441 G St. N.W. Washington, DC 20548

8-325938

June 17, 2014 

### U.S. GOVERNMENTACCOUNTABILITY OFFICE

The Honorable Mary L. Landrieu Chair The Honorable Lisa Murkowski Ranking Member Committee on Energy and Natural Resources United States Senate The Honorable Fred Upton Chairman The Honorable Henry A. Waxman Ranking Member Committee on Energy and Commerce House of Representatives Subject: DepartmentofEnergy: Energy Conservation Program: Energy Conservation Standards for Walk-In Coolers andFreezers Pursuantto section 801 (a)(2)(A) oftitle 5, United States Code, this is our report on a major rule promulgated by the Departmentof Energy (Energy) entitled "Energy Conservation Program: Energy Conservation StandardsforWalk-In Coolers and Freezers" (RIN: 1904-AB86). We received the rule on June 3, 2014. Itwas published in the FederalRegisteras afinal rule on June 3, 2014. 79 Fed. Reg. 32,050. Thefinal rule adopts energy conservation standards for some classes ofwalk-in cooler and walk-in freezer components thatthe Departmentof Energy has determined are technologically feasible, economicallyjustified, and would result in the significant conservation ofenergy. The final rule is effective August4, 2014, and compliance with the amended standards established in the final rule is required on June 5, 2017. Enclosed is our assessment of Energy's compliance with the procedural steps required by section 801 (a)(1)(B)(i) through (iv) oftitle 5with respectto the rule. Our review ofthe procedural steps taken indicates that Energy complied with the applicable requirements. Ifyou have any questions aboutthis report orwish to contact GAO officials responsible forthe evaluation work relating to the subject matterofthe rule, please contact Shirley A. Jones, Assistant General Counsel, at(202) 512-8156.

RobertJ. Cra Managing Associate Enclosure

cc: Daniel Cohen Assistant General Counsel for Legislation,

Regulation and Energy Efficiency Departmentof Energy
GA0-14-682RREPORT UNDER 5 U.S.C. 

### § 801 (a)(2)(A) ON A MAJOR RULE ISSUED BY THE

(i) Cost-benefit analysis DEPARTMENT OF ENERGY ENTITLED "ENERGY CONSERVATION PROGRAM: ENERGY CONSERVATION STANDARDS FOR WALK-IN COOLERSAND FREEZERS" (RIN: 1904-AB86) ENCLOSURE

Energy prepared a cost-benefit analysis in conjunction with the final rule. Energyfound thatthe benefitsto the nation from the standards, which include energy savings, consumer life-cycle cost (LCC) savings, positive net presentvalue ofconsumer benefit, and emission reductions, outweigh the burdens, which include loss of industry net present value (INPV) and LCC increasesfor some users ofthis equipment. Energy prepared estimates ofannualized benefits and costs ofthe final rule. Using a 7 percent discount rate for benefits and costs otherthan carbon dioxide (C02) reduction, forwhich Energy used a 3 percent discount rate along with the average social cos' ofcarbon (SCC} series that uses a 3 percent discount rate, the cost ofthe standards in this rule is $511 million peryear in increased equipment costs, while the benefits are $879 million per year in reduced equipment operating costs, $287 million in C02 reductions, and $16.93 million in reduced nitrogen oxides (NOx) emissions. In this case, the net benefit amounts to $671 million peryear. Using a 3 percent discount rate for all benefits and costs and the average SCC series, the cost ofthe standards in this rule is $528 million peryear in increased equipment costs, while the benefits are $1,064 million per year in reduced operating costs, $287 million in C02 reductions, and $19.82 million in reduced NOx emissions. In this case, the net benefit amounts to $842 million peryear. (ii) Agency actions relevant to the Regulatory FlexibilityAct (RFA), 5 U.S.C. 

### §§603-605, 607, and 609 Energy certifiedthatthe final rule would not have a significant impact on small businesses with respectto the walk-ins panel industry orthe refrigeration equipment industry. Energy certified that the final rule would not have a significant impact on a large number ofsmall entities with respectto the door industry, but it prepared a complete regulatory flexibility analysis with regard to the door industry. (iii) Agency actions relevant to sections 202-205 ofthe Unfunded Mandates Reform Act of 1995, 2 U.S.C. 

### §§ 1532-1535 Energy determined thatthe final rule would likely require expenditures of$100 million or more on the private sector. Energy responded to the requirementto prepare a cost-benefit analysis relative to the private sector mandate as part ofits cost-benefit analysis noted above. In addition, Energy determined that it selected the alternative thatwas the most cost-effective and least burdensome alternative that achieved the objectives ofthe rule.

GA0-14-682R(iv) Other relevant information orrequirements under acts and executive orders
Administrative Procedure Act, 5 U.S.C. 

### §§ 551 et seq. On September 11, 2013, Energy published a notice ofproposed rulemaking in the Federal Register. 78 Fed. Reg. 55,781. Energy held a public meeting in Washington, D.C., on October9, 2013, to receive oral comments. Energy responded to the comments received at the public hearing and in response to the notice of proposed rulemaking in the final rule. Paperwork Reduction Act (PRA), 44 U.S.C. 

### §§ 3501-3520
The final rule contains collection of information requirements subjectto review and approval by the Office of Management and Budget (OMB) underthe Paperwork Reduction Act (PRA). This requirement has been approved by OMB under OMB control number 1910-1400. Energy estimated thatthe public reporting burden forthe certification will average 20 hours per response, including thetimefor reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Statutory authorization forthe rule
Thefinal rule is authorized by the Energy Policy and Conservation Act of 1975, as amended, as codified at42 U.S.C. 

### §§6311-17 and 6295(0).
Executive Order No. 12,866 (Regulatory Planning and Review) Energy determined thatthe final rule is an "economically significant rule" for purposes ofthe Executive Order. As a result, Energy prepared a regulatory impact analysis forthe rule and submitted the rule to OMB for review.
Executive Order No. 13,132 (Federalism) The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limitthe policymaking discretion oLthe states and to carefully assess the necessityfor such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by state and local officials in the development ofregulatory policies that have federalism implications. Energy has a statement of policy describing the intergovernmental consultation process itwill follow in the development of such regulations, which was published in the Federal Registeron March 14, 2000. 65 Fed. Reg. 13,735. EPCAgoverns and prescribes federal preemption ofstate regulations as to energy conservation forthe equipmentthat arethe subject ofthe final rule, and sets forth criteria bywhich states can petition Energyfor exemption from such preemption. 42 U.S.C. 

### § 6297.

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