This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

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REGISTER issue of each week.

Rules and Regulations Federal Register

38287 

Vol. 76, No. 126 

Thursday, June 30, 2011 

1For editorial reasons, Parts B (consumer 

products) and C (commercial equipment) of Title III 

of EPCA were re-designated as parts A and A–1, 

respectively, in the United States Code. 

DEPARTMENT OF ENERGY 

10 CFR Part 429 

[Docket Number: EERE–2010–BT–CE–0014] 

RIN 1904–AC23 

Energy Conservation Program: 

Certification, Compliance, and 

Enforcement for Consumer Products 

and Commercial and Industrial 

Equipment 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Final rule. 

SUMMARY: The U.S. Department of 

Energy (DOE or the ‘‘Department’’) is 

adopting amendments to the 

compliance dates for manufacturers to 

submit certification reports for the 

certification provisions for commercial 

refrigeration equipment; commercial 

heating, ventilating, air-conditioning 

(HVAC) equipment; commercial water 

heating (WH) equipment; and automatic 

commercial ice makers, which are 

covered under the Energy Policy and 

Conservation Act of 1975, as amended 

(EPCA or the ‘‘Act’’). Manufacturers of 

these products will be required to 

submit certification reports no later than 

December 31, 2012. 

DATES: This rule is effective July 5, 

2011. 

ADDRESSES: This rulemaking can be 

identified by docket number EERE– 

2010–BT–CE–0014 and/or RIN number 

1904–AC23. 

Docket: The docket is available for 

review at http://www.regulations.gov, 

including Federal Register notices, 

public meetings attendee lists, 

transcripts, comments, and other 

supporting documents/materials. All 

documents in the docket are listed in 

the http://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. 

For further information on how to 

review public comments or view hard 

copies of the docket in the Resource 

Room, contact Ms. Brenda Edwards at 

(202) 586–2945 or e-mail: 

Brenda.Edwards@ee.doe.gov. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Ashley Armstrong, U.S. Department of 

Energy, Office of Energy Efficiency and 

Renewable Energy, Building 

Technologies Program, EE–2J, 1000 

Independence Avenue, SW., 

Washington, DC 20585–0121. E-mail: 

Ashley.Armstrong@ee.doe.gov; and Ms. 

Celia Sher, U.S. Department of Energy, 

Office of the General Counsel, Forrestal 

Building, GC–71, 1000 Independence 

Avenue, SW., Washington, DC 20585. 

Telephone: (202) 287–6122. E-mail: 

Celia.Sher@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

A. Authority 

Title III of the Energy Policy and 

Conservation Act of 1975, as amended 

(‘‘EPCA’’ or ‘‘the Act’’) sets forth a 

variety of provisions designed to 

improve energy efficiency. Part A of 

Title III (42 U.S.C. 6291–6309) provides 

for the Energy Conservation Program for 

Consumer Products Other Than 

Automobiles. The National Energy 

Conservation Policy Act (NECPA), 

Public Law 95–619, amended EPCA to 

add Part A–1 of Title III, which 

established an energy conservation 

program for certain industrial 

equipment. (42 U.S.C. 6311–6317) 1

Sections 6299–6305, and 6316 of 

EPCA authorize DOE to enforce 

compliance with the energy and water 

conservation standards (all non-product 

specific references herein referring to 

energy use and consumption include 

water use and consumption; all 

references to energy efficiency include 

water efficiency) established for certain 

consumer products and commercial 

equipment. (42 U.S.C. 6299–6305 

(consumer products), 6316 (commercial 

equipment)) DOE has promulgated 

enforcement regulations that include 

specific certification and compliance 

requirements. See 10 CFR part 429; 10 

CFR part 431, subparts B, U, and V. 

B. Background 

On March 7, 2011, DOE published a 

final rule in the Federal Register that, 

among other things, modified the 

requirements regarding manufacturer 

submission of compliance statements 

and certification reports to DOE (March 

2011 final rule). 76 FR 12421. This rule 

was largely procedural in nature; it did 

not amend pre-existing sampling 

provisions, test procedures, or 

conservation standard levels for any 

covered products or equipment. It did, 

however, impose new or revised 

reporting requirements for some types of 

covered products and equipment, 

including a requirement that 

manufacturers submit annual reports to 

the Department certifying compliance of 

their basic models with applicable 

standards. Finally, the Department 

emphasized that manufacturers could 

use their discretion in grouping 

individual models as a ‘‘basic model’’ 

such that the certified rating for the 

basic model matched the represented 

rating for all included models. See 76 

FR 12428–12429 for more information. 

This reflected a basic requirement of the 

Department’s longstanding selfcertification compliance regime—that 

efficiency certifications and 

representations must be supported by 

either testing or an approved alternative 

method of estimating efficiency. 

Since the publication of the March 

2011 final rule, certain manufacturers of 

particular types of commercial and 

industrial equipment have stated that 

they would be unable to meet the July 

5th deadline for complying with the 

certification requirements. In particular, 

manufacturers of commercial 

refrigeration equipment; commercial 

HVAC equipment; commercial WH 

equipment; walk-in coolers; walk-in 

freezers; and automatic commercial ice 

makers (as defined in 10 CFR part 431) 

contend that certifying supported basic 

model ratings under the revised 

provisions would require a costprohibitive amount of additional testing 

and take far longer than the time 

allowed. Some commercial 

manufacturers also expressed concern 

over DOE’s regulations for alternative 

efficiency determination methods 

(AEDMs), which are intended to reduce 

testing burdens by allowing 

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38288 Federal Register / Vol. 76, No. 126 / Thursday, June 30, 2011 / Rules and Regulations 

manufacturers to use computer 

simulations, mathematical models, and 

other alternative methods to determine 

the amount of energy used or efficiency 

by a particular basic model. These 

manufacturers suggested that the AEDM 

provisions are too restrictive, overly 

burdensome, and unavailable for some 

products that would benefit from them 

and, as a result, do not permit the viable 

alternative to testing intended by the 

Department. 

The Department responded in part to 

these concerns by taking two immediate 

steps. On April 8, 2011, DOE issued a 

request for information (RFI) (available 

at http://www.eere.energy.gov/

buildings/appliance_standards/pdfs/

arm_aedms_rfi.pdf) seeking comment 

on, among other things, the use of such 

alternative methods for determining the 

efficiency of commercial and industrial 

equipment. 76 FR 21673 (April 18, 

2011). As the RFI explained, the 

Department intends to use this 

information to propose revisions and 

expansions, as necessary, to the existing 

AEDM provisions in a future 

rulemaking. The Department expects 

that addressing manufacturers’ concerns 

with the AEDM provisions may alleviate 

some of industry’s estimated burden of 

complying with DOE’s existing testing 

regulations and allow the development 

of the data necessary to file the 

certifications and compliance reports as 

required by the March 2011 final rule. 

Given the testing burdens reported by 

certain commercial manufacturers and 

the Department’s recent RFI on 

alternative ways to estimate efficiency 

in lieu of testing, on April 19, 2011, 

DOE published in the Federal Register, 

a notice of proposed rulemaking 

regarding the compliance date for 

certification of certain commercial and 

industrial equipment (April 2011 

NOPR). 76 FR 21813. In the April 2011 

NOPR, DOE proposed an 18-month 

extension to the compliance date for the 

certification provisions for commercial 

refrigeration equipment; commercial 

HVAC equipment; commercial WH 

equipment; walk-in coolers; walk-in 

freezers; and automatic commercial ice 

makers. In the April 2011 NOPR, the 

Department sought comment on 

whether a limited reporting requirement 

should be required of manufacturers of 

these types of commercial equipment 

during an interim 18-month period. 

Additionally, the Department noted it 

was considering extending the 

compliance date for the certification 

provisions for other commercial 

equipment based on comments from 

interested parties. Id. 

II. Discussion of Comments 

The Department received comments 

on the April 2011 NOPR from a number 

of interested commenters, including 

various manufacturers, trade 

associations, and advocacy groups. The 

comments and DOE’s responses to them 

are generally discussed below. 

A. Extension of Certification Deadline 

for Commercial Refrigeration 

Equipment; HVAC Equipment; 

Commercial WH Equipment; and 

Automatic Commercial Ice Makers 

As stated above, DOE proposed a 

tentative 18-month extension to the 

compliance date for filing complete 

certification reports for manufacturers of 

commercial refrigeration equipment; 

commercial HVAC equipment; 

commercial WH equipment; walk-in 

coolers; walk-in freezers; and automatic 

commercial ice makers in the April 

2011 NOPR. 76 FR 21815. Most 

commenters were in support of such an 

extension, including the AirConditioning, Heating, and Refrigeration 

Institute (AHRI), Traulsen, International 

Cold Storage (ICS), Crown Tonka, 

ThermalRite (ICS, Crown Tonka and 

ThermalRite hereafter referred to as 

‘‘Joint Manufacturers’’), Carrier 

Corporation (Carrier), National 

Automatic Merchandising Association 

(NAMA), AAON, Inc. (AAON), Lennox 

International Inc. (Lennox), Heatcraft 

Refrigeration Products LLC (Heatcraft), 

Hill Phoenix Walk-Ins (Hill Phoenix), 

Royal Vendors, Inc., Appliance 

Standards Awareness Project (ASAP), 

American Council for an EnergyEfficient Economy (ACEE), and the 

Natural Resources Defense Council 

(NRDC) (ASAP, ACEEE, and NRDC 

hereafter referred to as ‘‘Joint Advocacy 

Comments’’). (AHRI, No. 113.1 at p. 1; 

Traulsen, No. 111.1 at p. 1; Joint 

Manufacturers, No. 115.1 at p. 1; 

Carrier, No. 114.1 at p. 1; NAMA, No. 

116.1 at p. 2; AAON, No. 118.1 at p. 1; 

Lennox, No. 119.1 at p. 1; Heatcraft, No. 

124.1 at p. 1; Hill Phoenix, No. 121.1 at 

p. 1; Royal Vendors, Inc., No. 123.1 at 

p. 1; Joint Advocacy Comments, No. 

125.1 at p. 1) For example, Traulsen 

commented that the proposed extension 

should provide a significant time frame 

required to review and adjust the open 

issues such as sample size, tolerances, 

and base models. (Traulsen, No. 111.1 at 

p. 1) Carrier additionally commented 

that the proposed 18-month extension is 

warranted to revise the AEDM 

procedures to reduce the envisioned 

testing burden. (Carrier, No. 114.1 at p. 

2) Carrier further requested that DOE 

amend the confidence level to be used 

for calculating energy efficiency levels 

for commercial HVAC equipment, 

noting an inconsistency in the 

confidence levels used for commercial 

HVAC equipment and residential 

central air conditioners and heat pumps 

in the March 2011 final rule. (Carrier, 

No. 114.1 at p. 2) The Joint Advocacy 

Comments noted their support of DOE’s 

proposal to extend the certification 

deadline, and also suggested DOE 

consider whether a blanket 18-month 

extension is needed for all products and 

requirements. (Joint Advocacy 

Comments, No. 125.1 at p. 1) 

Some of the commenters were in favor 

of increasing the proposed compliance 

timeline. In particular, the Joint 

Manufacturers recommended that the 

extension be increased to 24 months for 

walk-in coolers and walk-in freezers, 

given the inherent cost burden and 

logistical challenges of the physical 

testing that must be absorbed by smaller 

manufacturers. (Joint Manufacturers, 

No. 115.1 at p. 1) AHRI suggested a 

further extension of time may be 

necessary depending on the extent to 

which DOE modifies its AEDM/ 

Alternate Rating Method (ARM) 

provisions and validation requirements. 

(AHRI, No. 113.1 at p. 2) Along these 

lines, Zero Zone, Inc. (Zero Zone) 

commented that, with the current 

definition of the basic model in the 

March 2011 final rule and the exclusion 

of AEDM methods, 18 months is not 

enough time to comply with the 

regulations. (Zero Zone, No. 127.1 at p. 

1) Moreover, Zero Zone asserted that the 

compliance regulations in the March 

2011 final rule are new for the 

commercial refrigeration industry and 

burdensome. Id. 

AAON reported that the AEDM 

validation test tolerance stated in the 

March 2011 final rule is less than the 

current level of repeatability achievable 

in independent test laboratories making 

this validation impossible to achieve. 

Until these issues can be resolved and 

made clear, AAON stated it could not 

comment on the time required to 

comply with new testing burdens or 

AEDM requirement. (AAON, No. 118.1 

at p. 1) 

While many commenters supported 

the certification extension for certain 

commercial equipment, Earth Justice 

was the sole commenter arguing against 

the proposed 18-month extension, 

noting that any delay would undermine 

the energy savings achieved by the 

standards-setting process. (Earth Justice, 

No. 120.1 at p. 1) Instead, Earth Justice 

suggested DOE consider an alternative 

approach that would maintain some 

certification requirements for these 

products but make those requirements 

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Federal Register / Vol. 76, No. 126 / Thursday, June 30, 2011 / Rules and Regulations 38289 

less onerous for the first 18 months that 

the rule is effective. Id. 

The Department appreciates Earth 

Justice’s concern but declines to adopt 

interim certification requirements in 

this final rule. Although today’s rule 

delays the reporting requirements for 

some products distributed in commerce, 

such products must still meet all 

prescribed energy conservation 

standards under DOE’s regulations. As 

DOE has previously made clear, the 

existing energy conservation standards, 

test procedures, and sampling 

provisions are not affected by this rule. 

While the Department believes the 

certification reporting requirements are 

a good monitoring tool, their impact on 

energy savings should not be wholly 

undermined by a delay because the 

energy conservation standards 

themselves will still be enforced. Based 

on the volume of questions DOE has 

received since the issuance of the March 

2011 final rule, the Department believes 

that a phased-in certification 

requirement is likely to result in 

industry confusion that would more 

than offset any benefit. The Department 

believes that industry should focus its 

efforts on developing a basis for future 

regulatory compliance. 

In light of most of the comments 

above, DOE is extending the compliance 

date for the certification provisions for 

commercial refrigeration equipment; 

commercial warm air furnaces, 

commercial packaged boilers, and 

commercial air conditioners and heat 

pumps (collectively referred to as 

commercial HVAC equipment); 

commercial water heaters, commercial 

hot water supply boilers, and unfired 

hot water storage tanks (collectively 

referred to as commercial WH 

equipment); and automatic commercial 

ice makers to 18 months from the 

publication of this final rule. Thus, the 

certification compliance date for these 

products will now be December 31, 

2012. DOE believes 18 months is a 

reasonable extension to provide 

manufacturers with the time necessary 

to develop the data and supporting 

documentation needed to populate the 

certification reports and certify 

compliance with DOE’s regulations, 

including the existing testing and 

sampling procedures. 

Manufacturer responses, however, 

indicate that numerous manufacturers 

for certain types of commercial 

equipment have been making 

representations of efficiency and 

determining compliance with the 

applicable energy conservation 

standards without testing products in 

accordance with all of the provisions of 

the DOE test procedures, which include 

sampling plans and certification testing 

tolerances. As such, it is apparent from 

the comments and concerns expressed 

to the Department that a subset of 

manufacturers of commercial equipment 

now require additional time to comply 

with testing and sampling requirements. 

In addition, manufacturer comments 

have demonstrated to DOE that the 

existing AEDM provisions need to be 

carefully reviewed and modified, as 

necessary, in order to permit 

manufacturers to determine compliance 

without undue test burden. DOE is 

committed to reviewing the AEDM 

provisions quickly and to enable 

manufacturers to determine compliance 

through approved methodologies. To 

that end, any comments regarding the 

AEDM provisions, such as Carrier’s 

request to amend the confidence levels 

for calculating energy efficiency, will be 

addressed in the current ARM/AEDM 

rulemaking. 

DOE emphasizes that the testing and 

sampling requirements for commercial 

refrigeration equipment; commercial 

HVAC equipment; commercial WH 

equipment; and automatic commercial 

ice makers were not adopted or revised 

in the March 2011 final rule and are 

unchanged by this extension. These 

regulations can be found on a per 

product basis in Subpart B to Part 429 

(sampling plans for testing) and 431.64, 

431.76, 431.86, 431.96, 431.106, and 

431.134 (uniform test methods). Those 

provisions were previously finalized in 

various product-specific rulemakings 

after being subject to notice and 

comment. 

While AAON stated its support for the 

proposed 18-month extension, it 

requested clarification from DOE on 

how the March 2011 final rule indicates 

that ‘‘manufacturers could use their 

discretion in grouping individual 

models as a certified basic model such 

that the certified rating for the basic 

model matched the represented rating 

for all included models’’ as stated in the 

April 2011 NOPR. (AAON, No. 118.1 at 

p. 1) DOE provided clarification of its 

basic model definition in the March 

2011 final rule. See 76 FR 12428–12429 

for more information. 

B. Extension of Certification Deadline 

for Walk-In Coolers and Freezers 

In the April 2011 NOPR, DOE initially 

proposed an 18-month extension for 

manufacturers of walk-in coolers and 

freezers to certify compliance. As noted 

above, AHRI, ICS, Crown Tonka, the 

Joint Manufacturers, and Hill Phoenix 

all supported the certification extension 

for these products. Additionally, the 

Joint Manufacturers commented in 

support of an interim reporting 

requirement, suggesting mandatory 

registration with the Department’s 

CCMS system for all walk-in coolers and 

walk-in freezers (WICFs) manufacturers 

based on published ratings and 

operating characteristics of components 

and materials used in construction of 

these products. (Joint Manufacturers, 

No. 115.1 at p. 1) The Joint 

Manufacturers clarified that this 

mandatory filing should be delayed 

until January 1, 2012, to allow all 

parties time to become acclimated to the 

system and to prevent an influx of errors 

and subsequent delays in completion of 

the filing. Id. 

Although the Department tentatively 

proposed an extension to the 

certification compliance date for WICFs 

in the April 2011 NOPR, upon further 

consideration, DOE has determined that 

an 18-month extension for these 

products is not warranted. The current 

Federal energy conservation standards 

for walk-in coolers and freezers are 

design requirements prescribed under 

section 312(b) of the Energy 

Independence and Security Act of 2007 

(EISA 2007), subsequently codified in 

10 CFR 431.306. Manufacturers of 

WICFs are not currently required to 

comply with a performance-based 

standard, which could require extensive 

testing to determine the efficiency of 

each WICF and/or WICF component. 

Instead, EISA 2007 prescribed a number 

of design requirements, only one of 

which requires the use of a testing 

procedure. Because determining 

compliance with the design standard 

does not require extensive, timeconsuming testing, DOE believes an 18- 

month delay to certify compliance with 

the EISA 2007 design standards is 

unwarranted. 

WICFs that did not meet the EISA 

2007 design requirements could not be 

distributed in commerce in the United 

States since January 1, 2009. As DOE 

clarified in the March 2011 final rule, 

EISA 2007 provided the framework for 

a component-based approach since each 

design standard is based on the 

performance of a given component of 

the WICF. Accordingly, DOE believes 

manufacturers of WICF components 

should be able to attest and demonstrate 

their products meet the design 

requirements without any additional 

time. Based on manufacturers’ request 

for additional time, however, DOE will 

delay the certification compliance date 

to October 1, 2011, in order to provide 

manufacturers with sufficient time and 

notice to certify compliance to the 

Department. The new certification 

deadline is after the annual submission 

deadline for WICFs eliminating the need 

for manufacturers to submit two 

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38290 Federal Register / Vol. 76, No. 126 / Thursday, June 30, 2011 / Rules and Regulations 

complete certification reports this year 

and provides for a little extra time for 

component manufacturers to certify 

compliance to the design standards. 

C. Extension of Certification Deadline 

for Other Types of Commercial or 

Industrial Equipment 

Several commenters requested that 

the Department extend the compliance 

date for filing certification reports to 

other types of commercial or industrial 

equipment, such as beverage vending 

machines, distribution transformers and 

metal halide lamp ballasts and fixtures. 

A discussion of the comments and DOE 

response is presented below by product. 

For instance, Royal Vendors, Inc., 

NAMA and Automated Merchandising 

Systems Inc. (AMS) all asserted that 

DOE should provide an 18-month 

extension for beverage vending 

machines for compliance with the 

certification provisions. Specifically, 

NAMA noted that manufacturers of 

beverage vending machines will be 

impacted by increased costs relating to 

compliance and testing; and operators 

will be impacted by increased prices for 

beverage vending machines, due to 

passed-along costs from manufacturers. 

(NAMA, No. 116.1 at p. 1) NAMA 

further stated that if the ‘‘July 5, 2011 

compliance date is allowed to stand, 

operators could also be impacted by a 

reduced number of compliant and 

certified vending machine models 

available for sale if manufacturers 

cannot bring their designs into 

compliance and obtain certification in 

this very short time.’’ Id. Additionally, 

Royal Vendors, Inc. reported that, 

because it offers such a proliferation of 

product models, the quantity of testing 

required to verify compliance to the 

DOE 2012 requirement is quite 

extensive and costly to achieve in the 

timeline required. (Royal Vendors, Inc., 

No. 123.1 at p. 1) AMS similarly 

commented that the lead times for 

testing and the costs involved 

necessitate additional time to obtain the 

necessary certifications. (AMS, No. 

128.1 at pp. 1–2) 

The Department is clarifying that 

covered bottled or canned beverage 

vending machines are not required to be 

certified until the compliance date for 

the applicable energy conservation 

standards, which is August 31, 2012. 10 

CFR 431.296. Irrespective of 

certification provisions, all 

manufacturers must bring their designs 

into compliance by that compliance 

date to continue distributing them in 

commerce. While many of the 

commenters suggested that the 

certification burden is large due to the 

compliance and testing costs, DOE 

considered these costs in the test 

procedure and energy conservation 

standards rulemakings for this product. 

See 71 FR 71340 (December 8, 2006) 

and 74 FR 74 44914 (August 31, 2009), 

respectively. Manufacturers of bottled 

and canned beverage vending machines 

should have the required information 

readily available by August 31, 2012. 

Additionally, DOE notes that it uses a 

self-certification process, where a 

manufacturer is attesting to the 

compliance of its products upon 

submission of the templates in CCMS; 

manufacturers are not required to obtain 

a third-party testing facility’s 

certification. 

With regard to distribution 

transformers, the National Electrical 

Manufacturers Association (NEMA) 

Transformers Products Section 

requested that DOE delay the 

compliance date for certification until 

120 days from May 13, 2011, the day the 

Compliance Certification Management 

System (CCMS) templates for 

distribution transformers were 

published. (NEMA, No. 117.1 at p. 2) 

NEMA commented that such a 120 day 

delay is justified, reasonable and 

absolutely necessary, as any reporting 

represents a significant effort, both in 

time and labor; initial reporting even 

more so. Id. at pp 1–2. Similarly, NEMA 

requested DOE delay the enforcement of 

compliance reporting for metal halide 

lamp ballasts and fixtures until a date 

no earlier than September 1, 2012, 

because of the breadth of basic models 

covered and ballast testing 

requirements. (NEMA, No. 122.1 at pp. 

1–2) NEMA noted this date coincides 

with the annual reporting date, 

minimizing the burden of multiple 

reports within the same year. Id. at p. 2. 

DOE acknowledges that both 

distribution transformers and metal 

halide lamp ballasts and fixtures are 

unique markets. DOE understands, as 

noted by NEMA, that the distribution 

transformer market contains a great deal 

of customization, where many models 

are built-to-order. This can result in a 

large number of models requiring 

certification to DOE before distribution 

in commerce. DOE also understands it 

is common in the distribution 

transformer market to maintain many 

legacy models that were custom built for 

a given client instead of discontinuing 

them. DOE believes that manufacturers 

of distribution transformers will need 

sufficient time to review their records 

for legacy models to make sure that all 

models currently distributed in 

commerce are properly certified with 

the Department. As such, a large 

number of basic models may need to be 

certified in the initial certification 

report. 

Metal halide lamp ballasts and 

fixtures are also a unique market since 

the manufacturer of the metal halide 

lamp fixture is responsible for 

compliance and certification to the 

Department, but the standards are based 

on the ballast (i.e., one component of 

the fixture). While the testing 

procedures and standards for these 

products are already effective and any 

representations of the efficiency must be 

made using the existing test procedure, 

DOE believes manufacturers of metal 

halide fixtures may require additional 

time to submit the certification reports. 

Many of these manufacturers will need 

to gather data on the ballasts from their 

component suppliers before the 

certification reports can be completed. 

Rather than adopting a compliance 

date mid-month, DOE is delaying the 

compliance date for certification of 

distribution transformers and metal 

halide lamp ballasts and fixtures until 

October 1, 2011. This date provides 

slightly more time to allow for sufficient 

notice, data gathering, and certifying 

compliance, and addresses the concerns 

voiced by the manufacturers that they 

would be required to submit an annual 

certification report just a few months 

after the initial certification was due. 

D. Reporting Requirement During 

Interim Period 

In the April 2011 NOPR, the 

Department sought comment on 

whether a limited reporting requirement 

should be established for manufacturers 

receiving a compliance date extension 

for the certification reporting 

provisions. In response, numerous 

commenters stated their opposition to 

any such type of interim reporting 

requirement. AHRI asserted that DOE 

should not require registration with 

CCMS and the reporting of efficiency 

ratings before reasonable testing 

requirements and AEDM/ARM 

authorization and validation 

requirements have been clearly 

established, and manufacturers have 

been provided adequate time for 

compliance. (AHRI, No. 113.1 at p. 2) 

Hill Phoenix, NAMA, Lennox and 

Heatcraft were also opposed to reporting 

in the interim period. (Hill Phoenix, No. 

121.1 at p. 1; NAMA, No. 116.1 at p. 3; 

Lennox, No. 119.1 at p. 2; Heatcraft, No. 

124.1 at p. 2) 

AHRI further stated that 

manufacturers should not have to worry 

about being prosecuted for inaccurate 

ratings or reporting errors while DOE 

has yet to determine what product 

rating methods and procedures will be 

deemed acceptable. (AHRI, No. 113.1 at 

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Federal Register / Vol. 76, No. 126 / Thursday, June 30, 2011 / Rules and Regulations 38291 

p. 2) Lennox and Heatcraft noted that 

the new certification requirements 

already impose an additional significant 

reporting burden on manufacturers, and 

DOE should not impose still another 

reporting obligation on an interim basis. 

(Lennox, No. 119.1 at p. 2; Heatcraft, 

No. 124.1 at p. 2) Instead, manufacturers 

should be able to simply maintain in 

their files, accessible on request by DOE, 

records demonstrating that covered 

equipment is in compliance with 

applicable conservation standards. Id. 

NAMA argued that adding limited 

reporting requirements will complicate 

testing, cost valuable staff time and 

could slow accurate conclusion of 

testing procedures. (NAMA, No. 116.1 at 

p. 3) 

In response to these commenters, DOE 

desires to clarify that all products 

distributed in commerce must comply 

with the applicable energy conservation 

standards. Today’s rule delays the 

reporting requirements only; existing 

energy conservation standards, test 

procedures and sampling provisions are 

not affected by this rule. Therefore, 

during the interim period before 

compliance is required for compliance 

certification, manufacturers must 

maintain records to demonstrate that 

covered equipment meet the applicable 

conservation standards—even if the 

manufacturers’ determination of 

compliance was not made in accordance 

with DOE testing and sampling 

requirements. 

E. Timing of Annual Filing Deadline 

The March 2011 final rule added an 

annual certification requirement for all 

covered products and covered 

equipment currently subject to 

standards. The annual reporting 

requirement covers: (1) All discontinued 

basic models previously certified that 

have not previously been reported as 

discontinued (marked as discontinued); 

(2) all previously certified basic models 

that are still in distribution in commerce 

that are unchanged (marked as 

carryover); (3) all previously certified 

basic models that are still in distribution 

in commerce but for which the 

manufacturer needs to report new or 

changed information (marked as 

modified/revised) (e.g., new brand info, 

new or different model numbers, 

modified rating); and (4) any new 

models a manufacturer anticipates 

offering for distribution in commerce 

(marked as new). Lennox and Heatcraft 

requested DOE clarify the timing of the 

annual filing deadline of certificationrelated information (pursuant to 10 CFR 

429.12(d)) and the 18-month extension. 

(Lennox, No. 119.1 at p. 2; Heatcraft, 

No. 124.1 at p. 2) These commenters 

suggested that the first certification 

reports for covered equipment should 

not be due until the DOE-specified 

month following the expiry of the 18- 

month extension (and any requirement 

for submitting a certification report 

before distributing relevant covered 

equipment in commerce should also be 

deferred until that date). Id. Lennox and 

Heatcraft believe this approach would 

preserve DOE’s rolling submittal 

approach for annual reports and also 

clarify that a manufacturer is not 

required to submit a certification report 

twice in the first year that these reports 

are due. Id. With regard to timing, 

Carrier urged DOE to establish, once the 

AEDM procedures are amended, a 

subsequent effective date to actually 

conduct any required tests under the 

amended procedures. (Carrier, No. 114.1 

at p. 2) 

As discussed above, DOE is delaying 

the compliance date for the submittal of 

certification reports for certain 

commercial equipment. The annual 

certification requirement does not apply 

until the initial certification 

requirements are required. As an 

example, the earliest annual reporting 

deadline for commercial WH equipment 

will be May 1, 2013. 

F. Compliance and Enforcement 

DOE emphasizes that all covered 

equipment must meet the applicable 

energy conservation standard. 

Furthermore, all testing procedures and 

sampling provisions are unaffected by 

this final rule. DOE is adopting a 

delayed compliance date only for the 

reporting requirements in the March 

2011 final rule and only for the 

equipment types discussed above. 

DOE has also received questions 

regarding the compliance date for 

covered products and covered 

equipment, where compliance with the 

standards are not yet required, like 

general service incandescent lamps 

(GSILs). Covered products and covered 

equipment are not required to be 

certified until the compliance date of an 

applicable standard, so equipment such 

as GSILs and beverage vending 

machines are not required to be certified 

until the compliance date of the 

applicable energy conservation 

standard. Further, DOE is adopting 

clarifying language in today’s final rule, 

which makes it clear that certification is 

required by the compliance date of the 

initial set of applicable energy 

conservation standards. 

DOE encourages manufacturers to 

become familiar with the CCMS prior to 

the certification deadline. The CCMS 

requires users to apply to use the system 

by filling out a registration form, signing 

a compliance statement, and receiving a 

personal password. The CCMS has 

templates for all covered products and 

covered equipment available for 

manufacturers to use when submitting 

certification data to DOE. The 

Department encourages manufacturers, 

to the extent possible, to fill out these 

templates in advance of the compliance 

date in case questions arise. 

G. Technical Amendments 

DOE is modifying the regulatory text 

for cast-iron sectional boilers and hot 

water boilers (429.18), vented hearth 

heaters (429.22), general service 

incandescent lamps (429.27), and 

refrigerated bottled or canned beverage 

vending machines (429.52) to remove 

the reference to the conservation 

standards compliance date. Because 

DOE has added new regulatory text in 

section 429.12 explicitly stating for all 

product categories that certification is 

not required until compliance with a 

standard is required, the productspecific regulatory text is now 

redundant. 

DOE is also deleting the regulatory 

text in section 429.35 requiring 

reporting and record retention relating 

to production dates for compact 

fluorescent lamps. That requirement 

was inadvertently added in the March 

2011 final rule. Because there is no 

sampling requirement related to dates 

for compact fluorescent lamps, there is 

no purpose to this information. 

III. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Order 12866 

Today’s regulatory action is not a 

‘‘significant regulatory action’’ under 

section 3(f) of Executive Order 12866. 

Accordingly, this action was not subject 

to review under the Executive Order by 

the Office of Information and Regulatory 

Affairs (OIRA) in the Office of 

Management and Budget (OMB). 

B. Administrative Procedure Act 

DOE has determined, pursuant to 

authority at 5 U.S.C. 553(b)(B), that 

there is good cause to waive the 

requirement to provide prior notice and 

an opportunity for comment concerning 

two technical amendments described in 

section G above as such procedures 

would be unnecessary. Both technical 

amendments merely conform the 

existing text to previously existing or 

newly added regulatory text without 

adding any new substantive 

requirements. These amendments are of 

a type in which the public would not be 

particularly interested or for which an 

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38292 Federal Register / Vol. 76, No. 126 / Thursday, June 30, 2011 / Rules and Regulations 

opportunity for comment would serve 

any purpose. 

DOE has determined, pursuant to 

authority at 5 U.S.C. 553(d)(1), that this 

final rule is not subject to a 30-day 

effective date because this rule 

extending the compliance date for 

requirement relieves a restriction. 

C. 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 (IFRA) for any rule that by law 

must be proposed for public comment, 

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 DOE 

rulemaking process. 68 FR 7990. DOE 

has made its procedures and policies 

available on the Office of the General 

Counsel’s Web site: http:// 

www.gc.doe.gov. 

DOE reviewed this rule under the 

provisions of the Regulatory Flexibility 

Act and the procedures and policies 

published on February 19, 2003. This 

rule merely extends the compliance date 

of a rulemaking already promulgated. 

To the extent such action has any 

economic impact it would be positive in 

that it would allow regulated parties 

additional time to come into 

compliance. DOE did undertake a full 

regulatory flexibility analysis of the 

original Certification, Compliance, and 

Enforcement for Consumer Products and 

Commercial and Industrial Equipment 

rulemaking. That analysis considered 

the impacts of that rulemaking on small 

entities. As a result, DOE certifies that 

this rule will not have a significant 

economic impact on a substantial 

number of small entities. 

D. Review Under the National 

Environmental Policy Act 

DOE has determined that this rule 

falls into a class of actions that are 

categorically excluded from review 

under the National Environmental 

Policy Act of 1969 (42 U.S.C. 4321 et 

seq.) and DOE’s implementing 

regulations at 10 CFR part 1021. 

Specifically, this rule amends an 

existing rule without changing its 

environmental effect and, therefore, is 

covered by the Categorical Exclusion in 

10 CFR part 1021, subpart D, paragraph 

A5. Accordingly, neither an 

environmental assessment nor an 

environmental impact statement is 

required. 

IV. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s final rule. 

List of Subjects in 10 CFR Part 429 

Confidential business information, 

Energy conservation, Household 

appliances, Imports, Reporting and 

recordkeeping requirements. 

Issued in Washington, DC, on June 21, 

2011. 

Kathleen Hogan, 

Deputy Assistant Secretary for Energy 

Efficiency, Office of Technology 

Development, Energy Efficiency and 

Renewable Energy. 

For the reasons set forth in the 

preamble, DOE amends part 429 of 

chapter II of Title 10 of the Code of 

Federal Regulations to read as follows: 

PART 429—CERTIFICATION, 

COMPLIANCE, AND ENFORCEMENT 

FOR CONSUMER PRODUCTS AND 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for Part 429 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. Revise § 429.12 by adding a new 

paragraph (i) to read as follows: 

§ 429.12 General requirements applicable 

to certification reports. 

* * * * * 

(i) Compliance dates. For any product 

subject to an applicable energy 

conservation standard for which the 

compliance date has not yet occurred, a 

certification report must be submitted 

not later than the compliance date for 

the applicable energy conservation 

standard. The following covered 

products are subject to delayed 

compliance dates for certification: 

(1) Commercial refrigeration 

equipment, December 31, 2012; 

(2) Commercial heating, ventilating, 

and air-conditioning equipment, 

December 31, 2012; 

(3) Commercial water heating 

equipment, December 31, 2012; 

(4) Walk-in coolers and freezers, 

October 1, 2011; 

(5) Distribution transformers, October 

1, 2011; and 

(6) Metal halide lamp ballasts and 

fixtures, October 1, 2011. 

§ 429.18 [Amended] 

■ 3. Amend § 429.18(b)(2)(ii) and (b)(3) 

by removing the words, ‘‘no later than 

September 1, 2012’’. 

§ 429.22 [Amended] 

■ 4. Amend § 429.22(b)(2) by removing 

the last sentence. 

§ 429.27 [Amended] 

■ 5. Amend § 429.27(b)(2)(iii) by 

removing the phrase, ‘‘On or after the 

effective dates specified in § 430.32,’’. 

§ 429.35 [Amended] 

■ 6. Section 429.35 is amended: 

■ a. In paragraph (b)(1) by removing 

‘‘bare of’’ and adding in its place ‘‘bare 

or’’; 

■ b. In paragraph (b)(2) by removing the 

text, ‘‘production dates for the units 

tested,’’; and 

■ c. By removing paragraph (c). 

■ 7. Revise § 429.42(b)(2)(iii) to read as 

follows: 

§ 429.42 Commercial refrigerators, 

freezers, and refrigerator-freezers. 

* * * * * 

(b) * * * 

(2) * * * 

(iii) Remote condensing commercial 

refrigerators, freezers, and refrigeratorfreezers, self-contained commercial 

refrigerators, freezers, and refrigeratorfreezers without doors, commercial icecream freezers, and commercial 

refrigeration equipment with two or 

more compartments (i.e., hybrid 

refrigerators, hybrid freezers, hybrid 

refrigerator-freezers, and non-hybrid 

refrigerator-freezers): The maximum 

daily energy consumption in kilowatt 

hours per day (kWh/day), the total 

display area (TDA) in feet squared (ft2) 

or the chilled volume in cubic feet (ft3) 

as necessary to demonstrate compliance 

with the standards set forth in § 431.66, 

the rating temperature in degrees 

Fahrenheit (°F), the operating 

temperature range in degrees Fahrenheit 

(e.g., ≥32 °F, <32 °F, and ≤¥5 °F), the 

equipment family designation as 

described in § 431.66, and the 

condensing unit configuration. 

■ 8. Revise § 429.52(b)(2) to read as 

follows: 

§ 429.52 Refrigerated bottled or canned 

beverage vending machines. 

* * * * * 

(b) * * * 

(2) Pursuant to § 429.12(b)(13), a 

certification report shall include the 

following public product-specific 

information: The maximum average 

daily energy consumption in kilowatt 

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Federal Register / Vol. 76, No. 126 / Thursday, June 30, 2011 / Rules and Regulations 38293 

1See Exchange Act Release No. 63241 (Nov. 3, 

2010), 75 FR 69792 (Nov. 15, 2010) (‘‘Rule 15c3– 

5 Adopting Release’’). 

2Rule 15c3–5 applies to trading in all securities 

on an exchange or ATS. Id. at 69765. 

3See 17 CFR 240.15c3–5(c)(1). 

4See 17 CFR 240.15c3–5(c)(2). 

5See 17 CFR 240.15c3–5(c)(1)(i). 

6See 17 CFR 240.15c3–5(c)(1)(ii). 

7See 17 CFR 240.15c3–5(c)(2)(i). 

8See 17 CFR 240.15c3–5(c)(2)(ii). 

9See 17 CFR 240.15c3–5(c)(2)(iii). 

10See 17 CFR 240.15c3–5(c)(2)(iv). 

11See letter from Manisha Kimmel, Executive 

Director, Financial Information Forum, to David 

Shillman, Associate Director, Division of Trading 

and Markets (‘‘Division’’), Commission, dated April 

15, 2011; see also letters from Sean Davy, Managing 

Director, et al., Securities Industry and Financial 

Markets Association, to Robert Cook, Director, 

Division, Commission, dated April 21, 2011; and 

Stephen Merkel, Chairman, Wholesale Markets 

Brokers’ Association, Americas, to Robert Cook, 

Director, Division, Commission, dated May 31, 

2011. 

12 Id. 

hours per day (kWh/day), the 

refrigerated volume (V) in cubic feet (ft3) 

used to demonstrate compliance with 

standards set forth in § 431.296, the 

ambient temperature in degrees 

Fahrenheit (°F), and the ambient relative 

humidity in percent (%) during the test. 

[FR Doc. 2011–16143 Filed 6–29–11; 8:45 am] 

BILLING CODE 6450–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 240 

[Release No. 34–64748; File No. S7–03–10] 

RIN 3235–AK53 

Risk Management Controls for Brokers 

or Dealers With Market Access 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Final rule; limited extension of 

compliance date for certain 

requirements. 

SUMMARY: The Commission is extending 

the compliance date for certain recently 

adopted requirements of Rule 15c3–5 

under the Securities Exchange Act of 

1934 (‘‘Exchange Act’’). Specifically, the 

Commission is extending the 

compliance date, until November 30, 

2011, for all of the requirements of Rule 

15c3–5 for fixed income securities, and 

the requirements of Rule 15c3–5(c)(1)(i) 

for all securities. The compliance date 

remains July 14, 2011 for all provisions 

of Rule 15c3–5 not subject to this 

limited extension. Among other things, 

Rule 15c3–5 requires broker-dealers 

with access to trading securities directly 

on an exchange or alternative trading 

system (‘‘ATS’’), including those 

providing sponsored or direct market 

access to customers or other persons, 

and broker-dealer operators of an ATS 

that provide access to trading securities 

directly on their ATS to a person other 

than a broker-dealer, to establish, 

document, and maintain a system of risk 

management controls and supervisory 

procedures that, among other things, is 

reasonably designed to systematically 

limit the financial exposure of the 

broker-dealer that could arise as a result 

of market access, and ensure 

compliance with all regulatory 

requirements that are applicable in 

connection with market access. 

The Commission is extending the 

compliance date for all of the 

requirements of Rule 15c3–5 for fixed 

income securities, and the requirements 

of Rule 15c3–5(c)(1)(i) for all securities 

to give broker-dealers with market 

access additional time to develop, test, 

and implement the relevant risk 

management controls and supervisory 

procedures required under the Rule. 

DATES: The effective date for this release 

is June 30, 2011. The effective date for 

Rule 15c3–5 remains January 14, 2011. 

The compliance date is extended to 

November 30, 2011, for all of the 

requirements of Rule 15c3–5 for fixed 

income securities, and the requirements 

of Rule 15c3–5(c)(1)(i) for all securities. 

The compliance date remains July 14, 

2011, for all provisions of Rule 15c3–5 

not subject to the limited extension. 

FOR FURTHER INFORMATION CONTACT: 

Theodore S. Venuti, Senior Special 

Counsel, at (202) 551–5658; Marc F. 

McKayle, Special Counsel, at (202) 551– 

5633; and Daniel Gien, Special Counsel, 

at (202) 551–5747, Division of Trading 

and Markets, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–7010. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

On November 3, 2010, the 

Commission adopted Rule 15c3–5 under 

the Exchange Act.1 Among other things, 

Rule 15c3–5 requires each broker-dealer 

with access to trading securities 2

directly on an exchange or ATS, 

including a broker-dealer providing 

sponsored or direct market access to 

customers or other persons, and each 

broker-dealer operator of an ATS that 

provides access to trading securities 

directly on their ATS to a person other 

than a broker-dealer, to establish, 

document, and maintain a system of risk 

management controls and supervisory 

procedures that, among other things, is 

reasonably designed to (1) 

systematically limit the financial 

exposure of the broker-dealer that could 

arise as a result of market access,3 and 

(2) ensure compliance with all 

regulatory requirements that are 

applicable in connection with market 

access.4 The required financial risk 

management controls and supervisory 

procedures must be reasonably designed 

to prevent the entry of orders that 

exceed appropriate pre-set credit or 

capital thresholds,5 or that appear to be 

erroneous.6 The regulatory risk 

management controls and supervisory 

procedures must also be reasonably 

designed to prevent the entry of orders 

unless there has been compliance with 

all regulatory requirements that must be 

satisfied on a pre-order entry basis,7

prevent the entry of orders that the 

broker-dealers or customer is restricted 

from trading,8 restrict market access 

technology and systems to authorized 

persons,9 and assure appropriate 

surveillance personnel receive 

immediate post-trade execution 

reports.10

The Commission understands that, as 

broker-dealers with market access have 

worked to meet the July 14, 2011 

compliance date, some have determined 

that additional time is needed to 

implement effective policies and 

procedures and complete the systems 

changes necessary to comply with 

certain requirements of Rule 15c3–5. 

The Financial Information Forum 

(‘‘FIF’’), the Securities Industry and 

Financial Markets Association 

(‘‘SIFMA’’), and the Wholesale Market 

Brokers’ Association (‘‘WMBA’’) have 

submitted letters requesting that the 

Commission extend the compliance date 

for those requirements.11 Specifically, 

FIF, SIFMA, and WMBA have indicated 

that more time is needed to comply with 

Rule 15c3–5(c)(1)(i), which requires the 

implementation of risk management 

controls and supervisory procedures 

that are reasonably designed to prevent 

the entry of orders that exceed 

appropriate pre-set credit or capital 

thresholds, because the type of controls 

required by the Rule are not currently in 

place at many broker-dealers, and 

developing and implementing 

appropriate controls in this area can be 

a complex exercise.12 In addition, they 

have indicated that more time is needed 

generally to comply with the 

requirements under Rule 15c3–5 with 

respect to fixed income securities, 

because the type of pre-trade controls 

required by the Rule have generally not 

been used in the fixed income market, 

and developing and implementing 

controls that appropriately account for 

the differences in fixed income trading 

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