February 14, 2011

Submitted Electronically

The Honorable Lisa Jackson

Administrator Environmental Protection Agency 1200 Pennsylvania Avenue, NW Washington, DC 20460

RE: Protection of Stratospheric Ozone: Amendments t o the Section 608 Leak Repair Requirements

Docket ID No. EPA-HQ-OAR-2003-0167

On December 15, 2010, the Environmental Protection Agency (EPA or Agency) published in the Federal Register for comment a proposed rule which would amend the leak repair regulations promulgated under Section 608 of the Clean Air Act Amendments of 1990 (the “Proposed Rule). 1

The Proposed Rule lowers the leak repair trigger ra tes, changes certain definitions and imposes a new follow-up verification test and three strike ru le for commercial refrigeration and comfort cooling appliances among other things.

The Food Marketing Institute (FMI) appreciates the opportunity to respond to the request of EPA for comments on the Proposed Rule. FMI’s comments will focus on changes to definitions in current regulations, the follow-up verification tes t requirement, the three strikes rule and new recordkeeping requirements.

FMI is the national trade association that conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1 ,500 member companies – food retailers and

wholesalers – in the United States and around the w orld. FMI’s members in the United States operate approximately 26,000 retail food stores and 14,000 pharmacies. Their combined annual sales volume of $680 billion represents three-quart ers of all retail food store sales in the United States. FMI’s retail membership is composed of lar ge multi-store chains, regional firms, and independent supermarkets. Our international member ship includes 200 companies from more than

1 75 Fed. Reg. 78558 (December 15, 2010).FMI Comments

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50 countries. FMI’s associate members include the supplier partners of its retail and wholesale

members.

I. Background

Properly Working Equipment is Essential to Success

Properly functioning commercial refrigeration equip ment is essential to the success of food retailers and wholesalers. The industry takes the utmost car e to prevent leaks in commercial refrigeration equipment. Retailers and wholesalers go to great l engths to detect and repair leaks as quickly as possible. The bottom line is that refrigerant leak s are bad for business. Retailers and wholesalers

do not have an incentive to let them continue witho ut repair.

First, leaks may result in temperature increases in cases and boxes which leads to loss of product and creates food safety hazards. Second, when case s and boxes are out of service, fewer perishable products can be stored or offered to consumers, imp osing significant costs and inconveniencing shoppers. Third, loss of the refrigerant itself is costly to firms in the industry.

Refrigeration Systems are Monitored Vigilantly

Competition in the supermarket industry is fierce. Retailers and wholesalers know that in order to succeed in the marketplace, they have to deliver th e freshest food possible to meet consumer demands. As commercial refrigeration is the lifebl ood of the industry, retailers and wholesalers vigilantly watch refrigeration systems for signs of leaks. For example retailers today monitor case temperatures at store locations remotely for signs of anomalies. The temperature of cases on store floors may be monitored from a central location ten s, hundreds or even thousands of miles away. When an anomalous temperature is detected, it is in vestigated, and a technician is sent to diagnose and repair the equipment if necessary. Not only ar e temperatures monitored constantly, retailers and wholesalers also deploy leak detectors near cri tical points in a system. Similarly, these detectors may be monitored remotely with an alert s ent to a central location when refrigerants are detected. Refrigerant levels are checked remotely as well.

The supermarket industry goes to these great length s to monitor refrigeration systems not because of regulatory mandates, but rather, because they wi sh to provide consumers with the safest and freshest food possible. Also, the industry recogni zes the importance of environmental sustainability and views leak prevention as one way to make stores more environmentally friendly.FMI Comments

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Voluntary Initiatives

FMI has had a long history of addressing leak issue s and our Energy and Store Development Committee has—and continues to play a key role—in e stablishing best practices for the industry. The industry also values its partnership with EPA i n the GreenChill program. We believe voluntary partnerships like GreenChill and the implementation of industry best practices are achieving many of the goals EPA seeks to attain in the Proposed Ru le.

We believe that these means, rather than burdensome regulations, are the way to move forward in continuing to reduce the emissions of ozone-depleti ng substances (ODS).

II. Regulatory Analysis: E.O. 13563, §7617 and the RFA

In Executive Order 13563, President Obama ordered t hat:

Our regulatory system . . . must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends. . . As stated in (Executive Order 12866) . . . each agency mus t . . . propose or adopt a regulation only upon a reas oned determination that its benefits justify its co sts. . . (and) tailor its regulations to impose the least burden on society. 2

EPA has additional obligations to consider less bur densome regulatory alternatives. Pursuant to 42 USC §7617, the Administrator is required to conside r in this rulemaking:

the costs of compliance with any such standard or r egulation, including the extent to which the costs of compliance will vary depending on . . . the de velopment of less expensive, more efficient means or methods of compliance with the standard or regul ation. . . the effects on competition of the standard or regulation with respect to small busine ss; the effects of the standard or regulation on

consumer costs . . .

In addition to §7617, EPA is required to consider t he impact of the Proposed Rule on small

businesses and assess less burdensome alternatives pursuant to the Regulatory Flexibility Act (RFA). 3 The Administrator has certified that the Proposed Rule will not have a significant economic impact on a substantial number of small entities. This is simply not the case. As explained later, the Proposed Rule will h ave a very significant impact on thousands of small business grocers, costing them hundreds or thousands of more dollars per repair. EPA has failed to meet its obligations under the RF A. The Agency must conduct a proper initial regulatory flexibility analysis which fully considers the impact of the Proposed Rule

on small firms and considers less burdensome altern atives.

2 Executive Order 13563 (January 18, 2011).

3 5 U.S.C. §601 et seq.FMI Comments

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FMI believes that if EPA follows the recommendation s contained within these comments it will develop a regulation in a manner consistent wi th the principles articulated by President

Obama in E.O 13563. Our recommendations will resul t in less expensive and more efficient means of compliance for small and large firms as th e Administrator must consider under §7617 and the RFA.

III. Proposed Revisions to the Leak Repair Regulati ons

FMI understands the stated intent in the Proposed R ule is to break the cycle of repeat repairs and recharges on a refrigeration appliance. This is di scussed extensively in the preamble, and made clear by the following items in the proposed amendm ents:

• The inclusion of the word “all” in §82.156(i) & 82. 156(j) regarding leaks to be repaired in an appliance with a leak rate in excess of the trig ger rate

• The requirement for leak verification testing in §8 2.156(i)(2) & 82.156 (j)(2)

• The three-strike rule §82.156 (i)(4) & 82.156 (j)(4 )

Definition of Appliance

FMI believes that the definition of “appliance” in the Proposed Rule is overly broad, and places an undue and unnecessary burden on owners/operators of systems typical of those found in a supermarket. This burden makes the Proposed Rule i nconsistent with E.O. 13563.

EPA defines both “Comfort Cooling Appliance” and “C ommercial Refrigeration Appliance” in §82.152. 4 The definitions are vague, but would seem to regard a supermarket system in its entirety as a single appliance. The implication of this in implementing EPA’s remedy to retire or retrofit an “appliance” with a leak rate exceeding 20% and fail ing the three strike rule would be to replace or retrofit all cases, unit coolers, condensers, compr essor systems and interconnecting piping that comprise the full system. We consider this to be a n unduly burdensome and wasteful remedy. This is especially true when considering a typical super market scenario where the failed portion of the system might be a discrete piece of equipment (e.g. an air-cooled condenser) that may be of much older vintage than other fully functional and compl iant parts of the system that had been replaced in

a recent remodel.

4 Comfort cooling appliance means any air-conditioning appliance used to provid e cooling in order to control heat and/or humidity in facilities such as office buildi ngs and computer rooms. Commercial refrigeration appliance means any refrigeration appliance used to store perishabl e goods in retail food, cold storage warehousing, o r any other sector requiring cold storage. Retail food includes the r efrigeration equipment found in supermarkets, groce ry and convenience stores, restaurants, and other food ser vice establishments. Cold storage includes the ref rigeration equipment used to house perishable goods or any man ufactured product requiring refrigerated storage.FMI Comments

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We see two options for addressing the concern over the present definition:

One option would be to somewhat broaden the definit ion of component, and alter the regulations such that they would impose the follow-up verificat ion test requirement and the retire option to failed components rather than the whole appliance.

A proposed broader definition for “Component” reads as follows:

“A factory-made assembly or device that serves a si ngle, or limited, function as part of a Comfort Cooling or Refrigeration Appliance”

“This definition is intended to include, but not be limited to, evaporators, condensers, refrigerant compressors, refrigerant control valves and piping in a self-contained appliance, or refrigerated merchandising or storage fixtures, unit coolers, air-handlers, condensers, heat exchangers, condensing units, compressor systems an d refrigerant piping that interconnects two factory-made assemblies or devices located remo tely from one another in a field-erected system.”

With this definition, we believe the Agency’s inten t is satisfied by revising §82.156(i)(4) and §82.156(j)(4), among others, to limit the “retire” option to a component rather than the complete appliance. It is FMI’s intention that this broader definition of Component only be incorporated in conjunction with these additional revisions to the regulations.

The second, and our recommended option, would be to constrain the definition of appliance with more technically precise language that doesn’t capt ure a field-erected, supermarket type, system in its entirety. We see this as the most straight-for ward approach, though additional revisions to the regulations would be necessary (e.g. leak rate defi nition, §82.156(i), §82.156(j)) so that the use of the newly defined terms would not alter the intent of the regulations.

Our proposal for new definitions follows. These re quire the definition of a new term “Engineered System.” An Engineered System is typical of those systems used in the supermarket industry. These definitions borrow some language from ASHRAE, 5 which is generally recognized by governments and regulatory agencies as the authorit ative source of standards for the industry.

• A proposed alternate definition for “Commercial Ref rigeration Appliance” reads as follows:

“A factory-made assembly of refrigeration Component s that function to extract heat from or reject heat to a space or substance, or to compress a refrigerant vapor, for the purposes of

5 American Society of Heating, Refrigerating and Air Conditioning EngineersFMI Comments

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storing perishable goods in retail food, cold stora ge warehousing, or any other sector requiring cold storage.”

“This definition is intended to include, but not be limited to, self-contained refrigeration equipment, and remote refrigerated merchandising or storage fixtures, unit coolers, condensers, condensing units and compressor systems used in an Engineered System.”

• A proposed alternate definition for “Comfort Coolin g Appliance” reads as follows:

“A factory-made assembly of refrigeration Component s that function to control air temperature and/or humidity in facilities such as o ffice buildings and computer rooms.”

“This definition is intended to include, but not be limited to packaged indoor or outdoor airconditioning units, and air-handlers, condensers, c ondensing units and compressor systems used in an Engineered System.”

• A proposed alternate definition for “Component” rea ds as follows:

“A factory-made assembly or device that serves a si ngle, or limited, function as part of a Comfort Cooling Appliance, Refrigeration Appliance or Engineered Refrigeration System.”

“This definition is intended to include, but not be limited to, evaporator, condenser or heat recovery heat exchangers, refrigerant compressors, refrigerant control valves, or refrigerant piping that interconnects two components located re motely from one another in a fielderected Engineered System.”

• A proposed new definition for “Engineered System” r eads as follows:

“A field-erected refrigeration or comfort cooling s ystem comprised of multiple appliances or Components interconnected by refrigerant piping, forming a closed circuit in which refrigerant is circulated between one or more evapo rators and a central condenser”

The above definitions would allow owners/operators of engineered systems to implement the “retire” option for a three-strike failed appliance (e.g. refrigerated merchandiser, condenser, etc) rather than the entire system.

Follow-up Verification

Contrary to EPA’s expectations, FMI believes that a follow-up verification as defined in the proposed amendments would have almost no value in r educing refrigerant emissions. ThisFMI Comments

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amendment would require that the effectiveness of r epairs made at a specific leak site be validated by test (e.g. soap bubbles, electronic leak detecti on, etc) within 30 days, but no sooner than 24 hours after the repair is made. It would be an ext remely rare event for the repair of a specific leak site, having passed a verification test immediately following the appliance’s return to normal operating characteristics and conditions, to subseq uently fail within the presently prescribed followup window.

A technician’s reputation is on the line with every service call. Retailers and wholesalers do not tolerate shoddy work. Technicians know that if the ir repairs fail regularly, they will lose the

business of retailer or wholesaler. Firms in the i ndustry expect the job to be done correctly the fir st

time.

The 24 hour waiting period proposed by the Agency f or the follow-up verification does essentially nothing to reduce ODS emissions, yet it imposes a v ery large cost on food retailers and wholesalers.

It is important to view the philosophy of the Propo sed Rule in other contexts. Say for example, the Proposed Rule applied to the cars of Americans. Af ter the repair of every leaky hose and blown gasket, Americans would be required to take their c ars back to the garage or dealership the next day

or sometime within the next month to have the hose or gasket checked. The burden would vastly outweigh any benefit accrued to society.

FMI does not oppose EPA's proposed amendment to ext end the follow-up verification test requirement to commercial refrigeration appliances; however, we believe the test should be able to be conducted at any point an appliance has returned to normal operating characteristics and conditions within 30 days of the date of the repair , rather than imposing a 24 hour waiting period before such test may be conducted.

For the owner/operator of a supermarket system, pro viding access to a repair site often means removing perishable product from a merchandising fi xture. The service cost of a follow-up inspection, the cost of store labor and the cost of lost revenue that results from removing saleable product from a merchandising fixture are far in exc ess of the benefit gained by imposing a 24 hour waiting period for a follow-up verification test.

The typical service call for a technician lasts abo ut 4 hours, and often they are significantly longer

. It is essential for EPA to contemplate that a techn ician in many circumstances may have to drive an hour or two to visit a store location, and then an hour or two back. Thousands of small, independent retailers are locat ed in small towns that do not have resident certified refrigeration technicians. For many of t hese retailers, the closest technician may be a six hour or more drive away. These retailers face chal lenges in getting technicians to drive vast distances to make a repair in the first place. Req uiring these retailers to bring a technician back t oFMI Comments

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check on a previously made repair will be nearly im possible. If the Agency decides to promulgate the follow-up verification requirement as written i n the Proposed Rule, under these circumstances a retailer would effectively be forced to pay a techn ician to stay overnight to comply with the 24 hour waiting period.

With contractor rates averaging $90 to more than $1 00 an hour, the follow-up verification requirement will cost retailers and wholesalers hun dreds or thousands of dollars more for each leak repair in addition to the costs of lost revenue and store labor described above. Pulling a case for repair requires significant amounts of store labor. If the 24 hour waiting period is implemented, it is likely that retailers will leave a case pulled f or that entire period, which not only leads to lost revenue, but inconveniences consumers. Small busin esses will bear a significant share of this burden. The economic analysis conducted for the Pr oposed Rule has failed to contemplate the costs of the 24 hour waiting period for the follow-up ver ification test.

FMI believes that a follow-up verification test as specified would have a very significant cost—far

in excess of the incremental benefit—and a cost not adequately contemplated by EPA.

A proposed alternate definition for Follow-up Verif ication Test reads as follows:

“A test that validates the effectiveness of repairs within 30 days of the appliance’s return to normal operating characteristics and conditions”

Availability of Records

Clarification of the recordkeeping requirements of §82.166 is requested to confirm that full system charge, leak rate calculations, leak verification t ests, etc, summarized or transcribed from original

service records and available on-site in electronic format, is acceptable to EPA, provided that the

source documents can be made available to EPA withi n some reasonable period of time (e.g. 30 days). Requiring the maintenance of paper records would be unnecessarily burdensome.

Retrofit/Retire Requirements

If EPA does decide to move forward in extending ret rofit/retirement requirements to commercial refrigeration and comfort cooling appliances, FMI p refers the second option proposed by EPA that would allow owners or operators to decide on a case -by-case basis if a component or its subassembly requires replacement in order to comple tely repair the appliance because it will reduce the odds that replacement of a component is require d in circumstances where it is not necessary or

warranted.FMI Comments

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Three Strikes Rule

The Proposed Rule requires the retrofit to a refrig erant or substitute with a lower ODP, or retirement an appliance, if it fails three initial or follow-up verifications during a consecutive six

month period. We have serious concerns with this p rovision of the rule as written. We believe the three strikes rule should be stricken from the Prop osed Rule. However, if EPA does decide craft a final rule with this provision, unless the definiti on of appliance is significantly changed, as discussed earlier, this provision will impose enorm ous—and unnecessary—burdens on the supermarket industry. Strikes should only be appli ed and aggregated towards components individually, and not a system in its entirety. F or example, three leaks in a particular component o r causally related to one component would trigger the requirement to replace that component.

Extension to Repair Timelines

The Proposed Rule grants owners or operators of com fort cooling and commercial refrigeration appliances the same flexibility as owners or operat ors of industrial process refrigeration appliances when requesting additional time to make repairs due to the unavailability of parts or components or when other applicable regulations make repair withi n the 30 day timeframe impossible. FMI applauds EPA for granting owners or operators of co mfort cooling and commercial refrigeration equipment this additional flexibility.

Seasonal Variances

The Proposed Rule specifies that owners or operator s of commercial appliances may take seasonal variances into account in determining the full char ge of an appliance. FMI supports EPA for making this change to the existing regulation.

Leak Repair Clock

FMI supports EPA’s change to the definition of leak rate whereby the leak repair clock for a leak event is stopped after successful initial verificat ion and follow-up verification and documentation of repairs for all leaks.

Effective Date

Implementing the Proposed Rule will be a very compl ex undertaking. FMI requests an effective date of 18 months after the date of publication of a final rule in the Federal Register.FMI Comments

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FMI appreciates the opportunity to comment on this important matter and looks forward to working with EPA to continue further reducing emissions of ODS.

Sincerely,

Erik R. Lieberman Regulatory Counsel