within 
each efficiency range to the total unit shipments for a given equipment 
class to estimate the distribution of shipments within the base case. 
Then, from those market shares and projections of shipments by 
equipment class, DOE extrapolated future equipment efficiency trends 
both for a base-case scenario and for standards-case scenarios. The 
difference in equipment efficiency between the base case and standards 
cases was the basis for determining the reduction in per-unit annual 
energy consumption that could result from amended standards.
    For the base case, DOE had no basis to estimate potential change in 
efficiency market shares. Therefore, DOE assumed that, absent amended 
standards, forecasted market shares would remain frozen until the end 
of the forecast period (30 years after the compliance date). This 
prediction could cause DOE to overestimate the savings associated with 
the higher efficiency levels discussed in this notice because computer 
room air conditioner efficiencies or relative efficiency class 
preferences may change voluntarily over time.
    For each efficiency level analyzed, DOE used a ``roll-up'' scenario 
to establish the market shares by efficiency level for the year that 
compliance would be required with amended standards (i.e., 2017 if DOE 
adopts more-stringent efficiency levels than those in ASHRAE Standard 
90.1-2010). DOE collected information that suggests the efficiencies of 
equipment in the base case that did not meet the standard level under 
consideration would roll up to meet the standard level. This 
information also suggests that equipment efficiencies in the base case 
that were above the standard level under consideration would not be 
affected.
    The base-case efficiency distributions for each equipment class are 
presented in chapter 7 of the TSD. DOE seeks input on its basis for the 
NES-forecasted base-case distribution of efficiencies and its 
prediction of how amended energy conservation standards would affect 
the distribution of efficiencies in the standards case. This is 
identified as Issue 16 under ``Issues on Which DOE Seeks Comment'' in 
section X.E of today's NOPR.
4. National Energy Savings and Net Present Value
    The computer room air conditioner equipment stock is the total 
number of computer room air conditioners in each equipment class 
purchased or shipped from previous years that have survived until the 
point at which stock is taken. The NES spreadsheet,\48\ through use of 
the shipments model, keeps track of the total number of computer room 
air conditioners shipped each year. For purposes of the NES and NPV 
analyses, DOE assumes that shipments of CRAC units survive for 15 
years, at the end of which time they are removed from stock.
---------------------------------------------------------------------------

    \48\ The NES spreadsheet can be found on the DOE's ASHRAE 
Products Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_meeting.html.
---------------------------------------------------------------------------

    The national annual energy consumption is the product of the annual 
unit energy consumption and the number of computer room air conditioner 
units of each vintage in the stock, summed over all vintages. This 
approach accounts for differences in unit energy consumption from year 
to year. In determining national annual energy consumption, DOE 
calculated the annual energy consumption at the site (i.e., million kWh 
consumed by computer room air conditioners) and

[[Page 2397]]

multiplied that by a conversion factor to account for generation and 
distribution losses, resulting in annual energy consumption at the 
source (or primary energy). DOE then summed the source or primary 
energy savings over a 30-year period to arrive at NES.
    Table VI.11 summarizes the inputs to the NES spreadsheet model 
along with a brief description of the data sources. The results of 
DOE's NES and NPV analysis are summarized in section VIII.B.3.b below 
and described in detail in chapter 7 of the NOPR TSD.

            Table VI.11--Summary of NES and NPV Model Inputs
------------------------------------------------------------------------
              Inputs                             Description
------------------------------------------------------------------------
Shipments.........................  Annual shipments based on Australian
                                     data adjusted to the U.S. (see
                                     chapter 7 of the NOPR TSD).
Compliance Date of Standard.......  2017 for adoption of a more-
                                     stringent efficiency level than
                                     those specified by ASHRAE Standard
                                     90.1-2010.
                                    2012 or 2013 for adoption of the
                                     efficiency levels specified by
                                     ASHRAE Standard 90.1-2010.
Base-Case Efficiencies............  Distribution of base-case shipments
                                     by efficiency level.
Standards-Case Efficiencies.......  Distribution of shipments by
                                     efficiency level for each standards
                                     case. Standards-case annual
                                     shipment-weighted market shares
                                     remain the same as in the base case
                                     and each standard level for all
                                     efficiencies above the efficiency
                                     level being analyzed. All other
                                     shipments are at the efficiency
                                     level.
Annual Energy Use per Unit........  Annual national weighted-average
                                     values are a function of efficiency
                                     level. (See chapter 4 of the NOPR
                                     TSD.)
Total Installed Cost per Unit.....  Annual weighted-average values are a
                                     function of efficiency level. (See
                                     chapter 5 of the NOPR TSD.)
Annualized Maintenance and Repair   Annual weighted-average values are a
 Costs per Unit.                     function of efficiency level. (See
                                     chapter 5 of the NOPR TSD.)
Escalation of Fuel Prices.........  AEO2011 forecasts (to 2035) and
                                     extrapolation for beyond 2035. (See
                                     chapter 8 of the NOPR TSD.)
Site-Source Conversion............  AEO2011 forecasts (to 2035) and
                                     extrapolation for beyond 2035. (See
                                     chapter 8 of the NOPR TSD.)
Discount Rate.....................  3 percent and 7 percent real.
Present Year......................  Future costs are discounted to 2012.
------------------------------------------------------------------------

G. Other Issues

1. Compliance Date of the Proposed Amended Energy Conservation 
Standards
    Generally, covered equipment to which a new or amended energy 
conservation standard applies must comply with the standard if such 
equipment is manufactured or imported on or after a specified date. In 
today's NOPR, DOE is evaluating whether more-stringent efficiency 
levels than those in ASHRAE Standard 90.1-2010 would be technologically 
feasible, economically justified, and result in a significant amount of 
energy savings. If DOE were to propose a rule prescribing energy 
conservation standards at the efficiency levels contained in ASHRAE 
Standard 90.1-2010, EPCA states that compliance with any such standards 
shall be required on or after a date which is two or three years 
(depending on equipment size) after the compliance date of the 
applicable minimum energy efficiency requirement in the amended ASHRAE/
IES standard. (42 U.S.C. 6313(a)(6)(D)) DOE has applied this two-year 
or three-year implementation period to determine the compliance date of 
any energy conservation standard equal to the efficiency levels 
specified by ASHRAE Standard 90.1-2010 proposed by this rulemaking. 
Thus, if DOE decides to adopt the efficiency levels in ASHRAE Standard 
90.1-2010, the compliance date of the rulemaking would be dependent 
upon the date specified in ASHRAE Standard 90.1-2010 or its publication 
date, if none is specified.
    The rule would apply to equipment h (10 product classes 
\49\) manufactured on or after October 29, 2012, which is two years 
after the publication date of ASHRAE Standard 90.1-2010, and to 
equipment >=65,000 Btu/h (20 product classes \50\) manufactured on or 
after October 29, 2013, which is three years after the publication date 
of ASHRAE Standard 90.1-2010. Typically, equipment equal to or greater 
than 65,000 Btu/h and less than 135,000 Btu/h would have a compliance 
date two years after the publication of ASHRAE Standard 90.1. However, 
because ASHRAE Standard 90.1-2010 established a product class for 
computer room air conditioners that combines traditional small and 
large categories, DOE has decided to assign the later compliance date 
of three years after the publication of ASHRAE 90.1-2010 to all 
computer room air conditioner product classes that cover products 
between 65,000 Btu/h and 240,000 Btu/h.
---------------------------------------------------------------------------

    \49\ The analysis only shows five product classes for this 
equipment size because DOE was able to analyze downflow and upflow 
units in combination. These units are nearly identical, but ASHRAE 
Standard 90.1-2010 identifies a 0.11 SCOP reduction in efficiency 
levels for upflow units as compared to downflow units (likely as a 
result of the additional static pressure that the blower fan must 
overcome in the upflow orientation). By adjusting the upflow units 
by 0.11 SCOP, DOE could analyze upflow and downflow units in 
combination.
    \50\ The analysis only shows ten product classes for this 
equipment size for the same reasons mentioned for equipment h.
---------------------------------------------------------------------------

    If DOE were to propose a rule prescribing energy conservation 
standards higher than the efficiency levels contained in ASHRAE 
Standard 90.1-2010, EPCA states that compliance with any such standards 
is required for products manufactured on or after a date which is four 
years after the date the rule is published in the Federal Register. (42 
U.S.C. 6313(a)(6)(D)) DOE has applied this 4-year implementation period 
to determine the compliance date for any energy conservation standard 
higher than the efficiency levels specified by ASHRAE Standard 90.1-
2010 that might be prescribed in a future rulemaking. Thus, for 
products for which DOE might adopt a level more stringent than the 
ASHRAE efficiency levels, the rule would apply to products manufactured 
on or after a date four years from the date of publication of the final 
rule, which the statute requires to be completed by April 29, 2013 
(thereby resulting in a compliance date no later than April 29, 
2017).\51\
---------------------------------------------------------------------------

    \51\ Since ASHRAE published ASHRAE Standard 90.1-2010 on October 
29, 2010, EPCA requires that DOE publish a final rule adopting more-
stringent standards than those in ASHRAE Standard 90.1-2010, if 
warranted, within 30 months of ASHRAE action (i.e., by April 2013). 
Thus, four years from April 2013 would be April 2017, which would be 
the anticipated complaince date for DOE adoption of more-stringent 
standards.
---------------------------------------------------------------------------

    Table VI.12 presents the anticipated compliance dates of an amended 
energy conservation standard for each equipment class for which DOE

[[Page 2398]]

developed a potential energy savings analysis.

  Table VI.12--Compliance Dates of an Amended Energy Conservation Standard for Each Equipment Class of Computer
                                              Room Air Conditioners
----------------------------------------------------------------------------------------------------------------
                                                                              Compliance date for adopting more-
                                          Compliance date for adopting the     stringent efficiency levels than
            Equipment class                 efficiency levels in ASHRAE       those in ASHRAE standard 90.1-2010
                                                 standard 90.1-2010                    (no later than)
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, h.
Air conditioners, air-cooled, >=65,000  October 29, 2013...................  April 29, 2017.
 to h.
Air conditioners, air-cooled,           October 29, 2013...................  April 29, 2017.
 >=240,000 Btu/h.
Air conditioners, water-cooled,         October 29, 2012...................  April 29, 2017.
 h.
Air conditioners, water-cooled,         October 29, 2013...................  April 29, 2017.
 >=65,000 to h.
Air conditioners, water-cooled,         October 29, 2013...................  April 29, 2017.
 >=240,000 Btu/h.
Air conditioners, water-cooled with     October 29, 2012...................  April 29, 2017.
 fluid economizers, h.
Air conditioners, water-cooled with     October 29, 2013...................  April 29, 2017.
 fluid economizers, >=65,000 to
 h.
Air conditioners, water-cooled with     October 29, 2013...................  April 29, 2017.
 fluid economizers, >=240,000 Btu/h.
Air conditioners, glycol-cooled,        October 29, 2012...................  April 29, 2017.
 h.
Air conditioners, glycol-cooled,        October 29, 2013...................  April 29, 2017.
 >=65,000 to h.
Air conditioners, glycol-cooled,        October 29, 2013...................  April 29, 2017.
 >=240,000 Btu/h.
Air conditioners, glycol-cooled with    October 29, 2012...................  April 29, 2017.
 fluid economizers, h.
Air conditioners, glycol-cooled with    October 29, 2013...................  April 29, 2017.
 fluid economizers, >=65,000 to
 h.
Air conditioners, glycol-cooled with    October 29, 2013...................  April 29, 2017.
 fluid economizers, >=240,000 Btu/h.
----------------------------------------------------------------------------------------------------------------

VII. Methodology for Emissions Analysis and Monetizing Carbon Dioxide 
and Other Emissions Impacts

A. Emissions Analysis

    In the emissions analysis, DOE estimated the reduction in power 
sector emissions of carbon dioxide (CO2), nitrogen oxides 
(NOX), and mercury (Hg) from amended energy conservation 
standards for ASHRAE equipment. DOE used the NEMS-BT computer 
model,\52\ which is run similarly to the AEO NEMS, except that 
equipment energy use is reduced by the amount of energy saved (by fuel 
type) at each efficiency level. The inputs of national energy savings 
come from the NIA spreadsheet model, while the output is the forecasted 
physical emissions. The net benefit of each efficiency level in today's 
proposed rule is the difference between the forecasted emissions 
estimated by NEMS-BT at each efficiency level and the AEO 2011 
Reference case, which incorporates projected effects of all emissions 
regulations promulgated as of January 31, 2011. NEMS-BT tracks 
CO2 emissions using a detailed module that provides results 
with broad coverage of all sectors and inclusion of interactive 
effects. For today's NOPR, DOE used the version of NEMS-BT based on AEO 
2011. For the final rule, DOE intends to revise the emissions analysis 
using the most current version of NEMS-BT, which may be based on AEO 
2012.
---------------------------------------------------------------------------

    \52\ EIA approves the use of the name ``NEMS'' to describe only 
an AEO version of the model without any modification to code or 
data. Because the present analysis entails some minor code 
modifications and runs the model under various policy scenarios that 
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the 
model as used here. (BT stands for DOE's Building Technologies 
Program.)
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs, and DOE has preliminarily determined that these programs 
create uncertainty about the impact of energy conservation standards on 
SO2 emissions. Title IV of the Clean Air Act sets an annual 
emissions cap on SO2 for affected EGUs in the 48 contiguous 
States and the District of Columbia (DC). SO2 emissions from 
28 eastern States and DC are also limited under the Clean Air 
Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), which created an 
allowance-based trading program. Although CAIR was remanded to the 
Environmental Protection Agency (EPA) by the U.S. Court of Appeals for 
the District of Columbia Circuit (DC Circuit) (see North Carolina v. 
EPA, 550 F.3d 1176 (DC Cir. 2008)), it remained in effect temporarily, 
consistent with the D.C. Circuit's earlier opinion in North Carolina v. 
EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2010, EPA issued the 
Transport Rule proposal, a replacement for CAIR (75 FR 45210 (Aug. 2, 
2010)), and on July 6, 2011, EPA issued the final Transport Rule, 
titled the Cross-State Air Pollution Rule. 76 FR 48208 (August 8, 2011) 
(See http://www.epa.gov/crossstaterule/). Because the AEO 2011 NEMS 
used for today's NOPR assumes the implementation of CAIR, DOE has not 
been able to take into account the effects of the Transport Rule for 
this rulemaking.\53\
---------------------------------------------------------------------------

    \53\ DOE notes that future iterations of the NEMS-BT model will 
incorporate any changes necessitated by issuance of the Transport 
Rule.
---------------------------------------------------------------------------

    The attainment of emissions caps typically is flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, any excess SO2 
emissions allowances resulting from the lower electricity demand caused 
by the imposition of an energy conservation standard could be used to 
permit offsetting increases in SO2 emissions by any 
regulated EGU. However, if the new and amended standards resulted in a 
permanent increase in the quantity of unused emissions allowances, 
there would be an overall reduction in SO2 emissions from 
the standards. While there remains some uncertainty about the ultimate 
effects of energy conservation standards on SO2 emissions 
covered by the existing cap-and-trade system, the NEMS-BT modeling 
system that DOE uses to forecast emissions reductions currently 
indicates that no physical reductions in power sector emissions would 
occur for SO2.
    As discussed above, the AEO 2011 NEMS used for today's NOPR assumes 
the implementation of CAIR, which established a cap on NOX 
emissions in 28 eastern States and the District of Columbia. With CAIR 
in effect, the

[[Page 2399]]

energy conservation standards that are the subject of today's NOPR are 
expected to have little or no physical effect on NOX 
emissions in those States covered by CAIR, for the same reasons that 
they may have little effect on SO2 emissions. However, the 
proposed standards would be expected to reduce NOX emissions 
in the 22 States not affected by CAIR. For these 22 States, DOE is 
using the NEMS-BT to estimate NOX emissions reductions from 
the standards considered in today's NOPR.
    In the absence of caps, a DOE energy conservation standard could 
reduce Hg emissions, and DOE used NEMS-BT to estimate these reductions. 
Although at present there are no national, Federally binding 
regulations for mercury from EGUs, on March 16, 2011, EPA proposed 
national emissions standards for hazardous air pollutants (NESHAPs) for 
mercury and certain other pollutants emitted from coal and oil-fired 
EGUs. 76 FR 24976. The NESHAPs do not include a trading program and, as 
such, DOE's energy conservation standards would likely reduce Hg 
emissions. However, for the emissions analysis for this rulemaking, DOE 
estimated mercury emissions reductions using NEMS-BT based on AEO2011, 
which does not incorporate the NESHAPs. DOE expects that future 
versions of the NEMS-BT model will reflect the implementation of the 
NESHAPs.

B. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this proposed rule, DOE considered 
the estimated monetary benefits likely to result from the reduced 
emissions of CO2 and NOX that are expected to 
result from each of the considered efficiency levels. In order to make 
this calculation similar to the calculation of the NPV of customer 
benefit, DOE considered the reduced emissions expected to result over 
the lifetime of products shipped in the forecast period for each 
efficiency level. This section summarizes the basis for the monetary 
values used for each of these emissions and presents the values 
considered in this rulemaking.
    For today's NOPR, DOE is relying on a set of values for the social 
cost of carbon (SCC) that was developed by an interagency process. A 
summary of the basis for those values is provided below, and a more 
detailed description of the methodologies used is provided as an 
appendix to chapter 10 of the NOPR TSD.
1. Social Cost of Carbon
    Under section 1(b)(6) of Executive Order 12866, ``Regulatory 
Planning and Review,'' 58 FR 51735 (Oct. 4, 1993), agencies must, to 
the extent permitted by law, assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs. The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed the SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide.
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of serious 
challenges. A recent report from the National Research Council \54\ 
points out that any assessment will suffer from uncertainty, 
speculation, and lack of information about: (1) Future emissions of 
greenhouse gases; (2) the effects of past and future emissions on the 
climate system; (3) the impact of changes in climate on the physical 
and biological environment; and (4) the translation of these 
environmental impacts into economic damages. As a result, any effort to 
quantify and monetize the harms associated with climate change will 
raise serious questions of science, economics, and ethics and should be 
viewed as provisional.
---------------------------------------------------------------------------

    \54\ National Research Council, ``Hidden Costs of Energy: 
Unpriced Consequences of Energy Production and Use,'' National 
Academies Press: Washington, DC (2009).
---------------------------------------------------------------------------

    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Consistent with the directive in 
Executive Order 12866 discussed above, the purpose of the SCC estimates 
presented here is to make it possible for agencies to incorporate the 
social benefits from reducing carbon dioxide emissions into cost-
benefit analyses of regulatory actions that have small, or 
``marginal,'' impacts on cumulative global emissions. Most Federal 
regulatory actions can be expected to have marginal impacts on global 
emissions.
    For such policies, the agency can estimate the benefits from 
reduced (or costs from increased) emissions in any future year by 
multiplying the change in emissions in that year by the SCC value 
appropriate for that year. The net present value of the benefits can 
then be calculated by multiplying each of these future benefits by an 
appropriate discount factor and summing across all affected years. This 
approach assumes that the marginal damages from increased emissions are 
constant for small departures from the baseline emissions path, an 
approximation that is reasonable for policies that have effects on 
emissions that are small relative to cumulative global carbon dioxide 
emissions. For policies that have a large (non-marginal) impact on 
global cumulative emissions, there is a separate question of whether 
the SCC is an appropriate tool for calculating the benefits of reduced 
emissions. This concern is not applicable to this notice, and DOE does 
not attempt to answer that question here.
    At the time of the preparation of this notice, the most recent 
interagency estimates of the potential global benefits resulting from 
reduced CO2 emissions in 2010, expressed in 2010$, were 
$4.9, $22.3, $36.5, and $67.6 per metric ton avoided. For emissions 
reductions that occur in later years, these values grow in real terms 
over time. Additionally, the interagency group determined that a range 
of values from 7 percent to 23 percent should be used to adjust the 
global SCC to calculate domestic

[[Page 2400]]

effects,\55\ although preference is given to consideration of the 
global benefits of reducing CO2 emissions.
---------------------------------------------------------------------------

    \55\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
---------------------------------------------------------------------------

    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. Specifically, the interagency group has set a preliminary 
goal of revisiting the SCC values within 2 years or at such time as 
substantially updated models become available, and to continue to 
support research in this area. In the meantime, the interagency group 
will continue to explore the issues raised by this analysis and 
consider public comments as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    To date, economic analyses for Federal regulations have used a wide 
range of values to estimate the benefits associated with reducing 
carbon dioxide emissions. In the model year 2011 CAFE final rule, the 
Department of Transportation (DOT) used both a ``domestic'' SCC value 
of $2 per ton of CO2 and a ``global'' SCC value of $33 per 
ton of CO2 for 2007 emission reductions (in 2007$), 
increasing both values at 2.4 percent per year. It also included a 
sensitivity analysis at $80 per ton of CO2. See Average Fuel 
Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74 
FR 14196 (March 30, 2009) (Final Rule); Final Environmental Impact 
Statement Corporate Average Fuel Economy Standards, Passenger Cars and 
Light Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at: 
http://www.nhtsa.gov/fuel-economy). A domestic SCC value is meant to 
reflect the value of damages in the United States resulting from a unit 
change in carbon dioxide emissions, while a global SCC value is meant 
to reflect the value of damages worldwide.
    A 2008 regulation proposed by DOT assumed a domestic SCC value of 
$7 per ton of CO2 (in 2006$) for 2011 emission reductions 
(with a range of $0 to $14 for sensitivity analysis), also increasing 
at 2.4 percent per year. See Average Fuel Economy Standards, Passenger 
Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 
(Proposed Rule); Draft Environmental Impact Statement Corporate Average 
Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 
2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy). A regulation for packaged terminal air conditioners and 
packaged terminal heat pumps finalized by DOE in October of 2008 used a 
domestic SCC range of $0 to $20 per ton CO2 for 2007 
emission reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008). In 
addition, EPA's 2008 Advance Notice of Proposed Rulemaking on 
Regulating Greenhouse Gas Emissions Under the Clean Air Act identified 
what it described as ``very preliminary'' SCC estimates subject to 
revision. 73 FR 44354 (July 30, 2008). EPA's global mean values were 
$68 and $40 per ton CO2 for discount rates of approximately 
2 percent and 3 percent, respectively (in 2006$ for 2007 emissions).
    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per ton of CO2. These interim values 
represent the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules and were offered for public comment in connection with 
proposed rules, including the joint EPA-DOT fuel economy and 
CO2 tailpipe emission proposed rules.
c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates, which 
were considered for this proposed rule. Specifically, the group 
considered public comments and further explored the technical 
literature in relevant fields. The interagency group relied on three 
integrated assessment models (IAMs) commonly used to estimate the SCC: 
the FUND, DICE, and PAGE models.\56\ These models are frequently cited 
in the peer-reviewed literature and were used in the last assessment of 
the Intergovernmental Panel on Climate Change. Each model was given 
equal weight in the SCC values that were developed.
---------------------------------------------------------------------------

    \56\ The models are described in appendix 15-A of the NOPR TSD.
---------------------------------------------------------------------------

    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four SCC values for use in 
regulatory analyses. Three values are based on the average SCC from 
three integrated assessment models, at discount rates of 2.5 percent, 3 
percent, and 5 percent. The fourth value, which represents the 95th-
percentile SCC estimate across all three models at a 3-percent discount 
rate, is included to represent higher-than-expected impacts from 
temperature change further out in the tails of the SCC distribution. 
For emissions (or emission reductions) that occur in later years, these 
values grow in real terms over time, as depicted in Table VII.1.

[[Page 2401]]

                                   Table VII.1--Social Cost of CO2, 2010-2050
                                        [In 2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                   Discount rate (%)
                                     ---------------------------------------------------------------------------
                Year                          5                  3                 2.5                 3
                                     ---------------------------------------------------------------------------
                                           Average            Average            Average        95th percentile
----------------------------------------------------------------------------------------------------------------
2010................................                4.7               21.4               35.1               64.9
2015................................                5.7               23.8               38.4               72.8
2020................................                6.8               26.3               41.7               80.7
2025................................                8.2               29.6               45.9               90.4
2030................................                9.7               32.8               50.0              100.0
2035................................               11.2               36.0               54.2              109.7
2040................................               12.7               39.2               58.4              119.3
2045................................               14.2               42.1               61.7              127.8
2050................................               15.7               44.9               65.0              136.2
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the Federal agencies participating in the 
interagency process to estimate the SCC.
    DOE recognizes the uncertainties embedded in the estimates of the 
SCC used for cost-benefit analyses. As such, DOE and others in the U.S. 
Government intend to periodically review and reconsider those estimates 
to reflect increasing knowledge of the science and economics of climate 
impacts, as well as improvements in modeling. In this context, 
statements recognizing the limitations of the analysis and calling for 
further research take on exceptional significance.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the most recent values 
identified by the interagency process, adjusted to 2010$ using the GDP 
price deflator. For each of the four cases specified, the values used 
for emissions in 2010 were $4.9, $22.3, $36.5, and $67.6 per metric ton 
avoided (values expressed in 2010$).\57\ To monetize the CO2 
emissions reductions expected to result from new or amended standards 
for the product classes in today's NOPR, DOE used the values identified 
in Table A1 of the ``Social Cost of Carbon for Regulatory Impact 
Analysis Under Executive Order 12866,'' which is reprinted in appendix 
16-A of the NOPR TSD, appropriately escalated to 2010$. To calculate a 
present value of the stream of monetary values, DOE discounted the 
values in each of the four cases using the specific discount rate that 
had been used to obtain the SCC values in each case.
---------------------------------------------------------------------------

    \57\ Table A1 presents SCC values through 2050. For DOE's 
calculation, it derived values after 2050 using the 3-percent per 
year escalation rate used by the interagency group.
---------------------------------------------------------------------------

2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the efficiency levels it considered. As 
noted above, DOE has taken into account how new or amended energy 
conservation standards would reduce NOX emissions in those 
22 States not affected by the CAIR. DOE estimated the monetized value 
of NOX emissions reductions resulting from each of the 
efficiency levels considered for today's NOPR based on environmental 
damage estimates found in the relevant scientific literature. Available 
estimates suggest a very wide range of monetary values, ranging from 
$370 per ton to $3,800 per ton of NOX from stationary 
sources, measured in 2001$ (equivalent to a range of $450 to $4,623 per 
ton in 2010$).\58\ In accordance with OMB guidance, DOE conducted two 
calculations of the monetary benefits derived using each of the 
economic values used for NOX, one using a real discount rate 
of 3 percent and the other using a real discount rate of 7 percent.\59\
---------------------------------------------------------------------------

    \58\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
    \59\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------

    DOE is aware of multiple agency efforts to determine the 
appropriate range of values used in evaluating the potential economic 
benefits of reduced Hg emissions. DOE has decided to await further 
guidance regarding consistent valuation and reporting of Hg emissions 
before it once again monetizes Hg in its rulemakings.

VIII. Analytical Results

A. Efficiency Levels Analyzed

1. Water-Cooled and Evaporatively-Cooled Products
    The methodology for water-cooled and evaporatively-cooled products 
was presented in the May 2011 NODA. 76 FR 25622, 25637-40 (May 5, 
2011). Table VIII.1 presents the baseline efficiency level and the 
higher efficiency levels analyzed for each equipment class of water-
cooled and evaporatively-cooled products subject to today's proposed 
rule. The baseline efficiency levels correspond to the lowest 
efficiency levels currently available on the market. The efficiency 
levels above the baseline represent efficiency levels specified in 
ASHRAE Standard 90.1-2010 and higher efficiency levels where equipment 
is currently available on the market.

[[Page 2402]]

           Table VIII.1--Efficiency Levels Analyzed for Water-Cooled and Evaporatively-Cooled Products
----------------------------------------------------------------------------------------------------------------
                                                     Representative
                  Equipment class                    capacity (tons)       Efficiency levels analyzed (EER)
----------------------------------------------------------------------------------------------------------------
Small Water-Cooled Air Conditioners Electric or No                 8  Baseline--11.5
 Heat >=65,000-h.                                        ASHRAE--12.1
                                                                      13.0
                                                                      14.0
                                                                      15.0
                                                                      Max-Tech--16.4
----------------------------------------------------------------------------------------------------------------
Small Water-Cooled Air Conditioners, Other Heat,                   8  Baseline--11.3
 >=65,000-h.                                             ASHRAE--11.9
                                                                      13.0
                                                                      14.0
                                                                      15.0
                                                                      Max-Tech--16. 4
----------------------------------------------------------------------------------------------------------------
Large Water-Cooled Air Conditioners, Electric or                  15  Baseline--11.0
 No Heat, >=135,000-h.                                   ASHRAE--12.5
                                                                      13.0
                                                                      14.0
                                                                      15.0
                                                                      Max-Tech--16.1
----------------------------------------------------------------------------------------------------------------
Large Water-Cooled Air Conditioners, Other Heat,                  15  Baseline--11.0
 >=135,000-h.                                            ASHRAE--12.3
                                                                      13.0
                                                                      14.0
                                                                      15.0
                                                                      Max-Tech--16.1
----------------------------------------------------------------------------------------------------------------
Very Large Water-Cooled Air Conditioners, Electric                35  Baseline--11.0
 or No Heat, >=240,000-h.                                ASHRAE--12.4
                                                                      13.0
                                                                      14.0
                                                                      Max-Tech--14.8
----------------------------------------------------------------------------------------------------------------
Very Large Water-Cooled Air Conditioners, Other                   35  Baseline--10.8
 Heat, >=240,000-h.                                      ASHRAE--12.2
                                                                      13.0
                                                                      14.0
                                                                      Max-Tech--14.8
----------------------------------------------------------------------------------------------------------------
Very Large Evaporatively-Cooled Air Conditioner,                  40  Baseline--11.0
 Electric or No Heat, >=240,000-h.                       ASHRAE--11.9
                                                                      12.5
                                                                      Max-Tech--13.1
----------------------------------------------------------------------------------------------------------------
Very Large Evaporatively-Cooled Air Conditioner,                  40  Baseline--10.8
 Other Heat, >=240,000-h.                                ASHRAE--11.7
                                                                      12.5
                                                                      Max-Tech--13.1
----------------------------------------------------------------------------------------------------------------

2. VRF Water-Source Heat Pumps
    Table VIII.2 presents the baseline efficiency level and the higher 
efficiency levels analyzed for each equipment class of VRF water-source 
heat pumps subject to today's proposed rule and with equipment on the 
market. The baseline efficiency levels correspond to the lowest 
efficiency levels currently available on the market. The efficiency 
levels above the baseline represent efficiency levels specified in 
ASHRAE Standard 90.1-2010 and higher efficiency levels where equipment 
is currently available on the market.

[[Page 2403]]

                    Table VIII.2--Efficiency Levels Analyzed for VRF Water-Source Heat Pumps
----------------------------------------------------------------------------------------------------------------
                                                     Representative
                  Equipment class                    capacity kBtu/h       Efficiency levels analyzed (EER)
----------------------------------------------------------------------------------------------------------------
VRF Water-Source Heat Pumps, >=135,000 Btu/h                     242  Baseline--9.5
 without heat recovery.                                               ASHRAE--10
                                                                      11
                                                                      12
                                                                      13
                                                                      Max-Tech--14.5
----------------------------------------------------------------------------------------------------------------
VRF Water-Source Heat Pumps, >=135,000 Btu/h with                215  Baseline--9.5
 heat recovery.                                                       ASHRAE--9.8
                                                                      11
                                                                      12
                                                                      13
                                                                      Max-Tech--14.5
----------------------------------------------------------------------------------------------------------------

3. Computer Room Air Conditioners
    Table VIII.3 presents the market baseline efficiency level and the 
higher efficiency levels analyzed for each equipment class of computer 
room air conditioners subject to today's proposed rule. The market 
baseline efficiency levels correspond to the lowest efficiency levels 
currently available on the market. The efficiency levels above the 
baseline represent efficiency levels specified by ASHRAE Standard 90.1-
2010 and efficiency levels above those specified in ASHRAE Standard 
90.1-2010 where equipment is currently available on the market. Note 
that for the economic analysis, efficiency levels above those specified 
in ASHRAE Standard 90.1-2010 are compared to ASHRAE Standard 90.1-2010 
as the baseline rather than the market baseline.

                   Table VIII.3--Efficiency Levels Analyzed for Computer Room Air Conditioners
----------------------------------------------------------------------------------------------------------------
                                                     Representative
                  Equipment class                    capacity kBtu/h     Efficiency levels analyzed (SCOP-127)
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, h.......                40  Market Baseline--2.00
                                                                      ASHRAE--2.20
                                                                      2.40
                                                                      2.60
                                                                      Max-Tech--2.80
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, >=65,000 to h.                                                               ASHRAE--2.10
                                                                      2.35
                                                                      2.60
                                                                      2.85
                                                                      Max-Tech--3.10
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, >=240,000 Btu/h.....               280  Market Baseline--1.90
                                                                      ASHRAE--1.90
                                                                      2.15
                                                                      2.40
                                                                      2.65
                                                                      Max-Tech--2.90
----------------------------------------------------------------------------------------------------------------
Air conditioners, water-cooled, h.....                30  Market Baseline--2.40
                                                                      ASHRAE--2.60
                                                                      2.80
                                                                      3.00
                                                                      3.10
                                                                      Max-Tech--3.30
----------------------------------------------------------------------------------------------------------------

[[Page 2404]]

 
Air conditioners, water-cooled, >=65,000 to                      106  Market Baseline--2.30
 h.                                                      ASHRAE--2.50
                                                                      2.70
                                                                      2.90
                                                                      3.10
                                                                      Max-Tech--3.30
----------------------------------------------------------------------------------------------------------------
Air conditioners, water-cooled, >=240,000 Btu/h...               260  Market Baseline--2.20
                                                                      ASHRAE--2.40
                                                                      2.60
                                                                      2.80
                                                                      3.00
                                                                      Max-Tech--3.20
----------------------------------------------------------------------------------------------------------------
Air conditioners, water-cooled with fluid                         30  Market Baseline--2.35
 economizers, h.                                          ASHRAE--2.55
                                                                      2.75
                                                                      2.95
                                                                      3.15
                                                                      Max-Tech--3.35
----------------------------------------------------------------------------------------------------------------
Air conditioners, water-cooled with fluid                        118  Market Baseline--2.25
 economizers, >=65,000 to h.                             ASHRAE--2.45
                                                                      2.65
                                                                      2.85
                                                                      3.05
                                                                      Max-Tech--3.25
----------------------------------------------------------------------------------------------------------------
Air conditioners, water-cooled with fluid                        280  Market Baseline--2.15
 economizers, >=240,000 Btu/h.                                        ASHRAE--2.35
                                                                      2.55
                                                                      2.75
                                                                      2.95
                                                                      Max-Tech--3.15
----------------------------------------------------------------------------------------------------------------
Air conditioners, glycol-cooled, h....                32  Market Baseline--2.30
                                                                      ASHRAE--2.50
                                                                      2.70
                                                                      2.90
                                                                      3.10
                                                                      Max-Tech--3.30
----------------------------------------------------------------------------------------------------------------
Air conditioners, glycol-cooled, >=65,000 to                     100  Market Baseline--1.95
 h.                                                      ASHRAE--2.15
                                                                      2.35
                                                                      2.55
                                                                      2.75
                                                                      Max-Tech--2.95
----------------------------------------------------------------------------------------------------------------
Air conditioners, glycol-cooled, >=240,000 Btu/h..               260  Market Baseline--1.90
                                                                      ASHRAE--2.10
                                                                      2.30
                                                                      2.50
                                                                      2.70
                                                                      Max-Tech--2.90
----------------------------------------------------------------------------------------------------------------

[[Page 2405]]

 
Air conditioners, glycol-cooled with fluid                        20  Market Baseline--2.25
 economizers, h.                                          ASHRAE--2.45
                                                                      2.65
                                                                      2.85
                                                                      3.05
                                                                      Max-Tech--3.25
----------------------------------------------------------------------------------------------------------------
Air conditioners, glycol-cooled with fluid                       118  Market Baseline--1.90
 economizers, >=65,000 to h.                             ASHRAE--2.10
                                                                      2.30
                                                                      2.50
                                                                      2.70
                                                                      Max-Tech--2.90
----------------------------------------------------------------------------------------------------------------
Air conditioners, glycol-cooled with fluid                       280  Market Baseline--1.85
 economizers, >=240,000 Btu/h.                                        ASHRAE--2.05
                                                                      2.25
                                                                      2.45
                                                                      2.65
                                                                      Max-Tech--2.85
----------------------------------------------------------------------------------------------------------------

B. Energy Savings and Economic Justification

1. Water-Cooled and Evaporatively-Cooled Equipment
    DOE estimated the potential primary energy savings in quads (i.e., 
10\15\ Btu) for each efficiency level considered within each equipment 
class analyzed. Table VIII.4 to Table VIII.11 show the potential energy 
savings resulting from the analyses conducted as part of the May 2011 
NODA. 76 FR 25622, 25637 (May 5, 2011). As mentioned in section IV.B.1 
and IV.B.2, DOE did not conduct an economic analysis for this equipment 
category, because of the minimal energy savings.

 Table VIII.4--Potential Energy Savings for Small Water-Cooled Equipment
                   With Electric Resistance or No Heat
------------------------------------------------------------------------
                                      Primary energy savings  estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical     Shipments  fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--12.1 EER...........          0.000005          0.000011
Level 2--13 EER.....................          0.000018          0.000060
Level 3--14 EER.....................          0.000044          0.000144
Level 4--15 EER.....................          0.000074          0.000238
Level 5--``Max-Tech''--16.4 EER.....          0.000121          0.000388
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

 Table VIII.5--Potential Energy Savings Estimates for Small Water-Cooled
                        Equipment With Other Heat
------------------------------------------------------------------------
                                      Primary energy savings  estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical     Shipments  fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--11.9 EER...........         0.0000005         0.0000013
Level 2--13 EER.....................         0.0000024         0.0000082
Level 3--14 EER.....................         0.0000053         0.0000174
Level 4--15 EER.....................         0.0000085         0.0000276
Level 5--``Max-Tech''--16.4 EER.....         0.0000137         0.0000441
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

[[Page 2406]]

 Table VIII.6--Potential Energy Savings Estimates for Large Water-Cooled
              Equipment With Electric Resistance or No Heat
------------------------------------------------------------------------
                                      Primary energy savings  estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical     Shipments  fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--12.5 EER...........           0.00014           0.00027
Level 2--13 EER.....................           0.00002           0.00008
Level 3--14 EER.....................           0.00013           0.00032
Level 4--15 EER.....................           0.00024           0.00056
Level 5--``Max-Tech''--16.1 EER.....           0.00039           0.00089
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

 Table VIII.7--Potential Energy Savings Estimates for Large Water-Cooled
                        Equipment With Other Heat
------------------------------------------------------------------------
                                      Primary energy savings  estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical     Shipments  fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--12.3 EER...........           0.00001           0.00003
Level 2--13 EER.....................           0.00001           0.00001
Level 3--14 EER.....................           0.00002           0.00004
Level 4--15 EER.....................           0.00003           0.00007
Level 5--``Max-Tech''--16.1 EER.....           0.00005           0.00010
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

 Table VIII.8--Potential Energy Savings Estimates for Very Large Water-
          Cooled Equipment With Electric Resistance or No Heat
------------------------------------------------------------------------
                                      Primary energy savings  estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical     Shipments  fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--12.4 EER...........            0.0002            0.0001
Level 2--13 EER.....................            0.0001            0.0001
Level 3--14 EER.....................            0.0005            0.0003
Level 4--``Max-Tech''--14.8 EER.....            0.0008            0.0005
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

 Table VIII.9--Potential Energy Savings Estimates for Very Large Water-
                    Cooled Equipment With Other Heat
------------------------------------------------------------------------
                                      Primary energy savings  estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical     Shipments  fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--12.2 EER...........             0.002             0.001
Level 2--13 EER.....................             0.001             0.001
Level 3--14 EER.....................             0.005             0.003
Level 4--``Max-Tech''--14.8 EER.....             0.008             0.005
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

[[Page 2407]]

    Table VIII.10--Potential Energy Savings Estimates for Very Large
   Evaporatively-Cooled Equipment With Electric Resistance or No Heat
------------------------------------------------------------------------
                                       Primary energy savings estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical      Shipments fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--11.9 EER...........           0.00013           0.00009
Level 2--12.5 EER...................           0.00008           0.00005
Level 3--``Max-Tech''--13.1 EER.....           0.00017           0.00011
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

    Table VIII.11--Potential Energy Savings Estimates for Very Large
             Evaporatively-Cooled Equipment With Other Heat
------------------------------------------------------------------------
                                       Primary energy savings estimate *
                                                    (quads)
          Efficiency level           -----------------------------------
                                         Historical      Shipments fixed
                                       shipment trend        to 2009
------------------------------------------------------------------------
Level 1--ASHRAE--11.7 EER...........            0.0011            0.0007
Level 2--12.5 EER...................            0.0010            0.0007
Level 3--``Max-Tech''--13.1 EER.....            0.0019            0.0012
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

2. VRF Water-Source Heat Pumps
    DOE estimated the potential primary energy savings in quads (i.e., 
10\15\ Btu) for each efficiency level considered within the two 
equipment classes of VRF water-source heat pumps at or greater than 
135,000 Btu/h. Table VIII.12 and Table VIII.13 show the potential 
energy savings resulting from the analyses conducted as part of today's 
NOPR (see section V). Because there appear to be no models on the 
market below ASHRAE Standard 90.1-2010 levels, there are no energy 
savings from adopting ASHRAE. However, there are also extremely minimal 
energy savings from adopting a higher standard. As mentioned in section 
IV.B.3, DOE did not conduct an economic analysis for this equipment 
category.

 Table VIII.12--Potential Energy Savings for VRF Water-Source Heat Pumps
                  >135,000 Btu/h Without Heat Recovery
------------------------------------------------------------------------
                                                         Primary energy
                   Efficiency level                     savings estimate
                                                            * (quads)
------------------------------------------------------------------------
Level 1--ASHRAE--10.0 EER.............................  ................
Level 2--11 EER.......................................            0.0009
Level 3--12 EER.......................................            0.0174
Level 4--13 EER.......................................            0.0416
Level 5--``Max-Tech''--14.5 EER.......................            0.0761
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

 Table VIII.13--Potential Energy Savings for VRF Water-Source Heat Pumps
                    >135,000 Btu/h With Heat Recovery
------------------------------------------------------------------------
                                                         Primary energy
                   Efficiency level                     savings estimate
                                                            * (quads)
------------------------------------------------------------------------
Level 1--ASHRAE--9.8 EER..............................  ................
Level 2--11 EER.......................................            0.0008
Level 3--12 EER.......................................            0.0083
Level 4--13 EER.......................................            0.0195
Level 5--``Max-Tech''--14.5 EER.......................            0.0358
------------------------------------------------------------------------
* The potential energy savings for efficiency levels more stringent than
  those specified by ASHRAE Standard 90.1-2010 were calculated relative
  to the efficiency levels that would result if ASHRAE Standard 90.1-
  2010 standards were adopted.

[[Page 2408]]

3. Computer Room Air Conditioners
a. Economic Impacts on Commercial Customers
i. Life-Cycle Cost and Payback Period
    To evaluate the economic impact of the efficiency levels on 
commercial customers, DOE conducted an LCC analysis for each efficiency 
level. More-efficient computer room air conditioners would affect these 
customers in two ways: (1) Annual operating expense would decrease; and 
(2) purchase price would increase. Inputs used for calculating the LCC 
include total installed costs (i.e., equipment price plus installation 
costs), operating expenses (i.e., annual energy savings, energy prices, 
energy price trends, repair costs, and maintenance costs), equipment 
lifetime, and discount rates.
    The output of the LCC model is a mean LCC savings (or cost \60\) 
for each equipment class, relative to the baseline computer room air 
conditioner efficiency level. The LCC analysis also provides 
information on the percentage of customers that are negatively affected 
by an increase in the minimum efficiency standard.
---------------------------------------------------------------------------

    \60\ An LCC cost is shown as a negative savings in the results 
presented.
---------------------------------------------------------------------------

    DOE also performed a PBP analysis as part of the LCC analysis. The 
PBP is the number of years it would take for the customer to recover 
the increased costs of higher-efficiency equipment as a result of 
energy savings based on the operating cost savings. The PBP is an 
economic benefit-cost measure that uses benefits and costs without 
discounting. Chapter 5 of the NOPR TSD provides detailed information on 
the LCC and PBP analyses.
    DOE's LCC and PBP analyses provided five key outputs for each 
efficiency level above the baseline (i.e., efficiency levels more 
stringent than those in ASHRAE Standard 90.1-2010), as reported in 
Table VIII.14 through Table VIII.23 below. These outputs include the 
proportion of computer room air conditioner purchases in which the 
purchase of a computer room air conditioner that is compliant with the 
amended energy conservation standard creates a net LCC increase, no 
impact, or a net LCC savings for the customer. Another output is the 
average net LCC savings from standard-compliant equipment, as well as 
the average PBP for the customer investment in standard-compliant 
equipment.

                        Table VIII.14--Summary LCC and PBP Results for Computer Room Air Conditioners, Air-Cooled, h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                --------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                 % of consumers that experience       (years)
                                                  Installed    operating       LCC         Average   ---------------------------------------------------
                                                     cost         cost                     savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       11,982       32,039       44,021  ............  ...........  ...........  ...........  ...........
1..............................................       13,471       29,822       43,294          809             3           89            8          8.5
2..............................................       15,222       28,140       43,362          212            17           68           14         10.2
3..............................................       17,281       26,756       44,037         (587)           65           23           12         12.1
4..............................................       19,700       25,623       45,323       (1,761)           90            5            6         14.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative LCC savings.

                  Table VIII.15--Summary LCC and PBP Results for Computer Room Air Conditioners, Air-Cooled, >=65,000 to h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
                Efficiency level                                Discounted                                % of consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................       39,412      121,532      160,945  ...........  ...........  ...........  ...........  ...........
1...............................................       41,651      110,885      152,536        9,334            0           98            2          2.6
2...............................................       44,063      102,936      146,999        6,406            0           78           22          3.0
3...............................................       46,664       96,523      143,187        5,895            0           33           67          3.5
4...............................................       49,467       91,289      140,756        6,437            1            2           97          4.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

                       Table VIII.16--Summary LCC and PBP Results for Computer Room Air Conditioners, Air-Cooled, >=240,000 Btu/h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
                Efficiency level                                Discounted                                % of consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................       56,879      286,458      343,337  ...........  ...........  ...........  ...........  ...........
1...............................................       60,102      258,403      318,505       27,198            0           98            2          1.4
2...............................................       63,577      237,739      301,316       19,713            0           78           22          1.7
3...............................................       67,322      221,326      288,648       19,071            0           33           67          1.9
4...............................................       71,358      208,099      279,458       22,152            0            2           98          2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 2409]]

                       Table VIII.17--Summary LCC and PBP Results for Computer Room Air Conditioners, Water-Cooled, h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
                Efficiency level                                Discounted                                % of consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................       23,748       29,266       53,014  ...........  ...........  ...........  ...........  ...........
1...............................................       20,311       27,237       47,548        5,455            0           72           28       (21.5)
2...............................................       17,527       25,621       43,148        7,389            0           49           51       (20.9)
3...............................................       15,273       24,215       39,488        8,003            0           13           87       (20.3)
4...............................................       13,447       22,984       36,430       10,213            0            3           97       (19.7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative payback period due to a declining installed cost at higher efficiency levels.

                 Table VIII.18--Summary LCC and PBP Results for Computer Room Air Conditioners, Water-Cooled, >=65,000 to h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
                Efficiency level                                Discounted                                % of consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................       22,983      109,615      132,598  ...........  ...........  ...........  ...........  ...........
1...............................................       28,614      104,631      133,245        (672)           20           72            8         15.4
2...............................................       36,183      101,867      138,049      (5,118)           54           42            4         22.4
3...............................................       46,355      100,831      147,186     (12,844)           79           20            1         35.9
4...............................................       60,027      101,734      161,761     (25,278)           96            4            0         64.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative LCC savings.

                      Table VIII.19--Summary LCC and PBP Results for Computer Room Air Conditioners, Water-Cooled, >=240,000 Btu/h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                --------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                 % of consumers that experience       (years)
                                                  Installed    operating       LCC         Average   ---------------------------------------------------
                                                     cost         cost                     savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       42,217      239,903      282,120  ............  ...........  ...........  ...........  ...........
1..............................................       52,902      227,027      279,929        2,133            13           72           15         11.1
2..............................................       67,262      219,010      286,272       (5,292)           49           42            9         15.4
3..............................................       86,562      214,580      301,142      (18,696)           77           20            3         22.4
4..............................................      112,498      214,030      326,528      (40,964)           96            4            0         36.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative LCC savings.

                   Table VIII.20--Summary LCC and PBP Results For Air Conditioners, Water-Cooled With Fluid Economizers, h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                -------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                % of consumers that experience        (years)
                                                  Installed    operating       LCC        Average   ----------------------------------------------------
                                                     cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       25,059       19,565       44,624  ...........  ...........  ...........  ...........  ............
1..............................................       21,422       18,442       39,864        4,759            0           72           28        (40.3)
2..............................................       18,476       17,541       36,017        6,459            0           49           51        (39.3)
3..............................................       16,090       16,763       32,853        6,960            0           13           87        (38.3)
4..............................................       14,158       16,086       30,244        8,832            0            3           97        (37.3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative payback period due to a declining installed cost at higher efficiency levels.

[[Page 2410]]

     Table VIII.21--Summary LCC and PBP Results for Computer Room Air Conditioners, Water-Cooled With Fluid Economizers, >=65,000 to h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                -------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                % of consumers that experience        (years)
                                                  Installed    operating       LCC        Average   ----------------------------------------------------
                                                     cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       24,169       73,475       97,645  ...........  ...........  ...........  ...........  ............
1..............................................       30,129       71,967      102,095      (4,439)           25           72            3         41.5
2..............................................       38,138       71,937      110,075     (10,105)           58           42            0         34.1
3..............................................       48,903       73,290      122,193     (19,437)           80           20            0        (66.1)
4..............................................       63,372       76,298      139,669     (33,672)           96            4            0        (75.0)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate either negative LCC savings or show a negative payback due to increased annual operating costs.

           Table VIII.22--Summary LCC and PBP Results for Computer Room Air Conditioners, Water-Cooled With Fluid Economizers, >=240,000 Btu/h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                -------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                % of consumers that experience        (years)
                                                  Installed    operating       LCC        Average   ----------------------------------------------------
                                                     cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       44,469      157,416      201,886  ...........  ...........  ...........  ...........  ............
1..............................................       55,777      152,704      208,481      (6,568)           25           72            3         30.5
2..............................................       70,973      151,095      222,068     (16,717)           57           42            1         40.7
3..............................................       91,397      152,234      243,631     (33,664)           80           20            0         43.1
4..............................................      118,844      156,568      275,412     (59,831)           96            4            0        (57.8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate either negative LCC savings or show a negative payback due to increased annual operating costs.

                       Table VIII.23--Summary LCC and PBP Results for Computer Room Air Conditioners, Glycol-Cooled, h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                -------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                % of consumers that experience        (years)
                                                  Installed    operating       LCC        Average   ----------------------------------------------------
                                                     cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       24,353       29,757       54,110  ...........  ...........  ...........  ...........  ............
1..............................................       20,916       27,643       48,559        5,540            0           72           28        (20.2)
2..............................................       18,132       25,962       44,094        7,501            0           49           51        (19.7)
3..............................................       15,878       24,509       40,387        8,117            0           13           87        (19.2)
4..............................................       14,052       23,241       37,293       10,350            0            3           97        (18.6)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative payback period due to a declining installed cost at higher efficiency levels.

                Table VIII.24--Summary LCC and PBP Results for Computer Room Air Conditioners, Glycol-Cooled, >=65,000 to h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                --------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                 % of consumers that experience       (years)
                                                  Installed    operating       LCC         Average   ---------------------------------------------------
                                                     cost         cost                     savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       24,377      123,088      147,465  ............  ...........  ...........  ...........  ...........
1..............................................       30,001      116,846      146,847          594            15           72           13         11.9
2..............................................       37,559      113,489      151,048       (3,901)           52           42            6         17.8
3..............................................       47,717      112,428      160,145      (11,921)           78           20            2         29.1
4..............................................       61,368      113,891      175,258      (25,047)           96            4            0         50.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative LCC savings.

[[Page 2411]]

                      Table VIII.25--Summary LCC and PBP Results for Computer Room Air Conditioners, Glycol-Cooled, >=240,000 Btu/h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                --------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                 % of consumers that experience       (years)
                                                  Installed    operating       LCC         Average   ---------------------------------------------------
                                                     cost         cost                     savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       42,217      266,128      308,345  ............  ...........  ...........  ...........  ...........
1..............................................       52,902      250,960      303,862        4,429            10           72           18          9.2
2..............................................       67,262      242,073      309,336       (3,308)           44           42           14         13.2
3..............................................       86,562      238,019      324,581      (17,633)           76           20            4         20.2
4..............................................      112,498      239,151      351,650      (41,761)           95            4            1         35.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative LCC savings.

                  Table VIII.26--Summary LCC and PBP Results for Air Conditioners, Glycol-Cooled With Fluid Economizers, h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                --------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                 % of consumers that experience       (years)
                                                  Installed    operating       LCC         Average   ---------------------------------------------------
                                                     cost         cost                     savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       25,664       24,815       50,479  ............  ...........  ...........  ...........  ...........
1..............................................       22,027       23,156       45,183        5,295             0           72           28       (28.2)
2..............................................       19,081       21,851       40,932        7,159             0           49           51       (27.6)
3..............................................       16,695       20,727       37,422        7,717             0           13           87       (26.9)
4..............................................       14,763       19,751       34,514        9,808             0            3           97       (26.3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative payback period due to a declining installed cost at higher efficiency levels.

     Table VIII.27--Summary LCC and PBP Results for Computer Room Air Conditioners, Glycol-Cooled With Fluid Economizers, >=65,000 to h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)              Payback
                                                --------------------------------------------------------------------------------------------    period
                Efficiency level                               Discounted                                 % of consumers that experience       (years)
                                                  Installed    operating       LCC         Average   ---------------------------------------------------
                                                     cost         cost                     savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................................       25,563      102,580      128,143  ............  ...........  ...........  ...........  ...........
1..............................................       31,514       98,451      129,965       (1,802)           23           72            5         21.0
2..............................................       39,512       96,813      136,325       (7,200)           55           42            3         33.4
3..............................................       50,261       97,235      147,496      (16,388)           79           20            1         40.8
4..............................................       64,708       99,990      164,697      (30,857)           96            4            0         22.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative LCC savings.

          Table VIII.28--Summary LCC and PBP Results for Computer Room Air Conditioners, Glycol-Cooled With Fluid Economizers, >=240,000 Btu/h
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2011$)                   Life-cycle cost savings (2011$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
                Efficiency level                                Discounted                                % of consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................       44,469      220,328      264,797  ...........  ...........  ...........  ...........  ...........
1...............................................       55,777      209,958      265,735        (891)           21           72            7         15.4
2...............................................       70,973      204,967      275,941     (10,569)           53           42            5         23.3
3...............................................       91,397      204,265      295,662     (27,375)           77           20            3         32.3
4...............................................      118,844      208,311      327,156     (54,306)           95            4            1         34.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative LCC savings.

b. National Impact Analysis
i. Amount and Significance of Energy Savings
    To estimate the energy savings through 2041 or 2042 due to amended 
energy conservation standards, DOE compared the energy consumption of 
computer room air conditioners under the ASHRAE Standard 90.1-2010 
efficiency levels to energy consumption of computer room air 
conditioners under higher efficiency standards. DOE also compared the 
energy consumption of computer room air conditioners under the ASHRAE 
Standard 90.1-2010 efficiency levels to energy consumption of computer 
room air conditioners under the current market base case. DOE examined 
up to four efficiency levels higher than those of ASHRAE Standard

[[Page 2412]]

90.1-2010. Table VIII.29 shows the forecasted national energy savings 
at each of the considered standard levels. (See chapter 8 of the NOPR 
TSD.) As mentioned in section VI.B, DOE adjusted the efficiency rating 
(SCOP) upward for all upflow units in order to analyze the energy 
savings from only 15 classes of computer room air conditioners, with 
upflow and downflow units combined.

         Table VIII.29--Summary of Cumulative National Energy Savings for Computer Room Air Conditioners
                        [Energy savings for units sold from 2012 to 2041 or 2013 to 2042]
----------------------------------------------------------------------------------------------------------------
                                                                National energy savings (quads) *
                                                ----------------------------------------------------------------
                Equipment class                     ASHRAE     Efficiency   Efficiency   Efficiency   Efficiency
                                                    level       level 1      level 2      level 3      level 4
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, h....      0.00018       0.0006       0.0021       0.0052       0.0086
Air conditioners, air-cooled, >=65,000 to                -**        0.006        0.059        0.196        0.364
 h................................
Air conditioners, air-cooled, >=240,000 Btu/h..          -**        0.004        0.034        0.112        0.206
Air conditioners, water-cooled, h..      0.00003       0.0001       0.0003       0.0007       0.0010
Air conditioners, water-cooled, >=65,000 to           0.0009       0.0088       0.0246       0.0435       0.0634
 h................................
Air conditioners, water-cooled, >=240,000 Btu/h       0.0008       0.0079       0.0220       0.0388       0.0565
Air conditioners, water-cooled with fluid            0.00001      0.00004      0.00011      0.00021      0.00031
 economizers, h....................
Air conditioners, water-cooled with fluid             0.0004       0.0038       0.0106       0.0187       0.0273
 economizers, >=65,000 to h.......
Air conditioners, water-cooled with fluid             0.0002       0.0016       0.0043       0.0076       0.0111
 economizers, >=240,000 Btu/h..................
Air conditioners, glycol-cooled, h.      0.00003      0.00013      0.00033      0.00063      0.00092
Air conditioners, glycol-cooled, >=65,000 to           0.001        0.011        0.031        0.054        0.078
 h................................
Air conditioners, glycol-cooled, >=240,000 Btu/       0.0008       0.0080       0.0220       0.0384       0.0554
 h.............................................
Air conditioners, glycol-cooled with fluid           0.00002       0.0001       0.0002       0.0005       0.0007
 economizers, h....................
Air conditioners, glycol-cooled with fluid             0.001        0.010        0.027        0.047        0.067
 economizers, >=65,000 to h.......
Air conditioners, glycol-cooled with fluid            0.0005       0.0054       0.0147       0.0257       0.0369
 economizers, >=240,000 Btu/h..................
----------------------------------------------------------------------------------------------------------------
* All energy savings from efficiency levels above ASHRAE Standard 90.1-2010 are calculated with those ASHRAE
  levels as a baseline.
** For these equipment classes, no models were identified below the efficiency levels shown in ASHRAE Standard
  90.1-2010, so there are no energy savings for the ASHRAE Standard 90.1-2010 efficiency levels.

ii. Net Present Value
    The NPV analysis is a measure of the cumulative benefit or cost of 
standards to the Nation. In accordance with OMB's guidelines on 
regulatory analysis (OMB Circular A-4, section E (Sept. 17, 2003)), DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. The 7-percent rate is an estimate of the average before-tax rate 
of return on private capital in the U.S. economy, and reflects the 
returns to real estate and small business capital, as well as corporate 
capital. DOE used this discount rate to approximate the opportunity 
cost of capital in the private sector, because recent OMB analysis has 
found the average rate of return on capital to be near this rate. DOE 
also used the 3-percent rate to capture the potential effects of 
standards on private customers' consumption (e.g., reduced purchasing 
of equipment due to higher prices for equipment and purchase of reduced 
amounts of energy). This rate represents the rate at which society 
discounts future consumption flows to their present value. This rate 
can be approximated by the real rate of return on long-term government 
debt (e.g., yield on Treasury notes minus annual rate of change in the 
Consumer Price Index), which has averaged about 3 percent on a pre-tax 
basis for the last 30 years. Table VIII.30 and Table VIII.31 provide an 
overview of the NPV results. (See chapter 7 of the NOPR TSD for further 
detail.)

            Table VIII.30--Summary of Cumulative Net Present Value for Computer Room Air Conditioners
                                          [Discounted at seven percent]
----------------------------------------------------------------------------------------------------------------
                                                                     Net present value (billion 2011$)
                                                         -------------------------------------------------------
                     Equipment class                       Efficiency    Efficiency    Efficiency    Efficiency
                                                          level 1  ($)  level 2  ($)  level 3  ($)  level 4  ($)
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, h.............       0.0003       (0.0005)      (0.0060)      (0.0174)
Air conditioners, air-cooled, >=65,000 to h         0.01          0.10          0.29          0.44
Air conditioners, air-cooled, >=240,000 Btu/h...........         0.01          0.07          0.22          0.37
Air conditioners, water-cooled, h...........        0.001         0.003         0.006         0.009
Air conditioners, water-cooled, >=65,000 to       (0.008)       (0.053)       (0.166)       (0.377)
 h......................................................
Air conditioners, water-cooled, >=240,000 Btu/h.........       (0.001)       (0.026)       (0.097)       (0.239)
Air conditioners, water-cooled with fluid economizers,          0.001         0.002         0.003         0.005
 h..........................................
Air conditioners, water-cooled with fluid economizers,          (0.02)        (0.08)        (0.20)        (0.41)
 >=65,000 to h.............................
Air conditioners, water-cooled with fluid economizers,         (0.005)       (0.023)       (0.061)       (0.127)
 >=240,000 Btu/h........................................
Air conditioners, glycol-cooled, h..........        0.001         0.003         0.006         0.008
Air conditioners, glycol-cooled, >=65,000 to h..................................................
Air conditioners, glycol-cooled, >=240,000 Btu/h........        0.002        (0.017)       (0.077)       (0.200)
Air conditioners, glycol-cooled with fluid economizers,         0.001         0.003         0.005         0.008
 h..........................................
Air conditioners, glycol-cooled with fluid economizers,         (0.01)        (0.08)        (0.24)        (0.53)
 >=65,000 to h.............................

[[Page 2413]]

 
Air conditioners, glycol-cooled with fluid economizers,        (0.004)       (0.031)        (0.10)        (0.23)
 >=240,000 Btu/h........................................
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative NPV.

            Table VIII.31--Summary of Cumulative Net Present Value for Computer Room Air Conditioners
                                          (Discounted at three percent)
----------------------------------------------------------------------------------------------------------------
                                                                       Net present value (Billion 2011$)
                                                             ---------------------------------------------------
                       Equipment class                         Efficiency   Efficiency   Efficiency   Efficiency
                                                                level 1      level 2      level 3      level 4
                                                                  ($)          ($)          ($)          ($)
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled, h.................        0.001        0.002      (0.004)      (0.021)
Air conditioners, air-cooled, >=65,000 to h....         0.03         0.26         0.76         1.25
Air conditioners, air-cooled, >=240,000 Btu/h...............         0.02         0.18         0.54         0.93
Air conditioners, water-cooled, h...............        0.003        0.006        0.012        0.017
Air conditioners, water-cooled, >=65,000 to h..      (0.006)      (0.079)      (0.280)      (0.671)
Air conditioners, water-cooled, >=240,000 Btu/h.............        0.006      (0.028)      (0.150)      (0.407)
Air conditioners, water-cooled with fluid economizers,              0.001        0.003        0.006        0.009
 h..............................................
Air conditioners, water-cooled with fluid economizers,             (0.03)       (0.14)       (0.37)       (0.77)
 >=65,000 to h.................................
Air conditioners, water-cooled with fluid economizers,            (0.008)      (0.039)      (0.110)      (0.235)
 >=240,000 Btu/h............................................
Air conditioners, glycol-cooled, h..............        0.002        0.006        0.011        0.016
Air conditioners, glycol-cooled, >=65,000 to h.        0.004      (0.058)      (0.258)      (0.665)
Air conditioners, glycol-cooled, >=240,000 Btu/h............         0.01       (0.01)       (0.12)       (0.34)
Air conditioners, glycol-cooled with fluid economizers,             0.002        0.006        0.011        0.015
 h..............................................
Air conditioners, glycol-cooled with fluid economizers,            (0.02)       (0.14)       (0.43)       (0.97)
 >=65,000 to h.................................
Air conditioners, glycol-cooled with fluid economizers,           (0.003)      (0.047)       (0.17)       (0.41)
 >=240,000 Btu/h............................................
----------------------------------------------------------------------------------------------------------------
\*\ Numbers in parentheses indicate negative NPV.

C. Need of the Nation to Conserve Energy

    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts or costs of energy production. Reduced 
electricity demand from energy conservation standards is also likely to 
reduce the cost of maintaining the reliability of the electricity 
system, particularly during peak-load periods. As a measure of this 
reduced demand, Table VIII.32 presents the estimated reduction in 
generating capacity in 2042 attributable to the efficiency levels that 
DOE considered in this rulemaking.

   Table VIII.32--Reduction in National Electric Generating Capacity in 2042 Under Evaluated Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                                                         Efficiency level
                                                ----------------------------------------------------------------
                                                    ASHRAE
                                                  (baseline)       1            2            3            4
----------------------------------------------------------------------------------------------------------------
Water-Cooled and Evaporatively-Cooled Products.         0.00         0.01         0.01         0.02         0.02
VRF Water-Source Heat Pumps....................         0.00         0.00         0.05         0.12         0.23
Computer Room Air Conditioners.................         0.01         0.12         0.47         1.09         1.81
----------------------------------------------------------------------------------------------------------------

    Energy savings from standards for the product classes covered in 
today's NOPR could also produce environmental benefits in the form of 
reduced emissions of air pollutants and greenhouse gases associated 
with electricity production. Table VIII.33 provides DOE's estimate of 
cumulative CO2, NOX, and Hg emissions reductions 
projected to result from the efficiency levels considered in this 
rulemaking. DOE reports annual CO2, NOX, and Hg 
emissions reductions for each efficiency level in chapter 9 of the NOPR 
TSD.
    As discussed in section VII.A, DOE did not report SO2 
emissions reductions from power plants because there is uncertainty 
about the effect of energy conservation standards on the overall level 
of SO2 emissions in the United States due to SO2 
emissions caps. DOE also did not include NOX emissions 
reduction from power plants in States subject to CAIR, because an 
energy conservation standard would not affect the overall level of 
NOX emissions in those States due to the emissions caps 
mandated by CAIR.

[[Page 2414]]

              Table VIII.33--Summary of Emissions Reduction Estimated for Product Efficiency Levels
                                [Cumulative in 2012 or 2013 through 2042 or 2043]
----------------------------------------------------------------------------------------------------------------
                                                                         Efficiency level
                                                ----------------------------------------------------------------
                                                    ASHRAE
                                                  (baseline)       1            2            3            4
----------------------------------------------------------------------------------------------------------------
Water-Cooled and Evaporatively-Cooled Products:
    CO2 (million metric tons)..................         0.10         0.10         0.25         0.36         0.37
    NOX (thousand tons)........................         0.08         0.08         0.21         0.30         0.31
    Hg (tons)..................................        0.001        0.001        0.003        0.004        0.004
VRF Water-Source Heat Pumps:
    CO2 (million metric tons)..................         0.00         0.05         0.82         1.96         3.58
    NOX (thousand tons)........................         0.00         0.04         0.68         1.60         2.93
    Hg (tons)..................................        0.000        0.001        0.009        0.022        0.040
Computer Room Air Conditioners:................
CO2 (million metric tons)......................         0.18         2.14         8.06         18.7         31.1
NOX (thousand tons)............................         0.14         1.76         6.62         15.4         25.6
Hg (tons)......................................        0.001        0.023        0.087        0.203        0.337
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this proposed rule, DOE estimated 
monetary benefits likely to result from the reduced emissions of 
CO2 and NOX that DOE estimated for each of the 
efficiency levels considered. As discussed in section VII.B, DOE used 
values for the SCC developed by an interagency process. The four values 
for CO2 emissions reductions resulting from that process 
(expressed in 2010$) are $4.9/ton (the average value from a 
distribution that uses a 5-percent discount rate), $22.3/ton (the 
average value from a distribution that uses a 3-percent discount rate), 
$36.5/ton (the average value from a distribution that uses a 2.5-
percent discount rate), and $67.6/ton (the 95th-percentile value from a 
distribution that uses a 3-percent discount rate). These values 
correspond to the value of emission reductions in 2010; the values for 
later years are higher due to increasing damages as the magnitude of 
climate change increases.
    Table VIII.34 presents the global value of CO2 emissions 
reductions at each efficiency level. For each of the four cases, DOE 
calculated a present value of the stream of annual values using the 
same discount rate as was used in the studies upon which the dollar-
per-ton values are based. DOE calculated domestic values as a range 
from 7 percent to 23 percent of the global values, and these results 
are presented in chapter 10 of the NOPR TSD.

   Table VIII.34--Estimates of Global Present Value of CO2 Emissions Reduction Under Product Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                      5% Discount rate,  3% Discount rate,    2.5% Discount    3% Discount rate,
              Eff level                    average            average         rate, average     95th percentile
----------------------------------------------------------------------------------------------------------------
                                                                     Million 2011$
----------------------------------------------------------------------------------------------------------------
Water-Cooled and Evaporatively-
 Cooled Products:
    ASHRAE (baseline)...............                0.5                2.4                4.1                7.4
    1...............................                0.5                2.5                4.3                7.7
    2...............................                1.2                6.3               10.6               19.1
    3...............................                1.8                9.0               15.2               27.4
    4...............................                1.8                9.2               15.6               28.1
VRF Water-Source Heat Pumps:
    ASHRAE (baseline)...............                0.0                0.0                0.0                0.0
    1...............................                0.3                1.4                2.3                4.2
    2...............................                4.3               22.5               38.1               68.4
    3...............................               10.3               53.7               91.1              163.4
    4...............................               18.9               98.1              166.5              298.5
Computer Room Air Conditioners:
    ASHRAE (baseline)...............                0.9                4.7                7.9               14.4
    1...............................               11.2               57.5               97.4              175.2
    2...............................               48.2              246.7              417.5              751.4
    3...............................              119.9              613.9             1038.7             1869.3
    4...............................              214.6             1099.0             1859.6             3346.6
----------------------------------------------------------------------------------------------------------------

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to evolve rapidly. Thus, any value placed in 
this rulemaking on reducing CO2 emissions is subject to 
change. DOE, together with other Federal agencies, will continue to 
review various methodologies for estimating the monetary value of 
reductions in CO2 and other GHG emissions. This ongoing 
review will consider the comments on this subject that are part of the 
public record for this and other rulemakings, as well as other 
methodological assumptions and issues. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this NOPR the most 
recent values and

[[Page 2415]]

analyses resulting from the ongoing interagency review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emissions reductions 
anticipated to result from amended standards for the equipment that is 
the subject of today's NOPR. The low and high dollar-per-ton values 
that DOE used are discussed in section VII.B.2. Table VIII.35 presents 
the cumulative present values of NOX emissions reductions 
for each efficiency level calculated using seven-percent and three-
percent discount rates.

 Table VIII.35--Estimates of Present Value of NOX Emissions Reduction in
                2012-2042 Under Product Efficiency Levels
------------------------------------------------------------------------
      Efficiency level          3% Discount rate      7% Discount rate
------------------------------------------------------------------------
                                             Million 2011$
------------------------------------------------------------------------
Water-Cooled and
 Evaporatively-Cooled
 Products:
    ASHRAE (baseline).......  0.02 to 0.25........  0.01 to 0.12.
    1.......................  0.02 to 0.24........  0.01 to 0.10.
    2.......................  0.06 to 0.64........  0.03 to 0.28.
    3.......................  0.09 to 0.92........  0.04 to 0.40.
    4.......................  0.09 to 0.95........  0.04 to 0.42.
VRF Water-Source Heat Pumps:
    ASHRAE (baseline).......  0.0 to 0.0..........  0.0 to 0.0.
    1.......................  0.01 to 0.13........  0.01 to 0.05.
    2.......................  0.2 to 2.2..........  0.1 to 0.9.
    3.......................  0.5 to 5.2..........  0.2 to 2.2.
    4.......................  0.9 to 9.5..........  0.4 to 4.0.
Computer Room Air
 Conditioners:
    ASHRAE (baseline).......  0.04 to 0.46........  0.02 to 0.22.
    1.......................  0.6 to 6.1..........  0.3 to 2.7.
    2.......................  2.4 to 24.6.........  1.0 to 10.7.
    3.......................  6.0 to 61.4.........  2.6 to 26.6.
    4.......................  10.7 to 109.8.......  4.6 to 47.6.
------------------------------------------------------------------------

D. Proposed Standards

1. Water-Cooled and Evaporatively-Cooled Equipment
    EPCA specifies that, for any commercial and industrial equipment 
addressed under 42 U.S.C. 6313(a)(6)(A)(i), DOE may prescribe an energy 
conservation standard more stringent than the level for such equipment 
in ASHRAE Standard 90.1, as amended, only if ``clear and convincing 
evidence'' shows that a more-stringent standard would result in 
significant additional conservation of energy and is technologically 
feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II))
    In evaluating more-stringent efficiency levels for water-cooled and 
evaporatively-cooled equipment than those specified by ASHRAE Standard 
90.1-2010, DOE reviewed the results in terms of the significance of 
their energy savings. For the reasons discussed in section IV.B, DOE 
agrees with commenters that the energy savings from increasing national 
energy conservation standards for water-cooled and evaporatively-cooled 
equipment above the levels specified by ASHRAE Standard 90.1-2010 would 
be very minimal. As such, DOE does not have ``clear and convincing 
evidence'' that significant additional conservation of energy would 
result from adoption of more-stringent standard levels. Therefore, DOE 
did not examine whether the levels are economically justified, and DOE 
is proposing to adopt the energy efficiency levels for these products 
as set forth in ASHRAE Standard 90.1-2010. Table VIII.36 presents the 
proposed energy conservation standards and compliance dates for water-
cooled and evaporatively-cooled equipment.

    Table VIII.36--Proposed Energy Conservation Standards for Water-Cooled and Evaporatively-Cooled Equipment
----------------------------------------------------------------------------------------------------------------
                                                                               Efficiency
          Equipment type                Subcategory         Size category        level        Compliance date
                                                               (input)           (EER)
----------------------------------------------------------------------------------------------------------------
Small Water-Cooled Air             Electric or No Heat.  >=65,000 Btu/h and          12.1  June 1, 2013.
 Conditioners.                                            h.
Small Water-Cooled Air             Other Heat..........  >=65,000 Btu/h and          11.9  June 1, 2013.
 Conditioners.                                            h.
Large Water-Cooled Air             Electric or No Heat.  >=135,000 Btu/h and         12.5  June 1, 2014.
 Conditioners.                                            h.
Large Water-Cooled Air             Other Heat..........  >=135,000 Btu/h and         12.3  June 1, 2014.
 Conditioners.                                            h.
Very Large Water-Cooled Air        Electric or No Heat.  >=240,000 Btu/h and         12.4  June 1, 2014.
 Conditioners.                                            h.
Very Large Water-Cooled Air        Other Heat..........  >=240,000 Btu/h and         12.2  June 1, 2014.
 Conditioners.                                            h.
Small Evaporatively-Cooled Air     Electric or No Heat.  >=65,000 Btu/h and          12.1  June 1, 2013.
 Conditioners.                                            h.
Small Evaporatively-Cooled Air     Other Heat..........  >=65,000 Btu/h and          11.9  June 1, 2013.
 Conditioners.                                            h.

[[Page 2416]]

 
Large Evaporatively-Cooled Air     Electric or No Heat.  >=135,000 Btu/h and         12.0  June 1, 2014.
 Conditioners.                                            h.
Large Evaporatively-Cooled Air     Other Heat..........  >=135,000 Btu/h and         11.8  June 1, 2014.
 Conditioners.                                            h.
Very Large Evaporatively-Cooled    Electric or No Heat.  >=240,000 Btu/h and         11.9  June 1, 2014.
 Air Conditioners.                                        h.
Very Large Evaporatively-Cooled    Other Heat..........  >=240,000 Btu/h and        *11.7  June 1, 2014.
 Air Conditioners.                                        h.
----------------------------------------------------------------------------------------------------------------
* ASHRAE Standard 90.1-2010 specifies this efficiency level as 12.2 EER. However, as explained in section IV.B.2
  of this NOPR, DOE has determined that this level was mistakenly reported and that the correct level is 11.7
  EER.

2. VRF Water-Source Heat Pumps
    As noted previously, EPCA specifies that, for any commercial and 
industrial equipment addressed under 42 U.S.C. 6313(a)(6)(A)(i), DOE 
may prescribe an energy conservation standard more stringent than the 
level for such equipment in ASHRAE Standard 90.1, as amended, only if 
``clear and convincing evidence'' shows that a more-stringent standard 
would result in significant additional conservation of energy and is 
technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(A)(ii)(II))
    In evaluating more-stringent efficiency levels for VRF water-source 
heat pumps than those specified by ASHRAE Standard 90.1-2010, DOE 
reviewed the results in terms of the significance of their energy 
savings. For the reasons discussed in section VIII.B.2, the energy 
savings for more-stringent efficiency levels for VRF water-source heat 
pumps greater than 135,000 Btu/h would be minimal. In addition, there 
are no models on the market of VRF water-source heat pumps less than 
17,000 Btu/h, so there are no energy savings predicted for this product 
class. As such, DOE does not have ``clear and convincing evidence'' 
that significant additional conservation of energy would result from 
adoption of more-stringent efficiency levels than those specified in 
ASHRAE Standard 90.1-2010. Therefore, DOE did not examine whether the 
levels are economically justified, and DOE is proposing to adopt the 
energy efficiency levels for these products as set forth in ASHRAE 
Standard 90.1-2010.\61\ Table VIII.37 presents the proposed amended 
energy conservation standards and compliance dates for VRF water-source 
heat pumps.
---------------------------------------------------------------------------

    \61\ For other classes of VRF systems introduced by ASHRAE 
Standard 90.1-2010, DOE is not proposing new standards but is 
clarifying that existing standards for air-cooled or water-source 
heat pumps continue to apply. In addition, DOE is tentatively 
proposing a new test procedure for all classes of VRF equipment. The 
proposed changes to the Code of Federal Regulations are found at the 
end of this NOPR.

              Table VIII.37--Proposed Energy Conservation Standards for VRF Water-Source Heat Pumps
----------------------------------------------------------------------------------------------------------------
                                                     Size category
        Equipment type             Subcategory          (input)        Efficiency level     Compliance date **
----------------------------------------------------------------------------------------------------------------
VRF Water-Source Heat Pumps...  Without Heat       h....  12.0 EER 4.2 COP   October 29, 2012.
                                 Recovery.                             *.
VRF Water-Source Heat Pumps...  With Heat          h....  11.8 EER 4.2 COP   October 29, 2012.
                                 Recovery.                             *.
VRF Water-Source Heat Pumps...  Without Heat       >=135,000 Btu/h..  10.0 EER 3.9 COP.  October 29, 2013.
                                 Recovery.
VRF Water-Source Heat Pumps...  With Heat          >=135,000 Btu/h..  9.8 EER 3.9 COP..  October 29, 2013.
                                 Recovery.
----------------------------------------------------------------------------------------------------------------
* 4.2 COP is the existing Federal minimum energy conservation standard for water-source heat pumps 
  h.
** ASHRAE Standard 90.1-2010 did not provide an effective date for these products, so it is assumed to be
  publication of ASHRAE Standard 90.1-2010, or October 29, 2010. As discussed in Section V.D.3, compliance dates
  for Federal standards would be two or three years after the effective date in ASHRAE, depending on product
  size.

3. Computer Room Air Conditioners
    As noted previously, EPCA specifies that, for any commercial and 
industrial equipment addressed under 42 U.S.C. 6313(a)(6)(A)(i), DOE 
may prescribe an energy conservation standard more stringent than the 
level for such equipment in ASHRAE Standard 90.1, as amended, only if 
``clear and convincing evidence'' shows that a more-stringent standard 
would result in significant additional conservation of energy and is 
technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(A)(ii)(II))
    In evaluating more-stringent efficiency levels for computer room 
air conditioner than those specified by ASHRAE Standard 90.1-2010, DOE 
reviewed the results in terms of their technological feasibility, 
significance of energy savings, and economic justification.
    DOE has tentatively concluded that all of the SCOP levels 
considered by DOE are technologically feasible, as units with 
equivalent efficiency appeared to be available in the current market at 
all levels examined. As noted in section VI.B.4, manufacturers are 
currently not reporting CRAC equipment efficiencies in terms of SCOP as 
defined and tested for in ASHRAE 127-2007. As a result, the efficiency 
data used to determine the SCOP levels for analysis were obtained using 
a rule-of-thumb method to convert EER (as determined using ASHRAE 
Standard 127-2001) to an estimate of the SCOP

[[Page 2417]]

(as determined by ASHRAE Standard 127-2007), which lends some 
uncertainty to the SCOP ratings of computer room air conditioners. 
However, based on this mapping between EER and SCOP, DOE believes that 
all SCOP levels analyzed are technically feasible.
    DOE examined the potential energy savings that would result from 
the efficiency levels specified in ASHRAE Standard 90.1-2010 and 
compared these to the potential energy savings that would result from 
efficiency levels more stringent than those in ASHRAE Standard 90.1-
2010. DOE estimates that 0.01 quads of energy would be saved if DOE 
adopts the efficiency levels set in ASHRAE Standard 90.1-2010 for each 
computer room air conditioner equipment class specified in that 
standard. If DOE were to adopt efficiency levels more stringent than 
those specified by ASHRAE Standard 90.1-2010, the potential additional 
energy savings range from 0.07 quads to 0.98 quads. Associated with 
proposing more-stringent efficiency levels is a three-and-a-half to 
four-and-a-half-year delay in implementation (depending on equipment 
size) compared to the adoption of energy conservation standards at the 
levels specified in ASHRAE Standard 90.1-2010 (see section VI.G.1). 
This delay in implementation of amended energy conservation standards 
would result in a small amount of energy savings being lost in the 
first years (2012 through 2016) compared to the savings from adopting 
the levels in ASHRAE Standard 90.1-2010 (approximately 0.0001 quad); 
however, this loss may be compensated for by increased savings in later 
years. Taken in isolation, the energy savings associated with more-
stringent standards might be considered significant enough to warrant 
adoption of such standards. However, as noted above, energy savings are 
not the only factor which DOE must consider.
    In considering whether potential standards are economically 
justified, DOE also examined the NPV that would result from adopting 
efficiency levels more stringent than those set forth in ASHRAE 
Standard 90.1-2010. With a 7-percent discount rate, all of the 
efficiency levels examined by DOE resulted in negative NPV. With a 3-
percent discount rate, Level 1 creates positive NPV, while Levels 2 
through 4 create negative NPV. These results indicate that adoption of 
efficiency levels more stringent than those in ASHRAE Standard 90.1-
2010 as Federal energy conservation standards would likely lead to 
negative economic outcomes for the nation. Consequently, this criterion 
for adoption of more-stringent standard levels does not appear to have 
been met.
    Furthermore, although DOE based it analyses on the best available 
data when examining the potential energy savings and the economic 
justification of efficiency levels more stringent than those specified 
in ASHRAE Standard 90.1-2010, DOE believes there are several 
limitations regarding that data which should be considered before 
proposing amended energy conservation standards for computer room air 
conditioners. As explained below, none of these concerns are likely to 
run in the direction of more-stringent standards.
    First, DOE reexamined the uncertainty in its analysis of computer 
room air conditioners. As noted in section VI.B.4, due to the lack of 
current coverage and certification requirements, no manufacturers 
currently test for the SCOP of their computer room air conditioner 
models, nor do they all report such information in their literature. 
DOE's efficiency information used in the analysis was the result of a 
``rule-of-thumb'' method that provides an approximation of SCOP, but 
DOE did not obtain any actual SCOP efficiency information that resulted 
from testing, leading to uncertainty over whether the levels considered 
(particularly at the max-tech level) are technologically feasible and 
also adding uncertainty in the energy savings estimates. In addition, 
for certain equipment classes, DOE was unable to obtain enough 
information even to estimate SCOP for a useful portion of the models on 
the market. For those equipment classes, DOE had to analyze various 
efficiency levels above the ASHRAE Standard 90.1-2010 levels using SCOP 
levels that were estimated based on the SCOP differences established by 
ASHRAE Standard 90.1 between the different equipment classes. The 
combination of these factors leads to concerns about the viability of 
using the estimated SCOP data for the basis of this analysis. Such 
concerns are heightened the further one moves away from the efficiency 
levels in ASHRAE Standard 90.1-2010 in the context of this rulemaking.
    Second, to assess the cost of increasing efficiency, DOE conducted 
a pricing survey in which DOE collected contractor price data across a 
range of efficiency levels, and examined the trend in price as 
efficiency increased. As noted in section VI.B.1, the primary drawback 
to this approach is that contractor pricing can be based on a variety 
of factors, some of which have little or nothing to do with changes in 
equipment efficiency (e.g., differences in manufacturer markups). This 
leads to unexpected results for certain equipment classes, including an 
observed trend of decreasing price with increasing efficiency for small 
water-cooled equipment based on the data collected, which reduces the 
certainty of the analysis in terms of economic justification. 
Therefore, the trends developed through such analyses may not be 
representative of the actual relationship between manufacturer cost and 
efficiency, or of what DOE would find if it used a design option 
approach with reverse engineering analysis (which is more time-
intensive). Further, although there was generally a trend of increasing 
price with increased efficiency across all manufacturers for most 
product classes, there was little discernable trend between price and 
efficiency for each individual manufacturer, leading to additional 
doubts about the role of equipment efficiency in determining pricing. 
As a result, DOE believes the results of this analysis are highly 
uncertain, and that a more in-depth analysis of the relationship 
between cost of manufacturing and efficiency could lead to different 
results.
    Third, due to the limited data on the existing distribution of 
shipments by efficiency level or historical efficiency trends, DOE was 
not able to assess possible future changes in either the available 
efficiencies of equipment in the computer room air conditioner market 
or the sales distribution of shipments by efficiency level in the 
absence of setting more-stringent standards. DOE recognizes that 
manufacturers may continue to make future improvements in the computer 
room air conditioner efficiencies even in the absence of mandated 
energy conservation standards. This possibility increases the 
uncertainty of the energy savings estimates. To the extent that 
manufacturers improve product efficiency and customers choose to 
purchase improved products in the absence of standards, the energy 
savings estimates would likely be reduced.
    Fourth, as a result of a lack of shipment information for the 
United States, DOE's shipment analysis rests primarily on a single 
market report from Australia. While DOE attempted to use an appropriate 
inflator to adjust Australian shipments to the United States market, 
DOE recognizes the uncertainty inherent in this approach. DOE also 
based its equipment class allocations on market share for a few classes 
from the Australian report, as well as model availability in the United 
States. It is unknown whether the United States market mirrors the 
Australian market or whether model

[[Page 2418]]

availability approximates shipment distributions. Any inaccuracy in the 
shipment forecast in total or by product class contributes to the 
uncertainty of the energy savings results and thus makes it difficult 
for DOE to determine that any energy savings are significant.
    In light of the above, DOE would again restate the statutory test 
for adopting energy conservation standards more stringent than the 
levels in ASHRAE Standard 90.1. DOE must have ``clear and convincing'' 
evidence in order to propose efficiency levels more stringent than 
those specified in ASHRAE Standard 90.1-2010, and for the reasons 
explained in this notice, the totality of information does not meet the 
level necessary to support these more-stringent efficiency levels for 
computer room air conditioners. Consequently, DOE has tentatively 
decided to propose the efficiency levels in ASHRAE Standard 90.1-2010 
as amended energy conservation standards for all 30 computer room air 
conditioner equipment classes. Table VIII.38 presents the proposed 
energy conservation standards for computer room air conditioners.
    By proposing to adopt the efficiency levels in ASHRAE Standard 
90.1-2010 as amended energy conservation standards, DOE would be 
setting a minimum floor for these previously unregulated products. This 
would allow the industry time to transition to coverage of these 
products, would require manufacturers to begin submitting efficiency 
data, and would spur the tracking of shipments. These data would 
improve DOE's future analysis of computer room air conditioners. DOE 
notes that it will be able to undertake such an analysis without 
waiting for the trigger of a subsequent amendment of ASHRAE Standard 
90.1, because of the six-year look back provision in the relevant EISA 
2007 amendments to EPCA. (42 U.S.C. 6313(a)(6)(C))
    DOE seeks comments from interested parties on its proposed amended 
energy conservation standards for computer room air conditioners, as 
well as the other efficiency levels considered. Although DOE currently 
believes that it would be appropriate to adopt the efficiency levels in 
ASHRAE Standard 90.1-2010 for computer room air conditioners, DOE may 
consider the possibility of setting standards at more-stringent 
efficiency levels if public comments and additional data supply clear 
and convincing evidence in support of such an approach.

            Table VIII.38--Proposed Energy Conservation Standards for Computer Room Air Conditioners
----------------------------------------------------------------------------------------------------------------
                                                                           Efficiency
         Equipment type               Subcategory        Size category       level          Compliance date
                                                            (Input)        (SCOP-127)
----------------------------------------------------------------------------------------------------------------
Air conditioners, air-cooled....  Downflow..........  h.....         2.20  October 29, 2012.
Air conditioners, air-cooled....  Upflow............  h.....         2.09  October 29, 2012.
Air conditioners, air-cooled....  Downflow..........  >=65,000 Btu/h and         2.10  October 29, 2013.
                                                       h.
Air conditioners, air-cooled....  Upflow............  >=65,000 Btu/h and         1.99  October 29, 2013.
                                                       h.
Air conditioners, air-cooled....  Downflow..........  >=240,000 Btu/h...         1.90  October 29, 2013.
Air conditioners, air-cooled....  Upflow............  >=240,000 Btu/h...         1.79  October 29, 2013.
Air conditioners, water-cooled..  Downflow..........  h.....         2.60  October 29, 2012.
Air conditioners, water-cooled..  Upflow............  h.....         2.49  October 29, 2012.
Air conditioners, water-cooled..  Downflow..........  >=65,000 Btu/h and         2.50  October 29, 2013.
                                                       h.
Air conditioners, water-cooled..  Upflow............  >=65,000 Btu/h and         2.39  October 29, 2013.
                                                       h.
Air conditioners, water-cooled..  Downflow..........  >=240,000 Btu/h...         2.40  October 29, 2013.
Air conditioners, water-cooled..  Upflow............  >=240,000 Btu/h...         2.29  October 29, 2013.
Air conditioners, water-cooled    Downflow..........  h.....         2.55  October 29, 2012.
 with fluid economizer.
Air conditioners, water-cooled    Upflow............  h.....         2.44  October 29, 2012.
 with fluid economizer.
Air conditioners, water-cooled    Downflow..........  >=65,000 Btu/h and         2.45  October 29, 2013.
 with fluid economizer.                                h.
Air conditioners, water-cooled    Upflow............  >=65,000 Btu/h and         2.34  October 29, 2013.
 with fluid economizer.                                h.
Air conditioners, water-cooled    Downflow..........  >=240,000 Btu/h...         2.35  October 29, 2013.
 with fluid economizer.
Air conditioners, water-cooled    Upflow............  >=240,000 Btu/h...         2.24  October 29, 2013.
 with fluid economizer.
Air conditioners, glycol-cooled.  Downflow..........  h.....         2.50  October 29, 2012.
Air conditioners, glycol-cooled.  Upflow............  h.....         2.39  October 29, 2012.
Air conditioners, glycol-cooled.  Downflow..........  >=65,000 Btu/h and         2.15  October 29, 2013.
                                                       h.
Air conditioners, glycol-cooled.  Upflow............  >=65,000 Btu/h and         2.04  October 29, 2013.
                                                       h.
Air conditioners, glycol-cooled.  Downflow..........  >=240,000 Btu/h...         2.10  October 29, 2013.
Air conditioners, glycol-cooled.  Upflow............  >=240,000 Btu/h...         1.99  October 29, 2013.
Air conditioners, glycol-cooled   Downflow..........  h.....         2.45  October 29, 2012.
 with fluid economizer.
Air conditioners, glycol-cooled   Upflow............  h.....         2.34  October 29, 2012.
 with fluid economizer.
Air conditioners, glycol-cooled   Downflow..........  >=65,000 Btu/h and         2.10  October 29, 2013.
 with fluid economizer.                                h.
Air conditioners, glycol-cooled   Upflow............  >=65,000 Btu/h and         1.99  October 29, 2013.
 with fluid economizer.                                h.
Air conditioners, glycol-cooled   Downflow..........  >=240,000 Btu/h...         2.05  October 29, 2013.
 with fluid economizer.
Air conditioners, glycol-cooled   Upflow............  >=240,000 Btu/h...         1.94  October 29, 2013.
 with fluid economizer.
----------------------------------------------------------------------------------------------------------------

[[Page 2419]]

IX. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that the standards in this rule address are as follows:
    (1) There is a lack of consumer information and/or information 
processing capability about energy efficiency opportunities in the 
commercial equipment market.
    (2) There is asymmetric information (one party to a transaction has 
more and better information than the other) and/or high transactions 
costs (costs of gathering information and effecting exchanges of goods 
and services).
    (3) There are external benefits resulting from improved energy 
efficiency of water-cooled and evaporatively-cooled commercial package 
air conditioners, variable refrigerant flow air conditioners, and 
computer room air conditioners that are not captured by the users of 
such equipment. These benefits include externalities related to 
environmental protection and energy security that are not reflected in 
energy prices, such as reduced emissions of greenhouse gases.
    In addition, DOE has determined that today's regulatory action is 
not an ``economically significant regulatory action'' under section 
3(f)(1) of Executive Order 12866. Accordingly, DOE has not prepared a 
regulatory impact analysis (RIA) for today's rule, and the Office of 
Information and Regulatory Affairs (OIRA) in the Office of Management 
and Budget (OMB) has not reviewed this rule.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). 
Executive Order 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. To the extent permitted by law, 
agencies are required by Executive Order 13563 to: (1) Propose or adopt 
a regulation only upon a reasoned determination that its benefits 
justify its costs (recognizing that some benefits and costs are 
difficult to quantify); (2) tailor regulations to impose the least 
burden on society, consistent with obtaining regulatory objectives, 
taking into account, among other things, and to the extent practicable, 
the costs of cumulative regulations; (3) select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity); 
(4) to the extent feasible, specify performance objectives, rather than 
specifying the behavior or manner of compliance that regulated entities 
must adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
DOE believes that today's NOPR is consistent with these principles, 
including the requirement that, to the extent permitted by law, 
agencies adopt a regulation only upon a reasoned determination that its 
benefits justify its costs and select, in choosing among alternative 
regulatory approaches, those approaches maximize net benefits.
    Consistent with Executive Order 13563, and the range of impacts 
analyzed in this rulemaking, the energy conservation standards proposed 
in this NOPR maximize net benefits to the extent permitted by EPCA.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) for 
any rule that by law must be proposed for public comment and a final 
regulatory flexibility analysis (FRFA) for any such rule that an agency 
adopts as a final rule, unless the agency certifies that the rule, if 
promulgated, will not have a significant economic impact on a 
substantial number of small entities. As required by Executive Order 
13272, ``Proper Consideration of Small Entities in Agency Rulemaking,'' 
67 FR 53461 (August 16, 2002), DOE published procedures and policies on 
February 19, 2003, to ensure that the potential impacts of its rules on 
small entities are properly considered during the rulemaking process. 
68 FR 7990. DOE has made its procedures and policies available on the 
Office of the General Counsel's Web site: (www.gc.doe.gov).
    For manufacturers of water-cooled and evaporatively-cooled air 
conditioners, computer room air conditioners, and VRF water-source heat 
pumps with a cooling capacity equal to or greater than 135,000 Btu/h, 
the Small Business Administration (SBA) has set a size threshold, which 
defines those entities classified as ``small businesses'' for the 
purposes of the statute. DOE used the SBA's small business size 
standards to determine whether any small entities would be subject to 
the requirements of the rule. 65 FR 30836, 30848 (May 15, 2000), as 
amended at 65 FR 53533, 53544 (Sept. 5, 2000) and codified at 13 CFR 
part 121. The size standards are listed by North American Industry 
Classification System (NAICS) code and industry description and are 
available at http://www.sba.gov/sites/default/files/Size_Standards_Table.pdf. The ASHRAE equipment covered by this rule are classified 
under NAICS 333415, ``Air-Conditioning and Warm Air Heating Equipment 
and Commercial and Industrial Refrigeration Equipment Manufacturing.'' 
The SBA sets a threshold of 750 employees or fewer for an entity to be 
considered as a small business for this category.
    DOE examined each of the manufacturers it found during its market 
assessment and used publicly-available information to determine if any 
manufacturers identified qualify as a small business under the SBA 
guidelines discussed above. (For a list of all manufacturers of ASHRAE 
equipment covered by this rule, see Chapter 2 of the TSD.) DOE's 
research involved individual company Web sites, marketing research 
tools (e.g., Hoovers reports \62\), and contacting individual companies 
to create a list of companies that manufacture the types of ASHRAE 
equipment affected by this rule. DOE screened out companies that do not 
have domestic manufacturing operations for ASHRAE equipment (i.e., 
manufacturers that produce all of their ASHRAE equipment 
internationally). DOE also did not consider manufacturers which are 
subsidiaries of parent companies that exceed the 750-employee threshold 
set by the SBA to be small businesses. DOE identified 3

[[Page 2420]]

manufacturers that qualify as a small business: 2 computer room air 
conditioner manufacturers (out of the 5 total identified) and 1 water-
cooled air conditioner manufacturer (of the 8 total identified). DOE 
did not identify any small business manufacturers of evaporatively-
cooled air conditioners or water-source VRF heat pump manufacturers.
---------------------------------------------------------------------------

    \62\ For more information see: http://www.hoovers.com/.
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    DOE has reviewed today's proposed rule under the provisions of the 
Regulatory Flexibility Act and the policies and procedures published on 
February 19, 2003. 68 FR 7990. As part of this rulemaking, DOE examined 
not only the impacts on manufacturers of revised standard levels, but 
also the existing compliance costs manufacturers already bear as 
compared to the revised compliance costs, based on the proposed 
revisions to the test procedures. Since DOE is proposing to adopt the 
efficiency levels in ASHRAE Standard 90.1-2010, which are part of the 
prevailing industry standard, DOE believes that manufacturers of water-
cooled and evaporatively-cooled commercial package air conditioners and 
heating equipment, computer room air conditioners, and VRF water-source 
heat pumps with a cooling capacity equal to or greater than 135,000 
Btu/h are already producing equipment at these efficiency levels. For 
VRF water-source heat pumps with a cooling capacity below 17,000 Btu/h, 
DOE believes the efficiency levels being proposed in today's NOPR are 
also part of the prevailing industry standard and that manufacturers 
would experience no impacts, because no such equipment is currently 
manufactured. Furthermore, DOE believes the industry standard was 
developed through a process which would attempt to mitigate the impacts 
on manufacturers, including any impacted small business manufacturers, 
while increasing the efficiency of this equipment.
    In addition, DOE does not find that the costs associated with the 
adoption of updated test procedures for commercial package air 
conditioning and heating equipment, commercial water heating equipment, 
or commercial warm-air furnaces in this document would result in any 
significant increase in testing or compliance costs. For these types of 
equipment, DOE already has testing requirements, which have only minor 
differences from those being adopted in this notice. DOE notes that 
this document proposes adoption of new test procedures for VRF systems 
and computer room air conditioners. However, VRF systems currently must 
be tested using the DOE test procedures for commercial package air 
conditioners and heating equipment. The procedure proposed for adoption 
in this NOPR is tailored to VRF systems, and DOE does not believe this 
procedure is more burdensome than the currently applicable test 
procedures. For computer room air conditioners, this notice proposes 
the use of a new test procedure where none was previously required. 
However, for all equipment types (including computer room air 
conditioners) the proposed test procedures are part of the prevailing 
industry standard to test and rate equipment. DOE believes that 
manufacturers generally already use the accepted industry test 
procedures when testing their equipment, and that given its inclusion 
in ASHRAE Standard 90.1-2010, they would continue to use it in the 
future. Therefore, DOE does not believe the additional burden imposed 
by today's proposal will have a significant adverse impact on a large 
number of small manufacturers. DOE requests public comment on the 
impact of this proposed rule on small entities. This is identified as 
issue 18 in section X.E, ``Issues on Which DOE Seeks Comment.''
    For the reasons stated above, DOE certifies that the proposed rule, 
if promulgated, would not have a significant economic impact on a 
substantial number of small entities. Therefore, DOE did not prepare an 
initial regulatory flexibility analysis for the proposed rule. DOE will 
transmit its certification and a supporting statement of factual basis 
to the Chief Counsel for Advocacy of the SBA for review pursuant to 5 
U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act of 1995

    Manufacturers of the ASHRAE equipment addressed in today's NOPR 
must certify to DOE that their equipment comply with any applicable 
energy conservation standards. In certifying compliance, manufacturers 
must test their equipment according to the applicable DOE test 
procedures for the given equipment type, including any amendments 
adopted for those test procedures. DOE has established regulations for 
the certification and recordkeeping requirements for all covered 
consumer products and commercial equipment, including the ASHRAE 
equipment at issue in this NOPR. (76 FR 12422 (March 7, 2011)). The 
collection-of-information requirement for the certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (PRA). This requirement has been approved by 
OMB under OMB control number 1910-1400. Public reporting burden for the 
certification is estimated to average 20 hours per response, including 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.), DOE has determined that the proposed rule fits 
within the category of actions included in Categorical Exclusion (CX) 
B5.1 and otherwise meets the requirements for application of a CX. See 
10 CFR part 1021, App. B, B5.1(b); 1021.410(b), and Appendix B, B(1)-
(5). The proposed rule fits within the category of actions because it 
is a rulemaking that establishes energy conservation standards for 
consumer products or industrial equipment, and for which none of the 
exceptions identified in CX B5.1(b) apply. Therefore, DOE has made a CX 
determination for this rulemaking, and DOE does not need to prepare an 
Environmental Assessment or Environmental Impact Statement for this 
proposed rule. DOE's CX determination for this proposed rule is 
available at http://cxnepa.energy.gov/.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 10, 
1999), imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE has

[[Page 2421]]

examined this proposed rule and has tentatively determined that it 
would not have a substantial direct effect on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. EPCA governs and prescribes Federal preemption of State 
regulations as to energy conservation for the equipment that are the 
subject of today's proposed rule. States can petition DOE for exemption 
from such preemption to the extent, and based on criteria, as set forth 
in EPCA. (42 U.S.C. 6297(d) and 6316(b)(2)(D)) No further action is 
required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform'' (61 FR 4729 (Feb. 7, 1996)) imposes on Federal 
agencies the general duty to adhere to the following requirements: (1) 
Eliminate drafting errors and ambiguity; (2) write regulations to 
minimize litigation; (3) provide a clear legal standard for affected 
conduct rather than a general standard and promote simplification and 
burden reduction. With regard to the review required by section 3(a), 
section 3(b) of Executive Order 12988 specifically requires that 
Executive agencies make every reasonable effort to ensure that the 
regulation: (1) Clearly specifies the preemptive effect, if any; (2) 
clearly specifies any effect on existing Federal law or regulation; (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction; (4) specifies the retroactive 
effect, if any; (5) adequately defines key terms; and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in sections 3(a) and 3(b) to determine 
whether they are met or it is unreasonable to meet one or more of them. 
DOE has completed the required review and determined that, to the 
extent permitted by law, the proposed rule meets the relevant standards 
of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy 
statement is also available at www.gc.doe.gov.
    Today's proposed rule contains neither an intergovernmental mandate 
nor a mandate that may result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any year. Accordingly, no assessment or analysis is 
required under the UMRA.

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

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights,'' 53 FR 8859 (March 18, 1988), that this regulation would not 
result in any takings that might require compensation under the Fifth 
Amendment to the U.S. Constitution.

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

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to 
review most disseminations of information to the public under 
guidelines established by each agency pursuant to general guidelines 
issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 
2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 
2002). DOE has reviewed today's NOPR under the OMB and DOE guidelines 
and has concluded that it is consistent with applicable policies in 
those guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgates or is expected to lead to promulgation of a 
final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any significant energy action, the 
agency must provide a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that today's regulatory action, which 
sets forth energy conservation standards for certain types of ASHRAE 
equipment, is not a significant energy action because the proposed 
standards are not a significant regulatory action under Executive Order 
12866 and are not likely to have a significant adverse effect on the 
supply, distribution, or use of energy, nor has it been designated as 
such by the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on the proposed rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued

[[Page 2422]]

its Final Information Quality Bulletin for Peer Review (the Bulletin). 
70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain 
scientific information shall be peer reviewed by qualified specialists 
before it is disseminated by the Federal Government, including 
influential scientific information related to agency regulatory 
actions. The purpose of the bulletin is to enhance the quality and 
credibility of the Government's scientific information. Under the 
Bulletin, the energy conservation standards rulemaking analyses are 
``influential scientific information,'' which the Bulletin defines as 
scientific information the agency reasonably can determine will have, 
or does have, a clear and substantial impact on important public 
policies or private sector decisions. 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs and/or projects. The ``Energy Conservation Standards 
Rulemaking Peer Review Report'' dated February 2007 has been 
disseminated and is available at the following Web site: 
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

X. Public Participation

A. Attendance at the Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this notice. If 
you plan to attend the public meeting, please notify Ms. Brenda Edwards 
at (202) 586-2945 or Brenda.Edwards@ee.doe.gov. As explained in the 
ADDRESSES section, foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures. Any foreign national 
wishing to participate in the meeting should advise DOE of this fact as 
soon as possible by contacting Ms. Brenda Edwards to initiate the 
necessary procedures.
    In addition, you can attend the public meeting via webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants will be 
published on DOE's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_meeting.html. 
Participants are responsible for ensuring their systems are compatible 
with the webinar software.

B. Procedure for Submitting Request To Speak and Prepared General 
Statements for Distribution

    Any person who has an interest in the topics addressed in this 
notice, or who is representative of a group or class of persons that 
has an interest in these issues, may request an opportunity to make an 
oral presentation at the public meeting. Such persons may hand-deliver 
requests to speak to the address show in the ADDRESSES section at the 
beginning of this notice between 9 a.m. and 4 p.m., Monday through 
Friday, except Federal holidays. Requests may also be sent by mail or 
email to Ms. Brenda Edwards, U.S. Department of Energy, Building 
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., 
Washington, DC 20585-0121, or Brenda.Edwards@ee.doe.gov. Persons who 
wish to speak should include in their request a computer diskette or 
CD-ROM in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format 
that briefly describes the nature of their interest in this rulemaking 
and the topics they wish to discuss. Such persons should also provide a 
daytime telephone number where they can be reached.
    DOE requests persons selected to make an oral presentation to 
submit an advance copy of their statements at least one week before the 
public meeting. DOE may permit persons who cannot supply an advance 
copy of their statement to participate, if those persons have made 
advance alternative arrangements with the Building Technologies 
Program. As necessary, request to give an oral presentation should ask 
for such alternative arrangements.
    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this notice. The request and advance copy of statements must be 
received at least one week before the public meeting and may be 
emailed, hand-delivered, or sent by mail. DOE prefers to receive 
requests and advance copies via email. Please include a telephone 
number to enable DOE staff to make follow-up contact, if needed.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. There shall not be discussion of proprietary 
information, costs or prices, market share, or other commercial matters 
regulated by U.S. anti-trust laws. After the public meeting, interested 
parties may submit further comments on the proceedings, as well as on 
any aspect of the rulemaking, until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will allow, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be posted on the DOE Web 
site and will be included in the docket, which can be viewed as 
described in the Docket section at the beginning of this notice. In 
addition, any person may buy a copy

[[Page 2423]]

of the transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this notice.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov Web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (CBI)). Comments submitted through 
www.regulations.gov cannot be claimed as CBI. Comments received through 
the Web site will waive any CBI claims for the information submitted. 
For information on submitting CBI, see the Confidential Business 
Information section below.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or mail. 
Comments and documents submitted via email, hand delivery, or mail also 
will be posted to www.regulations.gov. If you do not want your personal 
contact information to be publicly viewable, do not include it in your 
comment or any accompanying documents. Instead, provide your contact 
information in a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via mail or hand 
delivery/courier, please provide all items on a compact disc (CD), if 
feasible, in which case it is not necessary to submit printed copies. 
No telefacsimiles (faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery/courier two well-marked copies: 
One copy of the document marked confidential including all the 
information believed to be confidential, and one copy of the document 
marked non-confidential with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comment on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    1. How manufacturers currently differentiate commercial package air 
conditioning and heating equipment used solely for manufacturing and 
industrial processes from that equipment of the same type that is used 
in buildings.
    2. Any aspect of the test procedures affected by this rule as part 
of DOE's comprehensive 7-year-review requirement.
    3. DOE's proposed adoption of AHRI 210/240-2008 as the test 
procedure for small (h) commercial package air conditioning 
and heating equipment. DOE is also interested in receiving comment on 
the need for an optional ``break-in'' period for this equipment, and 
whether 16 hours is an appropriate maximum length for the break-in 
period.
    4. DOE's proposed adoption of AHRI 340/360-2007 as the test 
procedure for small (>=65,000 Btu/h and h), large, and 
very large commercial package air conditioning and heating equipment. 
DOE is also interested in receiving comment on the need for an optional 
``break-in'' period for this equipment, and whether 16 hours is an 
appropriate maximum length for the break-in period.
    5. DOE's proposed adoption of ANSI Z21.10.3-2006 for commercial 
water heating equipment, and DOE's finding that the updated test method 
will not impact measured efficiency.

[[Page 2424]]

    6. DOE's proposed adoption of ASHRAE Standard 127-2007 for computer 
room air conditioners. DOE is also interested in receiving comment on 
how to treat the draft revisions that ASHRAE has made to standard 127, 
and on any shortcomings with the test procedure that may require 
modification.
    7. DOE's proposed adoption of AHRI 1230-2010 with Amendment 1 for 
VRF systems. DOE is also interested in receiving comment on the need 
for an optional ``break-in'' period for this equipment, and whether 16 
hours is an appropriate maximum length for the break-in period.
    8. DOE's proposed adoption of AHRI 390-2003 as the test procedure 
for single package vertical air conditioners and single package 
vertical heat pumps. DOE is also interested in receiving comment on the 
need for an optional ``break-in'' period for this equipment, and 
whether 16 hours is an appropriate maximum length for the break-in 
period.
    9. The testing conditions, the basic model operating points, and 
set-up for variable refrigerant flow multi-split air conditioners and 
heat pumps.
    10. DOE's proposed definitions of ``variable refrigerant flow 
multi-split air conditioner,'' ``variable refrigerant flow multi-split 
heat pump,'' and ``heat recovery.''
    11. DOE's proposed definition of ``computer room air conditioner.'' 
DOE is specifically interested in whether there are any physical 
features or components that could allow DOE to differentiate between 
computer room air conditioners and commercial package air conditioners 
used for comfort conditioning
    12. The results of DOE's pricing analysis, and any data or 
information on the price-efficiency relationship for computer room air 
conditioners
    13. Does computer room air conditioner installation cost increase 
as a function of increased efficiency? If so, how should the increase 
in cost be estimated or derived?
    14. Is there a rebound effect in computer room air conditioner 
equipment energy use as a result of improvements in the efficiency of 
such units?
    15. Would shipments of computer room air conditioners change with 
higher standard levels?
    16. The NES-forecasted base-case distribution of efficiencies and 
DOE's prediction of how amended energy conservation standards might 
affect the distribution of efficiencies in the standards case.
    17. The need for an optional ``break-in'' period for computer room 
air conditioners, similar to the period being proposed for other types 
of commercial air conditioning and heating equipment.
    18. The impact of DOE's proposed standards on small business 
manufacturers.

XI. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's notice 
of proposed rulemaking.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Incorporation by reference, Reporting 
and recordkeeping requirements.

    Issued in Washington, DC, on December 20, 2011.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.
    For the reasons set forth in the preamble, DOE proposes to amend 
part 431 of Chapter II, Subchapter D, of Title 10 of the Code of 
Federal Regulations to read as set forth below:

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

    1. The authority citation for part 431 continues to read as 
follows:

    Authority: 42 U.S.C. 6291-6317.

    2. Section 431.2 is amended by revising the definition of 
``Commercial HVAC & WH product'' to read as follows:

Sec.  431.2  Definitions.

* * * * *
    Commercial HVAC & WH product means any small, large, or very large 
commercial package air-conditioning and heating equipment, packaged 
terminal air conditioner, packaged terminal heat pump, single package 
vertical air conditioner, single package vertical heat pump, computer 
room air conditioner, variable refrigerant flow multi-split air 
conditioner, variable refrigerant flow multi-split heat pump, 
commercial packaged boiler, hot water supply boiler, commercial warm 
air furnace, instantaneous water heater, storage water heater, or 
unfired hot water storage tank.
* * * * *
    3. Section 431.75 is revised to read as follows:

Sec.  431.75  Materials incorporated by reference.

    (a) General. DOE incorporates by reference the following test 
procedures into subpart D of part 431. The materials listed have been 
approved for incorporation by reference by the Director of the Federal 
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Any 
subsequent amendment to the listed materials by the standard-setting 
organization will not affect the DOE regulations unless and until 
amended by DOE. Materials are incorporated as they exist on the date of 
the approval and a notice of any changes in the materials will be 
published in the Federal Register. All approved materials are available 
for inspection at the National Archives and Records Administration 
(NARA). For information on the availability of this material at NARA, 
call (202) 741-6030 or go to http://www.archives.gov/federal_register/code_of_federalregulations/ibr_locations.html. Also, these materials 
are available for inspection at U.S. Department of Energy, Office of 
Energy Efficiency and Renewable Energy, Building Technologies Program, 
6th Floor, 950 L'Enfant Plaza SW., Washington, DC 20024, (202) 586-
2945, or go to: http://www1.eere.energy.gov/buildings/appliance_standards/. The referenced test procedure standards are listed below by 
relevant standard-setting organization, along with information on how 
to obtain copies from those sources.
    (b) ANSI. American National Standards Institute. 25 W. 43rd Street, 
4th Floor, New York, NY 10036, (212) 642-4900, or go to http://www.ansi.org.
    (1) ANSI Z21.47-2006, ``Gas-Fired Central Furnaces,'' approved on 
July 27, 2006, IBR approved for Sec.  431.76.
    (2) Reserved.
    (c) ASHRAE. American Society of Heating, Refrigerating and Air-
Conditioning Engineers Inc., 1791 Tullie Circle, NE., Atlanta, Georgia 
30329, (404) 636-8400, or go to http://www.ashrae.org.
    (1) ASHRAE Standard 103-1993, sections 7.2.2.4, 7.8, 9.2, and 
11.3.7, ``Method of Testing for Annual Fuel Utilization Efficiency of 
Residential Central Furnaces and Boilers,'' approved on June 26, 1993, 
IBR approved for Sec.  431.76.
    (2) Reserved.
    (d) HI. Hydronics Institute Division of AHRI, 35 Russo Place, P.O. 
Box 218, Berkeley Heights, NJ 07922, (703) 600-0350, or go to http://
www.ahrinet.org/hydronics+institute+section.aspx.
    (1) HI BTS-2000, sections 8.2.2, 11.1.4, 11.1.5, and 11.1.6.2, 
``Method to

[[Page 2425]]

Determine Efficiency of Commercial Space Heating Boilers,'' approved 
January 2001, IBR approved for Sec.  431.76.
    (2) Reserved.
    (e) UL. Underwriters Laboratories, Inc., 333 Pfingsten Road, 
Northbrook, IL 60062, (847) 272-8800, or go to http://www.ul.com.
    (1) UL Standard 727-2006, ``Standard for Safety Oil-Fired Central 
Furnaces,'' approved April 7, 2006, IBR approved for Sec.  431.76.
    (2) Reserved.
    4. Section 431.76 is revised to read as follows:

Sec.  431.76  Uniform test method for the measurement of energy 
efficiency of commercial warm air furnaces.

    (a) This section covers the test procedures you must follow if, 
pursuant to EPCA, you are measuring the steady-state thermal efficiency 
of a gas-fired or oil-fired commercial warm air furnace with a rated 
maximum input of 225,000 Btu per hour or more. Where this section 
prescribes use of ANSI Standard Z21.47-2006 or UL Standard 727-2006, 
(incorporated by reference, see Sec.  431.75), perform only the 
procedures pertinent to the measurement of the steady-state efficiency.
    (b) Test setup. (1) Test setup for gas-fired commercial warm air 
furnaces. The test setup, including flue requirement, instrumentation, 
test conditions, and measurements for determining thermal efficiency is 
as specified in sections 1.1 (Scope), 2.1 (General), 2.2 (Basic Test 
Arrangements), 2.3 (Test Ducts and Plenums), 2.4 (Test Gases), 2.5 
(Test Pressures and Burner Adjustments), 2.6 (Static Pressure and Air 
Flow Adjustments), 2.39 (Thermal Efficiency), and 4.2.1 (Basic Test 
Arrangements for Direct Vent Control Furnaces) of ANSI Standard Z21.47-
2006 (incorporated by reference, see Sec.  431.75). The thermal 
efficiency test must be conducted only at the normal inlet test 
pressure, as specified in Section 2.5.1 of ANSI Standard Z21.47-2006, 
and at the maximum hourly Btu input rating specified by the 
manufacturer for the product being tested.
    (2) Test setup for oil-fired commercial warm air furnaces. The test 
setup, including flue requirement, instrumentation, test conditions, 
and measurement for measuring thermal efficiency is as specified in 
sections 1 (Scope), 2 (Units of Measurement), 3 (Glossary), 37 
(General), 38 and 39 (Test Installation), 40 (Instrumentation, except 
40.4 and 40.6.2 through 40.6.7, which are not required for the thermal 
efficiency test), 41 (Initial Test Conditions), 42 (Combustion Test--
Burner and Furnace), 43.2 (Operation Tests), 44 (Limit Control Cutout 
Test), 45 (Continuity of Operation Test), and 46 (Air Flow, Downflow or 
Horizontal Furnace Test), of UL Standard 727-2006 (incorporated by 
reference, see Sec.  431.75). You must conduct a fuel oil analysis for 
heating value, hydrogen content, carbon content, pounds per gallon, and 
American Petroleum Institute (API) gravity as specified in Section 
8.2.2 of HI BTS-2000 (incorporated by reference, see Sec.  431.75). The 
steady-state combustion conditions, specified in Section 42.1 of UL 
Standard 727-2006, are attained when variations of not more than 
5[emsp14][deg]F in the measured flue gas temperature occur for three 
consecutive readings taken 15 minutes apart.
    (c) Additional test measurements. (1) Measurement of flue 
CO2 (carbon dioxide) for oil-fired commercial warm air 
furnaces. In addition to the flue temperature measurement specified in 
Section 40.6.8 of UL Standard 727-2006, (incorporated by reference, see 
Sec.  431.75) you must locate one or two sampling tubes within six 
inches downstream from the flue temperature probe (as indicated on 
Figure 40.3 of UL Standard 727-2006). If you use an open end tube, it 
must project into the flue one-third of the chimney connector diameter. 
If you use other methods of sampling CO2, you must place the 
sampling tube so as to obtain an average sample. There must be no air 
leak between the temperature probe and the sampling tube location. You 
must collect the flue gas sample at the same time the flue gas 
temperature is recorded. The CO2 concentration of the flue 
gas must be as specified by the manufacturer for the product being 
tested, with a tolerance of 0.1 percent. You must determine 
the flue CO2 using an instrument with a reading error no 
greater than 0.1 percent.
    (2) Procedure for the measurement of condensate for a gas-fired 
condensing commercial warm air furnace. The test procedure for the 
measurement of the condensate from the flue gas under steady state 
operation must be conducted as specified in sections 7.2.2.4, 7.8 and 
9.2 of ASHRAE Standard 103-1993 (incorporated by reference, see Sec.  
431.75) under the maximum rated input conditions. You must conduct this 
condensate measurement for an additional 30 minutes of steady state 
operation after completion of the steady state thermal efficiency test 
specified in paragraph (b) of this section.
    (d) Calculation of thermal efficiency. (1) Gas-fired commercial 
warm air furnaces. You must use the calculation procedure specified in 
Section 2.39, Thermal Efficiency, of ANSI Standard Z21.47-2006 
(incorporated by reference, see Sec.  431.75).
    (2) Oil-fired commercial warm air furnaces. You must calculate the 
percent flue loss (in percent of heat input rate) by following the 
procedure specified in sections 11.1.4, 11.1.5, and 11.1.6.2 of the HI 
BTS-2000 (incorporated by reference, see Sec.  431.75). The thermal 
efficiency must be calculated as:

Thermal Efficiency (percent) = 100 percent - flue loss (in percent).

    (e) Procedure for the calculation of the additional heat gain and 
heat loss, and adjustment to the thermal efficiency, for a condensing 
commercial warm air furnace. (1) You must calculate the latent heat 
gain from the condensation of the water vapor in the flue gas, and 
calculate heat loss due to the flue condensate down the drain, as 
specified in sections 11.3.7.1 and 11.3.7.2 of ASHRAE Standard 103-
1993, (incorporated by reference, see Sec.  431.75), with the exception 
that in the equation for the heat loss due to hot condensate flowing 
down the drain in section 11.3.7.2, the assumed indoor temperature of 
70[emsp14][deg]F and the temperature term TOA must be 
replaced by the measured room temperature as specified in Section 2.2.8 
of ANSI Standard Z21.47-2006 (incorporated by reference, see Sec.  
431.75).
    (2) Adjustment to the Thermal Efficiency for Condensing Furnace. 
You must adjust the thermal efficiency as calculated in paragraph 
(d)(1) of this section by adding the latent gain, expressed in percent, 
from the condensation of the water vapor in the flue gas, and 
subtracting the heat loss (due to the flue condensate down the drain), 
also expressed in percent, both as calculated in paragraph (e)(1) of 
this section, to obtain the thermal efficiency of a condensing furnace.
    5. Section 431.92, is amended by adding the definitions ``Computer 
room air conditioner,'' ``Heat Recovery,'' ``Sensible Coefficient of 
Performance, or SCOP,'' ``Variable Refrigerant Flow Multi-Split Air 
Conditioner'' and ``Variable Refrigerant Flow Multi-Split Heat Pump,'' 
in alphabetical order to read as follows:

Sec.  431.92  Definitions concerning commercial air conditioners and 
heat pumps.

* * * * *
    Computer Room Air Conditioner means a unit of commercial package 
air conditioning and heating equipment

[[Page 2426]]

that is advertised, marketed, and/or sold specifically for use in 
computer rooms, data processing rooms, or other precision cooling 
applications, and is rated for performance using ASHRAE Standard 127, 
(incorporated by reference, see Sec.  431.95). Such equipment may not 
be marketed or advertised as equipment for any other space conditioning 
applications, and may not be rated for performance using AHRI Standard 
210/240 or AHRI Standard 340/360. (incorporated by reference, see Sec.  
431.95).
* * * * *
    Heat Recovery (in the context of variable refrigerant flow multi-
split air conditioners or variable refrigerant flow multi-split heat 
pumps) means that the air conditioner or heat pump is also capable of 
providing simultaneous heating and cooling operation, where recovered 
energy from the indoor units operating in one mode can be transferred 
to one or more other indoor units operating in the other mode. A 
variable refrigerant flow multi-split heat recovery heat pump is a 
variable refrigerant flow multi-split heat pump with the addition of 
heat recovery capability.
* * * * *
    Sensible Coefficient of Performance, or SCOP means the net sensible 
cooling capacity in watts divided by the total power input in watts 
(excluding reheaters and humidifiers).
* * * * *
    Variable Refrigerant Flow Multi-Split Air Conditioner means a unit 
of commercial package air conditioning and heating equipment that is 
configured as a split system air-conditioner incorporating a single 
refrigerant circuit, with one or more outdoor units, at least one 
variable-speed compressor or an alternate compressor combination for 
varying the capacity of the system by three or more steps, and multiple 
indoor fan coil units, each of which is individually metered and 
individually controlled by an integral control device and common 
communications network and which can operate independently in response 
to multiple indoor thermostats. Variable refrigerant flow implies three 
or more steps of capacity control on common, inter-connecting piping.
    Variable Refrigerant Flow Multi-Split Heat Pump means a unit of 
commercial package air conditioning and heating equipment that is 
configured as a split system heat pump that uses reverse cycle 
refrigeration as its primary heating source and which may include 
secondary supplemental heating by means of electrical resistance, 
steam, hot water, or gas. The equipment incorporates a single 
refrigerant circuit, with one or more outdoor units, at least one 
variable-speed compressor or an alternate compressor combination for 
varying the capacity of the system by three or more steps, and multiple 
indoor fan coil units, each of which is individually metered and 
individually controlled by a control device and common communications 
network and which can operate independently in response to multiple 
indoor thermostats. Variable refrigerant flow implies three or more 
steps of capacity control on common, inter-connecting piping.
* * * * *
    6. Section 431.95 is revised to read as follows:

Sec.  431.95  Materials incorporated by reference.

    (a) General. DOE incorporates by reference the following test 
procedures into subpart F of part 431. The materials listed have been 
approved for incorporation by reference by the Director of the Federal 
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Any 
subsequent amendment to the listed materials by the standard-setting 
organization will not affect the DOE regulations unless and until 
amended by DOE. Materials are incorporated as they exist on the date of 
the approval and a notice of any changes in the materials will be 
published in the Federal Register. All approved materials are available 
for inspection at the National Archives and Records Administration 
(NARA). For information on the availability of this material at NARA, 
call (202) 741-6030, or go to http://www.archives.gov/federal_register/code_of_federalregulations/ibr_locations.html. Also, this 
material is available for inspection at U.S. Department of Energy, 
Office of Energy Efficiency and Renewable Energy, Building Technologies 
Program, 6th Floor, 950 L'Enfant Plaza SW., Washington, DC 20024, (202) 
586-2945, or go to: http://www1.eere.energy.gov/buildings/appliance_standards/. The referenced test procedure standards are listed below by 
relevant standard-setting organization, along with information on how 
to obtain copies from those sources.
    (b) AHRI. Air-Conditioning, Heating, and Refrigeration Institute, 
2111 Wilson Blvd., Suite 500, Arlington, VA 22201, (703) 524-8800, or 
go to http://www.ahrinet.org.
    (1) AHRI Standard 210/240-2008, ``Performance Rating of Unitary 
Air-Conditioning & Air-Source Heat Pump Equipment,'' approved April 21, 
2008, IBR approved for Sec.  431.96.
    (2) AHRI Standard 310/380-2004 (CSA C744-04), ``Standard for 
Packaged Terminal Air-Conditioners and Heat Pumps,'' approved September 
2004, IBR approved for Sec.  431.96.
    (3) AHRI Standard 340/360-2007, ``Performance Rating of Commercial 
and Industrial Unitary Air-Conditioning and Heat Pump Equipment,'' 
approved September 2007, IBR approved for Sec.  431.96.
    (4) AHRI Standard 390-2003, ``Performance Rating of Single Package 
Vertical Air-Conditioners and Heat Pumps,'' approved December 2003, IBR 
approved for Sec.  431.96.
    (5) AHRI Standard 1230-2010, ``Performance Rating of Variable 
Refrigerant Flow (VRF) Multi-Split Air-Conditioning and Heat Pump 
Equipment,'' approved August 2, 2010 and updated by addendum 1 in March 
2011, IBR approved for Sec.  431.96.
    (6) Reserved.
    (c) ASHRAE. American Society of Heating, Refrigerating and Air-
Conditioning Engineers, 1791 Tullie Circle NE., Atlanta, Georgia 30329, 
(404) 636-8400, or go to http://www.ashrae.org.
    (1) ASHRAE Standard 127-2007, ``Method of Testing for Rating 
Computer and Data Processing Room Unitary Air Conditioners,'' approved 
on June 28, 2007, IBR approved for Sec.  431.96.
    (2) Reserved.
    (d) ISO. International Organization for Standardization, 1, ch. De 
la Voie-Creuse, Case Postale 56, CH-1211 Geneva 20, Switzerland, +41 22 
749 01 11 or http://www.iso.ch/.
    (1) ISO Standard 13256-1, ``Water-source heat pumps--Testing and 
rating for performance--Part 1: Water-to-air and brine-to-air heat 
pumps,'' approved 1998, IBR approved for Sec.  431.96.
    (2) Reserved.
    7. Section 431.96 is revised to read as follows:

Sec.  431.96  Uniform test method for the measurement of energy 
efficiency of commercial air conditioners and heat pumps.

    (a) Scope. This section contains test procedures for measuring, 
pursuant to EPCA, the energy efficiency of any small, large, or very 
large commercial package air-conditioning and heating equipment, 
packaged terminal air conditioners and packaged terminal heat pumps, 
computer room air conditioners, and variable refrigerant flow systems.
    (b) Testing and calculations. Determine the energy efficiency of 
each covered product by conducting the test

[[Page 2427]]

procedure(s) listed in the rightmost column of Table 1 of this section, 
that apply to the energy efficiency descriptor for that product, 
category, and cooling capacity.

                                Table 1 to Sec.   431.96--Test Procedures for Commercial Air Conditioners and Heat Pumps
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Energy efficiency
              Product                       Category           Cooling capacity          descriptor         Use tests, conditions and procedures \1\ in
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Commercial Packaged Air        Air-Cooled, 3 Phase,   h........  SEER and HSPF........  AHRI Standard 210/240-2008
 Conditioning and Heating Equipment.  AC and HP.
                                     Air-Cooled AC and HP.  >=65,000 Btu/h and     EER and COP..........  AHRI Standard 340/360-2004
                                                             h.
                                     Water-Cooled and       h........  EER..................  AHRI Standard 210/240-2008
                                      Evaporatively-Cooled. >=65,000 Btu/h and     EER..................  AHRI Standard 340/360-2004
                                                             h.
                                     Water-Source HP......  h.......  EER and COP..........  ISO Standard 13256-1 (1998)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large Commercial Packaged Air-       Air-Cooled AC and HP.  >=135,000 Btu/h and    EER and COP..........  AHRI Standard 340/360-2004
 Conditioning and Heating Equipment.                         h.
                                     Water-Cooled and       >=135,000 Btu/h and    EER..................  AHRI Standard 340/360-2004
                                      Evaporatively-Cooled   h.
                                      AC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Large Commercial Packaged Air-  Air-Cooled AC and HP.  >=240,000 Btu/h and    EER and COP..........  AHRI Standard 340/360-2004
 Conditioning and Heating Equipment.                         h.
                                     Water-Cooled and       >=240,000 Btu/h and    EER..................  AHRI Standard 340/360-2004
                                      Evaporatively-Cooled   h.
                                      AC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Packaged Terminal Air-Conditioners   AC and HP............  h.......  EER and COP..........  AHRI Standard 310/380-2004
 and Heat Pumps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Computer Room Air Conditioners.....  AC...................  h.......  SCOP.................  ASHRAE Standard 127-2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
Variable Refrigerant Flow Multi-     AC and HP............  h.......  EER and COP..........  AHRI Standard 1230-2010
 split Systems.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Single Package Vertical Air          AC and HP............  h.......  EER and COP..........  AHRI Standard 390-2003
 Conditioners and Single Package
 Vertical Heat Pumps.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Incorporated by reference, see Sec.   431.95.

    (c) Optional break-in period for tests conducted using AHRI 210/
240-2008, AHRI 340/360-2004, AHRI 1230-2010, and AHRI 390-2003. 
Manufacturers may optionally specify a ``break-in'' period, not to 
exceed 16 hours, to operate the equipment under test prior to 
conducting the test method specified by AHRI 210/240-2008, AHRI 340/
360-2004, AHRI 1230-2010, or AHRI 390-2003.
    8. Section 431.97 is revised to read as follows:

Sec.  431.97  Energy efficiency standards and their compliance dates.

    (a) Each commercial air conditioner or heat pump (not including 
single package vertical air conditioners and single package vertical 
heat pumps, packaged terminal air conditioners and packaged terminal 
heat pumps, computer room air conditioners, and variable refrigerant 
flow systems) manufactured on or after the compliance date listed in 
the corresponding table must meet the applicable minimum energy 
efficiency standard level(s) set forth in Tables 1, 2, and 3 of this 
section.

  Table 1 to Sec.   431.97--Minimum Cooling Efficiency Standards for Air Conditioning and Heating Equipment (Not Including Single Package Vertical Air
       Conditioners and Single Package Vertical Heat Pumps, Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps, Computer Room Air
                                Conditioners, and Variable Refrigerant Flow Multi-Split Air Conditioners and Heat Pumps)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Compliance date: Products
             Product                 Cooling capacity        Sub-category         Heating type       Efficiency level       manufactured on and after
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Commercial Packaged Air      h.......  AC.................  All................  SEER = 13..........  June 16, 2008.
 Conditioning and Heating                                HP.................  All................  SEER = 13..........  June 16, 2008.
 Equipment (Air-Cooled, 3 Phase).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Commercial Packaged Air      >=65,000 Btu/h and    AC.................  No Heating or        EER = 11.2.........  January 1, 2010.
 Conditioning and Heating           h.                            Electric
 Equipment (Air-Cooled).                                                       Resistance Heating.

[[Page 2428]]

 
                                                                              All Other Types of   EER = 11.0.........  January 1, 2010.
                                                                               Heating.
                                                         HP.................  No Heating or        EER = 11.0.........  January 1, 2010.
                                                                               Electric
                                                                               Resistance Heating.
                                                                              All Other Types of   EER = 10.8.........  January 1, 2010.
                                                                               Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large Commercial Packaged Air      >=135,000 Btu/h and   AC.................  No Heating or        EER = 11.0.........  January 1, 2010.
 Conditioning and Heating           h.                            Electric
 Equipment (Air-Cooled).                                                       Resistance Heating.
                                                                              All Other Types of   EER = 10.8.........  January 1, 2010.
                                                                               Heating.
                                                         HP.................  No Heating or        EER = 10.6.........  January 1, 2010.
                                                                               Electric
                                                                               Resistance Heating.
                                                                              All Other Types of   EER = 10.4.........  January 1, 2010.
                                                                               Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Large Commercial Packaged     >=240,000 Btu/h and   AC.................  No Heating or        EER = 10.0.........  January 1, 2010.
 Air Conditioning and Heating       h.                            Electric
 Equipment (Air-Cooled).                                                       Resistance Heating.
                                                                              All Other Types of   EER = 9.8..........  January 1, 2010.
                                                                               Heating.
                                                         HP.................  No Heating or        EER = 9.5..........  January 1, 2010.
                                                                               Electric
                                                                               Resistance Heating.
                                                                              All Other Types of   EER = 9.3..........  January 1, 2010.
                                                                               Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Commercial Packaged Air      h.......  AC.................  All................  EER = 12.1.........  October 29, 2003.
 Conditioning and Heating
 Equipment (Water-Cooled,
 Evaporatively-Cooled, and Water-
 Source).
                                                         HP.................  All................  EER = 11.2.........  October 29, 2003.
                                   >=17,000 Btu/h and    AC.................  All................  EER = 12.1.........  October 29, 2003.
                                    h.
                                                         HP.................  All................  EER = 12.0.........  October 29, 2003.
                                   >=65,000 Btu/h and    AC.................  No Heating or        EER = 11.5.........  October 29, 2003 \1\.
                                    h.                            Electric
                                                                               Resistance Heating.
                                                                              All Other Types of   EER = 11.3.........  October 29, 2003\1\.
                                                                               Heating.
                                                         HP.................  All................  EER = 12.0.........  October 29, 2003 \1\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large Commercial Packaged Air      >=135,000 Btu/h and   AC.................  All................  EER = 11.0.........  October 29, 2004 \2\.
 Conditioning and Heating           h.
 Equipment (Water-Cooled,
 Evaporatively-Cooled, and Water-
 Source).
                                                         HP.................  All................  EER = 11.0.........  October 29, 2004 \2\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Large Commercial Packaged     >=240,000 Btu/h and   AC.................  No Heating or        EER = 11.0.........  January 10, 2011 \2\.
 Air Conditioning and Heating       h.                            Electric
 Equipment (Water-Cooled,                                                      Resistance Heating.
 Evaporatively-Cooled, and Water-
 Source).
                                                                              All Other Types of   EER = 10.8.........  January 10, 2011 \2\.
                                                                               Heating.
                                                         HP.................  No Heating or        EER = 11.0.........  January 10, 2011 \2\.
                                                                               Electric
                                                                               Resistance Heating.

[[Page 2429]]

 
                                                                              All Other Types of   EER = 10.8.........  January 10, 2011 \2\.
                                                                               Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ And manufactured before June 1, 2013. See Table 3 of this section for updated efficiency standards.
\2\ And manufactured before June 1, 2014. See Table 3 of this section for updated efficiency standards.

 Table 2 to Sec.   431.97--Minimum Heating Efficiency Standards for Air Conditioning and Heating Equipment (Heat
                                                     Pumps)
----------------------------------------------------------------------------------------------------------------
                                                                                 Compliance date: Products
             Product                Cooling capacity    Efficiency level         manufactured on and after
----------------------------------------------------------------------------------------------------------------
Small Commercial Packaged Air     h......  HSPF = 7.7........  June 16, 2008.
 Conditioning and Heating
 Equipment (Air-Cooled, 3 Phase).
Small Commercial Packaged Air     >=65,000 Btu/h and   COP = 3.3.........  January 1, 2010.
 Conditioning and Heating          h.
 Equipment (Air-Cooled).
Large Commercial Packaged Air     >=135,000 Btu/h and  COP = 3.2.........  January 1, 2010.
 Conditioning and Heating          h.
 Equipment (Air-Cooled).
Very Large Commercial Packaged    >=240,000 Btu/h and  COP = 3.2.........  January 1, 2010.
 Air Conditioning and Heating      h.
 Equipment (Air-Cooled).
Small Commercial Packaged Air     h.....  COP = 4.2.........  October 29, 2003.
 Conditioning and Heating
 Equipment (Water-Source).
----------------------------------------------------------------------------------------------------------------

  Table 3 to Sec.   431.97--Updates to the Minimum Cooling Efficiency Standards for Water-Cooled and Evaporatively-Cooled Air Conditioning and Heating
                                                                        Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Compliance date: Products manufactured on
               Product                    Cooling capacity          Heating type          Efficiency level                     and after
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Commercial Packaged Air         >=65,000 Btu/h and       No Heating or Electric  EER = 12.1............  June 1, 2013.
 Conditioning and Heating Equipment    h.          Resistance Heating.
 (Water-Cooled).
                                                               All Other Types of      EER = 11.9............  June 1, 2013.
                                                                Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large Commercial Packaged Air         >=135,000 Btu/h and      No Heating or Electric  EER = 12.5............  June 1, 2014.
 Conditioning and Heating Equipment    h.          Resistance Heating.
 (Water-Cooled).
                                                               All Other Types of      EER = 12.3............  June 1, 2014.
                                                                Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Large Commercial Packaged Air    >=240,000 Btu/h and      No Heating or Electric  EER = 12.4............  June 1, 2014.
 Conditioning and Heating Equipment    h.          Resistance Heating.
 (Water-Cooled).
                                                               All Other Types of      EER = 12.2............  June 1, 2014.
                                                                Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small Commercial Packaged Air         >=65,000 Btu/h and       No Heating or Electric  EER = 12.1............  June 1, 2013.
 Conditioning and Heating Equipment    h.          Resistance Heating.
 (Evaporatively-Cooled).
                                                               All Other Types of      EER = 11.9............  June 1, 2013.
                                                                Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large Commercial Packaged Air         >=135,000 Btu/h and      No Heating or Electric  EER = 12.0............  June 1, 2014.
 Conditioning and Heating Equipment    h.          Resistance Heating.
 (Evaporatively-Cooled).
                                                               All Other Types of      EER = 11.8............  June 1, 2014.
                                                                Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Large Commercial Packaged Air    >=240,000 Btu/h and      No Heating or Electric  EER = 11.9............  June 1, 2014.
 Conditioning and Heating Equipment    h.          Resistance Heating.
 (Evaporatively-Cooled).
                                                               All Other Types of      EER = 11.7............  June 1, 2014.
                                                                Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 2430]]

    (b) Each packaged terminal air conditioner (PTAC) and packaged 
terminal heat pump (PTHP) manufactured on or after January 1, 1994, and 
before October 8, 2012 (for standard size PTACs and PTHPs) and before 
October 7, 2010 (for non-standard size PTACs and PTHPs) must meet the 
applicable minimum energy efficiency standard level(s) set forth in 
Table 4 of this section. Each PTAC and PTHP manufactured on or after 
October 8, 2012 (for standard size PTACs and PTHPs) and on or after 
October 7, 2010 (for non-standard size PTACs and PTHPs) must meet the 
applicable minimum energy efficiency standard level(s) set forth in 
Table 5 of this section.

                    Table 4 to Sec.   431.97--Minimum Efficiency Standards for PTAC and PTHP
----------------------------------------------------------------------------------------------------------------
                                                                                  Compliance date: Products
           Product                Cooling capacity       Efficiency level      manufactured on and after * * *
----------------------------------------------------------------------------------------------------------------
PTAC.........................  h.........  EER = 8.88...........  January 1, 1994.
                               >=7,000 Btu/h and      EER = 10.0-(0.16 x     January 1, 1994.
                                h.         Cap \1\).
                               >=15,000 Btu/h.......  EER = 7.6............  January 1, 1994.
----------------------------------------------------------------------------------------------------------------
PTHP.........................  h.........  EER = 8.88...........  January 1, 1994.
                                                      COP = 2.72...........
                               >=7,000 Btu/h and      EER = 10.0-(0.16 x     January 1, 1994.
                                h.         Cap \1\).
                                                      COP = 1.3 + (0.16 x
                                                       EER) \2\.
                               >=15,000 Btu/h.......  EER = 7.6              January 1, 1994.
                                                      COP = 2.52...........
----------------------------------------------------------------------------------------------------------------
\1\ Cap means cooling capacity in thousand Btu/h at 95 [deg]F outdoor dry-bulb temperature.
\2\ The applicable minimum cooling EER prescribed in this table.

                Table 5 to Sec.   431.97--Updated Minimum Efficiency Standards for PTAC and PTHP
----------------------------------------------------------------------------------------------------------------
                                                                                             Compliance date:
            Product               Cooling capacity     Sub-category     Efficiency level   Products manufactured
                                                                                            on and after * * *
----------------------------------------------------------------------------------------------------------------
PTAC...........................  Standard Size....  h.....  EER = 11.7.......  October 8, 2012.
                                                    >=7,000 Btu/h and  EER = 13.8-(0.3 x  October 8, 2012.
                                                     h.     Cap \1\).
                                                    >=15,000 Btu/h...  EER = 9.3........  October 8, 2012.
                                 Non-Standard Size  h.....  EER = 9.4........  October 7, 2010.
                                                    >=7,000 Btu/h and  EER = 10.9-(0.213  October 7, 2010.
                                                     h.     x Cap \1\).
                                                    >=15,000 Btu/h...  EER = 7.7........  October 7, 2010.
----------------------------------------------------------------------------------------------------------------
PTHP...........................  Standard Size....  h.....  EER = 11.9.......  October 8, 2012.
                                                                       COP = 3.3........
                                                    >=7,000 Btu/h and  EER = 14.0-(0.3 x  October 8, 2012.
                                                     h.     Cap \1\).
                                                                       COP = 3.7-(0.052
                                                                        x Cap \1\).
                                 .................  >=15,000 Btu/h...  EER = 9.5........  October 8, 2012.
                                                                       COP = 2.9........
                                 Non-Standard Size  h.....  EER = 9.3........  October 7, 2010.
                                                                       COP = 2.7........
                                                    >=7,000 Btu/h and  EER = 10.8-(0.213  October 7, 2010.
                                                     h.     x Cap \1\).
                                                                       COP = 2.9-(0.026
                                                                        x Cap \1\).
                                                    >=15,000 Btu/h...  EER = 7.6........  October 7, 2010.
                                                                       COP = 2.5........
----------------------------------------------------------------------------------------------------------------
\1\ Cap means cooling capacity in thousand Btu/h at 95 [deg]F outdoor dry-bulb temperature.

    (c) Each single package vertical air conditioner and heat pump 
manufactured on or after January 1, 2010, must meet the applicable 
minimum energy efficiency standard level(s) set forth in this section.

       Table 6 to Sec.   431.97--Minimum Efficiency Standards for Single Package Vertical Air Conditioners and Single Package Vertical Heat Pumps
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Compliance date: Products manufactured on
               Product                   Cooling capacity           Sub-category          Efficiency level                  and after * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Single package vertical air           h.........  AC.....................  EER = 9.0.............  January 1, 2010.
 conditioners and single package
 vertical heat pumps, single-phase
 and three-phase.
                                                              HP.....................  EER = 9.0.............  January 1, 2010.
                                                                                       COP = 3.0.............
Single package vertical air           >=65,000 Btu/h and      AC.....................  EER = 8.9.............  January 1, 2010.
 conditioners and single package       h.
 vertical heat pumps.

[[Page 2431]]

 
                                                              HP.....................  EER = 8.9.............  January 1, 2010.
                                                                                       COP = 3.0.............
Single package vertical air           >=135,000 Btu/h and     AC.....................  EER = 8.6.............  January 1, 2010.
 conditioners and single package       h.
 vertical heat pumps.
                                                              HP.....................  EER = 8.6.............  January 1, 2010.
                                                                                       COP = 2.9.............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (d) Each computer room air conditioner with a net sensible cooling 
capacity less than 65,000 Btu/h manufactured on or after October 29, 
2012, and each computer room air conditioner with a net sensible 
cooling capacity greater than or equal to 65,000 Btu/h manufactured on 
or after October 29, 2013, must meet the applicable minimum energy 
efficiency standard level(s) set forth in this section.

            Table 7 to Sec.   431.97--Minimum Efficiency Standards for Computer Room Air Conditioners
----------------------------------------------------------------------------------------------------------------
                                                    Minimum SCOP efficiency
                                   Net sensible   --------------------------      Compliance date: Products
        Equipment type           cooling capacity    Downflow                     manufactured on and after
                                                       unit     Upflow unit
----------------------------------------------------------------------------------------------------------------
Computer Room Air               h....         2.20         2.09  October 29, 2012.
 Conditioners, Air-Cooled.
                                >=65,000 Btu/h            2.10         1.99  October 29, 2013.
                                 and 
                                 h.
                                >=240,000 Btu/h           1.90         1.79  October 29, 2013.
                                 and 
                                 h.
----------------------------------------------------------------------------------------------------------------
Computer Room Air               h....         2.60         2.49  October 29, 2012.
 Conditioners, Water-Cooled.
                                >=65,000 Btu/h            2.50         2.39  October 29, 2013.
                                 and 
                                 h.
                                >=240,000 Btu/h           2.40         2.29  October 29, 2013.
                                 and 
                                 h.
----------------------------------------------------------------------------------------------------------------
Computer Room Air               h....         2.55         2.44  October 29, 2012.
 Conditioners, Water-Cooled
 with a Fluid Economizer.
                                >=65,000 Btu/h            2.45         2.34  October 29, 2013.
                                 and 
                                 h.
                                >=240,000 Btu/h           2.35         2.24  October 29, 2013.
                                 and 
                                 h.
----------------------------------------------------------------------------------------------------------------
Computer Room Air               h....         2.50         2.39  October 29, 2012.
 Conditioners, Glycol-Cooled.
                                >=65,000 Btu/h            2.15         2.04  October 29, 2013.
                                 and 
                                 h.
                                >=240,000 Btu/h           2.10         1.99  October 29, 2013.
                                 and 
                                 h.
----------------------------------------------------------------------------------------------------------------
Computer Room Air Conditioner,  h....         2.45         2.34  October 29, 2012.
 Glycol-Cooled with a Fluid
 Economizer.
                                >=65,000 Btu/h            2.10         1.99  October 29, 2013.
                                 and 
                                 h.
                                >=240,000 Btu/h           2.05         1.94  October 29, 2013.
                                 and 
                                 h.
----------------------------------------------------------------------------------------------------------------

     (e) Each variable refrigerant flow air conditioner or heat pump 
manufactured on or after the effective date listed in this table must 
meet the applicable minimum energy efficiency standard level(s) set 
forth in this section.

            Table 8 to Sec.   431.97--Minimum Efficiency Standards for Variable Refrigerant Flow Multi-Split Air Conditioners and Heat Pumps
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Compliance date: Products manufactured
               Product                    Cooling capacity        Heating type \1\        Efficiency level                     and after
--------------------------------------------------------------------------------------------------------------------------------------------------------
VRF Multi-Split Air Conditioners      h..........  All...................  13.0 SEER.............  June 16, 2008.
 (Air-Cooled).
                                      >=65,000 and h.                   Resistance Heating.

[[Page 2432]]

 
                                                               All Other Types of      11.0 EER..............  January 1, 2010.
                                                                Heating.
                                      >=135,000 and h.                   Resistance Heating.
                                                               All Other Types of      10.8 EER..............  January 1, 2010.
                                                                Heating.
                                      >=240,000 and h.                   Resistance Heating.
                                                               All Other Types of      9.8 EER...............  January 1, 2010.
                                                                Heating.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VRF Multi-Split Heat Pumps (Air-      h..........  All...................  13.0 SEER.............  June 16, 2008.
 Cooled).                                                                              7.7 HSPF..............
                                      >=65,000 and h.                   Resistance Heating.    3.3 COP...............
                                                               All Other Types of      10.8 EER..............  January 1, 2010.
                                                                Heating.               3.3 COP...............
                                      >=135,000 and h.                   Resistance Heating.    3.2 COP...............
                                                               All Other Types of      10.4 EER..............  January 1, 2010.
                                                                Heating.               3.2 COP...............
                                      >=240,000 and h.                   Resistance Heating.    3.2 COP...............
                                                               All Other Types of      9.3 EER...............  January 1, 2010.
                                                                Heating.               3.2 COP...............
--------------------------------------------------------------------------------------------------------------------------------------------------------
VRF Multi-Split Heat Pumps (Water-    h..........  Without heat recovery.  12.0 EER..............  October 29, 2012.
 Source).
                                                                                       4.2 COP...............  October 29, 2003.
                                                               With heat recovery....  11.8 EER..............  October 29, 2012.
                                                                                       4.2 COP...............  October 29, 2003.
                                      >=17,000 and h.                                          4.2 COP...............
                                      >=65,000 and h.                                          4.2 COP...............
                                      >=135,000 and h.                                          3.9 COP...............
                                                               With heat recovery....  9.8 EER...............  October 29, 2013.
                                                                                       3.9 COP...............
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ VRF Multi-Split Heat Pumps (Air-Cooled) with heat recovery fall under the category of ``All Other Types of Heating'' unless they also have electric
  resistance heating, in which case it falls under the category for ``No Heating or Electric Resistance Heating.''

    9. Add a new section 431.104 to read as follows:

Sec.  431.104  Sources for information and guidance.

    (a) General. The standards listed in this paragraph are referred to 
in the DOE test procedures and elsewhere in this part but are not 
incorporated by reference. These sources are given here for information 
and guidance.
    (b) ASTM. American Society for Testing and Materials, 100 Barr 
Harbor Drive, PO Box C700, West Conshohocken, PA, 19438-2959, 1 (877) 
909-2786, or go to http://www.astm.org/index.shtml.
    (1) ASTM Standard Test Method C177-97, ``Standard Test Method for 
Steady-State Heat Flux Measurements and Thermal Transmission Properties 
by Means of the Guarded-Hot-Plate Apparatus.''
    (2) ASTM Standard Test Method C518-91, ``Standard Test Method for 
Steady-State Heat Flux Measurements and Thermal Transmission Properties 
by Means of the Heat Flow Meter Apparatus.''
    (3) ASTM Standard Test Method D2156-80, ``Method for Smoke Density 
in Flue Gases from Burning Distillate Fuels.''
    10. Section 431.105 is revised to read as follows:

Sec.  431.105  Materials incorporated by reference.

    (a) General. DOE incorporates by reference the following test 
procedures into subpart G of part 431. The materials listed have been 
approved for incorporation by reference by the Director of the Federal 
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Any 
subsequent amendment to the listed materials by the standard-setting 
organization will not affect the DOE regulations unless and until 
amended by DOE. Materials are incorporated as they exist on the date of 
the approval and a notice of any change in the materials will be 
published in the Federal Register. All approved materials are available 
for

[[Page 2433]]

inspection at the National Archives and Records Administration (NARA). 
For information on the availability of this material at NARA, call 
(202) 741-6030, or go to http://www.archives.gov/federal_register/code_of_federalregulations/ibr_locations.html. Also, this material 
is available for inspection at U.S. Department of Energy, Office of 
Energy Efficiency and Renewable Energy, Building Technologies Program, 
6th Floor, 950 L'Enfant Plaza SW., Washington, DC 20024, (202) 586-
2945, or go to: http://wwww.eere.energy.gov/buildings/appliance_standards/. The referenced test procedure standards are listed below by 
relevant standard-setting organization, along with information on how 
to obtain copies from those sources.
    (b) ANSI. American National Standards Institute, 25 W. 43rd Street, 
4th Floor, New York, NY 10036, (212) 642-4900, or go to http://www.ansi.org.
    (1) ANSI Z21.10.3-2004, CSA 4.3-2004, Sections 2.1.7, 2.3.3, 2.3.4, 
2.30, Figure 3, and Exhibit G, Volume III, ``Storage Water Heaters With 
Input Ratings Above 75,000 Btu Per Hour, Circulating and 
Instantaneous,'' approved on July 2, 2004, IBR approved for Sec.  
431.106.
    (2) Reserved.
    11. Section 431.106 is revised to read as follows:

Sec.  431.106  Uniform test method for the measurement of energy 
efficiency of commercial water heaters and hot water supply boilers 
(other than commercial heat pump water heaters).

    (a) Scope. This section covers the test procedures you must follow 
if, pursuant to EPCA, you are measuring the thermal efficiency or 
standby loss, or both, of a storage or instantaneous water heater or 
hot water supply boiler (other than a commercial heat pump water 
heater).
    (b) Testing and Calculations. Determine the energy efficiency of 
each covered product by conducting the test procedure(s), set forth in 
the two rightmost columns of the following table, that apply to the 
energy efficiency descriptor(s) for that product:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Energy efficiency         Use test setup, equipment and procedures in
                Product                         descriptor              subsection labeled ``Method of Test'' of      With these additional stipulations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas-fired Storage and Instantaneous     Thermal Efficiency.......  ANSI Z21.10.3-2004, Exhibit G1                     A. For all products, the duration
 Water Heaters and Hot Water Supply     Standby Loss.............  ANSI Z21.10.3-2004, Exhibit G2                      of the standby loss test shall be
 Boilers.*                              .........................  .................................................   until whichever of the following
Oil-fired Storage and Instantaneous     .........................  .................................................   occurs first after you begin to
 Water Heaters and Hot Water Supply     Thermal Efficiency.......  ANSI Z21.10.3-2004, Exhibit G1                      measure the fuel and/or electric
 Boilers.*                              Standby Loss.............  ANSI Z21.10.3-2004, Exhibit G2                      consumption: (1) The first cutout
Electric Storage and instantaneous      .........................  .................................................   after 24 hours or (2) 48 hours,
 Water Heaters                          .........................  .................................................   if the water heater is not in the
                                        Standby Loss.............  ANSI Z21.10.3-2004, Exhibit G2                      heating mode at that time.
                                                                                                                      B. For oil and gas products, the
                                                                                                                       standby loss in Btu per hour must
                                                                                                                       be calculated as follows: SL (Btu
                                                                                                                       per hour) = S (% per hour) x 8.25
                                                                                                                       (Btu/gal-F) x Measured Volume
                                                                                                                       (gal) x 70 (degrees F).
                                                                                                                      C. For oil-fired products, apply
                                                                                                                       the following in conducting the
                                                                                                                       thermal efficiency and standby
                                                                                                                       loss tests: (1) Venting
                                                                                                                       Requirements--Connect a vertical
                                                                                                                       length of flue pipe to the flue
                                                                                                                       gas outlet of sufficient height
                                                                                                                       so as to meet the minimum draft
                                                                                                                       specified by the manufacturer.
                                                                                                                       (2) Oil Supply--Adjust the burner
                                                                                                                       rate so that: (a) The hourly Btu
                                                                                                                       input rate lies within  2 percent of the
                                                                                                                       manufacturer's specified input
                                                                                                                       rate, (b) the CO2 reading shows
                                                                                                                       the value specified by the
                                                                                                                       manufacturer, (c) smoke in the
                                                                                                                       flue does not exceed No. 1 smoke
                                                                                                                       as measured by the procedure in
                                                                                                                       ASTM-D-2156-80, and (d) fuel pump
                                                                                                                       pressure lies within 10 percent of
                                                                                                                       manufacturer's specifications.
                                                                                                                      D. For electric products, apply
                                                                                                                       the following in conducting the
                                                                                                                       standby loss test:
                                                                                                                      (1) Assume that the thermal
                                                                                                                       efficiency (Et) of electric water
                                                                                                                       heaters with immersed heating
                                                                                                                       elements is 98 percent.
                                                                                                                      (2) Maintain the electrical supply
                                                                                                                       voltage to within  5
                                                                                                                       percent of the center of the
                                                                                                                       voltage range specified on the
                                                                                                                       water heater nameplate.
                                                                                                                      (3) If the set up includes
                                                                                                                       multiple adjustable thermostats,
                                                                                                                       set the highest one first to
                                                                                                                       yield a maximum water temperature
                                                                                                                       in the specified range as
                                                                                                                       measured by the topmost tank
                                                                                                                       thermocouple. Then set the lower
                                                                                                                       thermostat(s) to yield a maximum
                                                                                                                       mean tank temperature within the
                                                                                                                       specified range.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* As to hot water supply boilers with a capacity of less than 10 gallons, these test methods become mandatory on October 21, 2005. Prior to that time,
  you may use for these products either (1) these test methods if you rate the product for thermal efficiency, or (2) the test methods in Subpart E if
  you rate the product for combustion efficiency as a commercial packaged boiler.
** Incorporated by reference, see Sec.   431.105.

[FR Doc. 2012-327 Filed 1-13-12; 8:45 am]
BILLING CODE 6450-01-P
```