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Washington, DC, 20585. Those
stakeholders who want to attend the public meeting should notify Ms. Brenda Edwards-Jones at (202) 586

– 2945. Foreign nationals visiting DOE Headquarters are subject to advance security screening procedures, requiring a 30-day advance notice. A foreign national who wishes to participate in the meeting, must tell DOE of this fact as soon as possible by contacting Ms. Brenda Edwards-Jones to initiate the necessary procedures.

B. Procedure for Submitting Requests To Speak

Any person who has an interest in today ’ s notice, or who is a representative of a group or class of persons that has an interest in these issues, may request an opportunity to make an oral presentation. Hand-deliver requests to speak, along with a computer diskette or CD in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format, to the address shown at the beginning of this advance notice of proposed rulemaking between the hours of 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. They may be submitted by mail or e-mail to: Brenda.Edwards-Jones@ee.doe.gov.

Persons requesting to speak should briefly describe the nature of their interest in this rulemaking and provide a telephone number for contact. The Department requests persons selected to be heard to submit an advance copy of
their statements at least two weeks before the public meeting. At its discretion, DOE may permit persons who cannot supply an advance copy of their statement to participate, if that person has made advance alternative arrangements with the Building Technologies Program. The request to give an oral presentation should ask for such alternative arrangements.

C. Conduct of Public Meeting

The Department 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
5 U.S.C. 553 and section 336 of EPCA. (42 U.S.C. 6306) A court reporter will be present to record the transcript of the proceedings. The Department reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. 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. The Department will present summaries of comments received before the public meeting, allow time for presentations by participants, and encourage all interested parties to share their views on issues affecting this rulemaking. Each participant will be allowed to make a prepared general statement (within time limits determined by DOE), before the discussion of specific topics. The Department will permit 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. Department representatives may also ask questions of participants concerning other matters relevant to the public meeting. 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.

The Department will make the entire record of this rulemaking, including the transcript from the public meeting, available for inspection at the U.S. Department of Energy, Forrestal Building, Room 1J

– 018 (Resource Room of the Building Technologies Program), 1000 Independence Avenue, SW., Washington, DC, (202) 586

– 9127, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Any person may buy a copy of the transcript from the transcribing reporter.

D. Submission of Comments

The Department will accept comments, data, and information regarding the ANOPR before or after the public meeting, but no later than the date provided at the beginning of this advance notice of proposed rulemaking. Please submit comments, data, and information electronically. Send them to the following e-mail address:
commercialaircon ditioner.anopr@ee.doe.gov. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format and avoid the use of special characters or any form of encryption.
Comments in electronic format shouldbe identified by the docket number EERM/STD

– 01

– 375, and wherever possible carry the electronic signature of
the author. Absent an electronic signature, comments submitted electronically must be followed and authenticated by submitting the signed original paper document. No telefacsimiles (faxes) will be accepted.

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 two copies: One copy of the document including all the information believed to be confidential, and one copy of the document with the
information believed to be confidential deleted. The Department of Energy will
make its own determination about the
confidential status of the information and treat it according to its
determination.

Factors of interest to the Department 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.

E. Issues on Which DOE Seeks Comment

The Department is particularly interested in receiving comments (including data) concerning:

1. Approaches to Analyses for Split Systems, Heat Pumps, and Niche Equipment

The Department assumes that the cost/efficiency relationship forcommercial single-package unitary airconditioning equipment in the ANOPRis similar to that of commercial split airconditioning systems. Is this a reasonable assumption for the DOE to make in its approach to developing the cost/efficiency curves? ( See section II.C.1 of this ANOPR for details.)

This ANOPR and the analyses detailed in the accompanying TSD address only commercial unitary air conditioning equipment. The Department proposes to address energy efficiency standards for commercial unitary heat pump equipment in a way
that is consistent with the ASHRAE methodology used to set the ASHRAE/
IESNA Standard 90.1

– 1999 levels for unitary air conditioning systems with


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heat pump heating. The Department requests comments on this proposed approach. ( See section II.C.1 of this ANOPR for details.)

The Department did not consider any niche equipment classes in the engineering analysis. Should the Department consider any niche classes of commercial unitary air conditioning equipment ( e.g. , portable units and explosion-proof/hazardous-duty units)
that would fall under the definitions of either small unitary air conditioner, large unitary air conditioner, small unitary heat pump, or large unitary heat pump, in section I.C.3. of this ANOPR, apart from these general classes of commercial unitary air-conditioning equipment?

2. Alternative Refrigerant Analysis

The Department based its alternative refrigerant analysis on the use of R

–410a refrigerant. The Department concluded that the incremental manufacturing cost and efficiency relationship derived for equipment using R

– 22 refrigerant would not be substantially different for equipment using R

– 410a. The Department requests data concerning the incremental cost/efficiency relationship associated with the use of

R

–410a in commercial unitary air conditioners. Also, the Department requests stakeholders to identify and provide similar information for any other alternative refrigerants DOE should consider. ( See section II.C.5 of this ANOPR for details.)

3. Candidate Standards Levels

The Department has identified candidate energy efficiency standards levels ranging from 10.0 to 12.0 EER. The Department seeks comments on these efficiency standards levels and any other alternatives it should consider. ( See sections III. and II.G.4 of this ANOPR for details.)

4. Design-Option Analysis and Maximum Energy Efficiency Levels

Because there were no commercial unitary air conditioners that had efficiencies beyond 11.5 EER when the Department conducted its engineering analysis for commercial unitary air
conditioners rated ≥ 65,000 Btu/h through <240,000 Btu/h, the Department had to rely on its design-option analysis modeling to estimate the manufacturing cost and efficiency relationship beyond 11.5 EER. The Department requests comments from stakeholders on: (1) Whether the design options presented in the engineering analysis accurately estimate cost and efficiency trends beyond 11.5 EER, (2) whether the Department ’ s assumptions for evaluating a maximum technologically feasible design were appropriate, and (3) what other design options should the Department consider in its analysis.

Since the Department completed its engineering analysis in late 2002, several new commercial unitary air conditioners, with rated efficiency levels greater than 12.0 EER, have
become available on the market. The Department requests comments from stakeholders on any commercial unitary air-conditioning equipment with rated efficiency levels above 12.0 EER. (See
sections II.C.1.a and II.C.4 of this ANOPR for details.)

5. Industrial Buildings

The Department ’ s analysis relies on
simulations of electric loads in commercial buildings to determine the relative impact of the standard. The analysis is also intended to coverequipment installed in lightmanufacturing buildings. Lightmanufacturing buildings are those engaged in the process of making, assembling, altering, converting, fabricating, finishing, processing or treatment of a manufactured product utilizing a relatively clean and quiet process which does not include or generate significant objectionable or hazardous elements such as smoke, odor, vibration, water pollution or dust.As such, commercial unitary airconditioning equipment covered under this rulemaking could serve to providespace conditioning to lightmanufacturing buildings. If the electric load shapes and magnitudes, and in particular the degree of correlation between the hour of the peak air conditioning load and the hour of the peak building load, are substantially different for light-manufacturing buildings, a separate analysis for these buildings might be necessary. The Department seeks comments about whether adding light-manufacturing buildings to its analysis is necessary and what, if any, impact it would have on the results. (See sections II.D.1 and II.F.1.b.(2)(a) of this ANOPR for details.)

6. Economizer Performance

In its building simulation analysis, the Department assumed that the economizers operated flawlessly where economizer presence was indicated by CBECS data. This might result in some underestimation of the actual cooling loads in the buildings. Should the Department revise this assumption, and if so, what assumptions are appropriate? (See section II.D.1 of this ANOPR for details.) 7. Fan Energy Consumption
The Department included fan energy consumption as part of the total energy consumption of the commercial unitary air-conditioning equipment in the ANOPR analysis. This analysis includes fan energy consumption that occurs whenever the fan is in operation ( i.e.

, during cooling, heating, and ventilation). Should the Department revise this approach in the NOPR analysis, and if so, what approach is appropriate? (See section II.D.1 of this ANOPR for details.)

8. Equipment Markups

For purposes of deriving customer prices for more efficient equipment, the Department differentiated between a baseline markup and an incremental markup for wholesalers, general contractors, and mechanical contractors. The incremental markup covers only those expenses associated with a change in the manufacturer price and is used to derive the incremental change in customer equipment price due to higher
EER levels. Because the incremental markup covers fewer expenses, it has a lower value than its corresponding baseline markup. Nevertheless, it is essential to identify all expenses the incremental markup should cover. Therefore, the Department seeks
comments on whether more or fewer expenses should be covered by the wholesale, general contractor, and
mechanical contractor incremental markups. (See section II.E.2 of this ANOPR for details.)

9. Hourly Based Electricity Prices

The Department ’ s hourly based electricity price analysis uses extensive data to develop estimates of generation and coincident peak load savings due to the standard for each building in the sample. The Department enters these savings estimates into a customer price model to compute annual energy bill savings as an input to the LCC. The Department ’ s price model is based on the avoided-cost methodologies traditionally used to value demand reduction programs. Should the Department consider price models other
than those based on avoided-cost methodologies? (See section II.F.1.b.(2)(b) of this ANOPR for details.)

10. Forecasts of Electricity Prices

The Department has relied on EIA energy price forecasts, including the various EIA scenarios, to bound projected energy prices used in the standards analyses. The Department applied EIA ’ s projected trend in national average electricity prices to
each customer ’ s marginal energy


### 45502 Federal Register / Vol. 69, No. 145 / Thursday, July 29, 2004 / Proposed Rules

expenses. Although the Department
believes the EIA forecasts are the most credible projections available, the Department is open to using other
sources of credible information. Are there alternative electricity price
forecasts that are credible and warrant consideration by the Department? (See section II.F.1.b.(3) of this ANOPR for details.)

11. Equipment Lifetime

The Department based its equipment lifetime assumption on data from the

1999 ASHRAE HVAC Applications Handbook, which gives a median lifetime of 15 years for commercial unitary air conditioners. The Department found no other data to
indicate a different median or mean lifetime for commercial unitary air conditioning equipment. The Department seeks data concerning whether a 15-year median lifetime is appropriate for commercial unitary air conditioners and heat pumps. (See section II.F.1.b.(6) of this ANOPR for details.)

12. Maximum Market Share of Commercial Unitary Air Conditioning Equipment

The shipments model uses a logit decision model to represent the probability that a new building will have unitary air conditioning equipment installed. Even if all eligible commercial customers decided to acquire a unitary air conditioner, there is still only a finite fraction of floor space that would contain the particular equipment covered by the standard (due, for example, to the climate, the building size or type, etc.). The Department
estimates that the maximum fraction of floor space that is eligible to receive the unitary air conditioning equipment covered by the standard is about 10 percent for each equipment category. The Department seeks data to determine
whether it should revise its estimate. (See section II.G.3.c of this ANOPR for details.)

13. Future Building Types Using Commercial Unitary Equipment

Future shipments of unitary air conditioning equipment depend in part on the rate of growth of commercial floor space. The Department uses the average growth rate for all commercial buildings as provided by AEO. The shipments model should cover the effects of any commercial unitary air conditioning equipment that is preferentially installed in particular types of buildings ( e.g. , retail or office) and any growth rate of floor space for these building types that is substantially different from the average. The Department seeks comments concerning whether to base floor space growth rate on specific building types rather than the average growth rate. (See section II.G.3.c. of this ANOPR for details.)

14. Customer Sub-Groups

The Department has identified smaller businesses, as measured by annual revenue, as a possible sub-group in which to conduct a separate LCC analysis. Although the Department does
not know the annual revenues for the businesses in the buildings analyzed in the LCC analysis, the Department hopes to identify a building characteristic that
is an indicator of annual revenues. The Department seeks comments from interested parties on whether there is any building characteristic that correlates to business income. (See section II.H. of this ANOPR for details.)

15. Effective Date of New Standards and
Phaseout Date of R

– 22 Refrigerant

For purposes of conducting the shipments and manufacturer impact analyses, should the Department assume that manufacturers will change over to a new refrigerant (R

– 410a) at the same
time new standards levels become effective? (See section III. of this ANOPR for details.)

16. Independent Expert Third-Party

Reviews

ARI and Lennox raised the following issues: (a) Sample of buildings, (b) BLAST simulation and CBECS data, (c) supply fan energy use while ventilating, and (d) incremental markups. (ARI, Nos. 14, 17, 18, and 19; Lennox, No. 15; and Memo to the File: Meeting with ARI/ Lennox, March 12, 2003, No. 16) TheDepartment engaged independent thirdparty experts to review the approaches, assumptions, data, and analytical methods used for the ANOPR analyses
for these four issues. The results of these third-party reviews are available to interested parties on the Department ’ s website at http://www.eere.doe.gov/ buildings/appliance

_ standards/

ac

_hp.html. The Department seeks
comments about each of these issues and the third-party review of these issues. (See sections I.A.5, II.D.1 and
II.E.2 of this ANOPR and below discussion for more details.)

a. Sample of Buildings

The Department ’ s economic analysis examined energy-use estimates in a sample of buildings from the EIA ’ s CBECS database. The sample represents a diversity of cooling loads where commercial unitary air conditioning equipment is installed in six building types: assembly, education, food services, office, retail, and warehouse (non-refrigerated). Because of the complexity of this analysis, the Department also obtained an independent third-party expert review to ensure that the sample of buildings represented the operating conditions associated with the population of commercial unitary air conditioning equipment with rated cooling capacities
of ≥ 65,000 Btu/h to <240,000 Btu/h. The Department seeks comments from interested parties about this third-party

review.

b. Building Loads and System Thermodynamics Simulation and Commercial Buildings Energy Consumption Survey Estimates of Energy Use

The Department simulated load shapes for each of the above-sampled buildings at various efficiency levels by using the Building Loads and System Thermodynamics (BLAST) software. In doing so, the Department found that cooling energy use intensity (EUI) predicted by BLAST is higher than the cooling EUI estimated by CBECS for buildings with commercial unitary air conditioning equipment, although both
the BLAST and CBECS calculations of energy end uses for cooling and
ventilation are derived from modeled data. In view of these findings, the Department used a third party to
examine the differences between the
BLAST simulation EUI and the CBECS estimated EUI. The Department seeks comments from interested parties about the third-party review of the BLAST
simulation and CBECS estimates of energy use. (See section II.D.1 of this ANOPR for details.)

c. Supply Fan Energy Use While Ventilating

The Department ’ s analysis examines the total energy impact of commercial unitary air conditioning equipment on building energy consumption and therefore includes both the energy use and savings associated with the supply fan during non-cooling hours. The Department presumes that the fan is an integral component of a commercial unitary air conditioner and operates continuously to provide fresh air and air
circulation at established ASHRAE
Standard 62

– 1989 air quality levels when the building is occupied. The Department seeks comments from interested parties about the third-party review of fan energy use in the Department ’ s ANOPR analysis. (See section II.D.1 of this ANOPR for details.)


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d. Incremental Markups

To determine customer prices for more efficient commercial unitary air conditioning equipment, the ANOPR analysis addresses both the
manufacturer ’ s baseline markup and incremental markups for wholesalers, general contractors, and mechanical
contractors. It addresses those overhead expenses that may vary with an increase in equipment efficiency for each step of the distribution channel, and in particular those overhead expenses that can be attributed to higher EER levels. The Department seeks comments from interested parties about the third-party review of incremental markups in the ANOPR analysis. (See section II.E.2 of this ANOPR for details.)

17. Effect of Income Taxes on Life-Cycle

Cost

The Department did not include the
effect of income taxes in the LCC analysis for this ANOPR because it believes the net impact of taxes on the LCC analysis depends upon how a
firm ’ s accounting procedures expense the purchase cost of commercial equipment and measure profitability. The Department requests comments as to whether DOE should perform such an analysis. The Department also requests information from interested parties on the number of firms that purchase commercial unitary air conditioning equipment and actually pay taxes, and for those that pay taxes, how the purchase of such equipment is expensed and subsequently depreciated over time. (See section II.F.1 of this ANOPR for details.)

18. Technologies That Affect Full- or
Part-Load Performance

The Department understands that there are other technologies that operate under full- or part-load conditions and that can improve the net annual energy performance of a system, but which generally reduce the EER of commercial unitary air-conditioning equipment, or, at best, have no effect on EER. Such technologies include, for example, multiple compressors, economizers, inverter-driven variable-speed fans, and exhaust air enthalpy recovery devices. The Department did not examine such technologies because EPCA requires the commercial unitary air conditioners that
are under consideration in this rulemaking meet certain energy levels measured in terms of EER. Moreover,
EPCA establishes minimum EER levels for these air-cooled commercial unitary air conditioners and any amended national standard for that equipment must be more stringent

— in other words, have an increased EER. Nevertheless,the Department understands that partload and seasonal performance of a commercial unitary air conditioner is important because of the impact on national energy consumption. Therefore, the Department seeks
comments and recommendations from
interested stakeholders on how best to analyze the effects of those technologies that can reduce EER or are EER-neutral, and the implications both on national energy savings and consumer life cycle costs. (See section II.B of this ANOPR for details.)

19. Environmental Assessment

The Department recognizes the possibility that a reduction in airborne emissions may result from energy efficient commercial unitary air conditioners and heat pumps which, in turn, could result in improved health benefits. The Department has not
correlated reductions in installed generation capacity to possible improvements in public health for this ANOPR. Nevertheless, the Department requests data from stakeholders which identify specific health benefits from reductions airborne emissions. (See section II.K of this ANOPR for details.)

20. Rebound Effect

As part of the building energy use and end-use load characterization, the Department did not take into account a rebound effect in determining the reduction in cooling and fan energy consumption due to higher EER levels. The rebound effect occurs when a piece of equipment that is made more efficient is used more intensively, so that the expected energy savings from the efficiency improvement do not fully materialize. The Department seeks
comments on whether a rebound effect
should be included in the determination of annual energy savings. If a rebound effect should be included, the Department seeks data on which to base
the calculation of the rebound effect. (See section II.D.2 of this ANOPR for details.)

V. Regulatory Review and Procedural Requirements

This advance notice of proposed rulemaking was submitted for review to the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget under Executive Order 12866, ‘‘ Regulatory Planning and Review, ’’ 58 FR 51735 (October 4, 1993). If DOE later proposes amended energy conservation standards for certain air-cooled, electrically operated, unitary central air conditioners and heat pumps for commercial applications, the rulemaking would likely constitute a significant regulatory action, and DOE would prepare and submit to OIRA for
review the assessment of costs and benefits required by section 6(a)(3) of the Executive Order. In addition, various other analyses and procedures may apply to such future rulemaking action, including those required by the National Environmental Policy Act, 42

U.S.C. 4321 et seq. ; the Unfunded Mandates Act of 1995, Public Law 104

– 4; the Paperwork Reduction Act, 44

U.S.C. 3501 et seq. ; the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. ; and
certain other Executive Orders.

VI. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of today ’ s Advance Notice of Proposed Rulemaking.

Issued in Washington, DC, on July 13,

2004.
David K. Garman, Assistant Secretary, Energy Efficiency and Renewable Energy.

[FR Doc. 04

– 16575 Filed 7

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– 04; 8:45 am]

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