```

[Federal Register Volume 79, Number 106 (Tuesday, June 3, 2014)]
[Rules and Regulations]
[Pages 32049-32124]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11489]

[[Page 32049]]

Vol. 79

Tuesday,

No. 106

June 3, 2014

Part III

Department of Energy

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

10 CFR Part 431

Energy Conservation Program: Energy Conservation Standards for Walk-In 
Coolers and Freezers; Final Rule

Federal Register / Vol. 79 , No. 106 / Tuesday, June 3, 2014 / Rules 
and Regulations

[[Page 32050]]

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

DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket Number EERE-2008-BT-STD-0015]
RIN 1904-AB86

Energy Conservation Program: Energy Conservation Standards for 
Walk-In Coolers and Freezers

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Final rule.

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

SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
walk-in coolers and walk-in freezers. EPCA also requires the U.S. 
Department of Energy (DOE) to determine whether more-stringent 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this final rule, DOE 
is adopting more-stringent energy conservation standards for some 
classes of walk-in cooler and walk-in freezer components and has 
determined that these standards are technologically feasible and 
economically justified and would result in the significant conservation 
of energy.

DATES: The effective date of this rule is August 4, 2014. Compliance 
with the amended standards established for walk-in coolers and walk-in 
freezers in this final rule is required on June 5, 2017.

ADDRESSES: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at www.regulations.gov. 
All documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2010-BT-STD-0003. The 
regulations.gov Web page will contain simple instructions on how to 
access all documents, including public comments, in the docket.
    For further information on how to review the docket, contact Ms. 
Brenda Edwards at (202) 586-2945 or by email: 
Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: John Cymbalsky, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Program, EE-5B, 1000 Independence Avenue SW., Washington, 
DC, 20585-0121. Telephone: (202) 287-1692. Email: walk-in_coolers_and_walk-in_freezers@EE.Doe.Gov
Mr. Michael Kido, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC, 20585-
0121. Telephone: (202) 586-8145. Email: Michael.Kido@hq.doe.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Final Rule and Its Benefits
    A. Benefits and Costs to Customers
    B. Impact on Manufacturers
    C. National Benefits
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Walk-In Coolers and Walk-
In Freezers
III. General Discussion
    A. Component Level Standards
    B. Test Procedures and Metrics
    1. Panels
    2. Doors
    3. Refrigeration
    C. Certification, Compliance, and Enforcement
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Commercial Customers
    b. Savings in Operating Costs Compared to Increase in Price
    c. Energy Savings
    d. Lessening of Utility or Performance of Equipment
    e. Impact of Any Lessening of Competition
    f. Need of the Nation to Conserve Energy
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Comments
A. General Rulemaking Issues
    1. Trial Standard Levels
    2. Rulemaking Timeline
    B. Market and Technology Assessment
    1. Equipment Included in This Rulemaking
    a. Panels and Doors
    b. Refrigeration Systems
    2. Equipment Classes
    a. Panels and Doors
    b. Refrigeration Systems
    3. Technology Assessment
    C. Screening Analysis
    1. Panels and Doors
    2. Refrigeration Systems
    D. Engineering Analysis
    1. Representative Equipment for Analysis
    a. Panels and Doors
    b. Refrigeration
    2. Refrigerants
    3. Cost Assessment Methodology
    a. Teardown Analysis
    b. Cost Model
    c. Manufacturing Production Cost
    d. Manufacturing Markup
    e. Shipping Costs
    4. Energy Consumption Model
    a. Panels and Doors
    b. Refrigeration Systems
    5. Baseline Specifications
    a. Panels and Doors
    b. Refrigeration
    6. Design Options
    a. Panels and Doors
    b. Refrigeration
    E. Markups Analysis
    F. Energy Use Analysis
    1. Sizing Methodology for the Refrigeration System
    2. Oversize Factors
    G. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Costs
    3. Maintenance and Repair Costs
    4. Annual Energy Consumption
    5. Energy Prices
    6. Energy Price Projections
    7. Equipment Lifetime
    8. Discount Rates
    9. Compliance Date of Standards
    10. Base-Case Efficiency Distributions
    11. Inputs To Payback Period Analysis
    12. Rebuttable-Presumption Payback Period
    H. Shipments
    a. Share of Shipments and Stock by Equipment Class
    2. Impact of Standards on Shipments
    I. National Impact Analysis--National Energy Savings and Net 
Present Value
    1. Forecasted Efficiency in the Base Case and Standards Cases
    2. National Energy Savings
    3. Net Present Value of Customer Benefit
    J. Customer Subgroup Analysis
    K. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model
    a. Government Regulatory Impact Model Key Inputs
    b. Government Regulatory Impact Model Scenarios
    3. Discussion of Comments
    a. Refrigerants
    b. Installation Contractors
    c. Small Manufacturers
    d. Mark Up Scenarios
    e. Number of Small Businesses
    L. Emissions Analysis
    M. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Development of Social Cost of Carbon Values
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
    N. Utility Impact Analysis

[[Page 32051]]

    O. Employment Impact Analysis
V. Analytical Results
    A. Trial Standard Levels
    1. Trial Standard Level Selection Process
    2. Trial Standard Level Equations
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Commercial Customers
    a. Life-Cycle Cost and Payback Period
    b. Customer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Impacts on Direct Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Small Manufacturer Sub-Group
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Energy Savings
    b. Net Present Value of Customer Costs and Benefits
    c. Indirect Employment Impacts
    4. Impact on Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    7. Summary of National Economic Impact
    8. Other Factors
    C. Conclusions
    1. Benefits and Burdens of Trial Standard Levels Considered for 
Walk-in Coolers and Walk-in Freezers
    2. Summary of Benefits and Costs (Annualized) of the Standards
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    2. Description and Estimate of Compliance Requirements
    3. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    4. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
    M. Congressional Notification
VII. Approval of the Office of the Secretary

I. Summary of the Final Rule and Its Benefits

    Title III, Part C of EPCA, Public Law 94-163 (42 U.S.C. 6311-6317, 
as codified), added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, a program covering certain industrial equipment, which 
includes the walk-in coolers and walk-in freezers that are the focus of 
this notice.1 2 (42 U.S.C. 6311(1), (20), 6313(f) and 
6314(a)(9)) Pursuant to EPCA, any new or amended energy conservation 
standard that DOE prescribes for certain equipment, such as walk-in 
coolers and walk-in freezers (collectively, ``walk-ins'' or ``WICFs''), 
shall be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is both technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new 
or amended standard must result in the significant conservation of 
energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with these and other 
statutory provisions discussed in this notice, DOE is adopting amended 
energy conservation standards for the main components of walk-in 
coolers and walk-in freezers (walk-ins), refrigeration systems, panels, 
and doors. These standards are expressed in terms of annual walk-in 
energy factor (AWEF) for the walk-in refrigeration systems, R-value for 
walk-in panels, and maximum energy consumption (MEC) for walk-in doors. 
These standards are shown in Table I.1. These standards apply to all 
equipment listed in Table I.1 and manufactured in, or imported into, 
the United States once the compliance date listed above is reached.
---------------------------------------------------------------------------

    \1\ All references to EPCA in this document refer to the statute 
as amended through the American Energy Manufacturing Technical 
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.

                Table I.1--Energy Conservation Standards for Walk-In Coolers and Walk-In Freezers
----------------------------------------------------------------------------------------------------------------
              Class descriptor                                Class                        Standard level
----------------------------------------------------------------------------------------------------------------
Refrigeration Systems                                                                 Minimum AWEF (Btu/W-h) *
----------------------------------------------------------------------------------------------------------------
Dedicated Condensing, Medium Temperature,     DC.M.I, h Capacity.
Dedicated Condensing, Medium Temperature,     DC.M.I, >=9,000.....................                          5.61
 Indoor System, >=9,000 Btu/h Capacity.
Dedicated Condensing, Medium Temperature,     DC.M.O, h Capacity.
Dedicated Condensing, Medium Temperature,     DC.M.O, >=9,000.....................                          7.60
 Outdoor System, >=9,000 Btu/h Capacity.
Dedicated Condensing, Low Temperature,        DC.L.I, h Capacity.
Dedicated Condensing, Low Temperature,        DC.L.I, >=9,000.....................                          3.10
 Indoor System, >=9,000 Btu/h Capacity.
Dedicated Condensing, Low Temperature,        DC.L.O, h Capacity.
Dedicated Condensing, Low Temperature,        DC.L.O, >=9,000.....................                          4.79
 Outdoor System, >=9,000 Btu/h Capacity.
Multiplex Condensing, Medium Temperature....  MC.M................................                         10.89
Multiplex Condensing, Low Temperature.......  MC.L................................                          6.57
----------------------------------------------------------------------------------------------------------------
Panels                                                                                 Minimum R-value (h-ft2-
                                                                                             [deg]F/Btu)
----------------------------------------------------------------------------------------------------------------
Structural Panel, Medium Temperature........  SP.M................................                            25
Structural Panel, Low Temperature...........  SP.L................................                            32
Floor Panel, Low Temperature................  FP.L................................                            28
----------------------------------------------------------------------------------------------------------------
Non-Display Doors                                                                    Maximum energy consumption
                                                                                            (kWh/day) **
----------------------------------------------------------------------------------------------------------------
Passage Door, Medium Temperature............  PD.M................................              0.05 x And + 1.7
Passage Door, Low Temperature...............  PD.L................................              0.14 x And + 4.8
Freight Door, Medium Temperature............  FD.M................................              0.04 x And + 1.9
Freight Door, Low Temperature...............  FD.L................................              0.12 x And + 5.6
----------------------------------------------------------------------------------------------------------------

[[Page 32052]]

 
Display Doors                                                                        Maximum Energy Consumption
                                                                                         (kWh/day) [dagger]
----------------------------------------------------------------------------------------------------------------
Display Door, Medium Temperature............  DD.M................................             0.04 x Add + 0.41
Display Door, Low Temperature...............  DD.L................................             0.15 x Add + 0.29
----------------------------------------------------------------------------------------------------------------
* Q represents the system gross capacity as calculated in AHRI 1250.
** And represents the surface area of the non-display door.
[dagger] Add represents the surface area of the display door.

A. Benefits and Costs to Customers

    Table I.2 presents DOE's evaluation of the economic impacts of 
these standards on customers of walk-in coolers and walk-in freezers, 
as measured by the average life-cycle cost (LCC) savings and the median 
payback period (PBP). The average LCC savings are positive for all 
equipment classes for which customers are impacted by the standards.

      Table I.2--Impacts of the Final Rule's Standards on Customers of Walk-In Coolers and Walk-In Freezers
----------------------------------------------------------------------------------------------------------------
                                                                  Average LCC savings     Median payback period
                        Equipment class                                  2013$                    Years
----------------------------------------------------------------------------------------------------------------
                                          Refrigeration System Class *
----------------------------------------------------------------------------------------------------------------
DC.M.I *......................................................                     5942                      3.5
DC.M.O *......................................................                     6533                      2.2
DC.L.I *......................................................                     2078                      1.6
DC.L.O *......................................................                     5942                      3.5
MC.M..........................................................                      547                      3.1
MC.L..........................................................                      362                      3.1
���������������������������������������������������������������
                                                   Panel Class
----------------------------------------------------------------------------------------------------------------
SP.M..........................................................  .......................  .......................
SP.L..........................................................  .......................  .......................
FP.L..........................................................  .......................  .......................
���������������������������������������������������������������
                                             Non-Display Door Class
----------------------------------------------------------------------------------------------------------------
PD.M..........................................................  .......................  .......................
PD.L..........................................................  .......................  .......................
FD.M..........................................................  .......................  .......................
FD.L..........................................................  .......................  .......................
���������������������������������������������������������������
                                               Display Door Class
----------------------------------------------------------------------------------------------------------------
DD.M..........................................................                      143                      7.3
DD.L..........................................................                      902                      5.4
----------------------------------------------------------------------------------------------------------------
Note: ``--'' indicates no impact because standards are set at the baseline level.
*For dedicated condensing (DC) refrigeration systems, results include all capacity ranges.

B. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year (2013) through the end of 
the analysis period (2046). Using real discount rates of 10.5 percent 
for panels, 9.4 percent for doors, and 10.4 percent for 
refrigeration,\3\ DOE estimates that the INPV for manufacturers of 
walk-in coolers and walk-in freezers is $1,291 million in 2012$. Under 
these standards, DOE expects the industry net present value to change 
by -4.10 percent to 6.21 percent. Total industry conversion costs are 
expected to total $33.61 million. DOE does not expect any plant 
closings or significant loss of employment to result from these 
standards.
---------------------------------------------------------------------------

    \3\ These rates were used to discount future cash flows in the 
Manufacturer Impact Analysis. The discount rates were calculated 
from SEC filings and then adjusted based on cost of capital feedback 
collected from walk-in door, panel, and refrigeration manufacturers 
in MIA interviews. For a detailed explanation of how DOE arrived at 
these discount rates, refer to chapter 12 of the final rule TSD.
---------------------------------------------------------------------------

C. National Benefits 4

    DOE's analyses indicate that these standards would save a 
significant amount of energy. The lifetime savings for walk-in coolers 
and walk-in freezers purchased in the 30-year period that begins in the 
year of compliance with amended standards (2017-2046) amount to 3.149 
quadrillion British thermal units (quads). The annual savings in 2030 
(0.10 quads) is equivalent to 0.5 percent of total U.S. commercial 
energy use in 2014.
---------------------------------------------------------------------------

    \4\ All monetary values in this section are expressed in 2013 
dollars and are discounted to 2014.
---------------------------------------------------------------------------

    The cumulative net present value (NPV) of total consumer costs and 
savings of these standards for walk-in coolers and walk-in freezers 
ranges from $3.98 billion (at a 7-percent discount rate) to $9.90 
billion (at a 3-percent discount rate). This NPV expresses the 
estimated total value of future operating cost savings minus the 
estimated

[[Page 32053]]

increased equipment costs for equipment purchased in 2016-2047.
    In addition, these standards are expected to have significant 
environmental benefits. The energy savings would result in cumulative 
emission reductions of approximately 159.2 million metric tons (Mt) \5\ 
of carbon dioxide (CO2), 833 thousand tons of methane, 229 
thousand tons of sulfur dioxide (SO2), 254.4 thousand tons 
of nitrogen oxides (NOX), 3.5 thousand tons of nitrous oxide 
(N2O), and 0.27 tons of mercury (Hg).\6\ Through 2030, the 
cumulative emissions reductions of CO2 amount to 61.6 Mt.
---------------------------------------------------------------------------

    \5\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \6\ DOE calculated emissions reductions relative to the Annual 
Energy Outlook 2013 (AEO 2013) Reference case, which generally 
represents current legislation and environmental regulations for 
which implementing regulations were available as of December 31, 
2012.
---------------------------------------------------------------------------

    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon, or SCC) developed by a recent Federal 
interagency process.\7\ The derivation of the SCC values is discussed 
in section IV.M. Using discount rates appropriate for each set of SCC 
values, DOE estimates that the net present monetary value of the 
CO2 emissions reductions is between $1.2 billion and $16.3 
billion. DOE also estimates that the net present monetary value of the 
NOX emissions reductions is $183.5 million at a 7-percent 
discount rate, and $366.1 million at a 3-percent discount rate.\8\
---------------------------------------------------------------------------

    \7\ Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. Interagency Working 
Group on Social Cost of Carbon, United States Government. May 2013; 
revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
    \8\ DOE is investigating the valuation of the other emissions 
reductions.
---------------------------------------------------------------------------

    Table I.3 summarizes the national economic costs and benefits 
expected to result from these standards for walk-in coolers and walk-in 
freezers.

  Table I.3--Summary of National Economic Benefits and Costs of Walk-In
       Coolers and Walk-In Freezers Energy Conservation Standards
------------------------------------------------------------------------
                                        Present Value     Discount Rate
             Category *                 Billion 2013$       (percent)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings..............               9.5                 7
                                                  19.7                 3
CO2 Reduction Monetized Value ($12.0/              1.2                 5
 t case) **.........................
CO2 Reduction Monetized Value ($40.5/              5.3                 3
 t case) **.........................
CO2 Reduction Monetized Value ($62.4/              8.4               2.5
 t case) **.........................
CO2 Reduction Monetized Value ($119/              16.3                 3
 t case) **.........................
NOX Reduction Monetized Value (at                  0.2                 7
 $2,684/ton) **.....................
                                                   0.4                 3
------------------------------------------------------------------------
Total Benefits [dagger].............              15.0                 7
                                                  25.4                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs.........               5.5                 7
                                                   9.8                 3
------------------------------------------------------------------------
                              Net Benefits
------------------------------------------------------------------------
Including CO2 and NOX Reduction                    9.5                 7
 Monetized Value [dagger]...........
                                                  15.6                 3
------------------------------------------------------------------------
* This table presents the costs and benefits associated with walk-in
  coolers and walk-in freezers shipped in 2017-2046. These results
  include benefits to customers which accrue after 2046 from the
  equipment purchased in 2017-2046. The results account for the
  incremental variable and fixed costs incurred by manufacturers due to
  the amended standard, some of which may be incurred in preparation for
  this final rule.
** The CO2 values represent global monetized values of the SCC, in
  2013$, in 2015 under several scenarios of the updated SCC values. The
  first three cases use the averages of SCC distributions calculated
  using 5%, 3%, and 2.5% discount rates, respectively. The fourth case
  represents the 95th percentile of the SCC distribution calculated
  using a 3% discount rate. The SCC time series used by DOE incorporates
  an escalation factor. The value for NOX is the average of the low and
  high values used in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the series corresponding to average SCC with 3-percent discount rate.

    The benefits and costs of these standards, for equipment sold in 
2017-2046, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value of the benefits from operating the equipment (consisting 
primarily of operating cost savings from using less energy, minus 
increases in equipment purchase and installation costs, which is 
another way of representing consumer NPV, plus (2) the annualized 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\9\
---------------------------------------------------------------------------

    \9\ DOE used a two-step calculation process to convert the time-
series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2014, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits, using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.4. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2017 through 2046) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. consumer monetary savings that occur as a result of market 
transactions, while the value

[[Page 32054]]

of CO2 reductions is based on a global value. Second, the 
assessments of operating cost savings and CO2 savings are 
performed with different methods that use different time frames for 
analysis. The national operating cost savings is measured for the 
lifetime of walk-in coolers and walk-in freezers shipped in 2017-2046. 
The SCC values, on the other hand, reflect the present value of all 
future climate-related impacts resulting from the emission of one 
metric ton of carbon dioxide in each year. These impacts continue well 
beyond 2100.
    Estimates of annualized benefits and costs of these standards are 
shown in Table I.4. The results under the primary estimate are as 
follows. Using a 7-percent discount rate for benefits and costs other 
than CO2 reduction, for which DOE used a 3-percent discount 
rate along with the average SCC series that uses a 3-percent discount 
rate, the cost of the standards in this rule is $511 million per year 
in increased equipment costs, while the benefits are $879 million per 
year in reduced equipment operating costs, $287 million in 
CO2 reductions, and $16.93 million in reduced NOX 
emissions. In this case, the net benefit amounts to $671 million per 
year. Using a 3-percent discount rate for all benefits and costs and 
the average SCC series, the cost of the standards in this rule is $528 
million per year in increased equipment costs, while the benefits are 
$1,064 million per year in reduced operating costs, $287 million in 
CO2 reductions, and $19.82 million in reduced NOX 
emissions. In this case, the net benefit amounts to $842 million per 
year.

                         Table I.4--Annualized Benefits and Costs of Amended Standards for Walk-In Coolers and Walk-In Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Million 2013$/year
                                                                  --------------------------------------------------------------------------------------
                                             Discount rate                                      Low net  benefits  estimate       High net  benefits
                                                                        Primary estimate *                   *                        estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings..............  7%.........................  879........................  854........................  917.
                                      3%.........................  1064.......................  1027.......................  1115.
CO2 Reduction at ($12.08/t case) **.  5%.........................  86.........................  86.........................  86.
CO2 Reduction at ($40.5/t case) **..  3%.........................  287........................  287........................  287.
CO2 Reduction at ($62.4/t case) **..  2.5%.......................  420........................  420........................  420.
CO2 Reduction at ($119/t case) **...  3%.........................  884........................  884........................  884.
NOX Reduction at ($2,684/ton) **....  7%.........................  16.93......................  16.93......................  16.93.
                                      3%.........................  19.82......................  19.82......................  19.82.
Total Benefits [dagger].............  7% plus CO2 range..........  981 to 1,780...............  957 to 1,755...............  1,020 to 1,818.
                                      7%.........................  1,183......................  1,158......................  1,221.
                                      3% plus CO2 range..........  1,169 to 1,968.............  1,133 to 1,931.............  1,221 to 2,019.
                                      3%.........................  1,371......................  1,334......................  1,422.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Equipment Costs.........  7%.........................  511........................  501........................  522.
                                      -3%........................  528........................  515........................  541.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total [dagger]......................  7% plus CO2 range..........  470 to 1,269...............  456 to 1,255...............  498 to 1,296.
                                      7%.........................  671........................  657........................  699.
                                      3% plus CO2 range..........  641 to 1,440...............  617 to 1,416...............  680 to 1,478.
                                      3%.........................  842........................  818........................  881.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with walk-in coolers and walk-in freezers shipped in 2017-2046. These results include
  benefits to customers which accrue after 2046 from the equipment purchased in 2017-2046. The results account for the incremental variable and fixed
  costs incurred by manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule. The primary, low, and
  high estimates utilize projections of energy prices from the AEO 2013 Reference case, Low Estimate, and High Estimate, respectively. In addition,
  incremental equipment costs reflect a medium decline rate for projected equipment price trends in the Primary Estimate, a low decline rate for
  projected equipment price trends in the Low Benefits Estimate, and a high decline rate for projected equipment price trends in the High Benefits
  Estimate. The methods used to derive projected price trends are explained in section IV.I.
** The CO2 values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the updated SCC values. The first three
  cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th
  percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The value
  for NOX is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount
  rate, which is the $39.7/t CO2 reduction case. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX
  benefits are calculated using the labeled discount rate, and those values are added to the full range of CO2 values.

D. Conclusion

    Based on the analyses culminating in this final rule, DOE found the 
benefits to the nation from the standards (energy savings, consumer LCC 
savings, positive NPV of consumer benefit, and emission reductions) 
outweigh the burdens (loss of INPV and LCC increases for some users of 
this equipment). DOE has concluded that the standards in this final 
rule represent the maximum

[[Page 32055]]

improvement in energy efficiency that is technologically feasible and 
economically justified, and would result in significant conservation of 
energy. (42 U.S.C. 6295(o), 6316(e))

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this final rule, as well as some of the relevant historical 
background related to the establishment of standards for walk-in 
coolers and walk-in freezers.

A. Authority

    Title III, Part C of EPCA, Public Law 94-163 (42 U.S.C. 6311-6317, 
as codified), added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, a program covering certain industrial equipment, which 
includes the walk-in coolers and walk-in freezers that are the focus of 
this notice.\10\ \11\ (42 U.S.C. 6311(1), (20), 6313(f) and 6314(a)(9)) 
Walk-ins consist of two major pieces--the structural ``envelope'' 
within which items are stored and a refrigeration system that cools the 
air in the envelope's interior.
---------------------------------------------------------------------------

    \10\ All references to EPCA in this document refer to the 
statute as amended through the American Energy Manufacturing 
Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 
2012).
    \11\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
---------------------------------------------------------------------------

    DOE's energy conservation program for covered equipment generally 
consists of four parts: (1) Testing; (2) labeling; (3) the 
establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. For walk-ins, DOE is 
responsible for the entirety of this program. The DOE test procedures 
for walk-ins, including those prescribed by Congress in the Energy 
Independence and Security Act of 2007, Public Law 110-140 (December 19, 
2007) (``EISA''), and those established by DOE in a test procedure 
final rule, currently appear at title 10 of the Code of Federal 
Regulations (CFR) part 431, section 304.
    Any new or amended performance standards that DOE prescribes for 
walk-ins must achieve the maximum improvement in energy efficiency that 
is technologically feasible and economically justified. (42 U.S.C. 
6313(f)(4)(A)) For purposes of this rulemaking, DOE also plans to adopt 
those standards that are likely to result in a significant conservation 
of energy that satisfies both of these requirements. See 42 U.S.C. 
6295(o)(3)(B).
    Technological feasibility is determined by examining technologies 
or designs that could be used to improve the efficiency of the covered 
equipment. DOE considers a design to be technologically feasible if it 
is in use by the relevant industry or if research has progressed to the 
development of a working prototype.
    In ascertaining whether a particular standard is economically 
justified, DOE considers, to the greatest extent practicable, the 
following factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the equipment subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy or, as applicable, water 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
equipment likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i) (I)-(VII) and 6316(a))
    DOE does not generally prescribe an amended or new standard if 
interested persons have established by a preponderance of the evidence 
that the standard is likely to result in the unavailability in the 
United States of any covered product type (or class) of performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as those generally 
available in the United States. Further, under EPCA's provisions for 
consumer products, there is a rebuttable presumption that a standard is 
economically justified if the Secretary finds that the additional cost 
to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) For purposes of its walk-in 
analysis, DOE plans to account for these factors.
    Additionally, when a type or class of covered equipment such as 
walk-ins has two or more subcategories, in promulgating standards for 
such equipment, DOE often specifies more than one standard level. DOE 
generally will adopt a different standard level than that which applies 
generally to such type or class of products for any group of covered 
products that have the same function or intended use if DOE determines 
that products within such group (A) consume a different kind of energy 
than that consumed by other covered products within such type (or 
class) or (B) have a capacity or other performance-related feature that 
other products within such type (or class) do not have, and which 
justifies a higher or lower standard. Generally, in determining whether 
a performance-related feature justifies a different standard for a 
group of products, DOE considers such factors as the utility to the 
consumer of the feature and other factors DOE deems appropriate. In a 
rule prescribing such a standard, DOE typically includes an explanation 
of the basis on which such higher or lower level was established. DOE 
plans to follow a similar process in the context of this rulemaking.
    DOE notes that since the inception of the statutory requirements 
setting standards for walk-ins, Congress has since made one additional 
amendment to those provisions. That amendment provides that the wall, 
ceiling, and door insulation requirements detailed in 42 U.S.C. 
6313(f)(1)(C) do not apply to the given component if the component's 
manufacturer has demonstrated to the Secretary's satisfaction that 
``the component reduces energy consumption at least as much'' if those 
specified requirements were to apply to that manufacturer's component. 
American Energy Manufacturing Technology Corrections Act, Public Law 
112-210, Sec. 2 (Dec. 18, 2012) (codified at 42 U.S.C. 6313(f)(6)) 
(AEMTCA). Manufacturers seeking to avail themselves of this provision 
must ``provide to the Secretary all data and technical information 
necessary to fully evaluate its application.'' Id. DOE codified this 
amendment into its regulations on October 23, 2013, at 78 FR 62988.
    Since the promulgation of the amendment, one company, HH 
Technologies, submitted data on May 24, 2013, demonstrating that its 
RollSeal doors satisfied this new AEMTCA provision. DOE reviewed these 
data and all other submitted information and concluded that the 
RollSeal doors at issue satisfied 42 U.S.C. 6313(f)(6). Accordingly, 
DOE issued a determination letter on June 14, 2013, indicating that 
these doors met Section

[[Page 32056]]

6313(f)(6) and that the applicable insulation requirements did not 
apply to the RollSeal doors HH Technologies identified. Nothing in this 
rule affects the previous determination regarding HH Technologies.
    Federal energy conservation requirements generally pre-empt state 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a); 42 U.S.C. 6316(b)) However, EPCA 
provides that for walk-ins in particular, any state standard issued 
before publication of the final rule shall not be pre-empted until the 
standards established in the final rule take effect. (42 U.S.C. 
6316(h)(2)(B))
    Where applicable, DOE generally considers standby and off mode 
energy use for certain covered products or equipment when developing 
energy conservation standards. See 42 U.S.C. 6295(gg)(3). Because the 
vast majority of walk-in coolers and walk-in freezers operate 
continuously to keep their contents cold at all times, DOE is not 
proposing standards for standby and off mode energy use.

B. Background

1. Current Standards
    EPCA defines a walk-in cooler and a walk-in freezer as an enclosed 
storage space refrigerated to temperatures above, and at or below, 
respectively, 32[emsp14][deg]F that can be walked into. The statute 
also defines walk-in coolers and freezers as having a total chilled 
storage area of less than 3,000 square feet, excluding equipment 
designed and marketed exclusively for medical, scientific, or research 
purposes. (42 U.S.C. 6311(20)) EPCA also provides prescriptive 
standards for walk-ins manufactured on or after January 1, 2009, which 
are described below.
    First, EPCA sets forth general prescriptive standards for walk-ins. 
Walk-ins must have automatic door closers that firmly close all walk-in 
doors that have been closed to within 1 inch of full closure, for all 
doors narrower than 3 feet 9 inches and shorter than 7 feet; walk-ins 
must also have strip doors, spring hinged doors, or other methods of 
minimizing infiltration when doors are open. Walk-ins must also contain 
wall, ceiling, and door insulation of at least R-25 for coolers and R-
32 for freezers, excluding glazed portions of doors and structural 
members, and floor insulation of at least R-28 for freezers. Walk-in 
evaporator fan motors of under 1 horsepower and less than 460 volts 
must be electronically commutated motors (brushless direct current 
motors) or three-phase motors, and walk-in condenser fan motors of 
under 1 horsepower must use permanent split capacitor motors, 
electronically commutated motors, or three-phase motors. Interior light 
sources must have an efficacy of 40 lumens per watt or more, including 
any ballast losses; less-efficacious lights may only be used in 
conjunction with a timer or device that turns off the lights within 15 
minutes of when the walk-in is unoccupied. See 42 U.S.C. 6313(f)(1).
    Second, EPCA sets forth new requirements related to electronically 
commutated motors for use in walk-ins. See 42 U.S.C. 6313(f)(2)). 
Specifically, in those walk-ins that use an evaporator fan motor with a 
rating of under 1 horsepower and less than 460 volts, that motor must 
be either a three-phase motor or an electronically commutated motor 
unless DOE determined prior to January 1, 2009 that electronically 
commutated motors are available from only one manufacturer. (42 U.S.C. 
6313(f)(2)(A)) DOE determined by January 1, 2009 that these motors were 
available from more than one manufacturer; thus, according to EPCA, 
walk-in evaporator fan motors with a rating of under 1 horsepower and 
less than 460 volts must be either three-phase motors or electronically 
commutated motors. DOE documented this determination in the rulemaking 
docket as docket ID EERE-2008-BT-STD-0015-0072. This document can be 
found at http://www.regulations.gov/#!documentDetail;D=EERE-2008-BT-
STD-0015-0072. Additionally, EISA authorized DOE to permit the use of 
other types of motors as evaporative fan motors--if DOE determines 
that, on average, those other motor types use no more energy in 
evaporative fan applications than electronically commutated motors. (42 
U.S.C. 6313(f)(2)(B)) DOE is unaware of any other motors that would 
offer performance levels comparable to the electronically commutated 
motors required by Congress. Accordingly, all evaporator motors rated 
at under 1 horsepower and under 460 volts must be electronically 
commutated motors or three-phase motors.
    Third, EPCA sets forth additional requirements for walk-ins with 
transparent reach-in doors. Freezer doors must have triple-pane glass 
with either heat-reflective treated glass or gas fill for doors and 
windows for freezers. Cooler doors must have either double-pane glass 
with treated glass and gas fill or triple-pane glass with treated glass 
or gas fill. (42 U.S.C. 6313(f)(3)(A)-(B)) For walk-ins with 
transparent reach-in doors, EISA also prescribed specific anti-sweat 
heater-related requirements: Walk-ins without anti-sweat heater 
controls must have a heater power draw of no more than 7.1 or 3.0 watts 
per square foot of door opening for freezers and coolers, respectively. 
Walk-ins with anti-sweat heater controls must either have a heater 
power draw of no more than 7.1 or 3.0 watts per square foot of door 
opening for freezers and coolers, respectively, or the anti-sweat 
heater controls must reduce the energy use of the heater in a quantity 
corresponding to the relative humidity of the air outside the door or 
to the condensation on the inner glass pane. See 42 U.S.C. 
6313(f)(3)(C)-(D).
2. History of Standards Rulemaking for Walk-In Coolers and Walk-In 
Freezers
    EPCA directs the Secretary to issue performance-based standards for 
walk-ins that would apply to equipment manufactured 3 years after the 
final rule is published, or 5 years if the Secretary determines by rule 
that a 3-year period is inadequate. (42 U.S.C. 6313(f)(4))
    DOE initiated the current rulemaking by publishing a notice 
announcing the availability of its ``Walk-In Coolers and Walk-In 
Freezers Energy Conservation Standard Framework Document'' and a 
meeting to discuss the document. The notice also solicited comment on 
the matters raised in the document. 74 FR 411 (Jan 6, 2009). More 
information on the framework document is available at: http://www1.eere.energy.gov/buildings/appliance--standards/rulemaking.aspx/
ruleid/30. The framework document described the procedural and 
analytical approaches that DOE anticipated using to evaluate energy 
conservation standards for walk-ins and identified various issues to be 
resolved in conducting this rulemaking.
    DOE held the framework public meeting on February 4, 2009, in which 
it: (1) Presented the contents of the framework document; (2) described 
the analyses it planned to conduct during the rulemaking; (3) sought 
comments from interested parties on these subjects; and (4) in general, 
sought to inform interested parties about, and facilitate their 
involvement in, the rulemaking. Major issues discussed at the public 
meeting included: (1) The scope of coverage for the rulemaking; (2) 
development of a test procedure and appropriate test metrics; (3) 
manufacturer and market information, including distribution channels; 
(4) equipment classes, baseline units, and design options to improve 
efficiency; and (5) life-cycle costs to consumers, including 
installation, maintenance, and repair costs, and any consumer subgroups 
DOE should consider. At the

[[Page 32057]]

meeting and during the comment period on the framework document, DOE 
received many comments that helped it identify and resolve issues 
pertaining to walk-ins relevant to this rulemaking.
    DOE then gathered additional information and performed preliminary 
analyses to help develop potential energy conservation standards for 
this equipment. This process culminated in DOE's announcement of 
another public meeting to discuss and receive comments on the following 
matters: (1) The equipment classes DOE planned to analyze; (2) the 
analytical framework, models, and tools that DOE used to evaluate 
standards; (3) the results of the preliminary analyses performed by 
DOE; and (4) potential standard levels that DOE could consider. 75 FR 
17080 (April 5, 2010) (the April 2010 Notice). DOE also invited written 
comments on these subjects and announced the availability on its Web 
site of a preliminary technical support document (preliminary TSD) it 
had prepared to inform interested parties and enable them to provide 
comments. Id. (More information about the preliminary TSD is available 
at: http://www1.eere .energy.gov/buildings/appliance--standards/
rulemaking.aspx/ruleid/30.) Finally, DOE sought views on other relevant 
issues that participants believed either would impact walk-in standards 
or that the proposal should address. Id. at 17083.
    The preliminary TSD provided an overview of the activities DOE 
undertook to develop standards for walk-ins and discussed the comments 
DOE received in response to the framework document. The preliminary TSD 
also addressed separate standards for the walk-in envelope and the 
refrigeration system, as well as compliance and enforcement 
responsibilities and food safety regulatory concerns. The document also 
described the analytical framework that DOE used (and continues to use) 
in considering standards for walk-ins, including a description of the 
methodology, the analytical tools, and the relationships between the 
various analyses that are part of this rulemaking. Additionally, the 
preliminary TSD presented in detail each analysis that DOE had 
performed for these products up to that point, including descriptions 
of inputs, sources, methodologies, and results. These analyses were as 
follows:
     A market and technology assessment addressed the scope of 
this rulemaking, identified existing and potential new equipment 
classes for walk-in coolers and walk-in freezers, characterized the 
markets for this equipment, and reviewed techniques and approaches for 
improving its efficiency;
     A screening analysis reviewed technology options to 
improve the efficiency of walk-in coolers and walk-in freezers, and 
weighed these options against DOE's four prescribed screening criteria;
     An engineering analysis estimated the manufacturer selling 
prices (MSPs) associated with more energy efficient walk-in coolers and 
walk-in freezers;
     An energy use analysis estimated the annual energy use of 
walk-in coolers and walk-in freezers;
     A markups analysis converted estimated MSPs derived from 
the engineering analysis to customer purchase prices;
     A life-cycle cost analysis calculated, for individual 
customers, the discounted savings in operating costs throughout the 
estimated average life of walk-in coolers and walk-in freezers, 
compared to any increase in installed costs likely to result directly 
from the imposition of a given standard;
     A payback period analysis estimated the amount of time it 
would take customers to recover the higher purchase price of more 
energy efficient equipment through lower operating costs;
     A shipments analysis estimated shipments of walk-in 
coolers and walk-in freezers over the time period examined in the 
analysis;
     A national impact analysis (NIA) assessed the national 
energy savings (NES), and the national NPV of total customer costs and 
savings, expected to result from specific, potential energy 
conservation standards for walk-in coolers and walk-in freezers; and
     A manufacturer impact analysis (MIA) assessed the 
potential effects on manufacturers of amended efficiency standards.
    The public meeting announced in the April 2010 Notice took place on 
May 19, 2010. At this meeting, DOE presented the methodologies and 
results of the analyses set forth in the preliminary TSD. Interested 
parties that participated in the public meeting discussed a variety of 
topics, but the comments centered on the following issues: (1) Separate 
standards for the refrigeration system and the walk-in envelope; (2) 
responsibility for compliance; (3) equipment classes; (4) technology 
options; (5) energy modeling; (6) installation, maintenance, and repair 
costs; (7) markups and distributions chains; (8) walk-in cooler and 
freezer shipments; and (9) test procedures. The comments received since 
publication of the April 2010 Notice, including those received at the 
May 2010 public meeting, have contributed to DOE's resolution of the 
issues in this rulemaking as they pertain to walk-ins. This final rule 
responds to the issues raised by the commenters. (A parenthetical 
reference at the end of a quotation or paraphrase provides the location 
of the item in the public record.)
    On September 11, 2013, DOE published a notice of proposed 
rulemaking (NOPR) in this proceeding (September 2013 NOPR). 78 FR 
55781. In the September 2013 NOPR, DOE addressed, in detail, the 
comments received in earlier stages of rulemaking, and proposed new 
energy conservation standards for walk-ins. In conjunction with the 
September 2013 NOPR, DOE also published on its Web site the complete 
technical support document (TSD) for the proposed rule, which 
incorporated the analyses DOE conducted and technical documentation for 
each analysis. Also published on DOE's Web site were the engineering 
analysis spreadsheets, the LCC spreadsheet, and the national impact 
analysis standard spreadsheet; these can be found at: http://www1.eere.energy .gov/buildings/appliance--standards/rulemaking.aspx/
ruleid/30.
    The standards DOE proposed for walk-in coolers and walk-in freezers 
are shown in Table II.1.
BILLING CODE 6450-01-P

[[Page 32058]]

[GRAPHIC] [TIFF OMITTED] TR03JN14.010

[[Page 32059]]

    In the September 2013 NOPR, in addition to seeking comments 
generally on its proposal, DOE identified a number of specific issues 
on which it was particularly interested in receiving comments and views 
of interested parties, which were detailed in section VII.E of that 
notice. 78 FR at 55882-55887 (September 11, 2013) After the publication 
of the September 2013 NOPR, DOE received written comments on these and 
other issues. DOE also held a public meeting in Washington, DC, on 
October 9, 2013, to hear oral comments on, and solicit information 
relevant to, the proposed rule. The comments on the NOPR are addressed 
in this document.

III. General Discussion

A. Component Level Standards

    In the NOPR, DOE proposed component-level standards for walk-in 
coolers and freezers, in order to ensure accurate testing and 
compliance. Specifically, DOE proposed to regulate separately three 
main components of a walk-in: Panels, doors, and refrigeration systems. 
See 78 FR at 55822 (September 11, 2013). DOE received comments from a 
number of different entities. A list of these entities is included in 
Table III.1 below.

                         Table III.1--Interested Parties Who Commented on the WICF NOPR
----------------------------------------------------------------------------------------------------------------
                                                                                                 Comment number
               Commenter                          Acronym                  Affiliation              (docket
                                                                                                   reference)
----------------------------------------------------------------------------------------------------------------
Air Conditioning Contractors of America  ACCA.....................  Trade Association........                119
Air-Conditioning, Heating, and           AHRI.....................  Trade Association........           083, 114
 Refrigeration Institute.
Alex Milgroom..........................  Milgroom.................  Individual...............                090
American Panel Corporation.............  APC, American Panel......  Manufacturer.............                099
Architectural Testing, Inc.............  AT.......................  Manufacturer.............                111
Arctic Industries, Inc.................  Arctic...................  Manufacturer.............                117
Appliance Standards Awareness Project,   ASAP, ACEEE, NRDC (ASAP    Efficiency Organization..                113
 American Council for an Energy           et al.).
 Efficient Economy, and Natural
 Resources Defense Council.
Bally Refrigerated Boxes, Inc..........  Bally....................  Manufacturer.............                102
California Investor Owned Utilities....  CA IOUs..................  Utility Association......           089, 110
Center for the Study of Science Cato     Cato, CSS................  Efficiency Organization..                106
 Institute.
Crown Tonka, ThermalRite and             ICS et al................  Manufacturer.............                100
 International Cold Storage.
ebm-papst Inc..........................  ebm-papst................  Component/Material                       092
                                                                     Supplier.
Hillphoenix............................  Hillphoenix..............  Manufacturer.............                107
Hussmann Corporation...................  Hussmann.................  Manufacturer.............                093
Imperial-Brown.........................  IB.......................  Manufacturer.............                098
KeepRite Refrigeration.................  KeepRite.................  Manufacturer.............                105
Lennox International Inc./Heatcraft      Lennox...................  Manufacturer.............                109
 Refrigeration Products, LLC.
Louisville Cooler......................  Louisville Cooler........  Manufacturer.............                081
Manitowoc Company......................  Manitowoc................  Manufacturer.............                108
National Coil Company..................  NCC......................  Component/Material                       096
                                                                     Supplier.
National Restaurant Association........  NRA......................  Consumer Advocate........                112
New York State Office of the Attorney    AGNY.....................  State Official/Agency....                116
 General.
Nor-Lake, Inc..........................  Nor-Lake.................  Manufacturer.............                115
North American Association of Food       NAFEM....................  Consumer Advocate........                118
 Equipment Manufacturers.
Northwest Energy Efficiency Alliance     NEEA, NPCC (NEEA et al.).  Efficiency Organization..                101
 and Northwest Power and Conservation
 Council.
Natural Resources Defense Council,       NRDC, EDC, UCS, IPI (NRDC  Efficiency Organization..                094
 Environmental Defense Fund, Union of     et al.).
 Concenrned Scientists, Institute for
 Policy Integrity.
Robert Kopp............................  Kopp.....................  Individual...............                080
Society of American Florists...........  SAF......................  Consumer Advocate........                103
Suzanne Jaworowski.....................  Jaworowski...............  Individual...............                074
The Mercatus Center at George Mason      Mercatus, Mercatus Center  Efficiency Organization..                091
 University.
THERMO-KOOL/Mid-South Industries, Inc..  Thermo-Kool..............  Manufacturer.............                097
U.S. Chamber of Commerce...............  US Chamber of Commerce...  Regional Agency/                         095
                                                                     Association.
U.S. Cooler--Division of Craig           US Cooler................  Manufacturer.............           075, 104
 Industries Inc.
Heatcraft Refrigeration Products, LLC..  Heatcraft................  Manufacturer.............                  *
Honeywell..............................  Honeywell................  Manufacturer.............                  *
SmithBucklin Corporation...............  SmithBucklin.............  Manufacturer.............                  *
Heating, Air-Conditioning &              HARDI....................  Manufacturer.............                  *
 Refrigeration Distributors
 International.
Heat Transfer Products Group...........  HT, Heat Transfer........  Manufacturer.............                  *
The Danfoss Group......................  Danfoss..................  Component/Material                         *
                                                                     Supplier.
----------------------------------------------------------------------------------------------------------------
* These commenters were present at the public meeting but did not submit written comments.

    DOE received several comments supporting its component-based 
approach to setting standards for walk-ins. Nor-Lake, Kysor, and 
Louisville Cooler agreed with this approach. (Nor-Lake, No. 115 at p. 
1, Kysor, Public Meeting Transcript, No. 88 at p. 40, and Louisville 
Cooler, No. 81 at p. 1) Bally, IB, and ICS commented that component-
level standards were practical. (Bally, No. 102 at p. 1, IB, No. 98 at 
p. 1, and Hillphoenix, No. 107 at p. 2) ACCA notes that component-level 
standards simplify the compliance burden for assemblers. (ACCA, No. 119 
at p. 2) US Cooler also agreed with the component approach, noting that 
the refrigeration industry is well established, and adding

[[Page 32060]]

that a component-level approach will give US Cooler more flexibility to 
meet the proposed requirements. (US Cooler, No. 88 at p. 51) ASAP and 
the CA IOUs agreed with the component performance approach for panels 
and doors. (ASAP, Public Meeting Transcript, No. 88 at p. 16 and CA 
IOUs, Public Meeting Transcript, No. 88 at p. 30)
    DOE received additional comments concerning how WICF component 
standards could be set. Thermo-Kool commented that while component 
level standards were feasible, components added to doors such as 
windows and heater wires, among others, should be regulated 
separately--it added that doors should be regulated along with wall and 
ceiling panels. (ThermoKool, No. 97 at p. 1) Hillphoenix commented that 
standards for panels, walls, ceilings, and floors should also include 
the door panel. (Hillphoenix, No. 107 at p. 2) Bally noted that setting 
separate standards for windows would eliminate the need for door 
manufacturers to test the same door twice--i.e. with and without 
windows. (Bally, No. 102 at p. 5) APC commented that electrical 
components, such as vision windows, heater wires, relief vents, and 
temperature alarms, should have separate standards and not be included 
in the analysis of non-display doors. (APC, No. 99 at p. 2) The CA IOUs 
commented that separate standards for the envelope and refrigeration 
systems would be highly effective because they would reduce the 
possibility of underperforming envelopes or under-performing 
refrigeration systems. The CA IOUs remarked that it would have been 
difficult to enforce a standard that allowed performance trade-offs 
between the envelope and refrigeration system. (CA IOUs, No. 110 at p. 
1) The CA IOUs further commented that separate lighting performance 
standards for walk-ins would create more clarity for performance 
requirements of display doors. (CA IOUs, No. 110 at p. 4)
    In light of the comments received, DOE is finalizing an approach 
that sets out separate component-level standards for panels, doors, and 
refrigeration systems of WICFs. DOE recognizes that refrigeration 
systems may be sold as two other separate components--a unit cooler and 
a condensing unit--and is addressing this through a separate approach 
and certification process for this equipment. For more details on this 
approach, see section III.B.2.

B. Test Procedures and Metrics

    While Congress had initially prescribed certain performance 
standards and test procedures concerning walk-ins as part of the EISA 
2007 amendments, Congress also instructed DOE to develop specific test 
procedures for walk-in equipment. DOE subsequently established a test 
procedure for walk-ins. See 76 FR 21580 (April 15, 2011). See also 76 
FR 33631 (June 9, 2011) (final technical corrections). Recently, DOE 
published additional amendments that would, among other things, permit 
the use of alternative efficiency determination methods when evaluating 
the energy usage of refrigeration system unit coolers and condenser 
units. See 79 FR 27387 (May 13, 2014). These amendments have been taken 
into account when formulating the standards promulgated in this notice.
    The proposed amendments provide an approach that would base 
compliance on the ability of component manufacturers to produce 
components that meet the required standards. This approach is also 
consistent with the framework established by Congress, which set 
specific energy efficiency performance requirements on a component-
level basis. (42 U.S.C. 6313(f)) The approach is discussed more fully 
below.
1. Panels
    In the test procedure final rule for walk-ins, DOE defines 
``panel'' as a construction component, excluding doors, used to 
construct the envelope of the walk-in (i.e., elements that separate the 
interior refrigerated environment of the walk-in from the exterior). 76 
FR 21580, 21604 (April 15, 2011). DOE explained that panel 
manufacturers would test their panels to obtain a thermal transmittance 
metric--known as U-factor, measured in British thermal units (Btus) per 
hour-per square foot degrees (Fahrenheit) (Btu/h-ft\2\-[deg]F)--and 
identified three types of panels: display panels, floor panels, and 
non-floor panels. A display panel is defined as a panel that is 
entirely or partially comprised of glass, a transparent material, or 
both, and is used for display purposes. Id. It is considered equivalent 
to a window and the U-factor is determined by NFRC 100-2010-E0A1, 
``Procedure for Determining Fenestration Product U-factors.'' 76 FR at 
33639. Floor panels are used for walk-in floors, whereas non-floor 
panels are used for walls and ceilings.
    The U-factor for floor and non-floor panels accounts for any 
structural members internal to the panel and the long-term thermal 
aging of foam. This value is determined by a three-step process. First, 
both floor and non-floor panels must be tested using ASTM C1363-10, 
``Standard Test Method for Thermal Performance of Building Materials 
and Envelope Assemblies by Means of a Hot Box Apparatus.'' The panel's 
core and edge regions must be used during testing. Second, the panel's 
core U-factor must be adjusted with a degradation factor to account for 
foam aging. The degradation factor is determined by EN 13165:2009-02, 
``Thermal Insulation Products for Buildings--Factory Made Rigid 
Polyurethane Foam (PUR) Products--Specification,'' or EN 13164:2009-02, 
``Thermal Insulation Products for Buildings--Factory Made Products of 
Extruded Polystyrene Foam (XPS)--Specification,'' as applicable. Third, 
the edge and modified core U-factors are then combined to produce the 
panel's overall U-factor. All industry protocols were incorporated by 
reference most recently in the test procedure final rule correction. 76 
FR 33631.
    In response to the energy conservation standards NOPR, DOE received 
comments stating that the ASTM C1363, DIN EN 13164, and DIN EN 13165 
were significantly burdensome for manufacturers to conduct. DOE 
addressed these comments in a separate notice published on May 13, 
2014, which proposed certain simplifications to the current procedure. 
See 79 FR 27387. Specifically, under this approach, manufacturers would 
no longer need to use the performance-based test procedures for WICF 
floor and non-floor panels, which include ASTM C1363, DIN EN 13164, and 
DINE EN 13165 (10 CFR Part 431, Subpart R, Appendix A, sections 4.2, 
4.3, 5.1, and 5.2). DOE recognizes that these performance-based 
procedures for WICF floor and non-floor panels are in addition to the 
prescriptive requirements established in EPCA for panel insulation R-
values and, therefore, may increase the test burden to manufacturers. 
As DOE is no longer requiring the performance-based procedures which 
were ultimately used to calculate a U-value of a walk-in panel, the 
Department reverted to thermal resistance, or R-value, as measured by 
ASTM C518, as the metric for establishing performance standards for 
walk-in cooler and freezer panels. Based on the comments submitted by 
interested parties, DOE finds that using ASTM C518 will provide a 
sufficient robust method to measure panel energy efficiency while 
minimizing manufacturer testing burdens.
2. Doors
    The walk-in test procedure final rule addressed two door types: 
display and non-display doors. Within the general context of walk-ins, 
a door consists of the door panel, glass, framing materials,

[[Page 32061]]

door plug, mullion, and any other elements that form the door or part 
of its connection to the wall. DOE defines display doors as doors 
designed for product movement, display, or both, rather than the 
passage of persons; a non-display door is interpreted to mean any type 
of door that is not captured by the definition of a display door. See 
generally 76 FR 33631.
    The test metric for doors is in terms of energy use, measured in 
kilowatt-hours per day (kWh/day). The energy use accounts for thermal 
transmittance through the door and the electricity use of any 
electrical components associated with the door. The thermal 
transmittance is measured by NFRC 100-2010-E0A1, and is converted to 
energy consumption via conduction losses using an assumed efficiency of 
the refrigeration system in accordance with the test procedure. See 76 
FR at 33636-33637. The electrical energy consumption of the door is 
calculated by summing each electrical device's individual consumption 
and accounts for all device controls by applying a ``percent time off'' 
value to the appropriate device's energy consumption. For any device 
that is located on the internal face of the door or inside the door, 75 
percent of its power is assumed to contribute to an additional heat 
load on the compressor. Finally, the total energy consumption of the 
door is found by combining the conduction load, electrical load, and 
additional compressor load.
    DOE received several comments about the proposed metric. NEEA, et 
al. agreed with the door metric being a combination of the 
refrigeration load created by the heat loss through the door plus 
heater draw components associated with the door. (NEEA, et al., No. 101 
at p. 5) Nor-Lake commented that doors also have a U-value metric like 
panels and that other energy consuming devices should be considered as 
an additional load on the refrigeration system. (Nor-Lake, No. 115 at 
p. 2) Bally commented that the metric for doors should be a function of 
the temperature of the WICF box, the linear periphery dimensions of the 
door, the thickness of the door and the temperature or humidity 
conditions that exist on the outside of the door. (Bally, No. 102 at p. 
3) Hillphoenix commented that the energy consumption posed by the 
perimeter heat on a door is not associated with surface area, but 
instead the length of the heater wire. (Hillphoenix, No. 107 at p. 2) 
At the public meeting, Kysor commented that the door metric should 
include the R-value as tested by ASTM C518 and the electrical draw for 
heater wire, if used. (Kysor, Public Meeting Transcript, No. 88 at p. 
96) AHRI suggested that the energy metric for door efficiency be 
expressed as a function of door perimeter length, as opposed to surface 
area, since the largest heat gain was at the periphery and edges. AHRI 
pointed out that while the perimeter of a ``medium'' door was 11% 
greater than a ``small'' door, the surface area was 29% greater causing 
smaller doors to be over penalized. (AHRI, No. 114 at p. 5)
    In response to Nor-Lake's comment, DOE agrees that non-display 
doors are very similar to panels in that they are both primarily made 
up of insulation. However, the DOE test procedure adds the additional 
heat load caused by components like lighting and heater wire to the 
daily power consumption of these doors. DOE opted for this method 
because the electrical components, like heater wire, are integrated 
into the doors. DOE thought this method was more appropriate because 
the door manufacturers determine which electricity consuming components 
are integrated into the door. In response to Bally's comment, DOE 
agrees that the space conditions of a walk-in have an impact on a 
door's energy consumption. However, the thermal conductance of a cooler 
or freezer door, a portion of the maximum energy consumption metric, is 
measured at specific rating conditions to allow for equipment 
comparisons. These conditions are listed in 10 CFR 431.304 and 10 CFR 
Subpart R, appendix A. Additionally, DOE expects the thermal 
transmittance as measured by NFRC 100-2010-E0A1 to capture the energy 
loss though the periphery of the door because this test method measures 
the heat transfer through an entire door. DOE appreciates Kysor's 
comment, but finds that NFRC 100-2010-E0A1, and industry accepted test 
procedure, more accurately represents the thermal transmittance of the 
door. DOE agrees with AHRI that the energy consumption of the heater 
wire is directly related to the amount or length of heater wire used. 
However, EISA set a precedent by limiting the amount of heater wire per 
door opening area. Therefore, DOE is setting the standards in terms of 
door surface area instead of perimeter.
    DOE also received comments on the door test procedure. Bally 
remarked at the public meeting that the percent time off for device 
controls should be a floating value because it would be more practical 
than a set percent time off. (Bally, Public Meeting Transcript, No. 88 
at p. 148) DOE appreciates Bally's comment and acknowledges that some 
controls may reduce more energy than other. However, the current test 
procedure does not measure the effectiveness of the controls. 
Additionally, DOE is concerned that incorporating additional testing to 
measure a controls percent time off value would great undue burden on 
manufacturers. For these reasons the Department is not considering 
floating percent time off values.
3. Refrigeration
    The DOE test procedure incorporates an industry test procedure that 
applies to walk-in refrigeration systems: AHRI 1250 (I-P)-2009, ``2009 
Standard for Performance Rating of Walk-In Coolers and Freezers'' 
(``AHRI 1250-2009''). (10 CFR 431.304) This procedure applies to three 
different scenarios--(1) unit coolers and condensing units sold 
together as a matched system, (2) unit coolers and condensing units 
sold separately, and (3) unit coolers connected to compressor racks or 
multiplex condensing systems. It also describes methods for measuring 
the refrigeration capacity, on-cycle electrical energy consumption, 
off-cycle fan energy, and defrost energy. Standard test conditions, 
which are different for indoor and outdoor locations and for coolers 
and freezers, are also specified.
    The test procedure includes a calculation methodology to compute an 
annual walk-in energy factor (AWEF), which is the ratio of heat removed 
from the envelope to the total energy input of the refrigeration system 
over a year. AWEF is measured in Btu/W-h and measures the efficiency of 
a refrigeration system. DOE established a metric based on efficiency, 
rather than energy use, for describing refrigeration system 
performance, because a refrigeration system's energy use would be 
expected to increase based on the size of the walk-in and on the heat 
load that the walk-in produces. An efficiency-based metric would 
account for this relationship and would simplify the comparison of 
refrigeration systems to each other. Therefore, DOE is using an energy 
conservation standard for refrigeration systems that would be presented 
in terms of AWEF.
    Several stakeholders commented on the applicability of the test 
procedure to refrigeration components (i.e., the unit cooler and the 
condensing unit) sold separately. NEEA, et al. expressed support for 
the proposed standard's approach of using AHRI 1250 for testing and 
rating all condensing units. (NEEA, et al., No. 101 at p. 3) CA IOUs, 
on the other hand, asserted that the AHRI 1250 test was inadequate 
because it requires a unit cooler for testing a dedicated condensing 
unit, which is a less reliable rating method due to the lack of a 
viable enforcement mechanism. (CA IOUs,

[[Page 32062]]

Public Meeting Transcript, No. 88 at p. 384) CA IOUs recommended 
modifying the AHRI 1250 test method so that all unit coolers connected 
to remote condensing units are treated the same, whether they are 
connected to a dedicated, shared, or multiplex remote condensing unit. 
(CA IOUs, No. 110 at p. 2) CA IOUs further recommended developing a 
separate AHRI Standard for the performance rating of WICF refrigeration 
condensing units, along with TSLs (i.e. Trial Standard Levels) and 
energy conservation standards specific to refrigeration condensing 
units. (CA IOUs, No. 110 at p. 3) Manitowoc asserted that manufacturers 
that build only condensing units--but not evaporator coils--could not 
test the efficiency of the entire refrigeration system. (Manitowoc, No. 
108 at p. 2)
    Other stakeholders commented specifically on the metrics 
established by the test procedure. KeepRite and Bally suggested that 
the energy efficiency ratio (EER) of the condensing unit and evaporator 
be used as the refrigeration system metric and basis of performance 
specifications in place of AWEF. (KeepRite, No. 105 at p. 1; Bally, No. 
102 at p. 3) AHRI commented that the use of duty-cycle adjusted EER for 
condensing units and unit coolers, separately, was a more accurate 
metric than AWEF and should be the basis for performance 
specifications, because evaporator assemblies, condensing units, and 
refrigerants were often specified by contractors, procured from 
multiple manufacturers, and assembled as custom systems. (AHRI, No. 114 
at p. 2) Louisville Cooler commented that using a watts-per-hour was a 
more practical and replicable method of measuring energy use, and AWEF 
is impacted by variables such as ambient temperature and seasonal 
changes. (Louisville Cooler, No. 81 at p. 1) NEEA, et al., on the other 
hand, stated that AWEF was a logical metric to rate cooling system 
component efficiency in a way that enabled marketplace differentiation 
and simplified compliance and enforcement. (NEEA, et al., No. 101 at p. 
2)
    DOE understands that the test procedure, as originally conceived, 
required both a unit cooler and a condensing unit to be tested in order 
to derive an AWEF rating for the system. In light of the issues about 
enforcement and manufacturer burden raised by the CA IOUs and 
Manitowoc, DOE has developed a separate approach addressing 
certification issues for manufacturers who produce and sell condensing 
units and/or unit coolers as separate products. Under that approach, a 
manufacturer who sells a unit without a matched condensing unit must 
rate and certify a refrigeration system containing that unit cooler by 
testing according to the methodology in AHRI 1250 for unit coolers 
intended to be used with a parallel rack system (see AHRI 1250, section 
7.9). The manufacturer would use the calculation method in this section 
to determine the system AWEF and certify this AWEF to DOE. 
Additionally, all unit coolers tested and rated as part of a system 
under this method must comply with the standards in the multiplex 
equipment classes. DOE notes that this approach is consistent with the 
approach recommended by the CA IOUs because the same approach is used 
for separately-sold unit coolers regardless of what kind of condensing 
unit they are paired with. A manufacturer who sells a condensing unit 
separately must rate and certify a refrigeration system containing that 
condensing unit by conducting the condensing unit portion of the test 
method (using the standard ratings in section 5.1 of AHRI 1250-2009) 
but applying nominal values for saturated suction temperature, 
evaporator fan power, and defrost energy, in order to calculate an AWEF 
for the refrigeration system basic model containing that condensing 
unit. These nominal values would be standardized, which means that 
other similarly situated manufacturers would use these values when 
calculating the efficiency of a refrigeration system using their 
particular condensing unit. For complete details on how refrigeration 
system components must be rated and certified under this approach, see 
79 FR 27387 at 27397 (detailing revised approach to be incorporated 
under 10 CFR 431.304(c)(10)). In response to the comments about the 
appropriate metrics to use, DOE notes that it is continuing to use AWEF 
as the metric for WICF refrigeration systems and components, and 
continues to base its standards on AWEF. DOE believes AWEF is 
sufficient to capture WICF system and component performance and has not 
established a different metric, such as EER or watts/hour, for rating 
refrigeration equipment. In response to Louisville Cooler's comment on 
the effect of seasonal changes and temperatures, DOE notes that the 
test procedure established a set of uniform rating conditions that 
cover multiple ambient temperatures as a proxy for seasonal changes a 
system exposed to the outdoors may encounter. DOE's standards are based 
on rating systems under the uniform rating conditions contained in the 
test procedure, thus maximizing the repeatability of the test.
    Lennox noted that the test procedure did not contain provisions for 
multiple unit cooler matches on a single condensing unit. (Lennox, No. 
109 at p. 3) DOE acknowledges this fact but notes that manufacturer 
installation instructions typically include setup of multiple unit 
coolers because this setup is commonly used; for instance, by 
installers who wish to distribute airflow more evenly around a large 
walk-in. During the test, the system should be set up per the 
manufacturer's installation instructions. DOE successfully conducted 
testing of a system with two unit coolers as part of its rulemaking 
analysis. However, if DOE finds that such instructions are sufficiently 
unclear to others testing their equipment, DOE may introduce a test 
procedure addendum or amendment with more specific instructions for 
setup and testing.
    Further, some commenters identified types of systems or 
technologies that would not be covered by the test procedure. Hussmann 
commented that the AHRI 1250 procedure did not contain test methods for 
secondary refrigeration systems, such as those utilizing glycol, brine, 
or CO2. (Hussmann, No. 93 at p. 2) Danfoss commented that by 
regulating units in steady-state conditions, the proposed rule 
automatically excluded adaptive controls, which had tremendous energy 
savings potential. (Danfoss, Public Meeting Transcript, No. 88 at p. 
115) ACEEE agreed with Danfoss that the AHRI 1250 procedure lacked the 
ability to account for controls, and other design options not affecting 
steady-state energy consumption. (ACEEE, Public Meeting Transcript, No. 
88 at p. 149) AHRI added that the AHRI 1250 test procedure was likely 
to be updated in the next three to six months. (AHRI, No. 114 at p. 3)
    DOE agrees with Hussmann that the AHRI 1250 procedure does not 
cover secondary refrigeration systems, and agrees with Danfoss and 
ACEEE that controls or other options not affecting steady-state energy 
would also not be covered by AHRI 1250. If a manufacturer believes that 
the test procedure in its current form does not measure the efficiency 
of the equipment in a manner representative of its true energy use, the 
manufacturer may apply for a test procedure waiver. DOE also notes that 
should the industry develop a test method for WICF units with secondary 
refrigeration systems or adaptive controls, or update the existing test 
method so as to include such provisions, DOE will consider adopting it 
for WICFs. To address AHRI's comment, DOE will also consider

[[Page 32063]]

adopting test procedure revisions once they are developed.

C. Certification, Compliance, and Enforcement

    In keeping with the requirements of EPCA, DOE proposed a compliance 
date of three years from the date of publication of the final rule. 78 
FR 55830 (September 11, 2013) DOE received a variety of comments 
regarding this issue. Several stakeholders commented in favor of a 
three-year period between the final rule and the compliance date. 
Specifically, ASAP, et al. urged DOE to adopt a compliance date three 
years after publication of the final rule, since DOE's analysis of 
manufacturer impacts suggests that conversion costs to meet the 
proposed standards would be modest. (ASAP, et al., No. 113 at p. 5) 
Manitowoc stated that once the standard is finalized, three years is a 
sufficient timeframe for compliance. (Manitowoc, No. 108 at p. 3) ASAP, 
et al. noted that a compliance date of three years after the 
publication of the final rule is reasonable and that a later compliance 
date would result in avoidable loss of energy savings. (ASAP et al., 
No. 113 at p. 5)
    Several stakeholders favored a longer period between the final rule 
and the compliance date. Hussmann stated that DOE should consider the 
certification process when setting the compliance date and that the 
compliance date of the proposed standard should be delayed so as to 
allow for an AEDM to be enforced before the compliance date. (Hussmann, 
Public Meeting Transcript, No. 88 at p. 75, and No. 93 at p. 6) Lennox 
expressed concern that a three-year compliance timeframe is not 
adequate. (Lennox, No. 109 at p. 7) Nor-Lake requested that DOE extend 
the compliance date beyond 2017 and noted that a compliance date of 
April 2017 may not give manufacturers enough time to complete required 
testing since there are currently no known labs in the U.S. that can 
perform the DIN EN 13164/13165 tests. Nor-Lake observed that 
manufacturers that produce panels and refrigeration would be overloaded 
with having to perform both sets of tests. (Nor-Lake, No. 115 at pp. 3-
5) Hillphoenix requested additional time for the compliance date and 
testing to allow for more labs to qualify for testing, because 
currently none can. (Hillphoenix, No. at p. 69) AHRI recommended that 
the timeline consider the fact that there is no AHRI or other third-
party certification program for these products. (AHRI, Public Meeting 
Transcript, No. 88 at p. 76)
    Regarding enforcement, Hussmann commented that it was unclear how 
DOE intended to enforce the standard for cooling systems, and ACCA 
suggested that an outline of DOE's intended enforcement policy be 
included in the final rule. (Hussmann, No. 93 at p. 1; ACCA, No. 119 at 
p. 2) ACCA further urged that DOE simplify compliance obligations for 
the assembler, including giving the industry one year after adoption of 
an enforcement policy to comply with enforcement provisions. (ACCA, No. 
119 at p. 3)
    DOE notes that it has since simplified the testing requirements for 
WICF components--in part by eliminating the requirement to test panels 
using the ASTM C1363 and DIN EN 13164/13165 tests. For refrigeration 
systems, DOE established a testing approach for unit coolers and 
condensing units sold separately and allowed refrigeration systems, 
unit coolers, and condensing units to be rated using an Alternative 
Efficiency Determination Method, or AEDM. See 79 FR 27387 (May 14, 
2014). DOE believes these changes substantially simplify the process 
for certification, compliance, and enforcement. Therefore, DOE does not 
believe additional time is needed for compliance beyond three years 
from the publication of this notice.
    Since component-level standards were proposed in the NOPR, DOE 
requested comments on who should be responsible for complying with the 
regulation. DOE received comments from multiple interested parties in 
this regard. The CA IOUs stated that DOE found that the contractor is 
the ``manufacturer'' and that DOE should therefore provide a path to 
certification for contractors. (CA IOUs, No. 89 at p. 20) The CA IOUs 
further commented that manufacturers sell lighting systems specifically 
designed for cold storage facilities and these could therefore be 
regulated at the point of manufacture. (CA IOUs, No. 110 at p. 4) ACCA 
noted that the assembly of WICF component parts is often performed by 
independent heating, ventilation, air-conditioning, and refrigeration 
(HVAC/R) technicians not employed by component part manufacturers. 
(ACCA, No. 119 at p. 1) US Cooler noted that the proposed standard 
could significantly impact manufacturers who made individual 
refrigeration components that were then assembled into complete systems 
by contractors. (US Cooler, Public Meeting Transcript, No. 88 at p. 
344) More specifically, US Cooler expressed concern that wholesalers 
and contractors would not be held to the same level of compliance as 
component manufacturers, which would put US Cooler at a competitive 
disadvantage. (US Cooler, Public Meeting Transcript, No. 88 at p. 51) 
American Panel agreed that the standards must also apply to 
wholesalers, as well as component manufacturers to prevent wholesalers 
from circumventing the regulation (for instance, by selling cooler 
panels for freezer applications). (American Panel, No. 99 at p. 2) 
HARDI stated that holding the wholesaler responsible would limit 
product availability for replacement and repair. (HARDI, Public Meeting 
Transcript, No. 88 at p. 53) ACEEE stated that the approach chosen 
should support the goal of legitimate repair parts without abusing the 
system, where ``repair'' components are being sold by manufacturers to 
subvert the law. (ACEEE, Public Meeting Transcript, No. 88 at p. 54) 
Danfoss noted that about 25 percent of WICF refrigeration systems are 
assembled by contractors and not sold as combined sets, and American 
Panel noted that 15 percent of systems are unit coolers connected to 
rack systems, where below 10 percent are dedicated systems matched by a 
contractor. (Danfoss, Public Meeting Transcript, No. 88 at p. 60, and 
APC, Public Meeting Transcript, No. 88 at p. 60) Danfoss further 
expressed concern that the proposed standard would preclude 
manufacturers like itself who sold only condensing units, but not 
complete systems, from being able to sell products into the WICF 
market. (Danfoss, Public Meeting Transcript, No. 88 at p. 343)
    In general, DOE notes that the term ``manufacturer'' of a walk-in 
refers to any person who (1) manufactures a component of a walk-in 
cooler or walk-in freezer that affects energy consumption, including, 
but not limited to, refrigeration, doors, lights, windows, or walls; or 
(2) manufactures or assembles the complete walk-in cooler or walk-in 
freezer. (See 10 CFR 431.302.) For purposes of certification, DOE will 
require the manufacturer of the walk-in component to certify compliance 
with DOE's standards, which are component-based. Namely, the 
manufacturer of a panel or door that is used in a walk-in must certify 
compliance. Manufacturers of refrigeration system components--namely, 
unit coolers and condensing units--that sell those components 
separately must rate and certify those components, while manufacturers 
of complete refrigeration systems whose components are not already 
separately certified must rate and certify those systems, in a manner 
consistent with DOE's recent final rule, published at 79

[[Page 32064]]

FR 27387. This approach will allow manufacturers of one refrigeration 
component but not the other to sell their products into the WICF 
market, addressing Danfoss's concern. The manufacturer of the complete 
walk-in, or the assembler of any component thereof (for example, a 
person who assembles a walk-in refrigeration system from a separately-
sold unit cooler and condensing unit) must use components that are 
certified to and compliant with DOE's WICF standards. This approach 
avoids the compliance and certification issues inherent in requiring 
assemblers or contractors to certify WICF equipment, while maintaining 
the responsibility of assemblers or contractors to abide by the same 
standards as WICF components manufacturers, which DOE believes 
addresses US Cooler's concern about competitive disadvantage. This 
approach also requires that newly manufactured components comply with 
the DOE standards, regardless of whether they are being assembled into 
a new walk-in or being used as a replacement component on an existing 
walk-in, which addresses ACEEE's concern about the abuse of the 
``repair'' designation. DOE appreciates the statements made by Danfoss 
and American Panel, and notes that because several paths to 
``manufacture'' are available for walk-in coolers, it has developed its 
certification requirements accordingly.

D. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis, 
which it bases on information gathered on all current technology 
options and prototype designs that could improve the efficiency of the 
products or equipment that are the subject of the rulemaking. As the 
first step in such analysis, DOE develops a list of design options for 
consideration in consultation with manufacturers, design engineers, and 
other interested parties. DOE then determines which of these means for 
improving efficiency are technologically feasible. DOE considers 
technologies incorporated in commercial products or in working 
prototypes to be technologically feasible. 10 CFR part 430, subpart C, 
appendix A, section 4(a)(4)(i) Although DOE considers technologies that 
are proprietary, it will not consider efficiency levels that can only 
be reached through the use of proprietary technologies (i.e., a unique 
pathway), as it could allow a single manufacturer to monopolize the 
market.
    Once DOE has determined that particular design options are 
technologically feasible, it generally evaluates each of these design 
options in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-
(iv) Section IV.C of this notice discusses the results of the screening 
analyses for walk-in coolers and freezers. Specifically, it presents 
the designs DOE considered, those it screened out, and those that are 
the basis for the TSLs in this rulemaking. For further details on the 
screening analysis for this rulemaking, see chapter 4 of the TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt an amended standard for a type or class 
of covered product, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the 
engineering analysis, DOE determined the maximum technologically 
feasible (``max-tech'') improvements in energy efficiency for walk-ins 
using the design parameters for the most efficient products available 
on the market or in working prototypes. (See chapter 5 of the final 
rule TSD.) The max-tech levels that DOE determined for this rulemaking 
are described in section V.A.2 of this final rule.

E. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from the equipment at 
issue that are purchased during a 30-year period that begins in the 
year of compliance with amended standards (2017-2046). The savings are 
measured over the entire lifetime of products purchased in the 30-year 
period.\12\ The model forecasts total energy use over the analysis 
period for each representative equipment class at efficiency levels set 
by each of the considered TSLs. DOE then compares the energy use at 
each TSL to the base-case energy use to obtain the NES. The NIA model 
is described in section IV.I of this notice and in chapter 10 of the 
final rule TSD.
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    \12\ In the past, DOE presented energy savings results for only 
the 30-year period that begins in the year of compliance. In the 
calculation of economic impacts, however, DOE considered operating 
cost savings measured over the entire lifetime of equipment 
purchased during the 30-year period. DOE has chosen to modify its 
presentation of national energy savings to be consistent with the 
approach used for its national economic analysis.
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    The NIA spreadsheet model calculates energy savings in site energy, 
which is the energy directly consumed by products at the locations 
where they are used. For electricity, DOE reports national energy 
savings in terms of the savings in the primary energy that is used to 
generate and transmit the site electricity. To calculate this quantity, 
DOE derives annual conversion factors from the model used to prepare 
the Energy Information Administration's (EIA) Annual Energy Outlook 
(AEO).
    DOE has begun to also estimate full-fuel-cycle energy savings. 76 
FR 51282 (August 18, 2011), as amended at 77 FR 49701 (August 17, 
2012). The full-fuel-cycle (FFC) metric includes the energy consumed in 
extracting, processing, and transporting primary fuels, and thus 
presents a more complete picture of the impacts of energy efficiency 
standards. DOE's evaluation of FFC savings is driven in part by the 
National Academy of Science's (NAS) report on FFC measurement 
approaches for DOE's Appliance Standards Program.\13\ The NAS report 
discusses that FFC was primarily intended for energy efficiency 
standards rulemakings where multiple fuels may be used by a particular 
product. In the case of this rulemaking pertaining to walk-ins, only a 
single fuel--electricity--is consumed by the equipment. DOE's approach 
is based on the calculation of an FFC multiplier for each of the energy 
types used by covered equipment. Although the addition of FFC energy 
savings in the rulemakings is consistent with the recommendations, the 
methodology for estimating FFC does not project how fuel markets would 
respond to this particular standard rulemaking. The FFC methodology 
simply estimates how much additional energy, and in turn how many tons 
of emissions, may be displaced if the estimated fuel were not consumed 
by the equipment covered in this rulemaking. It is also important to 
note that the inclusion of FFC savings does not affect DOE's choice of 
proposed standards. For more information on FFC energy savings, see 
section IV.I.
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    \13\ ``Review of Site (Point-of-Use) and Full-Fuel-Cycle 
Measurement Approaches to DOE/EERE Building Appliance Energy- 
Efficiency Standards,'' (Academy report) was completed in May 2009 
and included five recommendations. A copy of the study can be 
downloaded at: http://www.nap.edu/catalog.php?record_id=12670.
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2. Significance of Savings
    To adopt more-stringent standards for a covered product, DOE must 
determine

[[Page 32065]]

that such action would result in significant additional energy savings. 
(42 U.S.C. 6295(o)(3)(B),(v) and 6316(a)) Although the term 
``significant'' is not defined in EPCA, the U.S. Court of Appeals for 
the District of Columbia, in Natural Resources Defense Council v. 
Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that 
Congress intended significant energy savings in the context of EPCA to 
be savings that were not ``genuinely trivial.'' The energy savings for 
these standards are nontrivial, and, therefore, DOE considers them 
``significant'' within the meaning of section 325 of EPCA.

F. Economic Justification

1. Specific Criteria
    As discussed in section II.A, EPCA provides seven factors to be 
evaluated in determining whether a potential energy conservation 
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i) and 
6316(a)) The following sections generally discuss how DOE is addressing 
each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Commercial Customers
    In determining the impacts of a potential new or amended energy 
conservation standard on manufacturers, DOE conducts a manufacturer 
impact analysis (MIA), as discussed in section IV.K. First, DOE 
determines its quantitative impacts using an annual cash flow approach. 
This includes both a short-term assessment (based on the cost and 
capital requirements associated with new or amended standards during 
the period between the announcement of a regulation and the compliance 
date of the regulation) and a long-term assessment (based on the costs 
and marginal impacts over the 30-year analysis period \14\). The 
impacts analyzed include INPV (which values the industry based on 
expected future cash flows), cash flows by year, changes in revenue and 
income, and other measures of impact, as appropriate. Second, DOE 
analyzes and reports the potential impacts on different types of 
manufacturers, paying particular attention to impacts on small 
manufacturers. Third, DOE considers the impact of new or amended 
standards on domestic manufacturer employment and manufacturing 
capacity, as well as the potential for new or amended standards to 
result in plant closures and loss of capital investment. Finally, DOE 
takes into account cumulative impacts of other DOE regulations and non-
DOE regulatory requirements on manufacturers.
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    \14\ DOE also presents a sensitivity analysis that considers 
impacts for equipment shipped in a 9-year period.
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    For individual customers, measures of economic impact include the 
changes in LCC and the PBP associated with new or amended standards. 
These measures are discussed further in the following section. For 
consumers in the aggregate, DOE also calculates the national net 
present value of the economic impacts applicable to a particular 
rulemaking. DOE also evaluates the LCC impacts of potential standards 
on identifiable subgroups of consumers that may be affected 
disproportionately by a national standard.
b. Savings in Operating Costs Compared to Increase in Price
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product compared 
to any increase in the price of the covered product that are likely to 
result from the imposition of the standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP 
analysis.
    The LCC is the sum of the purchase price of equipment (including 
the cost of its installation) and the operating costs (including energy 
and maintenance and repair costs) discounted over the lifetime of the 
equipment. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value. For 
its analysis, DOE assumes that consumers will purchase the covered 
products in the first year of compliance with amended standards.
    The LCC savings and the PBP for the considered efficiency levels 
are calculated relative to a base-case scenario, which reflects likely 
trends in the absence of new or amended standards. DOE identifies the 
percentage of consumers estimated to receive LCC savings or experience 
an LCC increase, in addition to the average LCC savings associated with 
a particular standard level. DOE's LCC and PBP analysis is discussed in 
further detail in section IV.G.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA also 
requires DOE, in determining the economic justification of a standard, 
to consider the total projected energy savings that are expected to 
result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and 
6316(a)) DOE uses NIA spreadsheet results to project national energy 
savings.
    For the results of DOE's analyses related to the potential energy 
savings, see section I.A.3 of this notice.
d. Lessening of Utility or Performance of Equipment
    In establishing classes of equipment, and in evaluating design 
options and the impact of potential standard levels, DOE seeks to 
develop standards that would not lessen the utility or performance of 
the equipment under consideration. DOE has determined that none of the 
TSLs presented in this final rule would reduce the utility or 
performance of the equipment considered in the rulemaking. (42 U.S.C. 
6295(o)(2)(B)(i)(IV) and 6316(a)) During the screening analysis, DOE 
eliminated from consideration any technology that would adversely 
impact customer utility. For the results of DOE's analyses related to 
the potential impact of amended standards on equipment utility and 
performance, see section IV.C of this notice and chapter 4 of the final 
rule TSD.
e. Impact of Any Lessening of Competition
    EPCA requires DOE to consider any lessening of competition that is 
likely to result from setting new or amended standards for a covered 
product. Consistent with its obligations under EPCA, DOE sought the 
views of the United States Department of Justice (DOJ). DOE asked DOJ 
to provide a written determination of the impact, if any, of any 
lessening of competition likely to result from the amended standards, 
together with an analysis of the nature and extent of such impact. 42 
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii). To assist DOJ in making such a 
determination, DOE provided DOJ with copies of both the NOPR and NOPR 
TSD for review. DOJ subsequently determined that the amended standards 
are unlikely to have a significant adverse impact on competition. 
Accordingly, DOE concludes that this final rule would not be likely to 
lead to a lessening of competition.
f. Need of the Nation To Conserve Energy
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(a)) 
The energy savings from new or amended standards are likely to improve 
the security and reliability of

[[Page 32066]]

the Nation's energy system. Reductions in the demand for electricity 
may also result in reduced costs for maintaining the reliability of the 
Nation's electricity system. DOE conducts a utility impact analysis to 
estimate how new or amended standards may affect the Nation's needed 
power generation capacity.
    Energy savings from amended standards for walk-ins are also likely 
to result in environmental benefits in the form of reduced emissions of 
air pollutants and GHGs associated with energy production (e.g., from 
power plants). For a discussion of the results of the analyses relating 
to the potential environmental benefits of the amended standards, see 
sections IV.L, IV.M and V.B.6 of this notice. DOE reports the expected 
environmental effects from the amended standards, as well as from each 
TSL it considered for walk-ins in the emissions analysis contained in 
chapter 13 of the final rule TSD. DOE also reports estimates of the 
economic value of emissions reductions resulting from the considered 
TSLs in chapter 14 of the final rule TSD.
g. Other Factors
    EPCA allows the Secretary, in determining whether a new or amended 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) 
and 6316(a)) There were no other factors considered for this final 
rule.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a), EPCA 
provides for a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
customer of equipment that meets the new or amended standard level is 
less than three times the value of the first-year energy (and, as 
applicable, water) savings resulting from the standard, as calculated 
under the applicable DOE test procedure. DOE's LCC and PBP analyses 
generate values that calculate the PBP for customers of potential new 
and amended energy conservation standards. These analyses include, but 
are not limited to, the 3-year PBP contemplated under the rebuttable 
presumption test. However, DOE routinely conducts a full economic 
analysis that considers the full range of impacts to the customer, 
manufacturer, Nation, and environment, as required under 42 U.S.C. 
6295(o)(2)(B)(i) and 6316(a). The results of these analyses serve as 
the basis for DOE to evaluate the economic justification for a 
potential standard level definitively (thereby supporting or rebutting 
the results of any preliminary determination of economic 
justification). The rebuttable presumption payback calculation is 
discussed in section IV.G.12 of this notice.

IV. Methodology and Discussion of Comments

A. General Rulemaking Issues

    During the October 9, 2013 NOPR public meeting, and in subsequent 
written comments, stakeholders provided input regarding general issues 
pertinent to the rulemaking, including the trial standard levels, the 
rulemaking timeline, and other subjects. These issues are discussed in 
this section.
1. Trial Standard Levels
    In the NOPR, DOE proposed the adoption of TSL 4 as the energy 
conservation standard for walk-ins, based on analysis showing that this 
level was both technically and economically feasible. 78 FR 55845 
(September 11, 2013) NEEA et al. agreed with DOE's proposal, noting 
that TSL 4 represented the highest economically justified efficiency 
level, even though higher efficiencies were technologically feasible. 
(NEEA et al., No. 101 at p. 4)
    Reaction to DOE's proposal was somewhat mixed with several parties 
viewing the proposed standard as sufficiently aggressive for some 
components but insufficient for other components. Specifically, ASAP 
opined that DOE's proposed efficiency level was strong, but urged DOE 
to consider a TSL 4.5, which would combine the envelope components of 
TSL 4, and the refrigeration components of TSL 5. (ASAP, No. at p. 15) 
Similarly, the CA IOUs, while agreeing with the proposed TSL for 
panels, urged DOE to adopt TSL 5 for refrigeration systems, since 
enhanced condenser coil, improved evaporator fan blades, and improved 
defrost controls--all of which are refrigeration systems components--
offered cost effective options DOE should consider. (CA IOUs, Public 
Meeting Transcript, No. 88 at p. 26)
    On the other hand, some commenters viewed the proposal as 
infeasible for manufacturers to meet. ThermoKool and US Cooler opined 
that TSL 2 was adequate. (US Cooler, Public Meeting Transcript, No. 88 
at p. 376, ThermoKool, No. 97 at p. 5) Lennox International also noted 
that DOE's AWEF values for TSL 4 were overly aggressive, based on 
modeling errors. (Lennox, No. 109 at p. 1)
    With regard to the selection of design options at each TSL, Nor-
Lake recommended that TSL 4 should consider standard levels requiring 
panels no thicker than 4 inches for class SP.L, as this was the current 
panel thickness most common in the industry. Nor-Lake noted that 
increasing panel thickness greatly increases production time and cost. 
(Nor-Lake, No. 115 at p. 2)
    In response to the comments from stakeholders, DOE reformulated its 
TSLs. See section V.A for further discussion on the TSLs.
2. Rulemaking Timeline
    A number of stakeholders commented on DOE's proposed rulemaking 
timeline. ICS requested that the target date for the final rule be 
moved beyond April 2014 to allow more opportunity for discussion and 
the development of a standard, and specifically recommended the final 
rule date be extended to at least 2016 to resolve all uncertainties in 
the analysis, using more accurate industry data. (ICS, et al., No. 100 
at p. 2 and 6). Lennox recommended a twelve-month delay in finalizing 
the proposed rule, in order for DOE to address modeling discrepancies 
and assumption errors in addition to providing separate performance 
targets for unit coolers and condensing units. (Lennox, No. 109 at p. 
7) Hillphoenix urged DOE to consider extending the completion date of 
the final rule, to allow, at minimum, four more opportunities for 
exchange of information between DOE and manufacturers. (Hillphoenix, 
No. 107 at p. 3) The CA IOUs suggested that DOE delay the adoption of 
energy conservation standards for walk-in coolers in order to rewrite 
the standards to make them more enforceable, and to develop separate 
standards for condensing units. (CA IOUs, No. 110 at p. 3)
    Additionally, Bally commented that the timeline is probably 
unrealistic due to the need for an additional public meeting. (Bally, 
No. 102 at p. 3) IB stated that DOE's proposal to have a final rule in 
place by April 2014 is very ambitious and does not allow enough time to 
make necessary modifications to the proposed rule. IB requested 
additional public meetings where the analysis assumptions can be 
reviewed in depth with manufacturers. (IB, No. 98 at p. 4) NCC stated 
that the time provided by DOE for manufacturers to evaluate the 
proposed standard was insufficient. (NCC, No. 96 at p. 2) Thermo-Kool 
commented that the target date for the final rule should be extended in 
order to allow manufacturers to fully understand DOE's analysis, and to 
facilitate more public meetings. (ThermoKool, No. 97 at

[[Page 32067]]

p. 5) Danfoss urged DOE to consider moving forward with the overall 
rulemaking but to take more time with the condensing unit and unit 
cooler split, potentially with an SNOPR, and to take separated 
condensing and cooling units into account. (Danfoss, Public Meeting 
Transcript, No. 88 at pp. 88 and 72)
    Public comment was also received opposing to extending the 
schedule. On the industry side, ebm-papst recommended proceeding 
quickly with the regulation because it raises the bar and spurs 
development toward a more sustainable refrigeration industry. (ebm-
papst, No. 92 at p. 2) Similarly, AGNY commented that the delay in 
amending efficiency standards for walk-ins has led to inefficient 
products staying on the market, depriving purchasers of more effective 
options, and further asserted that delays have cost the nation $2.2 
billion in lost savings. (AGNY, No. 116 at p. 2)
    While DOE appreciates the concerns expressed by commenters 
regarding the current rulemaking timeline, DOE believes that the recent 
modifications it has made will permit manufacturers to much more easily 
address the various requirements that will be established by this rule. 
For details regarding the separate analysis and certification of 
refrigeration system components, see 79 FR 27387 (May 14, 2014).

B. Market and Technology Assessment

    When beginning an energy conservation standards rulemaking, DOE 
develops information that provides an overall picture of the market for 
the equipment concerned, including the purpose of the equipment, the 
industry structure, and market characteristics. This activity includes 
both quantitative and qualitative assessments based primarily on 
publicly available information (e.g., manufacturer specification 
sheets, industry publications) and data submitted by manufacturers, 
trade associations, and other stakeholders. The subjects addressed in 
the market and technology assessment for this rulemaking include: (1) 
Quantities and types of equipment sold and offered for sale; (2) retail 
market trends; (3) equipment covered by the rulemaking; (4) equipment 
classes; (5) manufacturers; (6) regulatory requirements and non-
regulatory programs (such as rebate programs and tax credits); and (7) 
technologies that could improve the energy efficiency of the equipment 
under examination. DOE researched manufacturers of walk-in coolers and 
walk-in freezers and made a particular effort to identify and 
characterize small business manufacturers. See chapter 3 of the final 
rule TSD for further discussion of the market and technology 
assessment.
1. Equipment Included in This Rulemaking
a. Panels and Doors
    In the NOPR, DOE identified three types of panels used in the walk-
in industry: display panels, floor panels, and non-floor panels. Based 
on its research, DOE determined that display panels, typically found in 
beer caves (i.e. walk-ins used for the display and storage of beer or 
other alcoholic beverages often found in a supermarket) make up a small 
percentage of all panels currently present in the market. Therefore, 
because of the extremely limited energy savings potential currently 
projected to result from amending the requirements that these panels 
must meet, DOE did not propose to set new standards for walk-in display 
panels. Display panels, however, must still follow all applicable 
design standards already prescribed by EPCA. See 10 CFR 431.306(b). 
Additionally, DOE declined to propose standards for walk-in cooler 
floor panels because DOE determined through manufacturer interviews and 
market research that the majority of walk-in coolers are made with 
concrete floors and do not use insulated floor panels. DOE did, 
however, propose standards for other panels (i.e. door, ceiling and 
wall).
    Several stakeholders supported DOE's proposal to not set new 
standards for display and cooler floor panels. Thermo-Kool and 
Hillphoenix agreed that display panels and cooler floor panels should 
be excluded. (Thermo-Kool, No. 97 at p. 2; Hillphoenix, No. 107 at p. 
3) NEEA stated that it was impractical to regulate or require floors 
for walk-in coolers. (NEEA, No. 101 at p. 3) American Panel, however, 
believed that additional energy savings were possible while imposing 
only a minimal burden on industry if walk-in coolers were required to 
use insulated floor panels or insulated concrete slabs with thermal 
breaks instead of requiring panel manufacturers to increase panel 
thickness. (American Panel, No. 99 at p. 10) DOE agrees with American 
Panel that in theory a walk-in coolers would consume less energy with a 
insulated floor. However, EPCA directs DOE to adopt performance 
standards of walk-in and thus the Department cannot require all walk-in 
coolers to be installed with insulated floors. Additionally, the 
Department expected that setting an R-value requirement for walk-in 
cooler floor panels would cause manufactures to stop selling cooler 
floor panels to avoid the certification burden.
    American Panel asked if DOE considered freezers built inside a 
walk-in that are built inside another walk-in. American Panel noted 
that for cooler-freezer combination units, complicated dividing wall 
panels were required, which were complicated to manufacture, and would 
be very expensive, should the walk-in freezer require 5 inch 
insulation. (American Panel, No. 99 at p. 5) DOE agrees that its 
analysis does not account for the specific installation scenarios of 
walk-in panels beyond cooler versus freezer applications. However, the 
Department reiterates that it is not establishing prescriptive 
standards so freezer panels would not be required to be a specific 
thickness--only that they meet a particular thermal resistance value.
    DOE also identified two types of doors used in the walk-in market, 
display doors and non-display doors, which are discussed in section 
VI.2.A. of this NOPR. All types of doors will be subject to the 
performance standards proposed in this rulemaking.
b. Refrigeration Systems
Blast Chillers and Blast Freezers
    In the NOPR, DOE did not include blast freezers in its rulemaking 
analysis, but proposed to apply the same standards to blast freezer 
refrigeration systems as to storage freezer refrigeration systems, 
unless DOE were to find that blast freezer refrigeration systems would 
have difficulty complying with DOE's standards. DOE requested comments 
from the public on the inclusion of blast freezers within the scope of 
the proposed rule. 78 FR at 55799. In response, NEEA, et al., Hussmann, 
ACEEE, American Panel, the California IOU's, Heatcraft, Bally, 
Hillphoenix, Lennox, AHRI and Nor-Lake urged DOE to carefully define 
blast chillers and freezers, and to exclude them from the products 
covered by the proposed rule, since these were food processing 
equipment, as opposed to food storage equipment like most other walk-in 
coolers and freezers. (NEEA, et al., No. 101 at p. 5; Hussmann, No. 93 
at p. 7; ACEEE, Public Meeting Transcript, No. 88 at p. 112; APC, 
Public Meeting Transcript, No. 88 at p. 111; CA IOUs, Public Meeting 
Transcript, No. 88 at p. 109; Heatcraft, Public Meeting Transcript, No. 
88 at p. 108; Bally, Public Meeting Transcript, No. 88 at p. 108; 
Hillphoenix, No. 107 at p. 3; Lennox, No. 109 at p. 4; AHRI, No. 114 at 
p. 3; Nor-Lake, No. 115 at p. 1) APC recommended that in addition to 
blast freezers, blast chillers should also be

[[Page 32068]]

excluded from the ambit of the proposed rule for similar reasons. (APC, 
No. 99 at p. 3) AHRI, on the other hand, suggested that blast coolers 
and freezers, along with ripening rooms, should be held to different 
efficiency standards than WICFs. (AHRI, No. 114 at p. 3)
    After considering the comments received and conducting additional 
research, DOE agrees with commenters that blast chillers and blast 
freezers are food processing equipment and place them outside of the 
definition of a walk-in, which is defined as an ``enclosed storage 
space.'' (42 U.S.C. 6311(20)(A)) Additionally, DOE has found that blast 
chillers and blast freezers have very different energy consumption 
characteristics from storage coolers and freezers, which would justify 
their classification as a distinct product.
    Based on the comments, along with other information reviewed by DOE 
(e.g. manufacturer brochures and literature) regarding the operation 
and use of blast chillers and blast freezers. DOE is declining to treat 
these equipment categories as walk-ins. As a result, these two 
categories of equipment would not be required to meet the standards 
that DOE has detailed in this notice. In delineating these equipment, 
in DOE's view, a blast chiller (or shock chiller) refers to a type of 
cooling device that is designed specifically to, when fully loaded, 
cool its contents from 150[emsp14][deg]F to 55[emsp14][deg]F in less 
than 90 minutes. Similarly, a blast freezer (or shock freezer) refers 
to a type of freezer that is designed specifically to, when fully 
loaded, cool its contents from 150[emsp14][deg]F to 32[emsp14][deg]F in 
less than 90 minutes.
    While DOE believes that the above descriptions should be 
sufficiently clear to enable manufacturers to readily determine whether 
a particular device they produce falls under these descriptions, DOE 
may revise these descriptions in the future through guidance should 
additional clarification be necessary.
Special Application Walk-In Coolers
    Several commenters suggested that certain walk-in coolers designed 
for special applications should be excluded from the rulemaking. ebm-
papst commented that the proposed standard did not separate low-
velocity and low-profile unit coolers. (ebm-papst, No. 92 at p. 4) NCC 
and KeepRite commented that two-way or low-velocity coolers were 
designed as food-processing workspaces, and should be excluded from the 
scope of the proposed rule. (NCC, No. 96 at p. 2; K-RP, No. 105 at p. 
2) SAF noted that the floriculture industry had unique requirements 
with regard to air movement and humidity for walk-in coolers since 
potted plants and cut flowers had a rapid rate of respiration, and 
further expressed concern that the proposed standard did not account 
for the large degree of customization used in the engineering of floral 
storage units due to the higher humidity and gentle airflow required. 
(SAF, No. 103 at pp. 3 and 7) Manitowoc commented that grouping 
packaged refrigeration systems with split systems would make it 
difficult for packaged systems to meet the proposed standard levels at 
a reasonable cost, since packaged systems were typically 1 horsepower 
(hp) or less, and increased efficiency would have a greater cost 
impact. (Manitowoc, No. 108 at p. 2) Lennox stated that there were no 
known test laboratories in the U.S. that were certified or fully 
capable of testing the range of products and application temperatures 
covered by the proposed rule. (Lennox, No. 109 at p. 2)
    With respect to low-velocity and floral application coolers, DOE 
agrees that there is a certain category of medium- and low-temperature 
unit coolers that are characterized by low airflow. In medium-
temperature applications, these unit coolers may also be operated at a 
higher-than-usual temperature difference between the evaporator coil 
and the air, which contributes to a high humidity environment necessary 
for some applications. (For more details on temperature difference, see 
section IV.D.5.b.) Because these products are used for both storage and 
process applications, DOE cannot categorically exclude them from 
coverage, although DOE notes that equipment used for process cooling 
applications is excluded from the WICF standards. Also, DOE has not 
found evidence that such products would be at a disadvantage by having 
to satisfy the standards being adopted today, when tested under the 
rating conditions in the test procedure. In response to Manitowoc's 
comment, Manitowoc did not provide, nor has DOE found, evidence that 
packaged systems would have difficulty meeting the proposed standard; 
DOE notes that for dedicated condensing systems, which would include 
packaged systems, its standards for smaller systems are lower than 
those for larger systems and the required efficiency for smaller 
systems decreases with system size. To address Lennox's concern, if a 
manufacturer believes that the test procedure in its current form does 
not measure the efficiency of a model of covered equipment in a manner 
representative of its true energy use, the manufacturer may apply for a 
test procedure waiver for that model.
High-Temperature Products
    Hillphoenix commented that the definition of a walk-in cooler as 
having a maximum temperature of 55[emsp14][deg]F was incongruent with 
the NSF limit of 41[emsp14][deg]F as the maximum safe temperature for 
food. (Hillphoenix, No. 107 at p. 1) ICS, et al., American Panel, IB, 
Kysor, and ThermoKool suggested that DOE revise its definition of a 
walk-in cooler to align with the NSF's requirement of food storage at 
or below 41 [deg]F. (ICS, et al., No. 100 at p. 3; APC, No. 99 at p. 2; 
IB, No. 98 at p. 1; Kysor, Public Meeting Transcript, No. 88 at p. 40; 
ThermoKool, No. 97 at p. 1) Hussmann expressed concern that if the 
standards cover products up to 55 degrees, it may cover some products 
that have very different energy profiles than traditional [food] 
storage systems. (Hussmann, Public Meeting Transcript, No. 88 at p. 62) 
Lennox, however, agreed with DOE's proposal to base the definition of 
freezers vs. coolers on an operating temperature [at or] below and 
above 32[emsp14][deg]F, respectively. (Lennox, No. 109 at p. 5)
    DOE recognizes that the NSF requires food storage at 
41[emsp14][deg]F or below. However, DOE is retaining its definition of 
walk-in coolers and freezers because while the foodservice industry 
accounts for a large portion of the walk-in cooler market, these units 
also have applications in other industries, which do not fall within 
the ambit of the NSF standard. DOE notes that it based its analysis on 
coolers operating at 35[emsp14][deg]F (the AHRI 1250 test procedure 
rating temperature for coolers), which should not disadvantage products 
that must comply with the NSF requirement.
2. Equipment Classes
    In evaluating and establishing energy conservation standards, DOE 
generally divides covered equipment into classes by the type of energy 
used, or by capacity or other performance-related feature that 
justifies a different standard for equipment having such a feature. (42 
U.S.C. 6295(q) and 6316(a)) In deciding whether a feature justifies a 
different standard, DOE must consider factors such as the utility of 
the feature to users. DOE normally establishes different energy 
conservation standards for different equipment classes based on these 
criteria. In the NOPR, DOE proposed separate classes for panels, 
display doors, non-display doors, and refrigeration systems because 
each component type has a different utility to the consumer and 
possesses different energy use characteristics.

[[Page 32069]]

a. Panels and Doors
    In the NOPR, DOE proposed three equipment classes for walk-in 
panels: cooler structural panels, freezer structural panels, and 
freezer floor panels. DOE's proposal was based on the understanding 
that freezer floor panels and structural panels serve two different 
utilities.
    Freezer floor panels, which are panels used to construct the floor 
of a walk-in freezer, must often support the load of small machines 
like hand carts and pallet jacks. Structural panels are panels used to 
construct the ceiling or wall of a walk-in, provide structure for the 
walk-in.
    Structural panels are further divided into two more classes based 
on temperature--i.e., cooler versus freezer panels. Cooler structural 
panels are rated at an average foam temperature of 55[emsp14][deg]F, as 
required in the test procedure. Freezer structural panels are used in 
walk-in freezers and rated at an average foam temperature of 
20[emsp14][deg]F, also a test procedure requirement. See 79 FR at 
27412. Walk-in freezer panels must also meet a higher R-value than 
walk-in cooler panels. See 10 CFR 431.306.
    For doors, DOE distinguished between two different door types used 
in walk-ins: display doors and non-display doors. DOE proposed separate 
classes for display doors and non-display doors to retain consistency 
with the dual approach laid out by EPCA for these walk-in components. 
(42 U.S.C. 6313(f)(1)(C) and (3)) Non-display doors and display doors 
also serve separate purposes in a walk-in. Display doors contain mainly 
glass in order to display products or objects located inside the walk-
in. Non-display doors function as passage and freight doors and are 
mainly used to allow people and products to be moved into and out of 
the walk-in. Because of their different utilities, display and non-
display doors are made up of different material. Display doors are made 
of glass or other transparent material, while non-display doors are 
made of highly insulative materials like polyurethane. The different 
materials found in display and non-display doors significantly affect 
their energy consumption.
    DOE divided display doors into two equipment classes based on 
temperature differences: cooler and freezer display doors. Cooler 
display doors and freezer display doors are exposed to different 
internal temperature conditions, which affect the total energy 
consumption of the doors. DOE's test procedure contains an internal 
rating temperature of 35[emsp14][deg]F for walk-in cooler display doors 
and -10[emsp14][deg]F for walk-in freezer display doors. See 76 FR at 
21606 and 10 CFR 431.303
    DOE also separated non-display doors into two equipment classes, 
passage and freight doors. Passage doors are typically smaller doors 
and mostly used as a means of access for people and small machines, 
like hand carts. Freight doors typically are larger doors used to allow 
access for larger machines, like forklifts, into walk-ins. The 
different shape and size of passage and freight doors affects the 
energy consumption of the doors. Both passage and freight doors are 
also separated into cooler and freezer classes because, as explained 
for display doors, cooler and freezer doors are rated at different 
temperature conditions. A different rating temperature impacts the 
door's energy consumption.
    One stakeholder agreed with DOE's classification of equipment. Nor-
Lake commented that the proposed definitions for all three door 
equipment classes appeared to be reasonable. (Nor-Lake, No. 115 at p. 
1)
    Other stakeholders recommended changes to the envelope equipment 
classes. Hillphoenix noted that classifying doors based on whether they 
were display or non-display doors, and whether they were hinged or non-
hinged would allow for standards that would better represent their 
performance. (Hillphoenix, No. 107 at p. 3) ICS, et al., recommended 
that DOE categorize door panels with wall, floor, and ceiling panels 
and account for electrical consuming devices separately. (ICS, et al., 
No. 100 at pp. 2 and 3) American Panel also suggested that non-display 
doors should be classified with panels for the purpose of this 
rulemaking because they share the same R-value. (APC, No. 99 at p. 2) 
IB agreed with the proposed classes of panels and requested that door 
panels be included in these categories as they are manufactured from 
the same materials as those used in wall, floor and ceiling panels. 
(IB, No. 98 at p. 3)
    DOE agrees that non-display doors are very similar to panels 
because both components are primarily composed of insulation. However, 
non-display doors have a different utility than panels and for that 
reason may require features, like windows or heater wire, which walk-in 
panels do not require. For this reason, in this final rule the 
Department is creating separate equipment classes for non-display doors 
and panels.
    The Department did not receive any adverse comments regarding the 
equipment classes proposed for display doors.
    The equipment classes being adopted are listed in Table IV.1 below.

           Table IV.1--Equipment Classes for Panels and Doors
------------------------------------------------------------------------
             Product                   Temperature            Class
------------------------------------------------------------------------
Structural Panel................  Medium..............  SP.M
                                  Low.................  SP.L
Floor Panel.....................  Low.................  FP.L
Display Door....................  Medium..............  DD.M
                                  Low.................  DD.L
Passage Door....................  Medium..............  PD.M
                                  Low.................  PD.L
Freight Door....................  Medium..............  FD.M
                                  Low.................  FD.L
------------------------------------------------------------------------

b. Refrigeration Systems
    In the NOPR, DOE divided refrigeration systems into classes based 
on condensing unit type (i.e. whether the refrigeration system uses a 
dedicated condensing unit or is connected to a multiplex system), 
operating temperature (whether the system is designed to operate at 
medium or low temperature, corresponding to a walk-in cooler or walk-in 
freezer, respectively), location (for dedicated condensing systems, 
whether the condensing unit is located indoors or outdoors), and size 
(for dedicated condensing systems, whether the gross refrigerating 
capacity exceeds or is less than 9,000 Btu/h). DOE received comments on 
its proposed equipment classes.
General Comments
    NAFEM and Lennox opined that the equipment classes defined in the 
proposed rule did not fully encompass the variety of products and 
customizations currently available on the market. (NAFEM, No. 118 at p. 
3; Lennox, No. 109 at p. 2) The CA IOUs suggested that the standard 
would be more enforceable if, instead of classifying products as 
dedicated condensing or multiplex condensing, WICF refrigeration is 
treated like commercial refrigeration equipment, with separate classes 
for self-contained systems, unit coolers, and condensing units. In its 
view, this approach would address the splitting of the unit cooler from 
the condensing unit in cases where they are separate. (CA IOUs, No. 89 
at p. 19 and Public Meeting Transcript, No. 88 at pp. 30 and 103) ASAP 
commented that DOE should set a standard level for packaged dedicated 
refrigeration systems. (ASAP et al., No. 113 at p. 2) American Panel 
pointed out that the current classification did not account for pre-
charged units (i.e. refrigeration units that come ``pre-charged'' with 
refrigerant coolant added to the unit). (APC, No. 99 at p. 3)
    DOE takes note of manufacturer comments that the representative 
sizes in DOE's analysis do not fully

[[Page 32070]]

encompass the large variety of products and possible customizations. 
While recognizing that it would be impossible to model each and every 
one of these niche products, DOE has not changed the equipment classes 
or representative units from those analyzed in the NOPR, since these 
classes and units represent a large majority of the total market for 
walk-in coolers and freezers. DOE has not found, nor have stakeholders 
provided evidence, that ``niche'' products would be unable to meet the 
standards based on current equipment classification. DOE believes that 
its approach to testing and certification of unit coolers and 
condensing units sold separately addresses the comment from CA IOUs, 
and separate equipment classes are not needed; see section III.C for 
further discussion of certification. If a manufacturer believes that 
its design is subjected to undue hardship by regulations, the 
manufacturer may petition DOE's Office of Hearings and Appeals (OHA) 
for exception relief or exemption from the standard pursuant to OHA's 
authority under section 504 of the DOE Organization Act (42 U.S.C. 
7194), as implemented at subpart B of 10 CFR part 1003. OHA has the 
authority to grant such relief on a case-by-case basis if it determines 
that a manufacturer has demonstrated that meeting the standard would 
cause hardship, inequity, or unfair distribution of burdens.
Condensing Unit Location
    Lennox commented that for dedicated condensing units, systems 
manufactured and certified as outdoor units should be allowed to be 
used indoors without having to certify their units as indoor units as 
well; this approach would greatly reduce the testing and certification 
burden on manufacturers. (Lennox. No. 109 at p. 6) On the other hand, 
AHRI noted that it was possible for manufacturers to market a unit for 
use indoors, whereas contractors could choose to assemble it outdoors, 
where it may not meet the requisite standard. (AHRI, Public Meeting 
Transcript, No. 88 at p. 106)
    DOE understands that indoor and outdoor refrigeration systems are 
rated differently under the DOE test procedure, and this warrants the 
creation of separate equipment classes for indoor and outdoor 
refrigeration systems. Furthermore, indoor and outdoor refrigeration 
systems are often easily distinguishable visually: outdoor systems are 
characterized by a metal cover that protects the system from the 
elements. DOE realizes that a product may be used in a different 
application from which it was originally designed. In response to 
Lennox's comment, the standard for an outdoor refrigeration system is 
generally more stringent than for an indoor refrigeration system of the 
same size and operating temperature. Therefore, DOE is not opposed to 
systems rated as outdoor systems being used in practice as indoor 
systems, without having to be separately certified as ``indoor'' 
systems. Conversely, as AHRI pointed out, an indoor system used 
outdoors would not likely meet the requisite standard. DOE believes 
that in practice, this is not likely to occur at a significant rate 
because indoor units lack the protective features of outdoor units and 
therefore would be very unlikely to be installed outdoors. However, if 
DOE finds that indoor systems are being installed outdoors so as to 
circumvent the more stringent requirements for outdoor systems, DOE may 
promulgate future labeling standards specifying that a unit used 
outdoors must be labeled as an outdoor unit.
Capacity
    Lennox commented that the proposed classification for unit coolers 
did not fully account for various applications and that for dedicated 
condensing systems, the proposed equipment classification did not fully 
reflect the range currently available in the market. Further, Lennox 
noted that linear equations for units with capacity up to 36,000BTU/h, 
and fixed values for units with higher capacity, would be reasonable. 
(Lennox, No. 109 at p. 5) Similarly, on the classification of 
condensing systems, KeepRite commented that the definition between 
large and small classes at 9,000 Btu/hr was fairly low, and left a 
disproportionately wide range of products in the ``Large'' category. 
(K-RP, No. 105 at p. 2) American Panel, too, made a similar suggestion, 
recommending that equipment be divided into three categories--small 
(25,000 Btu)--to better represented 
the market. (APC, No. 99 at p. 3) Heatcraft stated that DOE did not 
look at a broad enough range of equipment, and that refrigeration 
systems can get up to 190,000 Btus in the 3,000 square foot range. 
(Heatcraft, Public Meeting Transcript, No. 88 at p. 102)
    In response to the comments from Lennox, KeepRite, and American 
Panel suggesting that separating the ``large'' equipment class could 
better represent the market, DOE notes that above the threshold for 
``large'' equipment, the standard level is equally attainable by 
varying sizes of equipment. DOE did not receive data or evidence from 
Heatcraft suggesting that systems larger than the ones analyzed would 
have difficulty meeting DOE's standards. Therefore, DOE is maintaining 
the size thresholds for refrigeration system classes proposed in the 
NOPR.
    In this document, the Department is adopting the equipment classes 
listed in Table IV.2.

                             Table IV.2--Equipment Classes for Refrigeration Systems
----------------------------------------------------------------------------------------------------------------
                                 Operating        Condenser         Refrigeration
       Condensing type          temperature        location       capacity (Btu/h)               class
----------------------------------------------------------------------------------------------------------------
Dedicated...................  Medium.........  Indoor.........                =9,000  DC.M.I, >=9,000.
                                               Outdoor........                =9,000  DC.M.O, >=9,000.
                              Low............  Indoor.........                =9,000  DC.L.I, >=9,000.
                                               Outdoor........                =9,000  DC.L.O, >=9,000.
Multiplex...................  Medium.........  ...............  ....................  MC.M.
                              Low............  ...............  ....................  MC.L.
----------------------------------------------------------------------------------------------------------------

[[Page 32071]]

3. Technology Assessment
    As part of the market and technology assessment performed for the 
final rule analysis, DOE developed a comprehensive list of technologies 
that would be expected to improve the energy efficiency of walk-in 
panels, non-display doors, display doors, and refrigeration systems. 
Chapter 3 of the TSD contains a detailed description of each technology 
that DOE identified. Although DOE identified a number of technologies 
that improve efficiency, DOE considered in its analysis only those 
technologies that would impact the efficiency rating of equipment as 
tested under the DOE test procedure. Therefore, DOE excluded several 
technologies from the analysis during the technology assessment because 
they would not improve the rated efficiency of equipment as measured 
under the specified test procedure. Technologies that DOE determined 
would impact the rated efficiency were carried through to the screening 
analysis and are discussed in section IV.C.
    ACEEE commented that there were significant technology options used 
abroad which could, if included in the DOE analysis, provide greater 
potential for energy savings. (ACEEE, Public Meeting Transcript, No. 88 
at p. 142) However, ACEEE did not identify any specific technology 
options and in the absence of an actionable recommendation, DOE is 
continuing to apply its methodology. DOE notes that its methodology 
does not exclude technology options primarily used outside the U.S. if 
they meet the requirements of the screening analysis.

C. Screening Analysis

    DOE uses four screening criteria to determine which design options 
are suitable for further consideration in a standards rulemaking. 
Namely, design options will be removed from consideration if they are 
not technologically feasible; are not practicable to manufacture, 
install, or service; have adverse impacts on product utility or product 
availability; or have adverse impacts on health or safety. 10 CFR part 
430, subpart C, appendix A, sections (4)(a)(4) and (5)(b)
1. Panels and Doors
    DOE proposed three efficiency improvements for walk-in panels: 
insulation thickness, insulation material, and framing material. 
Subsequent to the NOPR's publication, DOE modified its regulations to 
permit manufacturers to use ASTM C518--which measures panel performance 
by examining the panel's insulation performance--rather than ASTM 
C1363--which accounts for, among other things, the impact of structural 
members in a panel.. Because of this change, framing materials no 
longer impact the rated efficiency of walk-in panels--and hence, are no 
longer considered as design options.
    Some manufacturers and consumers urged DOE to screen out any design 
options which would even marginally affect the geometry of a unit, 
either by increasing its total footprint or reducing the cooled 
internal space. Specifically, these comments referred to DOE's 
consideration of added insulation thickness as a design option. ICS, et 
al., Louisville Cooler, and NRA noted that the increased footprint or 
decreased internal volume associated with thicker foam panels reduced 
storage utility and increased cost, perhaps even requiring full kitchen 
redesigns.(ICS, et al., No. 100 at p. 4; Louisville Cooler, No. 81 at 
p. 1; NRA, No. 112 at p. 4) SAF expressed concern that some of the 
design options considered in the WICF analysis, like thicker 
insulation, would reduce the size of the walk-in and cause a 
substantial negative impact on floral industry businesses. (SAF, No. 
103 at p. 7)
    DOE understands stakeholder concerns that increased panel thickness 
may reduce the interior space of a walk-in and affect the equipment's 
utility. DOE discussed the relationship between panel thickness and 
interior walk-in space during the manufacturer interviews. During the 
interviews, manufacturers agreed that the addition of \1/2\'' of 
insulation above the baseline thicknesses modeled would be accepted by 
commercial customers. Manufacturers noted that increased panel 
thickness would require them to redesign their equipment and, in some 
cases, replace current foaming fixtures. DOE incorporated these 
potential outcomes into its engineering and manufacturer impact 
analyses. Regarding insulation greater than \1/2\ an inch above the 
baseline thickness having an impact on the usefulness of the product to 
consumers, DOE notes that manufacturers are already employing these 
wall thicknesses in currently-available models. DOE believes that fact 
demonstrates that using thicker insulation is a viable technology 
option. Accordingly, DOE did not screen out increased panel thickness 
from its analysis.
    In the NOPR, DOE proposed to screen in the following technologies 
for non-display doors: insulation thickness, insulation material, 
framing material, improved window glass systems, and anti-sweat heat 
controls.
    DOE also proposed to ``screen in'' electronic lighting ballasts and 
high-efficiency lighting, occupancy sensors, improved glass system 
insulation performance, and anti-sweat heater controls as technologies 
that could improve the performance of display doors are rated by the 
test procedure.
    Several manufacturers were concerned with DOE's proposal to require 
tinted glass for transparent doors. Hussmann, ACCA and the California 
IOU's noted that the use of low-e coatings on high-performance display 
doors would add a considerable tint to the glass, making product 
visibility difficult and impacting consumer utility. (Hussmann, No. 93 
at p. 2) (ACCA, No. 119 at p. 2) (CA IOUs, No. 88 at p. 152) SAF 
commented that low-e coating would obscure floral products, and have a 
negative impact on the U.S. floral industry. (SAF, No 103 at pp. 6-7)
    DOE clarifies that the performance standards proposed in the NOPR 
did not require manufacturers to use low-e coating on their doors. Low-
e coating was considered as a design option. In the NOPR, DOE proposed 
TSL 4 which mapped to display cooler doors at efficiency level 1 (a 
baseline cooler door with LED lighting instead of fluorescent lighting) 
and mapped to baseline freezer doors. Baseline cooler doors do have one 
layer of hard coat low-e coating, but DOE expects that manufacturers 
could achieve this same level of performance by incorporating other 
design options like an additional pane of glass or a lighting sensor. 
Baseline display freezer doors do not have low-e coating. DOE notes 
that its market research shows that some display doors may have a low-e 
coating. While not all doors may have this feature, it is a viable one 
that manufacturers could opt to use in certain circumstances when 
appropriate. DOE also would like to remind stakeholders that it is not 
setting prescriptive standards, and should manufacturers value some 
features over others, they are free to use different design paths in 
order to attain the performance levels required by this rule.
    American Panel suggested that DOE should consider air curtains, a 
device that blows air parallel to an opening to create an infiltration 
barrier, because the technology would reduce air infiltration, a major 
contributor to the heat load in a walk-in. American Panel commented 
that air curtains may save almost as much energy as freezer panels with 
5-inches of insulation. (American Panel, No. 99 at p. 10) Manitowoc 
also commented that the largest factor to energy consumption was door 
open time and that cooler doors may be open

[[Page 32072]]

more than 200 times per day. Manitowoc suggested that door closers 
would significantly reduce energy consumption. (Manitowoc, No. 108 at 
p. 1) DOE agrees with American Panel and Manitowoc that infiltration 
adds heat load to walk-ins and that air curtains can be used to reduce 
infiltration. However, DOE's test procedure establishes metrics to 
measure the energy consumption or energy use of walk-in components and 
does not include the heat load caused by infiltration. See 76 FR at 
21594-21595. As a result, infiltration-related technologies do not 
improve the rated performance of walk-ins.
2. Refrigeration Systems
    NRA commented that reducing the energy usage of walk-ins has the 
potential to reduce cooling recovery time for equipment subjected to 
constant door openings and closings in busy kitchen environments, which 
could result in food spoilage and create public health and safety 
risks. (NRA, No. 112 at p. 3) DOE's analysis has not shown that the 
improvements in equipment efficiency required by its standards would 
negatively impact the capacity of that equipment or its cooling 
ability; therefore, DOE does not believe its standards alone would be 
likely to increase the risks to public health and safety. As noted 
earlier, DOE has screened from consideration particular design options 
that it believes may pose undue risks to health and safety.

D. Engineering Analysis

    The engineering analysis determines the manufacturing costs of 
achieving increased efficiency or decreased energy consumption. DOE 
historically has used the following three methodologies to generate the 
manufacturing costs needed for its engineering analyses: (1) The 
design-option approach, which provides the incremental costs of adding 
to a baseline model design options that will improve its efficiency; 
(2) the efficiency-level approach, which provides the relative costs of 
achieving increases in energy efficiency levels, without regard to the 
particular design options used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed data as to costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels.
    As discussed in the Framework document, preliminary analysis, and 
NOPR analysis, DOE conducted the engineering analyses for this 
rulemaking using a design-option approach for walk-ins. The decision to 
use this approach was made due to several factors, including the wide 
variety of equipment analyzed, the lack of equipment efficiency data 
regarding currently available equipment, and the prevalence of 
relatively easily implementable energy-saving technologies applicable 
to this equipment. More specifically, DOE identified design options for 
analysis, used a combination of industry research and teardown-based 
cost modeling to determine manufacturing costs, and employed numerical 
modeling to determine the energy consumption for each combination of 
design options used to increase equipment efficiency. Additional 
details of the engineering analysis are available in chapter 5 of the 
final rule TSD.
1. Representative Equipment for Analysis
    In performing its engineering analysis, DOE selected representative 
units for each primary equipment class to serve as analysis points in 
the development of cost-efficiency curves.
a. Panels and Doors
    DOE proposed three different panel sizes to represent the 
variations within each class. Table IV.3 shows each equipment class and 
the representative sizes associated with that class.

                                                           Table IV.3--Sizes Analyzed: Panels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Representative   Representative
         Equipment family name            Equipment family code         Temperature code              Size code           height (feet)    width (feet)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Structural Members....................  S........................  C........................  S........................               8              1.5
                                                                                              M........................               8              4
                                                                                              L........................               9              5.5
                                                                   F........................  S........................               8              1.5
                                                                                              M........................               8              4
                                                                                              L........................               9              5.5
Floor Panels..........................  F........................  F........................  S........................               8              2
                                                                                              M........................               8              4
                                                                                              L........................               9              6
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Similar to the panel analysis, the engineering analyses for walk-in 
display and non-display doors both use three different sizes to 
represent the differences in doors within each size class DOE examined. 
Details are provided in Table IV.4 for non-display doors and Table IV.5 
for display doors.

                                                      Table IV.4--Sizes Analyzed: Non-Display Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Representative   Representative
        Equipment family name            Equipment family code         Temperature code              Size code           height (feet)     width (feet)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Passage Doors........................  D........................  C........................  S........................              6.5              2.5
                                                                                             M........................              7                3
                                                                                             L........................              7.5              4
                                                                  F........................  S........................              6.5              2.5
                                                                                             M........................              7                3
                                                                                             L........................              7.5              4
Freight Doors........................  F........................  C........................  S........................              8                5
                                                                                             M........................              9                7
                                                                                             L........................             12                7

[[Page 32073]]

 
                                                                  F........................  S........................              8                5
                                                                                             M........................              9                7
                                                                                             L........................             12                7
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                        Table IV.5--Sizes Analyzed: Display Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Representative  Representative
         Equipment family name             Equipment family code         Temperature code              Size code           height (feet)   width (feet)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Display Doors.........................  D.........................  C........................  S........................            5.25            2.25
                                                                                               M........................            6.25            2.5
                                                                                               L........................            7               3
                                                                    F........................  S........................            5.25            2.25
                                                                                               M........................            6.25            2.5
                                                                                               L........................            7               3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    American Panel commented that freight doors are typically more than 
5 ft wide in order to allow for forklifts to pass through. (American 
Panel, No. 99 at p. 3) DOE notes that all the freight doors evaluated 
were 5ft or more in width, as shown in Table IV.4.
b. Refrigeration
    In the engineering analysis for walk-in refrigeration systems, DOE 
used a range of capacities as analysis points for each equipment class. 
The name of each equipment class along with the naming convention was 
discussed in section IV.B.2.b. In addition to the multiple analysis 
points, scroll, hermetic, and semi-hermetic compressors were also 
investigated because different compressor types have different 
efficiencies and costs.\15\
---------------------------------------------------------------------------

    \15\ Scroll compressors are compressors that operate using two 
interlocking, rotating scrolls that compress the refrigerant. 
Hermetic and semi-hermetic compressors are piston-based compressors 
and the key difference between the two is that hermetic compressors 
are sealed and hence more difficult to repair, resulting in higher 
replacement costs, while semi-hermetic compressors can be repaired 
relatively easily.
---------------------------------------------------------------------------

    Table IV.6 identifies, for each class of refrigeration system, the 
sizes of the equipment DOE analyzed in the engineering analysis. 
Chapter 5 of the TSD includes additional details on the representative 
equipment sizes and classes used in the analysis.

      Table IV.6--Sizes Analyzed for Refrigeration System Analysis
------------------------------------------------------------------------
                                  Sizes analyzed      Compressor types
        Equipment class              (Btu/h)              analyzed
------------------------------------------------------------------------
DC.M.I, =9,000...............             18,000  Hermetic, Semi-
                                                    hermetic, Scroll.
                                           54,000  Semi-Hermetic,
                                                    Scroll.
                                           96,000  Semi-Hermetic,
                                                    Scroll.
DC.M.O, =9,000...............             18,000  Hermetic, Semi-
                                                    hermetic, Scroll.
                                           54,000  Semi-Hermetic,
                                                    Scroll.
                                           96,000  Semi-Hermetic,
                                                    Scroll.
DC.L.I, =9,000...............              9,000  Hermetic, Semi-
                                                    hermetic, Scroll.
                                           54,000  Semi-Hermetic,
                                                    Scroll.
DC.L.O, =9,000...............              9,000  Hermetic, Semi-
                                                    hermetic, Scroll.
                                           54,000  Semi-Hermetic,
                                                    Scroll.
                                           72,000  Semi-Hermetic.
MC.M..........................              4,000  .....................
                                            9,000  .....................
                                           24,000  .....................
MC.L..........................              4,000  .....................
                                            9,000  .....................
                                           18,000  .....................
                                           40,000  .....................
------------------------------------------------------------------------

2. Refrigerants
    DOE used R404A, a hydrofluorocarbon (HFC) refrigerant blend, in its 
analysis for this NOPR because it is widely used currently in the walk-
in industry, but requested comment on the ability of systems using 
other refrigerants to meet a standard based on systems with 404A. 78 FR 
at 55799. Several stakeholders suggested that future refrigerant policy 
would play a role in dictating which refrigerant would be used with 
future refrigeration systems and noted this possibility in response to 
the engineering analysis.

[[Page 32074]]

AHRI commented that future changes in refrigerant policy were likely to 
drive the market towards low global warming potential (GWP) 
refrigerants, which could detrimentally affect the performance and 
efficiency of units. (AHRI, No. 114 at p. 5) KeepRite stated that 
policies in the near future may require the phase-out of 404A in favor 
of low-GWP refrigerants which may be less efficient than 404A, making 
it more difficult to meet the proposed standard. (KeepRite, No. 105 at 
p. 2) Hussmann agreed that upcoming policies would likely require the 
phasing-out of 404A in favor of low-GWP refrigerants, which could 
negatively affect system performance (Hussmann, No. 93 at p. 2) ICS, et 
al. opined that the DOE analysis did not sufficiently factor in the 
impending phase-out of HFCs. (ICS, et al., No. 100 at p. 10) Lennox 
agreed that alternative refrigerants were likely to see growing 
adoption in walk-ins over the timeline of the rule, but added that this 
factor may affect the achievable efficiency of a unit either positively 
or negatively. It suggested that DOE should be prepared to establish 
separate classes for equipment that uses non-HFC refrigerants if they 
have an adverse impact on equipment performance. (Lennox, No. 109 at p. 
4) Danfoss noted that a change in policy requiring low-GWP refrigerants 
would greatly impact the cost of production of refrigeration systems, 
as WICF units use a relatively large volume of charge. (Danfoss, Public 
Meeting Transcript, No. 88 at p. 164) Manitowoc stated that moving from 
HFCs to alternative refrigerants would increase cost. (Manitowoc, No. 
108 at p. 2)
    At this time, DOE does not believe that there is sufficient 
specific, actionable data presented at this juncture to warrant a 
change in its analysis and assumptions regarding the refrigerants used 
in walk-in cooler and freezer applications. As of now, there is 
inadequate publicly-available data on the design, construction, and 
operation of equipment featuring alternative refrigerants to facilitate 
the level of analysis of equipment performance which would be needed 
for standard-setting purposes. DOE is aware that many low-GWP 
refrigerants are being introduced to the market, and wishes to ensure 
that this rule is consistent with the phase-down of HFCs proposed by 
the United States under the Montreal Protocol. DOE continues to welcome 
comments on experience within the industry with the use of low-GWP 
alternative refrigerants. However, there are currently no mandatory 
initiatives such as refrigerant phase-outs driving a change to 
alternative refrigerants. Absent such action, DOE will continue to 
analyze the most commonly-used, industry-standard refrigerants in its 
analysis.
    DOE wishes to clarify that it will continue to consider WICF models 
meeting the definition of walk-in coolers and freezers to be part of 
their applicable covered equipment class, regardless of the refrigerant 
that the equipment uses. If a manufacturer believes that its design is 
subjected to undue hardship by regulations, the manufacturer may 
petition DOE's Office of Hearing and Appeals (OHA) for exception relief 
or exemption from the standard pursuant to OHA's authority under 
section 504 of the DOE Organization Act (42 U.S.C. 7194), as 
implemented at subpart B of 10 CFR part 1003. OHA has the authority to 
grant such relief on a case-by-case basis if it determines that a 
manufacturer has demonstrated that meeting the standard would cause 
hardship, inequity, or unfair distribution of burdens.
3. Baseline Specifications
a. Panels and Doors
    In the NOPR, DOE set the baseline level of performance to 
correspond to the most common, least efficient component that is 
compliant with the standards set forth in EPCA. (42 U.S.C. 
6313(f)(1)(3)) DOE determined specifications for each equipment class 
by surveying currently available units and models. More detail about 
the specifications for each baseline model can be found in chapter 5 of 
the TSD.
    DOE proposed that the baseline cooler structural panels would be 
comprised of 3.5 inches of polyurethane insulation, with wood framing 
members around the perimeter of the panel. Baseline freezer structural 
panels had 4-inches of polyurethane insulation, with wood framing 
members around the perimeter of the panel. Baseline freezer floor 
panels had 3.5 inches of polyurethane insulation with wood framing 
materials around the perimeter of the panel and additional wood 
structural material in the panel.
    Nor-Lake and Thermo Kool commented that DOE's baseline panels 
seemed reasonable. (Nor-Lake, No. 115 at p. 2; Thermo Kool, No 97 at p. 
2) American Panel made a number of suggestions regarding baseline 
panels. American Panel stated that 85% of the floor panels they built 
did not need additional structural members because they were going into 
restaurants. Thus, the floor panel is very similar to the structural 
panel. (American Panel, Public Meeting Transcript, No. 88 at p. 90) 
Additionally, American Panel commented that a 3.5-inch thick wood 
framed panel is not representative of the baseline for walk-in cooler 
structural panels. Baseline structural cooler panels should be 4 inches 
thick because that has the food service industry standard for the last 
10 to 20 years. Regarding freezer panels materials, American Panel 
estimated that less than 5% of the total market share has wood framing 
materials. (American Panel, No. 99 at p. 4) At the NOPR public meeting, 
American Panel generally stated that wood and hard nose framing 
material is not commonly used with foam-in-place polyurethane 
insulation. (American Panel, Public Meeting Transcript, No. 88 at p. 
128) Kinser also stated that 4-inch thick urethane panels without 
framing materials would be a representative baseline. (Kinser, No. 81 
at p. 1) US Cooler also disagreed with the baseline assumptions and 
noted that by misrepresenting the baseline, DOE could overestimate the 
monetary and emissions savings resulting from this rulemaking. (US 
Cooler, Public Meeting Transcript, No. 88 at p. 129) NEEA stated that 
most panel manufacturers were using high density PU foam as panel 
framing instead of wood. (NEEA, No. 101 at p. 3)
    DOE agrees with stakeholders that wood is not the predominate type 
of framing material in the WICF market, but it is present in the 
market. In a separate rulemaking, DOE proposed to eliminate the ASTM 
C1363 test, which measures the full panel thermal conductivity and 
accounts for features such as framing materials. (DOE subsequently 
finalized that proposal. See 79 FR at 27391 and 27405-27406.) 
Therefore, the impacts of framing material would not be captured by the 
WICF test procedure and framing material was no longer considered a 
design option for walk-in panels. In the final rule analysis, DOE 
incorporated high density polyurethane as the framing material for 
walk-in panels in order to more accurately capture the typical 
construction and cost of a baseline panel. However, for non-display 
doors, DOE continued to use wood as the baseline framing material, but 
DOE accounted for the market share of the baseline type unit and other 
design options in its efficiency distribution as part of the shipments 
analysis. See TSD chapter 9.
    At the NOPR public meeting, Arctic noted that solid core foam 
insulation, which DOE interprets as extruded polystyrene, is also found 
in the walk-in market. (Arctic, Public Meeting Transcript, No. 88 at p. 
126) US Cooler also commented that a sizable number

[[Page 32075]]

of units on the market use extruded polystyrene. US Cooler opined that 
polyurethane insulation did not have better long term thermal 
performance than extruded polystyrene. (US Cooler, No. 75 at p. 1) DOE 
agrees that some walk-ins use extruded polystyrene insulation, but 
found that the majority of panels are made with poured-in-place 
polyurethane. For its analysis of a representative panel, DOE continued 
to use one type of insulation material (i.e. poured-in-place 
polyurethane) in order to more accurately evaluate the energy 
consumption of a representative baseline walk-in panel. DOE notes that 
manufacturers can use any insulation or other features so long as they 
meet the energy conservation standard levels.
    In this final rule, DOE based its analysis on a representative 
model of a cooler structure panel by assuming that it is comprised of 
3.5 inches of polyurethane insulation. Baseline freezer structural 
panels had 4-inches of polyurethane insulation. Baseline freezer floor 
panels had 3.5 inches of polyurethane insulation. As previously stated, 
DOE accounted for high density polyurethane framing materials in all 
types of panels, but the framing materials did not have an impact on 
the panel's measured energy efficiency. DOE modeled a baseline cooler 
structural panel, freezer structural panel, and freezer floor panel to 
portray an industry representative baseline panel for these equipment 
classes. These baseline panels correspond to the most common, least 
efficient component found in the market that complies with the 
standards set forth in EPCA. (42 U.S.C. 6313(f)(1)(3)) In the case of 
walk-in cooler structural panels, the Department found that the most 
common, least efficient panel has an R-value that is higher than the 
current levels prescribed by EISA. However, the Department recognizes 
that there are other panel thicknesses and insulation materials 
employed in the WICF market. DOE used the baseline representative 
panels in its cost benefit evaluation to determine if energy efficiency 
improvements based on panel thickness were technologically feasible and 
economically justifiable.
    DOE's NOPR analysis assumed that the baseline non-display doors are 
constructed in a similar manner to baseline panels. Therefore, DOE uses 
baseline non-display doors that consist of wood framing materials, 
foamed-in-place polyurethane insulation. Passage doors were assumed to 
have a 2.25-square foot window with anti-sweat heater wire. The small 
freight doors have a 2.25-square foot window with anti-sweat heater 
wire and both the medium and large freight doors have a 4-square foot 
window with anti-sweat heater wire. DOE did not include heater wire in 
the perimeter of the cooler doors in its models, but included heater 
wire in the perimeter of freezer doors.
    Bally stated DOE should add heater wire to cooler doors because 
condensate from cooler doors could cause a workplace safety issue. 
(Bally, No. 102 at p. 3) DOE agrees with Bally and for this reason 
added heater wire to the perimeter of non-display cooler doors.
    Nor-Lake, ICS, et al., and American Panel remarked that non-display 
doors typically do not have windows. (Nor-Lake, No. 115 at pp. 1 and 2; 
ICS, et al., No. 100 at p. 4; American Panel, Public Meeting 
Transcript, No. 88 at p. 121) American Panel stated that less than 20% 
of their non-display doors have windows. (American Panel, Public 
Meeting Transcript, No. 88 at p. 121) Manitowoc commented that 25% of 
non-display doors sold by its company were fitted with 1.36-square foot 
windows and 5% of non-display doors sold had 2.23-square foot windows. 
(Manitowoc, No. 108 at p. 2) DOE found from its manufacturer interviews 
that windows in non-display doors serve a specific utility for 
consumers by allowing the user to look through the window instead of 
opening the door causing heat gain through infiltration. Therefore, DOE 
modeled its walk-in cooler doors with windows.
    At the public meeting Bally noted that consumers may choose to have 
windows on WICF doors, and these windows would need additional power to 
eliminate condensation. Therefore, Bally urged DOE to regulate doors 
(which DOE interprets to mean the door insulation) separately from 
windows and other electrical components. (Bally, Public Meeting 
Transcript, No. 88 at p. 379). DOE agrees with Bally that windows 
require heater wire to eliminate condensation and accounted for this 
power consumption in the engineering analysis. DOE is choosing not to 
regulate windows and electrical components separately from the door 
because they are inherent to a given door's total energy consumption. 
Each of these components contributes to the door's efficiency 
performance, much like the insulation in the door does.
    Hillphoenix commented that passage doors do not have complete 
frames, but instead use backings made of wood, fiber re-enforced 
plastic, or other materials. (Hillphoenix, Public Meeting Transcript, 
No. 88 at p. 131) DOE's own research through manufacturer interviews or 
market research did not indicate that a majority of walk-in non-display 
doors were constructed with wood backings instead of wood framing 
material. Accordingly, DOE continued to model the baseline non-display 
door with a complete wood frame.
    Nor-Lake expressed concern that DOE misinterpreted EPCA's 
requirements for windows in non-display doors, but offered no specific 
details as to how DOE misinterpreted EPCA. (Nor-Lake, No. 115 at p. 2) 
DOE notes that all the windows and display doors must meet the design 
requirements specified in 10 CRF 431.306(b).
    Nor-Lake commented that freezer windows in non-display doors tend 
not to be gas-filled since they have heated glass and the heater wires 
allow the gas to escape. (Nor-Lake, No. 115 at p. 2) In the display 
door market, DOE found that freezer display doors have both gas fill 
and anti-sweat heater wire. From an engineering perspective, it is 
unclear why windows in non-display doors would be significantly 
different from the glass packets used in display doors. DOE received no 
other comments stating that windows in freezer non-displays would lose 
all gas fill due to anti-sweat heater wire. Accordingly, both design 
features are included in the analysis.
    The baseline display doors modeled in DOE's analysis are based on 
the minimum specifications set by EPCA. (42 U.S.C. 6313(f)(3)) DOE 
modeled baseline display cooler doors comprised of two panes of glass 
with argon gas fill, hard coat low emittance or low-e coating, 2.9 
Watts per square foot of anti-sweat heater wire, no heater wire 
controller, and one fluorescent light. The baseline display freezer 
doors modeled in DOE's analysis consist of three panes of glass, argon 
gas, and soft coat low-e coating, 15.23 watts per square foot of anti-
sweat heater wire power, an anti-sweat heater wire controller, and one 
fluorescent light.
    Thermo-Kool commented that the Department's baseline for panels and 
doors was accurate. (Thermo-Kool, No. 97 at p. 2) US Cooler noted that 
DOE considered heater wire in doors that remained on all the time, 
whereas most units in the market used wires which only came on as 
needed. (US Cooler, Public Meeting Transcript, No. 88 at p. 143) DOE 
included heater wire controllers as a design option as a result of US 
Cooler's comment. Bally remarked that a typical cooler display door 
draws about 1.15 amps or 1.6 Wh/day. (Bally, Public Meeting Transcript, 
No. 88 at p. 135; Bally No. 102 at p.4) However, DOE found in its 
research that display doors typically drew more than 1.6 Wh/day--which 
prompted DOE to include a higher power draw in its engineering 
analysis.

[[Page 32076]]

b. Refrigeration
    DOE determined baseline characteristics for refrigeration systems 
based on typical low-cost, low-efficiency products currently on the 
market that meet the standards set forth in EPCA See 42 U.S.C. 
6313(f)(1)-(3). In the NOPR, DOE asked for comment on its assumptions 
about baseline equipment and received several responses, which are 
addressed below.
    In the NOPR, DOE tentatively proposed not to include piping and 
insulation between the unit cooler and condensing unit, as it believes 
these components would not be supplied by the manufacturer or included 
in the equipment's MSP, but by the contractor upon installation of the 
equipment. DOE requested comment on this assumption. Hussmann agreed 
with DOE's proposal that equipment such as piping that is used for 
final installation should not be included in the rulemaking. (Hussmann, 
No. 93 at p. 4) Thus, DOE has continued not to include such final 
installation components in its analysis.
    DOE made certain assumptions regarding the baseline temperature 
difference (TD) between saturated condensing temperature (SCT) and 
ambient air temperature for the condenser and between walk-in internal 
air temperature and saturated evaporating temperature (SET) for the 
evaporator that it used in the analysis for freezers and coolers and 
indoor and outdoor units. The SCT is the dew-point temperature \16\ of 
the refrigerant that corresponds to the refrigerant pressure in the 
compressor discharge line at the entrance to the condenser, while the 
SET is the dew-point temperature of the refrigerant that corresponds to 
the refrigerant pressure at the exit of the evaporator. DOE's baseline 
assumptions for the NOPR are listed in Table IV.10 below. DOE notes 
that the temperatures of air entering the evaporator and condenser 
coils are prescribed by the test procedure. The temperature difference 
(TD) is calculated as the difference between the air temperature and 
the refrigerant temperature (SET or SCT).
---------------------------------------------------------------------------

    \16\ Dew-point temperature is the vapor-liquid equilibrium point 
for a refrigerant mixture where the temperature of the mixture at a 
defined pressure is the maximum temperature required for a liquid 
drop to form in the vapor. (ANSI/ASHRAE Standard 23.1-2010, 
``Methods of Testing for Rating the Performance of Positive 
Displacement Refrigerant Compressors and Condensing Units that 
Operate at Subcritical Temperatures of the Refrigerant.'')

                            Table IV.10--Saturation Temperatures Assumed in the NOPR
----------------------------------------------------------------------------------------------------------------
                                          Temperature of air     Saturated evaporating    Temperature difference
             Application               entering the evaporator     temperature (SET)      (TD) between entering
                                            coil  ([deg]F)              ([deg]F)          air and SET  ([deg]F)
----------------------------------------------------------------------------------------------------------------
                                                   Evaporator
----------------------------------------------------------------------------------------------------------------
Medium Temperature...................                       35                       25                       10
Low Temperature......................                      -10                      -20                       10
----------------------------------------------------------------------------------------------------------------
                                                    Condenser
----------------------------------------------------------------------------------------------------------------
Application                                 Temperature of air     Saturated condensing   Temperature difference
                                        entering the condenser        temperature (SCT)    (TD) between entering
                                                          coil                 ([deg]F)              air and SCT
                                                      ([deg]F)                                          ([deg]F)
----------------------------------------------------------------------------------------------------------------
Medium Temperature Indoor............                       90                      115                       25
Medium Temperature Outdoor...........                       95                      115                       20
Low Temperature Indoor...............                       90                      110                       20
Low Temperature Outdoor..............                       95                      110                       15
----------------------------------------------------------------------------------------------------------------

    Several interested parties commented on the values of SET, SCT, 
and/or TD used in the analysis. Nor-Lake pointed out that the TD for 
evaporators could range from 7 [deg]F to 25 [deg]F depending on the 
application. (Nor-Lake, No. 115 at p. 2) Lennox commented that the DOE 
model used a constant condenser TD for fixed, floating, and variable 
speed calculations. (Lennox, No. 109 at p. 7) Lennox also stated that 
baseline SCT values of 120 [deg]F for medium temperature applications 
and 115 [deg]F for low temperature applications would be more in line 
with industry practice. (Lennox, No. 109 at p. 7) Heatcraft noted that 
the TDs DOE assumed were lower than industry standards. (Heatcraft, 
Public Meeting Transcript, No. 88 at p. 135)
    DOE conducted further testing in preparing the final rule and 
observed the following SET, SCT, and TDs at the highest ambient rating 
condition (that is, a 95[emsp14][deg]F ambient air temperature for the 
units tested):

[[Page 32077]]

                          Table IV.11--Saturation Temperatures Observed During Testing
----------------------------------------------------------------------------------------------------------------
                                          Temperature of air     Saturated evaporating    Temperature difference
             Unit tested               entering the evaporator     temperature (SET)      (TD) between entering
                                            coil  ([deg]F)              ([deg]F)          air and SET  ([deg]F)
----------------------------------------------------------------------------------------------------------------
                                                   Evaporator
----------------------------------------------------------------------------------------------------------------
Medium Temperature Outdoor--Unit 1...                       35                       22                       13
Medium Temperature Outdoor--Unit 2...                       35                       20                       15
Low Temperature Outdoor--Unit 3......                      -10                      -10                       10
Low Temperature Outdoor--Unit 4......                      -10                      -21                       11
----------------------------------------------------------------------------------------------------------------
                                                    Condensor
----------------------------------------------------------------------------------------------------------------
                                         Temperature of air       Saturated condensing     Temperature
Unit tested                             entering the condenser  temperature (SCT)        difference (TD) between
                                                          coil                 ([deg]F)     entering air and SCT
                                                      ([deg]F)                                          ([deg]F)
----------------------------------------------------------------------------------------------------------------
Medium Temperature Outdoor--Unit 1...                       95                      109                       14
Medium Temperature Outdoor--Unit 2...                       95                      114                       20
Low Temperature Outdoor--Unit 3......                       95                      106                       11
Low Temperature Outdoor--Unit 4......                       95                      106                       11
----------------------------------------------------------------------------------------------------------------

    The test results for evaporator TDs are close to the values DOE 
assumed in the NOPR, while the test results for condenser TDs are equal 
to or lower than the values DOE assumed in the NOPR. Based on these 
test results, DOE continued to use its assumed values in Table IV.10 
for SET, SCT, and TD at the highest ambient rating condition, with the 
exception of unit cooler (evaporator) TD for medium temperature 
systems, which DOE changed to 14[emsp14][deg]F. To address Nor-Lake's 
comment, DOE acknowledges that some units may operate with different 
evaporator TDs, and notes that if a manufacturer believes that the test 
procedure in its current form does not measure the efficiency of the 
equipment in a manner representative of its true energy use, the 
manufacturer may apply for a test procedure waiver. In response to 
Lennox's comment about constant condenser TD, DOE has updated its model 
such that, for lower ambient rating conditions, the model recalculates 
the TD based on the head pressure, with different values for fixed and 
floating head pressure. The model's treatment of the variable speed 
condenser fan option also takes the differences in TD into account. DOE 
discusses these calculations in more detail in chapter 5 of the TSD. To 
address Lennox's and Heatcraft's concern about baseline SCT values, DOE 
notes that it did not observe a higher condenser TD in testing than its 
baseline assumptions. Although DOE recognizes that some units on the 
market may have higher TDs, DOE is unaware of specific units that have 
higher TDs. Additionally, assigning a higher TD for the baseline might 
overestimate the energy savings of design options that lower the TD, 
such as having a larger condenser coil.
4. Cost Assessment Methodology
a. Teardown Analysis
    To calculate the manufacturing costs of the different walk-in 
components, DOE disassembled baseline equipment. This process of 
disassembling systems to obtain information on their baseline 
components is referred to as a ``physical teardown.'' During the 
physical teardown, DOE characterized each component that makes up the 
disassembled equipment according to its weight, dimensions, material, 
quantity, and the manufacturing processes used to fabricate and 
assemble it. The information was used to compile a bill of materials 
(BOM) that incorporates all materials, components, and fasteners 
classified as either raw materials or purchased parts and assemblies.
    DOE also used a supplementary method, called a ``virtual 
teardown,'' which examines published manufacturer catalogs and 
supplementary component data to estimate the major physical differences 
between equipment that was physically disassembled and similar 
equipment that was not. For virtual teardowns, DOE gathered product 
data such as dimensions, weight, and design features from publicly-
available information, such as manufacturer catalogs.
    The teardown analyses allowed DOE to identify the technologies that 
manufacturers typically incorporate into their equipment. The end 
result of each teardown is a structured BOM, which DOE developed for 
each of the physical and virtual teardowns. DOE then used the BOM from 
the teardown analyses as input to the cost model to calculate the 
manufacturer production cost (MPC) for the product that was torn down. 
The MPCs derived from the physical and virtual teardowns were then used 
to develop an industry average MPC for each product class analyzed. See 
chapter 5 of the TSD for more details on the teardown analysis.
    For display doors and non-display freight doors, limited 
information was publicly available, particularly as to the assembly 
process and shipping. To compensate for this situation, DOE conducted 
physical teardowns for two representative units, one within each of 
these equipment classes. DOE supplemented the cost data it derived from 
these teardowns with information from manufacturer interviews. The cost 
models for panels and for non-display structural doors were created by 
using public catalog and brochure information posted on manufacturer 
Web sites and information gathered during manufacturer interviews.
    For the refrigeration system, DOE conducted physical teardowns of 
unit cooler and condensing unit samples to construct a BOM. The 
selected systems were considered representative of baseline, medium-
capacity systems, and used to determine the base components and 
accurately estimate the materials, processes, and labor required to 
manufacture each individual component. From these teardowns, DOE 
gleaned important information and data not typically found in catalogs 
and brochures, such as heat exchanger and fan motor details, assembly 
parts and processes, and shipment packaging.

[[Page 32078]]

b. Cost Model
    The cost model is one of the analytical tools DOE used in 
constructing cost-efficiency curves. DOE derived the cost model curves 
from the teardown BOMs and the raw material and purchased parts 
databases. Cost model results are based on material prices, conversion 
processes used by manufacturers, labor rates, and overhead factors such 
as depreciation and utilities. For purchased parts, the cost model 
considers the purchasing volumes and adjusts prices accordingly. 
Original equipment manufacturers (OEMs), i.e., the manufacturers of 
WICF components, convert raw materials into parts for assembly, and 
also purchase parts that arrive as finished goods, ready-to-assemble. 
DOE bases most raw material prices on past manufacturer quotes that 
have been inflated to present day prices using Bureau of Labor 
Statistics (BLS) and American Metal Market (AMM) inflators. DOE 
inflates the costs of purchased parts similarly and also considers the 
purchasing volume--the higher the volume, the lower the price. Prices 
of all purchased parts and non-metal raw materials are based on the 
most current prices available, while raw metals are priced on the basis 
of a 5-year average to smooth out spikes. Chapter 5 of the TSD 
describes DOE's cost model and definitions, assumptions, data sources, 
and estimates.
c. Manufacturing Production Cost
    Once it finalized the cost estimates for all the components in each 
teardown unit, DOE totaled the cost of the materials, labor, and direct 
overhead used to manufacture the unit to calculate the manufacturer 
production cost of such equipment. The total cost of the equipment was 
broken down into two main costs: (1) The full manufacturer production 
cost, referred to as MPC; and (2) the non-production cost, which 
includes selling, general, and administration (SG&A) costs; the cost of 
research and development; and interest from borrowing for operations or 
capital expenditures. DOE estimated the MPC at each design level 
considered for each product class, from the baseline through max-tech. 
After incorporating all of the data into the cost model, DOE calculated 
the percentages attributable to each element of total production cost 
(i.e., materials, labor, depreciation, and overhead). These percentages 
were used to validate the data by comparing them to manufacturers' 
actual financial data published in annual reports, along with feedback 
obtained from manufacturers during interviews. DOE uses these 
production cost percentages in the MIA (see section IV.K).
    In discussing earlier comments received from interested parties, 
the NOPR's preamble erred in characterizing comments from American 
Panel as stating that panel costs were around $0.25 per square foot. As 
a result, US Cooler and American Panel stated that $0.25 per square 
foot was too low a cost for panels. (US Cooler, Public Meeting 
Transcrip, No. 88, at p. 19; American Panel, Public Meeting Transcript, 
No. 88 at p. 20) However, in the NOPR's actual analysis, the Department 
estimated that the manufacturer production cost of walk-in panels was 
considerably higher than $0.25 per square foot. The panel costs used in 
the analysis are listed in Table IV.7.

                          Table IV.7--NOPR Insulation Thickness Material and Labor Cost
----------------------------------------------------------------------------------------------------------------
                                                                Material/labor cost for
       Insulation thickness  in                Material          non-floor panels $/ft   Material/labor cost for
                                                                          \2\             floor panels $/ft \2\
----------------------------------------------------------------------------------------------------------------
3.5..................................  Polyurethane...........                    $5.06                    $5.50
4....................................  Polyurethane...........                     5.22                     5.64
5....................................  Polyurethane...........                     5.58                     5.99
6....................................  Polyurethane...........                     5.92                     6.33
----------------------------------------------------------------------------------------------------------------

    Based on manufacturer feedback, the Department further revised its 
cost model, which resulted in increased insulation prices. The material 
and labor prices used to characterize the cost of walk-in panels used 
in the analysis for this final rule are listed in Table IV.8.

                       Table IV.8--Final Rule Insulation Thickness Material and Labor Cost
----------------------------------------------------------------------------------------------------------------
                                                                Material/labor cost for
       Insulation thickness  in                Material          non-floor panels $/ft   Material/labor cost for
                                                                          \2\             floor panels $/ft \2\
----------------------------------------------------------------------------------------------------------------
3.5..................................  Polyurethane...........                    $6.62                    $7.14
4....................................  Polyurethane...........                     6.83                     7.34
5....................................  Polyurethane...........                    7.248                     7.81
6....................................  Polyurethane...........                    7.652                     8.21
----------------------------------------------------------------------------------------------------------------

    In the NOPR, in an effort to capture the anticipated cost reduction 
in LED fixtures in the analyses, DOE incorporated price projections 
from its Solid State Lighting program into its MPC values for the 
primary equipment classes. The price projections for LED case lighting 
were developed from projections developed for the DOE's Solid State 
Lighting Program's 2012 report, Energy Savings Potential of Solid-State 
Lighting in General Illumination Applications 2010 to 2030 (``the 
energy savings report''). ASAP, et al. supported the use of price 
projections in DOE's analysis because LED prices are likely to drop in 
the future as market penetration increases. (ASAP et al., No. 113 at p. 
4) More details about DOE price projections for LEDs are described in 
Chapter 5 of the TSD.
d. Manufacturing Markup
    DOE uses MSPs to conduct its downstream economic analyses. DOE 
calculated the MSPs by multiplying the manufacturer production cost by 
a markup and adding the equipment's shipping cost. The production price 
of the equipment is marked up to ensure that manufacturers can make a 
profit on the sale of the equipment. DOE gathered

[[Page 32079]]

information from manufacturer interviews to determine the markup used 
by different equipment manufacturers. Using this information, DOE 
calculated an average markup for each component of a walk-in, listed in 
Table IV.9.

                    Table IV.9--Manufacturer Markups
------------------------------------------------------------------------
                                                                Markup
                     Walk-in component                        (percent)
------------------------------------------------------------------------
Panels.....................................................           32
Display Doors..............................................           50
Non-Display Doors..........................................           62
Refrigeration Equipment....................................           35
------------------------------------------------------------------------

e. Shipping Costs
    The shipping rates in the NOPR, were developed by conducting market 
research on shipping rates and by interviewing manufacturers of the 
covered equipment. For example, DOE found through its research that 
most panel, display door, and non-display door manufacturers use less 
than truck load freight to ship their respective components and revised 
its estimated shipping rates accordingly. DOE also found that most 
manufacturers, when ordering component equipment for installation in 
their particular manufactured product, do not pay separately for 
shipping costs; rather, it is included in the selling price of the 
equipment. However, when manufacturers include the shipping costs in 
the equipment selling price, they typically do not mark up the shipping 
costs for profit, but instead include the full cost of shipping as part 
of the price quote. DOE has revised its methodology accordingly. Please 
refer to chapter 5 of the TSD for details.
    American Panel commented that the estimated shipping costs for 5-
inch panels could be significantly higher than shipping costs for 4-
inch panels and could range for a 67 percent to 140 percent increase. 
(American Panel, No. 99 at p. 6) Artic Industries commented that 
shipping has generally increased over the years and thicker panels will 
cause additional increases in the shipping price. (Artic Industries, 
No. 88 at pp. 301-304) US Cooler commented that DOE should not estimate 
shipping just by weight and volume because less than truck load 
shipment limit the amount of square footage a manufacturer can use per 
shipment. (US Cooler, No. 88 at p. 305) DOE appreciates American 
Panel's and Artic Industries comment on shipping. The Department found 
that while insulation thickness was a factor in increased shipping 
costs, so was the size of the walk-in being shipped. DOE modeled six 
different sized walk-ins each with 3.5-inch, 4-inch, 5-inch and 6-inch 
thick insulation. DOE used a weighted average based on using each walk-
in's estimated market share to develop a shipping price for square foot 
of panel. DOE appreciates US Coolers comment and accounted for a square 
footage limit in the shipping costs.
5. Energy Consumption Model
    In the NOPR, DOE proposed using an energy consumption model to 
estimate separately the energy consumption of panels, display doors, 
non-display doors and entire refrigeration systems at various 
performance levels using a design-option approach. DOE developed the 
model as a Microsoft Excel spreadsheet. The models estimate the 
performance of the baseline equipment and levels of performance above 
the baseline associated with specific design options that are added 
cumulatively to the baseline equipment. The model did not account for 
interactions between refrigeration systems and envelope components, nor 
did it address how a design option for one component may affect the 
energy consumption of other components.
    At the public meeting, Heatcraft requested that DOE share modeling 
tool and baseline assumptions used for the engineering analysis. 
(Heatcraft, Public Meeting Transcript, No. 88 at p. 123) DOE posted the 
spreadsheets used to model the energy consumption of walk-in panels, 
doors, and refrigeration systems to the WICF energy conservation 
standards rulemaking docket Web page, located at: http://www.regulations.gov/#!docketDetail;D=EERE-2008-BT-STD-0015
    In comments on the NOPR, Lennox stated that the results of the DOE 
model were not validated with actual laboratory results. (Lennox, No. 
109 at p. 2) KeepRite noted that the DOE model was not verified through 
testing or prototyping, and was therefore overestimating the efficiency 
gain achievable by manufacturers. (KeepRite, No. 105 at p. 1) Since the 
publication of the NOPR, DOE has conducted additional testing to 
support its analysis. See chapter 5 for details.
a. Panels and Doors
    In the NOPR performance model for walk-in panels, doors, and 
display doors, DOE used various assumptions to estimate the performance 
of each WICF component. In the NOPR, DOE used polyurethane insulation 
with a thermal resistance of 6.82 ft-h-[deg]F/Btu-in for panels and 
non-display doors. This thermal resistance accounted for the aging of 
insulation when measuring walk-in panel performance. See 76 FR at 
21612. DOE proposed in a separate rulemaking to eliminate the long term 
thermal aging test procedure. In this final rule, DOE's analysis used 
as its industry representative baseline panel a panel comprised of 
polyurethane insulation, which has as a thermal resistance value, 
without accounting for long term thermal aging, of 8 ft-h-[deg]F/Btu-
in. DOE also received a comment on the thermal resistance used in the 
non-display door model. IB commented that the insulation's age had no 
significant impact on door performance. (IB, No. 98 at p. 2) DOE agrees 
with IB's comment. The aging of insulation in non-display doors is not 
measured by the DOE test procedure and therefore does not have an 
impact on the door's performance. In the final rule analysis, DOE 
modeled its non-display doors assuming they would use polyurethane 
insulation with a thermal resistance of 8 ft-h-[deg]F/Btu-in.
    In the NOPR, DOE requested comment on the performance data of 
panels, non-display doors, and display doors which was calculated by 
the Department's energy consumption models and found in appendix 5A of 
the NOPR TSD. DOE requested that interested parties produce additional 
data regarding about the thermal resistance performance of panels, 
display doors, or non-display doors and their design options. Bally 
commented that DOE's evaluation of non-display doors was inappropriate 
because it did not account for the impact of the door frame. Bally 
recommended DOE evaluate the door frame along with the door cap. 
(Bally, No. 102 at p. 4) Bally added that the majority of heat through 
non-display doors was at the periphery rather than the center of the 
door. (Bally, Public Meeting Transcript, No. 88 at p. 122) Bally 
expanded on this comment by explaining that doors are not sealed 
tightly and it recommended that DOE account for the heat gain caused by 
these gaps. (Bally, No. 102 at p. 4) DOE appreciates Bally's comment, 
but notes that it did not account for gaps around the perimeter of 
doors. The Department did not adopt a test procedure that measured heat 
gain via infiltration and therefore did not consider gaps in the doors 
to have an impact on the performance of the door as measured by the DOE 
test procedure.
    In the NOPR, DOE evaluated the energy consumption associated with 
individual panels and doors at various sizes. As a result of this 
methodology, DOE associated design options such as occupancy sensors 
with one door. DOE recognizes that in the marketplace, one

[[Page 32080]]

occupancy sensor may serve multiple doors, and received a comment from 
NEEA, et al. confirming this practice. (NEEA, et al., No. 101 at p. 5) 
However, DOE is regulating display doors as single component and 
therefore assumed that all the costs and benefits of an occupancy 
sensor would be associated with the individual door. Although occupancy 
sensors may be applied over multiple doors, it is possible that a 
single display door could be installed in a walk-in with a single 
occupancy sensor. The Department chose this more conservative path and 
assumed one occupancy sensor per door.
b. Refrigeration Systems
    The CA IOUs made several recommendations for changing the 
refrigeration system model, particularly for the condensing unit. 
First, they noted that published condensing unit capacity ratings are 
overestimated by approximately 35 percent because they rely on 
compressor capacity information based on a 65[emsp14][deg]F return gas 
temperature, whereas return gas temperature is more likely to be around 
41[emsp14][deg]F for coolers and 5[emsp14][deg]F for freezers. 
Furthermore, they stated that the productive capacity of a walk-in 
system is more closely represented by the enthalpy difference between 
the liquid line enthalpy and the enthalpy of the refrigerant at 
approximately 10[emsp14][deg]F superheat. (CA IOUs, No. 110 at pp. 3-4)
    DOE agrees with the assessment by the CA IOUs that current 
published capacity ratings for WICF components are not necessarily 
indicative of the capacity of a system made up of those components when 
that system is tested under AHRI 1250, because AHRI 1250 has different 
rating conditions than the test procedures currently used to rate the 
components individually. DOE has adjusted its engineering model to more 
closely replicate unit performance under the test procedure based on 
additional test data developed during the NOPR phase. In the energy 
consumption model, return gas temperature is calculated based on an 
assumed evaporator superheat (i.e., heating of the refrigerant gas 
above its saturation temperature, measured at the evaporator exit) and 
compressor superheat (i.e., heating of the refrigerant gas above its 
saturation temperature, measured at the suction line entrance to the 
condensing unit), which are in turn based on test results. The 
evaporator superheat can be manually set by adjusting the expansion 
valve; manufacturers typically include recommended evaporator superheat 
ranges in their installation literature (for instance, one manufacturer 
recommends an evaporator superheat of 4 to 6[emsp14][deg]F for low 
temperature applications). The compressor superheat is equal to the 
evaporator superheat plus additional refrigerant temperature rise in 
the suction line plus the dew point temperature reduction associated 
with the suction line pressure drop. The energy model calculates the 
capacity of the system based on the refrigerant enthalpy difference 
between the unit cooler entrance (liquid line) and exit (suction line), 
accounting for evaporator superheat, as recommended by CA IOUs. 
Additional warming of the refrigerant in the suction line is not 
considered to represent additional capacity, but it reduces refrigerant 
density and, by extension, condensing unit capacity. The model assumes 
that the unit does not use a suction line heat exchanger. Similarly, 
pressure drop in the suction line is also accounted for in the model.
    With respect to modeling systems with electric defrost in the NOPR, 
DOE's analysis applied a temperature-terminated defrost approach for 
all defrost control schemes (baseline or higher)--that is, once a 
defrost is initiated, the defrost mechanism continues to heat the 
evaporator coil until the coil temperature reaches 45[emsp14][deg]F, 
which ensures that the coil is fully defrosted. In the engineering 
model for electric defrost, DOE calculated the defrost time based on 
the amount of heat applied by the defrost mechanism and the amount of 
heat energy it would take to heat the coil and melt the ice, with a 
``bypass factor'' accounting for heat lost into the coil's surroundings 
and not used to heat the coil.
    Lennox commented that DOE's calculations for defrost time were too 
short, and that a typical defrost duration would be in the 20 to 30 
minute range, and upwards of 45 to 60 minutes for larger electric 
defrost units. (Lennox, No. 109 at p. 7)
    After further evaluation, DOE agrees with Lennox's assessment. DOE 
conducted testing of low temperature refrigeration systems and found 
defrost times of approximately 30 minutes. DOE updated its assumptions 
in the engineering analysis to assume a 30-minute defrost duration for 
electric defrost systems smaller than 50,000 Btu/h. In the absence of 
test data for very large systems, DOE believes Lennox's estimates are 
reasonable and has increased the assumed defrost time to 45 minutes for 
electric defrost systems between 50,000 and 75,000 Btu/h and 1 hour for 
electric defrost systems larger than 75,000 Btu/h for larger electric 
defrost units it analyzed.
    DOE also included drain line heater wattage in the NOPR analysis 
for low-temperature units. Lennox noted that drain-line heaters are not 
typically supplied by the manufacturer of the main component (i.e. the 
unit cooler). (Lennox, No. 109 at p. 7) Accordingly, DOE has removed 
this from the energy model.
    For more details on the energy model, see chapter 5 of the TSD.
6. Design Options
a. Panels and Doors
    DOE evaluated the following design options in the NOPR analysis for 
panels, display doors, and non-display doors:

Panels
     Increased insulation thickness up to 6 inches
     Improved insulation material
     Improved framing material
Display Doors
     Electronic lighting ballasts and high-efficiency lighting
     Occupancy sensors
     Display and window glass system insulation performance
     Anti-sweat heater controls
     No anti-sweat systems
Non-Display Doors
     Increased insulation thickness up to 6 inches
     Improved insulation material
     Improved panel framing material
     Display and window glass system insulation performance
     Anti-sweat heater controls
     No anti-sweat systems

    DOE received a number of comments on increased panel thickness. In 
the NOPR, DOE increased the thickness of walk-in panels from the market 
representative baseline of 3.5 inches of polyurethane for walk-in 
cooler structural panels and freezer floor panels to 4 inches, 5 
inches, and 6 inches. For walk-in freezer structural panels DOE 
increased the panel thickness from the baseline of 4 inches to 5 inches 
and 6 inches. Nor-Lake and American Panel commented that increased 
insulation thickness resulted in longer cure times. These manufacturers 
commented that it takes 25 or 30 minutes to cure 4 inch thick panels, 
45 minutes to cure 5 inch thick panels, and 60 minutes to cure 6 inch 
thick panels. (Nor-Lake, No. 115 at p. 1; American Panel, No. 99 at pp. 
5 and 6) In response to these comments, DOE accounted for increased 
cure time in the panel cost model.
    Nor-Lake and Manitowoc also stated that increasing the thickness of 
insulation provided only a minimal amount of R-value improvement. (Nor-
lake, No. 115 at p. 1; Manitowoc, No.

[[Page 32081]]

108 at p. 3) DOE notes that it found that increasing the thickness of a 
panel directly improves the panel's efficiency. Accordingly, in 
preparing the analysis for this final rule, DOE continued to use 
increased panel thickness as a design option.
    To improve the insulation material, DOE evaluated hybrid panels, 
which are a sandwich of polyurethane and vacuum-insulated panels 
(VIPs). Nor-Lake commented that vacuum-insulated panels were cost 
prohibitive and technologically infeasible. (Nor-Lake, No. 115 at p. 2) 
Bally also commented that VIPs were not economically practical and 
therefore should be excluded as a design option. (Bally, No. 102 at p. 
2) Thermo-Kool remarked that VIPs were too fragile and too expensive to 
be used in walk-ins. (Thermo-Kool, No. 97 at p. 2)
    DOE considered vacuum-insulated panels as a design option in its 
engineering analysis because they have the potential to improve 
equipment efficiency, are available on the market today, are currently 
used in refrigeration products. 10 CFR part 430, subpart C, appendix A, 
sections (4)(a)(4) and (5)(b). DOE agrees with Thermo-Kool that VIPs 
may be too fragile for walk-in applications and therefore incorporated 
VIPs as part of a hybrid panel, which sandwiches the VIPs in 2-inch 
polyurethane layers. However, DOE understands that there is a high 
level of cost required in implementing this design option, including 
redesign costs, and sought to reflect that through appropriate cost 
values obtained from manufacturer interviews and other sources and 
included in its analyses. As a result, vacuum-insulated panels appear 
only in max-tech designs for each equipment class, and are not included 
in any of the modeled configurations selected in setting the standard 
levels put forth in this rule.
    Bally commented that DOE should consider pocket connectors as a 
design option for panels (Bally, Public Meeting Transcript, No. 88 at 
p. 148) DOE appreciates Bally's suggestion, but as previously described 
in this final rule notice the Department's test procedure for walk-in 
panels only measures the insulation's thermal resistance. Therefore, 
this technology would not result in energy savings as measured by the 
test procedure.
    DOE received a few comments on the design options evaluated for 
display doors. NEEA, et al. and the CA IOUs suggested that DOE consider 
low-e, gas filled glazing for medium temperature display doors. (NEEA 
et al., No. 101 at p.5; CA IOUs, No. 110 at p. 4) DOE clarifies that it 
evaluated 3 improved glass packs above the baseline, which included 
more efficient gas fills low-emissivity glazed panes, and additional 
glass panes. Chapter 5 of the TSD explains the design options for 
display doors in more detail.
    NEEA, et al. also recommended that DOE exclude lighting from the 
door frame assembly because it is not physically part of the door and 
because LEDs are already common in the WICF market. NEEA, et al. stated 
that the inclusion of lighting into the standards for doors would cause 
difficulty in enforcing compliance because no doors are shipped with 
lighting. (NEEA, et al., No. 101 at p. 5). In its market assessment, 
DOE found that lighting is typically installed and sold as part of the 
door assembly. Therefore, DOE continued to account for lighting used 
with display doors. DOE does not expect that including lighting will 
complicate enforcement of DOE standards because it is sold with the 
display door as integrated componentry. DOE agrees that LEDs are common 
in the WICF market and has accounted for the market share of LEDs as 
part of the efficiency distribution in the shipments analysis, detailed 
in chapter 9 of the TSD.
    Bally remarked that it was unclear as to what technology DOE was 
referring to by ``automatic door opener/closer.'' Bally asked for 
clarification as to how the power draw of opening and closing devices 
was to be evaluated. (Bally, No. 102 at p.5) DOE notes that because the 
test procedure does not measure heat gain from infiltration, it did not 
account for door openings and closings as part of its list of potential 
design options. See section III.B, infra.
    IB commented that edging material had no significant impact on door 
performance. (IB, No. 98 at p. 2) IB may be correct in that the edging 
material does not have a significant impact on door performance in real 
world applications. However, the DOE test procedure for doors measures 
the thermal performance for the entire door, including any materials in 
the edge of the door. Additionally, DOE notes that the edge materials, 
which could act like a thermal bridge, would have an impact on the 
performance of the door. For this reason, DOE continued to evaluate the 
possibility of using improved framing materials for non-display doors.
b. Refrigeration
    DOE included the following design options in the NOPR analysis:

 Higher efficiency compressors
 Improved condenser coil
 Higher efficiency condenser fan motors
 Improved condenser and evaporator fan blades
 Ambient sub-cooling
 Evaporator and condenser fan control
 Defrost control
 Hot gas defrost
 Head pressure control

    DOE described the design options in detail in chapter 5 of the NOPR 
TSD. In the notice, DOE requested comment on the design options, 
particularly improved condenser coil, fan motor efficiency, fan motor 
controls, and floating head pressure. In response, DOE received 
comments on these and other options.
Larger Condenser Coil
    In the NOPR, DOE considered a larger condenser coil as a design 
option, which would reduce the condenser TD, increasing system capacity 
and resulting in a higher AWEF. DOE increased the fan power 
proportionally to coil size, but requested comment on whether 
increasing the condenser coil size would require an increase in 
evaporator coil size. 78 FR at 55816. Hussmann commented that a larger 
condenser coil would not require a larger evaporator coil. (Hussmann, 
No. 93 at p. 5) Furthermore, DOE's analysis did not indicate that a 
larger evaporator coil would be required. Accordingly, DOE is not 
implementing a larger evaporator coil along with the larger condenser 
coil design option in the final rule analysis.
Defrost Controls
    In the preliminary analysis, DOE assumed that a demand defrost 
control would be tested using the optional demand defrost test in AHRI 
1250, section C11.2 and would have the equivalent effect of reducing 
the number of defrosts per day by 50 percent. However, stakeholder 
comments on the preliminary analysis stated that a 50 percent reduction 
was too difficult to achieve using current technologies. Therefore, in 
the NOPR, for the defrost controls design option, DOE applied a generic 
defrost control that would have the effect of reducing the number of 
defrosts per day by 40 percent. 78 FR at 55818. In comments on the NOPR 
assumption, Manitowoc noted that demand-defrost systems had been shown 
to reduce the number of defrost cycles as much as 80 percent compared 
to ``timed defrost'' systems. (Manitowoc, No. 108 at p. 3) DOE 
acknowledges that the energy savings due to demand-defrost systems may 
vary widely depending on the control mechanism; however, given the 
range of stakeholder comments it has received on the issue, believes an 
80 percent reduction is too aggressive. DOE notes that its recently

[[Page 32082]]

adopted approach with respect to the measurement of refrigeration 
system performance [79 FR 27387], provides a default value for the 
reduction in defrosts from 4 to 2.5 defrosts per day due to demand-
defrost controls. DOE has applied this default value in the engineering 
analysis for the final rule. For more details, see chapter 5.
Hot Gas Defrost
    In the NOPR, DOE included hot gas defrost as a design option for 
multiplex condensing systems because it assumed the unit cooler could 
use hot gas generated by the compressor rack. DOE did not include hot 
gas defrost as a design option for dedicated condensing systems because 
DOE did not believe it was effective at saving energy. 78 FR at 55804. 
In response, Heat Transfer commented that it manufactured many 
dedicated systems with hot gas defrost, which increased the efficiency 
of the unit. (Heat Transfer, Public Meeting Transcript, No. 88 at p. 
140) After further review, DOE agrees with Heat Transfer that hot gas 
defrost is a valid design option for dedicated condensing systems as 
well as unit coolers connected to multiplex systems, and has 
implemented this option in the analysis. Heat Transfer's literature 
claims that hot gas defrost causes systems to defrost four times 
faster, but did not have specific details on the energy savings. See 
chapter 5 for further details on the hot gas defrost design option.
Fan and Motor Efficiency
    In the NOPR, DOE assumed that baseline evaporator fan motors would 
be electronically commutated motors (ECMs), while baseline condenser 
fan motors would be permanent split capacitor (PSC) motors. One design 
option was to replace PSC motors in condenser fans with more-efficient 
ECMs. This approach was consistent with EPCA, which specified that 
evaporator fan motors of under 1 horsepower and less than 460 volts 
must use electronically commutated motors or 3-phase motors and 
condenser fan motors of under 1 horsepower must use electronically 
commutated motors, permanent split capacitor-type motors, or 3-phase 
motors. (42 U.S.C. 6313(f)(1)(E)-(F)) In the NOPR, DOE screened out 3-
phase motors from its design options because not all customers have 3-
phase power, although it noted that this would in no way prohibit 
manufacturers from using them to improve rated energy use. 78 FR at 
55805.
    In comments on the NOPR, Regal-Beloit noted that three-phase motors 
and multi-horsepower ECMs could greatly improve unit efficiency. ebm-
papst also commented that evaporator fans for WICFs did not necessarily 
have to be axial fans and that other types of air-moving devices, such 
as backward curved motorized impellers, may be a more efficient choice 
for certain refrigeration systems due to their aerodynamic 
characteristics. (ebm-papst, No. 92 at p. 5) Hussmann stated that the 
only way to accurately obtain fan motor power is to test the fan motors 
in-unit, or reference the fan, motor, and coil operating curves to 
determine power consumption at the desired CFM and pressure 
differential. (Hussmann, No. 93 at p. 5)
    DOE agrees with Regal-Beloit and ebm-papst that other, more 
efficient types of fans and motors may exist and may be used by 
manufacturers to improve the efficiency of their WICF equipment. DOE is 
continuing to screen out 3-phase motors based on utility to the 
consumer, because not all customers would have 3-phase power. In 
response to Hussmann's comment, DOE notes that Hussmann did not provide 
any detailed fan information for WICFs that DOE could use in the 
analysis. Furthermore, DOE does not believe that the consideration of 
such detailed information would significantly improve the analysis, as 
DOE believes it has made reasonable, conservative estimates for fan 
efficiency based on stakeholder comments and market research.
Evaporator Fan Controls
    In the NOPR, DOE applied both modulated evaporator fan controls and 
variable speed evaporator fan controls design options for all classes 
analyzed. A modulated fan control cycles the fans at a 50 percent duty 
cycle when the compressor cycles off, while variable speed fan control 
reduces fan speed during the off-cycle. To account for these types of 
controls, DOE's analysis reduced the fan speed to 50 percent. Lennox 
commented that the model takes into account variable speed during 
refrigeration, which would incorrectly reflect a greater AWEF value. 
(Lennox, No. 109 at p. 7) Hussmann mentioned that fan modulation always 
requires an electronic expansion valve (EEV) to function properly, 
which is not always accounted for in TSL 4. (Hussmann, No. 93 at p. 5) 
DOE notes that it has applied variable speed evaporator fans to those 
refrigeration applications where unit coolers are connected to a 
multiplex condensing unit in order to determine the fan speed during 
high and low load periods as specified in AHRI 1250, section 7.9. (That 
section requires that for unit coolers with variable speed evaporator 
fans that modulate fan speed in response to load, the fan shall be 
operated under its minimum, maximum and intermediate speed that equals 
to the average of the maximum and minimum speeds, respectively during 
the unit cooler test, and quadratic fit equations relating evaporator 
net capacities, fan operating speed, and fan power consumption be 
developed.) To address Hussmann's comment, DOE notes that the analysis 
is conservative regarding the fan speed reduction, with a maximum fan 
speed reduction of 50 percent. DOE does not expect that the system 
would need an EEV for this control approach.
Refrigeration Summary
    After considering all the comments it received on the design 
options, DOE applied the following design options in the final rule 
analysis:

 Higher efficiency compressors
 Improved condenser coil
 Higher efficiency condenser fan motors
 Improved condenser and evaporator fan blades
 Ambient sub-cooling
 Evaporator and condenser fan control
 Defrost control
 Hot gas defrost
 Head pressure control

E. Markups Analysis

    DOE applies multipliers called ``markups'' to the MSP to calculate 
the customer purchase price of the analyzed equipment. These markups 
are in addition to the manufacturer markup (discussed in section 
IV.D.3.d) and are intended to reflect the cost and profit margins 
associated with the distribution and sales of the equipment. DOE 
identified two major distribution channels for walk-ins, and markup 
values were calculated for each distribution channel based on industry 
financial data. The overall markup values were then calculated by 
weighted-averaging the individual markups with market share values of 
the distribution channels.
    In estimating markups for walk-ins and other equipment, DOE 
developed separate markups for the cost of baseline equipment and the 
incremental cost of higher-efficiency equipment. Incremental markups 
are applied as multipliers only to the MSP increments of higher-
efficiency equipment compared to baseline, and not to the entire MSP.
    See chapter 6 of the final rule TSD for more details on DOE's 
markups analysis.

[[Page 32083]]

F. Energy Use Analysis

    The energy use analysis estimates the annual energy consumption of 
refrigeration systems serving walk-ins and the energy consumption that 
can be directly ascribed to the selected components of the WICF 
envelopes. These estimates are used in the subsequent LCC and PBP 
analyses and NIA.
    The estimates for the annual energy consumption of each analyzed 
representative refrigeration system (see section IV.C.2) were derived 
assuming that (1) the refrigeration system is sized such that it 
follows a specific daily duty cycle for a given number of hours per day 
at full rated capacity, and (2) the refrigeration system produces no 
additional refrigeration effect for the remaining period of the 24-hour 
cycle. These assumptions are consistent with the present industry 
practice for sizing refrigeration systems. This methodology assumes 
that the refrigeration system is paired with an envelope that generates 
a load profile such that the rated hourly capacity of the paired 
refrigeration system, operated for the given number of run hours per 
day, produces adequate refrigeration effect to meet the daily 
refrigeration load of the envelope with a safety margin to meet 
contingency situations. Thus, the annual energy consumption estimates 
for the refrigeration system depend on the methodology adopted for 
sizing, the implied assumptions and the extent of oversizing. The 
sizing methodology is further discussed later in this section.
    For the envelopes, the estimates of equipment and infiltration 
loads are no longer used in estimating energy consumption in the 
analysis because these factors are not intended to be mitigated by any 
of the component standards. DOE calculated only the transmission loads 
across the envelope components under test procedure conditions and 
combined that with the annual energy efficiency ratio (AEER) to arrive 
at the annual refrigeration energy consumption associated with the 
specific component. AEER is a ratio of the net amount of heat removed 
from the envelope in Btu by the refrigeration system and the annual 
energy consumed in watt-hours using bin temperature data specified in 
AHRI 1250-2009 to calculate AWEF. The annual electricity consumption 
attributable to any envelope component is the sum of the direct 
electrical energy consumed by electrically-powered sub-components 
(e.g., lights and anti-sweat heaters) and the refrigeration energy, 
which is computed by dividing the transmission heat load traceable to 
the envelope component by the AEER metric, where the AEER metric 
represents the efficiency of the refrigeration system with which the 
envelope is paired.
    DOE estimated the annual energy consumption per unit of the 
specific envelope components by calculating the transmission load of 
the component over 24 hours under the test procedure conditions, and 
then calculating the annual refrigeration energy consumption attributed 
to that component by applying an appropriate AEER value. DOE used the 
same approach for the final rule's analysis.
1. Sizing Methodology for the Refrigeration System
    The load profile of WICF equipment that DOE used broadly follow the 
load profile assumptions of the industry test procedure for 
refrigeration systems--AHRI 1250-2009. As noted earlier, that protocol 
was incorporated into DOE's test procedure. 76 FR 33631 (June 9, 2011).
    As a result, the DOE test procedure incorporates an assumption 
that, during a 24-hour period, a WICF refrigeration system experiences 
a high-load period of 8 hours corresponding to frequent door openings, 
equipment loading events, and other design load factors, and a low-load 
period for the remaining 16 hours, corresponding to a minimum load 
resulting from conduction, internal heat gains from non-refrigeration 
equipment, and steady-state infiltration across the envelope surfaces. 
During the high-load period, the ratio of the envelope load to the net 
refrigeration system capacity is 70 percent for coolers and 80 percent 
for freezers. During the low-load period, the ratio of the envelope 
load to the net refrigeration system capacity is 10 percent for coolers 
and 40 percent for freezers. The relevant load equations correspond to 
a duty cycle for refrigeration systems, where the system runs at full 
design point refrigeration capacity for 7.2 hours per day for coolers 
and 12.8 hours per day for freezers. Specific equations to vary load 
based on the outdoor ambient temperature are also specified.
    For this final rule, DOE concluded that the duty cycle assumptions 
of AHRI 1250-2009 should not be used for the sizing purposes because 
they may not represent the average conditions for WICF refrigeration 
systems for all applications under all conditions. DOE recognizes that 
test conditions are often designed to effectively compare the 
performance of equipment with different features under the same 
conditions.
    As it did for the NOPR, DOE used a nominal run time of 16 hours per 
day for coolers and 18 hours per day for freezers over a 24-hour period 
to calculate the capacity of a ``perfectly'' sized refrigeration 
system. A fixed oversize factor of 10 percent was then applied to this 
size to calculate the actual runtime. With the oversize factor applied, 
DOE assumes that the runtime of the refrigeration system is 13.3 hours 
per day for coolers and 15 hours per day for freezers at full design 
point capacity. The reference outside ambient temperatures for the 
design point capacity conform to the AHRI 1250-2009 conditions 
incorporated into the DOE test procedure and are 95[emsp14][deg]F and 
90[emsp14][deg]F for refrigeration systems with outdoor and indoor 
condensers, respectively.
2. Oversize Factors
    As stated previously, DOE observed that the typical and widespread 
industry practice for sizing the refrigeration system is to calculate 
the daily heat load on the basis of a 24-hour cycle and divide by 16 
hours of runtime for coolers and 18 hours of runtime for freezers. 
Based on discussions with purchasers of walk-ins, DOE found that it is 
customary in the industry to add a 10 percent safety margin to the 
aggregate 24-hour load, resulting in 10 percent oversizing of the 
refrigeration system.
    Further, DOE recognized that an exact match for the calculated 
refrigeration capacity may not be available for the refrigeration 
systems available in the market because most refrigeration systems are 
mass-produced in discrete capacities. The capacity of the best matched 
refrigeration system is likely to be the nearest higher capacity 
refrigeration system available. This consideration led DOE to develop a 
scaled mismatch factor that could be as high as 33 percent for the 
smaller refrigeration system sizes, and was scaled down for the larger 
sized units. DOE applied this mismatch oversizing factor to the 
required refrigeration capacity at the high-load condition to determine 
the required capacity of the refrigeration system to be paired with a 
given envelope.
    In preparing the NOPR analysis, DOE considered comments from 
interested parties and recalculated the mismatch factor because 
compressors for the lower capacity units are available at smaller size 
increments than what DOE had initially assumed in the preliminary 
analysis. For larger sizes, the size increments of available capacities 
are higher than size increments available for the lower capacities. DOE 
further noted as part of the revised analysis that under current 
industry practice, if the exact calculated size of the refrigeration

[[Page 32084]]

system with a 10 percent safety margin is not available in the market, 
the user may choose the closest matching size even if it has a lower 
capacity, allowing the daily runtimes to be somewhat higher than their 
intended values. The designer would recalculate the revised runtime 
with the available lower capacity and compare it with the target 
runtime of 16 hours for coolers and 18 hours for freezers and, if this 
value falls within acceptable limits, then the chosen size of the 
refrigeration system is accepted and there is no mismatch oversizing.
    DOE further examined the data of available capacities in published 
catalogs of several manufacturers and noted that the range of available 
capacities depends on compressor type and manufacturer. Furthermore, 
because smaller capacity increments are available for units in the 
lower capacity range and larger capacity increments are available for 
units in the higher capacity range, the mismatch factor is generally 
uniform over the range of equipment sizes. For the NOPR, DOE 
tentatively concluded from these data that a scaled mismatch factor 
linked to the target capacity of the unit may not be applicable, but 
that the basic need to account for discrete capacities available in the 
market is still valid. To this end, for the final rule DOE applied a 
uniform average mismatch factor of 10 percent over the entire capacity 
range of refrigeration systems.
    To estimate the runtimes for the NOPR, DOE started with nominal 
runtimes of 16 hours for coolers, and 18 hours for freezers. However, 
these runtimes are appropriate for perfectly sized refrigeration 
systems, and do not account for equipment oversizing. DOE estimated 
runtimes as a function of this oversizing in accordance with industry 
practice (see chapter 7 of the final rule TSD).
    Several stakeholders commented that the runtime assumptions were 
too short, and should be increased to 18 hours for larger walk-ins used 
by convenience and grocery stores (ACCA, No. 119, at p. 3), or 16 hours 
for walk-in coolers and 20 hours for walk-in freezers (NorLake, No. 
115, at p. 2), or 16 hours for walk-in coolers and 18 hours for walk-in 
freezers (Manitowoc, No. 108; at p. 3).
    It is not clear whether the values cited in the comments refer to 
nominal runtimes. If so, DOE's assumptions are roughly similar to the 
values cited in the comments. Because the comments regarding runtimes 
do not provide enough evidence for DOE to revise its assumptions, DOE 
maintained the same approach for estimating runtimes as it used in the 
NOPR.

G. Life-Cycle Cost and Payback Period Analysis

    DOE conducts LCC and PBP analyses to evaluate the economic impacts 
of potential energy conservation standards for walk-ins on individual 
customers--that is, buyers of the equipment. As stated previously, DOE 
adopted a component-based approach for developing performance standards 
for walk-in coolers and freezers. Consequently, the LCC and PBP 
analyses were conducted separately for the refrigeration system and the 
envelope components: panels, non-display doors, and display doors.
    The LCC is defined as the total consumer expense over the life of a 
piece of equipment, consisting of purchase, installation, and operating 
costs (expenses for energy use, maintenance, and repair). To calculate 
the operating costs, DOE discounts future operating costs to the time 
of purchase and sums them over the lifetime of the equipment. The PBP 
is defined as the estimated number of years it takes customers to 
recover the increased purchase cost (including installation) of more 
efficient equipment. The increased purchase cost is derived from the 
higher first cost of complying with the higher energy conservation 
standard. DOE calculates the PBP by dividing the increase in purchase 
cost (normally higher) by the change in the average annual operating 
cost (normally lower) that results from the standard.
    For any given efficiency level, DOE measures the PBP and the change 
in LCC relative to the base-case equipment efficiency levels. The base-
case estimate reflects the market without new or amended energy 
conservation standards. For walk-ins, the base-case estimate assumes 
that newly manufactured walk-in equipment complies with the existing 
EPCA requirements and either equals or exceeds the efficiency levels 
achievable by EPCA-compliant equipment. Inputs to the economic analyses 
include the total installed operating, maintenance, and repair costs.
    Inputs to the calculation of total installed cost include the cost 
of equipment--which consists of manufacturer costs, manufacturer 
markups, distribution channel markups, and sales taxes--and 
installation costs. Inputs to the calculation of operating expenses 
include annual energy consumption, energy prices and price projections, 
repair and maintenance costs, equipment lifetimes, discount rates, and 
the year that compliance with standards is required. DOE created 
probability distributions for equipment lifetime inputs to account for 
their uncertainty and variability.
    DOE developed refrigeration and envelope component spreadsheet 
models to calculate the LCC and PBP. Chapter 8 of the final rule TSD 
and its appendices provide details on the refrigeration and envelope 
subcomponent spreadsheet models and on all the inputs to the LCC and 
PBP analyses.
    Table IV.12 summarizes DOE's approach and data used to derive 
inputs to the LCC and PBP calculations for the NOPR and the changes 
made for this final rule.

 Table IV.12--Summary of Inputs and Methods in the LCC and PBP Analysis*
------------------------------------------------------------------------
                                                      Changes for final
           Inputs                 NOPR analysis             rule
------------------------------------------------------------------------
                             Installed Costs
------------------------------------------------------------------------
Equipment Cost..............   Derived by    No change
                               multiplying           for systems, and
                               manufacturer cost     display doors, DOE
                               by manufacturer and   maintain its use of
                               retailer markups      a declining price
                               and sales tax, as     trend.
                               appropriate.          For non-
                                                     display doors and
                                                     panels the
                                                     manufacture
                                                     experience curve
                                                     was revised to use
                                                     constant real
                                                     prices.
                               Includes a
                               factor for
                               estimating
                               equipment price
                               trends due to
                               manufacturer
                               experience.
Installation Costs..........  Based on RS Means     No change.
                               Mechanical Cost
                               Data 2012. Assumed
                               no change with
                               efficiency level.
------------------------------------------------------------------------

[[Page 32085]]

 
                             Operating Costs
------------------------------------------------------------------------
Annual Energy Use...........  DOE calculated daily  No change.
                               load profile of the
                               refrigeration
                               system revised to
                               13.3 hours runtime
                               per day for coolers
                               and 15 hours for
                               freezers, at full
                               rated capacity and
                               at outside air
                               temperatures
                               corresponding to
                               the reference
                               rating temperatures.
Energy Prices...............  Commercial and        No change.
                               industrial prices
                               of electricity
                               based on Form EIA-
                               826 Database
                               Monthly Electric
                               Utility Sales and
                               Revenue Data.
Energy Price Trends.........  Forecasted using      No change.
                               AEO2013 price
                               forecasts.
Repair and Maintenance Costs   Annualized   Increased
                               repair and            refrigerant
                               maintenance costs     recharge cost to
                               of the combined       $500, to reflect
                               system were derived   industry practice,
                               from RS Means 2012
                               walk-in cooler and
                               freezer maintenance
                               data. Doors and
                               refrigeration
                               systems were
                               replaced during the
                               lifetime.
                               Refrigerant
                               recharge cost set
                               at $0.
------------------------------------------------------------------------
                 Present Value of Operating Cost Savings
------------------------------------------------------------------------
Equipment Lifetime..........  Based on              Revised to reflect
                               manufacturer          stakeholder
                               interviews.           comments, see
                               Variability:          section IV.G.7 for
                               characterized using   details.
                               Weibull probability
                               distributions.
Discount Rates..............  Based on Damodaran    No change.
                               Online, October
                               2012.
Compliance Date.............  2017................  No change.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the TSD.

1. Equipment Cost
    To calculate customer equipment costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups, described in section IV.E. DOE applied baseline markups to 
baseline MSPs, and incremental markups to the MSP increments associated 
with higher efficiency levels.
    For the NOPR, DOE developed an equipment price trend for WICFs 
based on the inflation-adjusted index of the producer price index (PPI) 
for air conditioning, refrigeration, and forced air heating from 1978 
to 2012.\17\ A linear regression of the inflation-adjusted PPI shows a 
downward trend. To project a future trend, DOE extrapolated the 
historic trend using the regression results. For the LCC and PBP 
analysis, this default trend was applied between the present and the 
first year of compliance with amended standards, 2017.
---------------------------------------------------------------------------

    \17\ Bureau of Labor Statistics, Producer Price Index Industry 
Data, Series: PCU3334153334153.
---------------------------------------------------------------------------

    Several commenters stated that, since prices for metal and urethane 
chemicals have increased about 3 percent annually over the last 20 
years, there is no justification for DOE's assumed decrease in prices. 
(APC, No. 99, at p. 8; ThermoKool, No. 97 at p. 4) Hussmann noted that 
a large portion of WICF manufacturer cost comes from copper coil and 
sheet metal; since the prices of these commodities have more than 
doubled in the last 10 years, Hussmann expects materials costs to 
increase in the future. (Hussmann, No.93, at p. 6) US Cooler pointed 
out that WICF prices have not decreased since 1986. (US Cooler, No. 
PMeeting, at pp. 310-311) US Cooler also argued that the WICF industry 
is dependent on the price of metals. (US Cooler, No. 99 at p. 8)
    DOE believes that the comments on past prices likely refer to 
nominal prices, since that is what manufacturers see. The PPI index 
that DOE used shows a slight increasing trend from 1980 to 2012. DOE 
uses real (inflation-adjusted) prices throughout its analysis, however, 
and the inflation-adjusted PPI shows a slight declining trend. For the 
final rule, DOE used a more disaggregated PPI: for commercial 
refrigerators and related equipment. The exponential fit that was 
derived exhibits a very slight declining trend, which DOE generally 
applied for WICFs.
    However, DOE determined that this trend was inappropriate for 
panels and non-display doors, where the majority of the manufacturer 
cost is polyurethane foam insulation. For these equipment classes DOE 
used constant real prices when estimating future equipment price. For 
details on the estimation of future equipment price, see appendix 8D of 
the final rule TSD.
2. Installation Costs
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. For the NOPR 
analysis, DOE included refrigeration system component installation 
costs based on RS Means Mechanical Cost Data 2012.\18\ Refrigeration 
system installation costs included separate installation costs for the 
condensing unit and unit cooler. DOE continued with this approach for 
refrigeration systems in preparing this final rule.
---------------------------------------------------------------------------

    \18\ Reed Construction Data, RSMeans Mechanical Cost Data 2012 
Book, 2012.
---------------------------------------------------------------------------

    For the NOPR, DOE estimated installation costs separately for 
panels, non-display doors, and display doors. Installation costs for 
panels were calculated per square foot of area while installation costs 
for non-display doors were calculated per door. Display door 
installation costs were omitted and assumed to be included in the panel 
installation costs for display walk-ins. DOE assumed that display doors 
are either installed along with the other walk-in components and that 
and the installation costs for the display doors are included in the 
``mark-up'' amounts for the OEM channel.
    DOE received several comments regarding panel installation costs as 
a result of increased foam insulation thickness. ICS stated that panels 
requiring more than 4 inches of foam insulation will require thermal 
barriers and automatic fire suppression, which are expensive and will 
place a burden on manufacturers and add unnecessary costs on end users. 
(ICS, No. 100, at p. 7) Similarly, Nor-Lake asserted that building 
codes may require a thermal barrier, sprinkler system, or other tests

[[Page 32086]]

if panel foam thickness increases above 4 inches. (Nor-Lake, No. 115 at 
p. 4)
    For cooler and freezer walls greater than 400 ft\2\, the 
International Building Code \19\ (IBC) requires sprinkler systems and 
other fire safety criteria regardless of panel thickness.\20\ 
Therefore, there would be no additional installation costs for walk-ins 
of this size that would be dependent on foam thickness.
---------------------------------------------------------------------------

    \19\ International Code Council, Inc., International Building 
Code, 2012, ISBN: 978-1-60983-040-3.
    \20\ Section 2603.4.1.2 states that foam plastics used in cooler 
and freezer walls up to a maximum thickness of 10 inches shall be 
protected by an automatic sprinkler system. Where the cooler or 
freezer is within a building, both the cooler or freezer and the 
part of building in which it is located shall be sprinklered.
---------------------------------------------------------------------------

    For walk-in coolers up to 400 ft\2\, Section 2603.4.1.3 of the IBC 
states that these coolers do not require special consideration for foam 
thickness up to 4 inches if the metal facing is of greater thickness 
than 0.032-inch or 0.016-inch for aluminum or steel, respectively. For 
foam thicknesses greater than 4 inches and up to 10 inches, a thermal 
barrier is required. DOE added the cost of installing a 0.5-inch gypsum 
thermal barrier when the panel foam thickness exceeds 4 inches.\21\ The 
cost of materials and labor was estimated at $1.53 ft\2\ (this includes 
the installation cost for taped, and finished (level 4 finish) fire 
resistant 0.5-inch gypsum) based on RSMeans Facilities Construction 
Cost Data, 2013 \22\. This cost was applied to all installations of 
walk-ins up to 400 ft\2\ where foam thickness is greater than 4 inches 
and up to 10 inches.
---------------------------------------------------------------------------

    \21\ Section 2603.4 defines a thermal barrier material where the 
average temperature of the exposed surface does not rise more than 
250 [deg]F after 15 minutes of fire exposure. One can meet this 
criterion using 0.5 inch gypsum which is rated at.
    \22\ Reed Construction Data, RSMeans Facilities Maintenance & 
Repair 2013 Cost Data Book, 2013.
---------------------------------------------------------------------------

3. Maintenance and Repair Costs
    Maintenance costs are associated with maintaining the equipment's 
operation, whereas repair costs are associated with repairing or 
replacing components that have failed in the refrigeration system and 
the envelope (i.e. panels and doors). In preparing the final rule's 
analysis, DOE followed the same approach that it applied for the NOPR 
analysis with regard to maintenance for display doors with lights. 78 
FR 55781, 55828. The remaining data on general maintenance for an 
entire walk-in were apportioned between the refrigeration system and 
the envelope doors. Based on the descriptions of maintenance activities 
in the RS Means Facilities Maintenance and Repair Cost Data, 2013,\23\ 
and manufacturer interviews, DOE assumed that the general maintenance 
associated with the panels is minimal and did not include any 
maintenance costs for panels in its analysis. RS Means 2013 data 
provided general maintenance costs for display and storage walk-ins.
---------------------------------------------------------------------------

    \23\ Reed Construction Data, RSMeans Facilities Maintenance & 
Repair 2013 Cost Data Book. 2013.
---------------------------------------------------------------------------

    For this final rule, the total annual maintenance costs for a walk-
in unit range from $172 to $265; of this DOE assumed $152 would be 
spent on the refrigeration system and the rest would be spent on the 
display and passage doors of the envelope. Maintenance costs were 
assumed to be the same across small, medium, and large door sizes in 
the case of both non-display doors and display doors. As stated 
previously, annual maintenance costs for the envelope wall and floor 
panels were assumed to be negligible and were not considered.
    Several parties stated that DOE had underestimated the maintenance 
costs associated with refrigerant leakage and refrigerant charge. 
(ACCA, No. 119, at p. 3; Nor-Lake, No. 115, at p. 2; ICS, et al., No. 
100 at p. 5; NRA No. 112, at p.3). ICS, et al. recommended an annual 
cost of $500 to $700, while Nor-Lake suggested $600.
    Based on the comments received, DOE used an annual cost of $500 to 
account for system refrigerant recharging.
4. Annual Energy Consumption
    Typical annual energy consumption of walk-ins at each considered 
efficiency level is obtained from the energy use analysis results (see 
section IV.F of this notice).
5. Energy Prices
    DOE calculated average State commercial electricity prices using 
the U.S. Energy Information Administration's (EIA's) ``Database of 
Monthly Electric Utility Sales and Revenue Data.'' \24\ DOE calculated 
an average State commercial price by (1) estimating an average 
commercial price for each utility company by dividing the commercial 
revenues by commercial sales; and (2) weighting each utility by the 
number of commercial customers it served by state.
---------------------------------------------------------------------------

    \24\ U.S. Energy Information Administration. EIA-826 Sales and 
Revenue Spreadsheets. (Last accessed May 16, 2012). www.eia.doe.gov/cneaf/electricity/page/eia826.html.
---------------------------------------------------------------------------

6. Energy Price Projections
    To estimate energy prices in future years, DOE extrapolated the 
average State electricity prices described above using the forecast of 
annual average commercial electricity prices developed in the Reference 
Case from AEO2013.\25\ AEO2013 forecasted prices through 2040. To 
estimate the price trends after 2040, DOE assumed the same average 
annual rate of change in prices as from 2031 to 2040.
---------------------------------------------------------------------------

    \25\ The spreadsheet tool that DOE used to conduct the LCC and 
PBP analyses allows users to select price forecasts from either 
AEO's High Economic Growth or Low Economic Growth Cases. Users can 
thereby estimate the sensitivity of the LCC and PBP results to 
different energy price forecasts.
---------------------------------------------------------------------------

7. Equipment Lifetime
    For the NOPR, DOE estimated lifetimes for the individual components 
analyzed instead of the entire unit. It used an average lifetime of 15 
years for panels, 14 years for display and non-display doors, and 12 
years for refrigeration systems. DOE reflects the uncertainty of 
equipment lifetimes in the LCC analysis for equipment components by 
using probability distributions.
    A number of stakeholders asserted that DOE had overestimated the 
equipment lifetimes, and that in general the average lifetime for WICFs 
is 10 years. (NAFEM, No. 118, at p. 3; Bally, No. 102, at p. 2; APC, 
No. PMeeting, at p. 246; Louisville Cooler, No. PMeeting, at p. 249; 
Hillphoenix, No. 107 at p. 5) Louisville Cooler stated that WICFs have 
a wide range of lifetimes, and that a typical fast food or convenience 
store walk-in unit will have a 10-year life, but institutional walk-ins 
would have a life up to 20 years. (Louisville Cooler, No. 81 at p. 1)
    For refrigeration systems, ThermoKool agreed with the assumed 
lifetime of 12 years (ThermoKool, No. 97 at p. 3), while Bally and 
Manitowoc suggested that average system lifetimes are between 6 and 10 
years. (Bally, No. 102 at p. 2; Manitowoc, No. 108, at p. 4)
    Nor-Lake commented that typical panel lifetime is 10 to 15 years 
(Nor-Lake, No. 115, at p. 3), while Manitowoc commented that 10 years 
is more typical. (Manitowoc, No. 108, at p. 4) Several comments stated 
that panel lifetimes from 7 to 10 years are representative. (IB, No. 
98, at p. 3; ThermoKool, No. 97, at p. 3; Hillphoenix, No. 107, at p. 
7) Further, IB stated that panel lifetimes should not be less than the 
minimum lifetime of the door. (IB, No. 98, at p. 3) APC asserted that 
customers will likely replace the entire WICF when the panels fail if 
the remaining components are close to end-of-life. (APC, No. PMeeting 
at p. 244)
    ThermoKool and Bally commented that doors have lifetimes of 3 to 5 
years and 4 to 6 years, respectively. (ThermoKool, No. 97, at p. 3; 
Bally, No.

[[Page 32087]]

102, at p. 2) Danfoss, Hillphoenix, APC, and IB asserted that doors are 
replaced every 3 years. (Danfoss, No. PMeeting at p. 239; Hillphoenix, 
No. 107, at p. 5; APC, No. PMeeting, at p. 246; IB, No. 98, at p. 3) 
The CA IOUs, after contacting end-users of walk-in doors, stated that 
their lifetime is approximately 15 years. (CA IOUS, No. 110, at p. 6) 
CA IOUs further stated that while there is a wide range of lifetimes 
for freight and panel doors, 8 to 9 years is typical. (CA IOUs, No. 
110, at p. 6) Nor-Lake stated that the typical lifetime of a passage 
door is 8 to 10 years, and the typical lifetime of a freight door is 5 
to 7 years. (Nor-Lake, No. 115, at p. 3)
    Based on the stakeholder comments, DOE revised its lifetime 
estimates for this final rule. In all cases, DOE reduced the average 
equipment lifetime, as shown in Table IV.13. Equipment lifetimes are 
described in detail in chapter 8 of the final rule TSD.

              Table IV.13--Average Equipment Lifetimes for Walk-in Coolers and Freezers (in Years)
----------------------------------------------------------------------------------------------------------------
                                                                                   Final Rule
              Component                          NOPR          -------------------------------------------------
                                                                         Small               All other sizes
----------------------------------------------------------------------------------------------------------------
Display Door.........................                       14                       12                       12
Freight Door.........................                       14                       12                        6
Passage Door.........................                       14                       12                        6
Panel Wall/Floor.....................                       15                       12                       12
Refrigeration System.................                       12                       10                       10
----------------------------------------------------------------------------------------------------------------

8. Discount Rates
    In calculating the LCC, DOE applies discount rates to estimate the 
present value of future operating costs to the customers of walk-
ins.\26\ DOE derived the discount rates for the walk-in analysis by 
estimating the average cost of capital for a large number of companies 
similar to those that could purchase walk-ins. This approach resulted 
in a distribution of potential customer discount rates from which DOE 
sampled in the LCC analysis. Most companies use both debt and equity 
capital to fund investments, so their cost of capital is the weighted 
average of the cost to the company of equity and debt financing.
---------------------------------------------------------------------------

    \26\ The LCC analysis estimates the economic impact on the 
individual customer from that customer's own economic perspective in 
the year of purchase and therefore needs to reflect that 
individual's own perceived cost of capital. By way of contrast DOE's 
analysis of national impact requires a societal discount rate. These 
rates used in that analysis are 7 percent and 3 percent, as required 
by OMB Circular A-4, September 17, 2003.
---------------------------------------------------------------------------

    DOE estimated the cost of equity financing by using the Capital 
Asset Pricing Model (CAPM).\27\ The CAPM assumes that the cost of 
equity is proportional to the amount of systematic risk associated with 
a company.
---------------------------------------------------------------------------

    \27\ Harris, R.S. Applying the Capital Asset Pricing Model. UVA-
F-1456. Available at SSRN: http://ssrn.com/abstract=909893.
---------------------------------------------------------------------------

9. Compliance Date of Standards
    Amended standards for WICFs apply to equipment manufactured 
beginning on the date 3 years after the final rule is published unless 
DOE determines, by rule, that a 3-year period is inadequate, in which 
case DOE may extend the compliance date for that standard by an 
additional 2 years. (42 U.S.C. 6313(f)(4)(B)) In the absence of any 
information indicating that 3 years is inadequate, DOE projects a 
compliance date for the standards of 2017. Therefore, DOE calculated 
the LCC and PBP for walk-in coolers and freezers under the assumption 
that compliant equipment would be purchased in the year when compliance 
with the new standard is required--2017.
10. Base-Case Efficiency Distributions
    To accurately estimate the share of consumers who would likely be 
impacted by a standard at a particular efficiency level, DOE's LCC 
analysis considers the projected distribution of equipment efficiencies 
that consumers purchase under the base case (i.e., the case without new 
energy efficiency standards). DOE refers to this distribution of 
equipment efficiencies as a base-case efficiency distribution.
    For the NOPR, DOE examined the range of standard and optional 
equipment features offered by manufacturers. For refrigeration systems, 
DOE estimated that 75 percent of the equipment sold under the base case 
would be at DOE's assumed baseline level--that is, the equipment would 
comply with the existing standards in EPCA, but have no additional 
features that improve efficiency. The remaining 25 percent of equipment 
would have features that would increase its efficiency. While 
manufacturers could have many options, DOE assumed that the average 
efficiency level of this equipment would correspond to the efficiency 
level achieved by the baseline equipment with the first design option 
in the sequence of design options in the engineering analysis ordered 
by their relative cost-effectiveness.
    For panels and non-display doors, DOE estimated that 100 percent of 
the equipment sold under the base case would consist of equipment at 
the baseline level--that is, minimally compliant with EPCA. For cooler 
display doors, DOE assumed that 25 percent of the current shipments are 
minimally compliant with EISA and the remaining 75 percent are higher-
efficiency (45 percent are assumed to have LED lighting, corresponding 
to the first efficiency level above the baseline in the engineering 
analysis, and 30 percent are assumed to have LED lighting plus anti-
sweat heater wire controls, corresponding to the second efficiency 
level above the baseline). For freezer display doors, DOE assumed that 
80 percent of the shipments would be minimally compliant with EPCA and 
the remaining 20 percent would have LED lighting, corresponding to the 
first efficiency level above the baseline. (See section IV.C for a 
discussion of the efficiency levels and design options in the 
engineering analysis). For further information on DOE's estimate of 
base-case efficiency distributions, see chapter 8 of the final rule 
TSD.
11. Inputs to Payback Period Analysis
    Payback period is the amount of time it takes the customer to 
recover the higher purchase cost of more energy efficient equipment as 
a result of lower operating costs. Numerically, the PBP is the ratio of 
the increase in purchase cost to the decrease in annual operating 
expenditures. This type of calculation is known as a ``simple'' PBP 
because it does not take into account changes in operating cost over 
time or the time value of money; that is, the calculation is done at an 
effective discount rate of zero percent. PBPs are expressed in years. 
PBPs greater than the life of the equipment mean that the increased 
total

[[Page 32088]]

installed cost of the more-efficient equipment is not recovered in 
reduced operating costs over the life of the equipment.
    The inputs to the PBP calculation are the total installed cost to 
the customer of the equipment for each efficiency level and the average 
annual operating expenditures for each efficiency level in the first 
year. The PBP calculation uses the same inputs as the LCC analysis, 
except that electricity price trends and discount rates are not used.
12. Rebuttable-Presumption Payback Period
    Sections 325(o)(2)(B)(iii) and 345(e)(1)(A) of EPCA (42 U.S.C. 
6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a)(A)) establish a rebuttable 
presumption applicable to walk-ins. The rebuttable presumption states 
that a new or amended standard is economically justified if the 
Secretary finds that the additional cost to the consumer of purchasing 
equipment complying with an energy conservation standard level will be 
less than three times the value of the energy savings during the first 
year that the consumer will receive as a result of the standard, as 
calculated under the applicable test procedure. This rebuttable 
presumption test is an alternative way of establishing economic 
justification.
    To evaluate the rebuttable presumption, DOE estimated the 
additional cost of purchasing more-efficient, standards-compliant 
equipment, and compared this cost to the value of the energy saved 
during the first year of operation of the equipment. DOE views the 
increased cost of purchasing standards-compliant equipment as including 
the cost of installing the equipment for use by the purchaser. DOE 
calculated the rebuttable presumption payback period (RPBP), or the 
ratio of the value of the increased installed price above the baseline 
efficiency level to the first year's energy cost savings. When the RPBP 
is less than 3 years, the rebuttable presumption is satisfied; when the 
RPBP is equal to or more than 3 years, the rebuttable presumption is 
not satisfied. Note that this PBP calculation does not include other 
components of the annual operating cost of the equipment (i.e., 
maintenance costs and repair costs).
    While DOE examined the rebuttable presumption, it also considered 
whether the standard levels considered are economically justified 
through a more detailed analysis of the economic impacts of these 
levels pursuant to 42 U.S.C. 6295(o)(2)(B)(i). Consistent with its 
usual practice, DOE conducted this more thorough analysis to help 
ensure the completeness of its analysis of the standards under 
consideration. The results of this analysis served as the basis for DOE 
to evaluate the economic justification for a potential standard level 
definitively (thereby supporting or rebutting the results of any 
preliminary determination of economic justification).

H. Shipments

    Forecasts of equipment shipments are used to calculate the national 
impacts of standards on energy use, NPV, and future manufacturer cash 
flows. The envelope component model and refrigeration system shipments 
model take an accounting approach, tracking market shares of each 
equipment class and the vintage of units in the existing stock. Stock 
accounting uses equipment shipments as inputs to estimate the age 
distribution of in-service equipment stocks for all years. The age 
distribution of in-service equipment stocks is a key input to 
calculations of both the NES and NPV because operating costs for any 
year depend on the age distribution of the stock. Detailed description 
of the procedure to calculate future shipments is presented in chapter 
9 of the final rule TSD.
    In DOE's shipments model, shipments of walk-in units and their 
components are driven by new purchases and stock replacements due to 
failures. Equipment failure rates are related to equipment lifetimes, 
which were revised for the final rule, as described in section IV.G.7. 
DOE modeled its growth rate projections for new equipment using the 
commercial building floor space growth rates from the AEO 2013 NEMS-BT 
model.
    Complete historical shipments data for walk-ins could not be 
obtained from any one single source. Therefore, for the NOPR DOE used 
data from multiple sources to estimate historical shipments.
    NEEA suggested that DOE use industry data such as those collected 
by NAEFEM to forecast shipments, even if it does not cover all 
manufacturers. (NEEA, No. 101, at p. 6) DOE contacted NAFEM, which 
provided DOE with recent copies of their ``Size and Shape of the 
Industry'' reports.\28\ These reports contain data on the annual sales 
of walk-in units in the food service sector for 2002-2012. DOE analyzed 
the data received from NAFEM and also obtained other data from 
manufacturer interviews and other sources. For the final rule, DOE 
included these new data into its shipments analysis.
---------------------------------------------------------------------------

    \28\ North American Association of Food Equipment Manufacturers. 
2012 Size and Shape of Industry. Chicago, IL.
---------------------------------------------------------------------------

a. Share of Shipments and Stock by Equipment Class
    For the NOPR, DOE estimated that dedicated condensing units account 
for approximately 70 percent of the refrigeration market and the 
remaining 30 percent consists of unit coolers connected to multiplex 
condensing systems. For dedicated condensing refrigeration systems, DOE 
estimated that approximately 66 percent and 3 percent of the shipments 
and stock of the refrigeration market is accounted for by outdoor and 
indoor dedicated condensing refrigeration systems, respectively. For 
unit coolers connected to multiplex systems, DOE estimated that medium 
temperature units account for about 25 percent of the shipments and 
stock.
    Regarding the relative shares of stock or shipments between walk-in 
coolers and freezers, for the NOPR, DOE estimated 71 percent share for 
coolers and 29 percent for freezers. DOE estimated that shares by size 
of walk-in units are 52 percent, 40 percent, and 8 percent for small, 
medium, and large units, respectively.
    DOE received no comments on the above estimates, and for this final 
rule DOE maintained the same values that were used in the NOPR.
2. Impact of Standards on Shipments
    For various equipment, price increases due to standards could lead 
to more refurbishing of equipment (or purchase of used equipment), 
which would have the effect of deferring the shipment of new equipment 
for a period of time. For the NOPR, DOE did not have enough information 
on customer behavior to explicitly model the extent of refurbishing at 
each TSL.
    ACCA and Hussmann stated that additional panel insulation will 
encourage businesses to extend the life of old units or purchase a used 
unit rather than a new unit. (ACCA, No. 93, at p.7; Hussmann, No. 93, 
at p. 7) However, Manitowoc noted that there is a very limited market 
for used equipment because the panel design does not lend itself to 
multiple cycles. (Manitowoc, No. 108, at p. 4) ACCA pointed out that 
while there is a large market for used small WICFs typically used in 
restaurants, larger WICFs found in grocery stores are less likely to be 
resold. (ACCA, No 119, at p. 3)
    DOE acknowledges that price increases from amended standards could 
lead to increases in equipment refurbishing or the purchase of used 
equipment. DOE did not have enough

[[Page 32089]]

information on WICF customer behavior to explicitly model the extent of 
refurbishing at each TSL. However, DOE believes that the degree of 
refurbishing would not be significant enough to change the ranking of 
the TSLs considered for this rule.
    Manitowoc argued that if the price of a WICF is too high, customers 
will use other appliances to keep their food cold, such as reach-ins 
and under-counter coolers, which would cause higher energy consumption. 
(Manitowoc, No. 108, at p. 4) Thermo-Kool agreed that higher prices 
would encourage customers to buy alternative means to keep products 
cold or frozen (Thermo-Kool, No. 97 at p. 3).
    DOE is releasing a concurrent standard for commercial refrigeration 
equipment, which includes the alternative equipment mentioned by 
Manitowoc and Thermo-Kool. The equipment covered under that rule will 
be subject to similar price increases as WICFs. Therefore, DOE believes 
that there will be limited incentive for customers to purchase 
alternatives to WICFs that meet the standards in this final rule.

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

    The NIA assesses the NES and the NPV of total customer costs and 
savings that would be expected as a result of amended energy 
conservation standards. The NES and NPV are analyzed at specific 
efficiency levels for each walk-in equipment class. DOE calculates the 
NES and NPV based on projections of annual equipment shipments, along 
with the annual energy consumption and total installed cost data from 
the LCC analysis. For the final rule analysis, DOE forecasted the 
energy savings, operating cost savings, equipment costs, and NPV of 
customer benefits over the lifetime of equipment sold from 2017 through 
2046.
    DOE evaluated the impacts of the amended standards by comparing 
base-case projections with standards-case projections. The base-case 
projections characterize energy use and customer costs for each 
equipment class in the absence of any amended energy conservation 
standards. DOE compares these projections with projections 
characterizing the market for each equipment class if DOE were to adopt 
an amended standard at specific energy efficiency levels for that 
equipment class.
    DOE uses a Microsoft Excel spreadsheet model to calculate the 
energy savings and the national customer costs and savings from each 
TSL. The final rule TSD and other documentation that DOE provides 
during the rulemaking help explain the models and how to use them, and 
interested parties can review DOE's analyses by interacting with these 
spreadsheets. The NIA spreadsheet model uses average values as inputs 
(as opposed to probability distributions of key input parameters from a 
set of possible values).
    For the final rule analysis, the NIA used projections of energy 
prices and commercial building starts from the AEO2013 Reference Case. 
In addition, DOE analyzed scenarios that used inputs from the AEO2013 
Low Economic Growth and High Economic Growth Cases. These cases have 
lower and higher energy price trends, respectively, compared to the 
Reference Case. NIA results based on these cases are presented in 
appendixes 10A and 10B of the final rule TSD.
    A detailed description of the procedure to calculate NES and NPV, 
and inputs for this analysis are provided in chapter 10 of the final 
rule TSD.
1. Forecasted Efficiency in the Base Case and Standards Cases
    A key component of the NIA is the trend in energy efficiency 
forecasted for the base and standards cases. As discussed in section 
IV.G, DOE used data collected from manufacturers and an analysis of 
market information to develop a base-case energy efficiency 
distribution (which yields a shipment-weighted average efficiency) for 
each of the considered equipment classes for the first year of the 
forecast period. For both refrigeration systems and envelope 
components, DOE assumed no improvement of energy efficiency in the base 
case and held the base-case energy efficiency distribution constant 
throughout the forecast period.
    To estimate market behavior in the standards cases, DOE uses a 
``roll-up'' scenario. Under the roll-up scenario, DOE assumes that 
equipment efficiencies in the base case that do not meet the standard 
level under consideration would ``roll up'' to meet the new standard 
level, and equipment efficiencies above the standard level under 
consideration would be unaffected.
    The estimated efficiency trends in the base case and standards 
cases are further described in chapter 8 of the final rule TSD.
2. National Energy Savings
    For each year in the forecast period, DOE calculates the NES for 
each potential standard level by multiplying the stock of equipment 
affected by the energy conservation standards by the estimated per-unit 
annual energy savings. DOE typically considers the impact of a rebound 
effect in its calculation of NES for a given piece of equipment. A 
rebound effect occurs when users operate higher efficiency equipment 
more frequently and/or for longer durations, thus offsetting estimated 
energy savings. DOE did not incorporate a rebound factor for walk-ins 
because they are operated 24 hours a day, and therefore there is no 
potential for a rebound effect.
    Major inputs to the NES calculation are annual unit energy 
consumption, shipments, equipment stock, a site-to-primary energy 
conversion factor, and a full fuel cycle factor.
    The annual unit energy consumption is the site energy consumed by a 
walk-in component in a given year. Because the equipment classes 
analyzed in this rule represent a range of different equipment that is 
sold across a range of sizes, DOE adopted different ``unit'' 
definitions for panels, and all other walk-in equipment. For panels, 
NES is expressed as a square footage of equipment, while for all other 
components NES is expressed per unit. DOE determined annual forecasted 
shipment-weighted average equipment efficiencies that, in turn, enabled 
determination of shipment-weighted annual energy consumption values.
    The NES spreadsheet model keeps track of the total square feet of 
walk-in cooler and freezer panels, and component units shipped each 
year. The walk-in stock in a given year is the total number of walk-ins 
shipped from earlier years that is still in use in that year, based on 
the equipment lifetime.
    DOE did not include any rebound effect for WICFs in its NOPR 
analysis. Several commenters agreed that there would be no rebound 
effect for WICFs. (ThermoKool, No. 97, at p. 4; APC, No. 99, at p.8; 
NEEA et al., No. 101, at p. 6; Hillphoenix, No. 107, at p. 5) DOE 
maintained the same approach in preparing the final rule.
    To estimate the national energy savings expected from energy 
conservation standards, DOE uses a multiplicative factor to convert 
site energy consumption (energy use at the location where the appliance 
is operated) into primary or source energy consumption (the energy 
required to deliver the site energy). For this final rule, DOE used 
conversion factors based on AEO 2013. For electricity, the conversion 
factors vary over time because of projected changes in generation 
sources (i.e., the types of power plants projected to provide 
electricity to the country). Because the AEO does not provide energy 
forecasts

[[Page 32090]]

beyond 2040, DOE used conversion factors that remain constant at the 
2040 values throughout the rest of the forecast.
    DOE has historically presented NES in terms of primary energy 
savings. In response to the recommendations of a committee on ``Point-
of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 
Standards'' appointed by the National Academy of Science, DOE announced 
its intention to use full-fuel-cycle (FFC) measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (August 18, 2011) After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in the Federal Register in which DOE 
explained its determination that NEMS is the most appropriate tool for 
its FFC analysis and its intention to use NEMS for that purpose. 77 FR 
49701 (August 17, 2012). The approach used for this final rule, and the 
FFC multipliers that were applied, are described in appendix 10E of the 
final rule TSD. NES results are presented in both primary energy and 
FFC savings in section V.B.3.a.
3. Net Present Value of Customer Benefit
    The inputs for determining the NPV of the total costs and benefits 
experienced by walk-in customers are: (1) Total annual installed cost; 
(2) total annual savings in operating costs; and (3) a discount factor. 
DOE calculated net national customer savings for each year as the 
difference between the base-case scenario and standards-case scenarios 
in terms of installation and operating costs. DOE calculated operating 
cost savings over the life of each piece of equipment shipped in the 
forecast period.
    DOE multiplied monetary values in future years by the discount 
factor to determine the present value of costs and savings. DOE 
estimated national impacts using both a 3-percent and a 7-percent real 
discount rate as the average real rate of return on private investment 
in the U.S. economy. These discount rates are used in accordance with 
the Office of Management and Budget (OMB) guidance to Federal agencies 
on the development of regulatory analysis (OMB Circular A-4, September 
17, 2003), and section E, ``Identifying and Measuring Benefits and 
Costs,'' therein. The 7-percent rate is an estimate of the average 
before-tax rate of return on private capital in the U.S. economy, and 
reflects the returns on real estate and small business capital, 
including corporate capital. DOE used the 3-percent rate to capture the 
potential effects of amended standards on private consumption. This 
rate represents the rate at which society discounts future consumption 
flows to their present value. DOE defined the present year as 2014 for 
the analysis.

J. Customer Subgroup Analysis

    In analyzing the potential impact of new or amended standards on 
commercial customers, DOE evaluates the impact on identifiable groups 
(i.e., subgroups) of customers, such as different types of businesses 
that may be disproportionately affected. Small businesses typically 
face a higher cost of capital. In general, the higher the cost of 
capital, the more likely it is that an entity would be disadvantaged by 
a requirement to purchase higher efficiency equipment. Based on data 
from the 2007 U.S. Economic Census and size standards set by the U.S. 
Small Business Administration (SBA), DOE determined that a majority of 
small restaurants fall under the definition of small businesses. It 
believes that this subgroup is broadly representative of small 
businesses that use walk-in coolers and walk-in freezers.
    DOE estimated the impacts on the identified customer subgroup using 
the LCC spreadsheet model. The inputs for small restaurants were fixed 
to ensure that the discount rates, electricity prices, and equipment 
lifetime associated with that subgroup were selected. The discount rate 
was further increased by applying the small firm premium to the WACC. 
Apart from these changes, all other inputs for the subgroup analysis 
are the same as those in the LCC analysis. Details of the data used for 
the subgroup analysis and results are presented in chapter 11 of the 
final rule TSD.

K. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impact of new energy 
conservation standards on manufacturers of walk-in equipment and to 
determine the impact of such standards on employment and manufacturing 
capacity. The MIA has both quantitative and qualitative aspects. The 
quantitative part of the MIA primarily relies on the Government 
Regulatory Impact Model (GRIM), an industry cash-flow model with inputs 
specific to this rulemaking. The key GRIM inputs are data on the 
industry cost structure, product costs, shipments, and assumptions 
about markups and conversion expenditures. The key output is the 
industry net present value (INPV). Different sets of markup scenarios 
will produce different results. The qualitative part of the MIA 
addresses factors such as equipment characteristics, impacts on 
particular subgroups of manufacturers, and important market and product 
trends. The complete MIA is outlined in chapter 12 of the final rule 
TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the walk-in industry that 
includes a top-down cost analysis of manufacturers used to derive 
preliminary financial inputs for the GRIM (e.g., sales general and 
administration (SG&A) expenses; research and development (R&D) 
expenses; and tax rates). DOE used public sources of information, 
including company Securities and Exchange Commission (SEC) 10-K 
filings, Moody's company data reports, corporate annual reports, the 
U.S. Census Bureau's Economic Census, and Dun and Bradstreet reports.
    In Phase 2 of the MIA, DOE prepared an industry cash-flow analysis 
to quantify the impacts of an energy conservation standard. In general, 
more-stringent energy conservation standards can affect manufacturer 
cash flow in three distinct ways: (1) By creating a need for increased 
investment; (2) by raising production costs per unit; and (3) by 
altering revenue due to higher per-unit prices and possible changes in 
sales volumes.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with a representative cross-section of manufacturers. During 
these interviews, DOE discussed engineering, manufacturing, 
procurement, and financial topics to validate assumptions used in the 
GRIM and to identify key issues or concerns.
    Also in Phase 3, DOE evaluated subgroups of manufacturers that may 
be disproportionately impacted by amended standards, or that may not be 
accurately represented by the average cost assumptions used to develop 
the industry cash-flow analysis. For example, small manufacturers, 
niche players, or manufacturers exhibiting a cost structure that 
largely differs from the industry average could be more negatively 
affected.
    DOE identified one subgroup, small manufacturers, for separate 
impact analyses. DOE applied the small business size standards 
published by the SBA to determine whether a company is considered a 
small business. 65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 
53533, 53544 (Sept. 5, 2000) and codified at 13 CFR part

[[Page 32091]]

121. The Small Business Administration (SBA) defines a small business 
for North American Industry Classification System (NAICS) 333415 ``Air-
Conditioning and Warm Air Heating Equipment and Commercial and 
Industrial Refrigeration Equipment Manufacturing'' as having 750 or 
fewer employees. The 750-employee threshold includes all employees in a 
business's parent company and any other subsidiaries. The small 
businesses were further sub-divided into small manufacturers of panels, 
doors, and refrigeration equipment to better understand the impacts of 
the rulemaking on those entities. The small business subgroup is 
discussed in sections V.B.2.d and VI.B of this notice and in Chapter 12 
of the final rule TSD.
2. Government Regulatory Impact Model
    DOE uses the GRIM to quantify the changes in the walk-in industry 
cash flow due to amended standards that result in a higher or lower 
industry value. The GRIM analysis uses a standard, annual cash-flow 
analysis that incorporates manufacturer costs, markups, shipments, and 
industry financial information as inputs, and models changes in costs, 
investments, and manufacturer margins that would result from new energy 
conservation standards. The GRIM spreadsheet uses the inputs to arrive 
at a series of annual cash flows, beginning with the base year of the 
analysis, 2013 in this case, and continuing to 2046. DOE calculated 
INPVs by summing the stream of annual discounted cash flows during this 
period. DOE applied discount rates derived from industry financials and 
then modified them according to feedback during manufacturer 
interviews. Discount rates ranging from 9.4 to 10.5 percent were used 
depending on the component being manufactured.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the base case and each TSL (the 
standards case). Essentially, the difference in INPV between the base 
case and a standards case represents the financial impact of the energy 
conservation standard on manufacturers. Additional details about the 
GRIM, the discount rate, and other financial parameters can be found in 
chapter 12 of the TSD.
    DOE presents its estimates of industry impacts by grouping the 
major equipment classes served by the same manufacturers. For the WICF 
industry, DOE groups results by panels, doors, and refrigeration 
systems.
a. Government Regulatory Impact Model Key Inputs
(1) Manufacturer Production Costs
    Manufacturing higher efficiency equipment is typically more 
expensive than manufacturing baseline equipment due to the use of more 
complex components, which are more costly than baseline components. The 
changes in the MPCs of the analyzed WICF components can affect the 
revenues, gross margins, and cash flow of the industry, making these 
production cost data key GRIM inputs for DOE's analysis.
    In the MIA, DOE used the MPCs for each considered efficiency level 
calculated in the engineering analysis, as described in section IV.D 
and further detailed in chapter 5 of the NOPR TSD. In addition, DOE 
used information from its teardown analysis, described in section 
IV.D.3, to disaggregate the MPCs into material, labor, and overhead 
costs. To calculate the MPCs for equipment above the baseline, DOE 
added incremental material, labor, overhead costs from the engineering 
cost-efficiency curves to the baseline MPCs. These cost breakdowns and 
equipment markups were validated with manufacturers during manufacturer 
interviews.
(2) Shipments Forecast
    The GRIM estimates manufacturer revenues based on total unit 
shipment forecasts and the distribution of shipments by equipment 
class. For the base-case analysis, the GRIM uses the NIA base-case 
shipment forecasts from 2013, the base year for the MIA analysis, to 
2046, the last year of the analysis period.
    For the standards case shipment forecast, the GRIM uses the NIA 
standards case shipment forecasts. The NIA assumes zero elasticity in 
demand as explained in section 9.3.1 in chapter 9 of the TSD. 
Therefore, the total number of shipments per year in the standards case 
is equal to the total shipments per year in the base case. DOE assumes 
a new efficiency distribution in the standards case, however, based on 
the energy conservation standard. DOE assumed that product efficiencies 
in the base case that did not meet the standard under consideration 
would ``roll up'' to meet the new standard in the standard year.
(3) Product and Capital Conversion Costs
    New energy conservation standards will cause manufacturers to incur 
conversion costs to bring their production facilities and product 
designs into compliance. For the MIA, DOE classified these conversion 
costs into two major groups: (1) Product conversion costs and (2) 
capital conversion costs. Product conversion costs are investments in 
research, development, testing, marketing, and other non-capitalized 
costs necessary to make product designs comply with a new or amended 
energy conservation standard. Capital conversion costs are investments 
in property, plant, and equipment necessary to adapt or change existing 
production facilities such that new product designs can be fabricated 
and assembled.
    To evaluate the level of capital conversion expenditures 
manufacturers would likely incur to comply with energy conservation 
standards, DOE used the manufacturer interviews to gather data on the 
level of capital investment required at each efficiency level. DOE 
validated manufacturer comments through estimates of capital 
expenditure requirements derived from the product teardown analysis and 
engineering model described in section IV.D.3. For the final rule, 
adjustments were made to the capital conversion costs based on feedback 
in the NOPR written comments and changes in the test procedure for 
panels and refrigeration components. DOE assessed the product 
conversion costs at each level by integrating data from quantitative 
and qualitative sources. DOE considered feedback from multiple 
manufacturers at each efficiency level to determine conversion costs 
such as R&D expenditures and certification costs. Industry 
certification costs included fire safety testing by Underwriter 
Laboratories (UL) and food safety certifications by the NSF 
International (NSF). Manufacturers' data was aggregated to better 
reflect the industry as a whole and to protect confidential 
information. For the final rule, adjustments were made to product 
conversion costs based on feedback in the NOPR written comments and 
changes in the test procedure for panels and refrigeration components.
    In general, DOE assumes that all conversion-related investments 
occur between the year of publication of the final rule and the year by 
which manufacturers must comply with an amended standard. The 
investment figures used in the GRIM can be found in section V.B.2.a of 
this notice. For additional information on the estimated product 
conversion and capital conversion costs, see chapter 12 of the final 
rule TSD.

[[Page 32092]]

b. Government Regulatory Impact Model Scenarios
Markup Scenarios
    As discussed above, MSPs include direct manufacturing production 
costs (i.e., labor, material, and overhead estimated in DOE's MPCs) and 
all non-production costs (i.e., SG&A, R&D, and interest), along with 
profit. To calculate the MSPs in the GRIM, DOE applied markups to the 
MPCs estimated in the engineering analysis and then added in the cost 
of shipping. Modifying these markups in the standards case yields 
different sets of impacts on manufacturers. For the MIA, DOE modeled 
two standards-case markup scenarios to represent the uncertainty 
regarding the potential impacts on prices and profitability for 
manufacturers following the implementation of amended energy 
conservation standards: (1) A preservation of gross margin percentage 
markup scenario; and (2) a preservation of operating profit markup 
scenario. These scenarios lead to different markups values that, when 
applied to the inputted MPCs, result in varying revenue and cash flow 
impacts.
    Under the preservation of gross margin percentage scenario, DOE 
applied a single uniform ``gross margin percentage'' markup across all 
efficiency levels. As production costs increase with efficiency, this 
scenario implies that the absolute dollar markup will increase as well. 
Based on publicly available financial information for walk-in 
manufacturers, submitted comments, and information obtained during 
manufacturer interviews, DOE assumed the non-production cost markup--
which includes SG&A expenses, R&D expenses, interest, and profit--to be 
1.32 for panels, 1.50 for solid doors, 1.62 for display doors, and 1.35 
for refrigeration. These markups are consistent with the ones DOE 
assumed in the engineering analysis. Manufacturers have indicated that 
it is optimistic to assume that, as manufacturer production costs 
increase in response to an energy conservation standard, manufacturers 
would be able to maintain the same gross margin percentage markup. 
Therefore, DOE assumes that this scenario represents a high bound to 
industry profitability under an energy conservation standard.
    In the preservation of operating profit scenario, manufacturer 
markups are set so that operating profit 1 year after the compliance 
date of the amended energy conservation standard is the same as in the 
base case. Under this scenario, as the cost of production and the cost 
of sales rise, manufacturers generally must reduce their markups to a 
level that maintains base-case operating profit. The implicit 
assumption behind this markup scenario is that the industry can 
maintain only its operating profit in absolute dollars after the 
standard. Operating margin in percentage terms is reduced between the 
base case and standards case.
3. Discussion of Comments
    During the October 2013 NOPR public meeting, interested parties 
commented on the assumptions and results of the analyses as described 
in the TSD. Oral and written comments addressed several topics, 
including refrigerants, installation contractors, impacts on small 
manufacturers, the base case markup, and the number of small panel 
manufacturers in the industry.
a. Refrigerants
    NAFEM and ICS requested that DOE incorporate the phase out of HFCs 
in its analysis. NAFEM stated that alternative refrigerants could add 
to overall engineering costs and reduce energy savings. (NAFEM, No. 118 
at p. 4) (ICS, et al., No. 100 at p. 7) (IB, No. 98 at p. 2). The use 
of alternative refrigerants is not a direct result of this rule and is 
not included in this analysis. Furthermore, there is no regulatory 
requirement to use alternative refrigerants at this time. DOE does not 
include the impacts of pending legislation or regulatory proposals in 
its analysis, as any impact would be speculative. For this final rule, 
DOE does not include the impact of alternative refrigerants in its 
analysis.
b. Installation Contractors
    ACCA noted that the MIA did not assess the impact on installation 
contractors. (ACCA, No. 88 at p. 338) Consistent with EPCA, and in 
keeping with industry's requests submitted at the Preliminary Analysis 
and summarized in the proposal, DOE has taken a component-based 
approach in setting standards for WICF. (42 U.S.C. 6311(20)) As such, 
the MIA focuses on manufacturers of WICF panels, WICF refrigeration, 
and WICF doors. DOE does not consider the installation contractors to 
be manufacturers for the purpose for the Manufacturer Impact Analysis 
as they do not produce the panels, refrigeration components, or doors 
being tested, labeled, and certified.
c. Small Manufacturers
    In written comments, manufacturers stated that new energy 
efficiency standards would impose severe economic hardship on small 
business manufacturers. (Manitowoc, No. 108 at p. 4) (Hillphoenix, No. 
107 at p. 6) (APC, No.99 at p. 20) NAFEM stated that small businesses 
do not have the R&D resources to create and implement the design 
options necessary to meet the standards. (NAFEM, No. 118 at p. 4) A 
large number of comments focused on the economic hardship of small 
business manufacturers that DOE considered to be primarily 
manufacturers of WICF panels. These comments focused on capital 
conversion costs, product conversion costs, and production capacity 
impacts.
    Hillphoenix and ICS commented that increased panel thickness would 
result in excessive capital conversion costs, especially for small 
manufacturers. (Hillphoenix, No. 107 at p. 6) (ICS, et al., No. 100 at 
p. 7) US Cooler stated that small manufacturers using foamed-in-place 
polyurethane that do not currently have the capability to manufacture 
5'' insulation would be faced with costs of $800,000 for two foamed-in-
place fixtures. Arctic stated that in order to manufacture 5'' foamed-
in-place polyurethane panels, small manufacturers would be required to 
invest at least $1M. (Arctic, No. 117 at p. 2) Thermo-Kool estimated 
that the equipment cost required to manufacture thicker insulation 
panels would likely be in excess of $1 million for each manufacturer. 
(ThermoKool, No. 97 at p. 2) Arctic and US Cooler added that moving 
from a 4-inch to a 5-inch insulation panel would result in prohibitive 
retooling and labor costs for small manufacturers currently making 4-
inch panels. (Arctic, No. 117 at p. 1) (US Cooler, No. 104 at p. 1) ICS 
further noted that requiring more than 4 inches of foam insulation will 
require thermal barriers and automatic fire suppression, which are 
expensive and will add to manufacturer burdens and place unnecessary 
costs on end users. (ICS, et al., No. 100 at p. 7) US Cooler and Arctic 
asserted that small manufacturers using extruded polystyrene (EPS) 
would need to make extensive and costly changes to their manufacturing 
process and materials to meet a standard above baseline since EPS is 
only sold in 4'' thick sheets. (US Cooler, No. 104 at p. 2) (Arctic, 
No. 117 at p. 1).
    Manufacturers were also concerned about the product conversion 
costs related to the standard proposed in the NOPR. Specifically, 
commenters cited high testing costs and limited availability of test 
labs accredited to perform ASTM C1363 as prohibitive barriers to small 
manufacturers complying with the standard. (Hillphoenix, No. 107 at p. 
6) (Hussmann, No. 93 at p. 6) (Arctic, No. 117 at p. 1) (US Cooler, No. 
100 at p.

[[Page 32093]]

6) APC commented that the ASTM C1363 test had an excessive cost-burden 
of around $4,000 for each test. (APC, No. 99 at p. 1) IB estimated the 
total cost of testing to be in the range of $2.5 million for a 
manufacturer and stated that such a cost would be prohibitive for small 
businesses. (IB, No. 98 at p. 4)
    Aside from capital conversion costs and product conversion costs, 
panel manufacturers noted other concerns related to a standard that 
would require an increase in panel thickness. Nor-Lake noted that 
increased panel thickness would raise production costs. These higher 
production costs stem in part from the additional curing time needed 
for thicker panels--Nor-Lake pointed out that a 4'' panel took 
approximately 25 minutes to cure, while 5'' and 6'' panels took 45 
minutes and one hour, respectively, to cure. (Nor-Lake, No. 115 at p. 
1) APC agreed with Nor-Lake's cure time estimates and further noted 
that a 5'' panel would force manufacturers to lose 1/3rd of their 
production capacity. (APC, No. 99 at p. 4) Manitowoc stated that 
thicker panels would be heavier, necessitating longer curing times and 
raising safety concerns during the manufacturing process. (Manitowoc, 
No. 108 at p. 3)
    DOE has taken the industry's feedback on capital conversion costs, 
product conversion costs, production capacity implications into account 
in its final rule analysis. As a result, DOE selected a standard level 
that is equivalent to the current baseline for WICF panels. 
Consequently, DOE expects that no new investment in capital equipment 
or outside testing would be necessary to meet the standard, thereby 
minimizing impacts on small manufacturers.
d. Mark Up Scenarios
    Manufacturers submitted several comments with regard to 
manufacturer markups. Hussmann stated that the market does not use a 
simple markup and that markups vary based on customer payback periods 
and each manufacturer's ability to maximize profits. (Hussmann, No.93 
and p.3) Thermokool submitted a comment that DOE's markups are 
extremely undervalued. (ThermoKool, No 97 at p.3) APC noted that panel 
markups are closer to 1.46 (rather than DOE's value of 1.32) and 
refrigeration markups are closed to 1.45 (rather than DOEs markup of 
1.35). (APC, No 99 at p.6)
    While applying a simple markup on manufacturer production cost may 
not be a common practice to arrive at a selling price for walk-in panel 
manufacturers, DOE believes applying a simple industry-average markup 
is a useful tool for modeling the industry as a whole. DOE validated 
its markup values with eight different panel manufacturers during 
manufacturer interviews. While the industry-average markup values may 
be low for specific companies, especially for small manufacturers, DOE 
notes that using low markup assumptions provides a more conservative 
analysis, which ensures that DOE does not understate the potential 
negative impacts on industry.
e. Number of Small Businesses
    American Panel commented on the number of manufacturers in the WICF 
panel industry. It estimates that there are only 5 large manufacturers 
of walk-in panels. Therefore, American Panel suggested that 42 of 47 
walk-in panel manufacturers (89%) are small businesses, not 42 of 52 
(81%) as estimated by DOE in the NOPR.
    DOE identified 5 parent companies with 10 subsidiaries that produce 
walk-in panels. This is consistent with American Panel's written 
comment that there are only 5 large manufacturers of walk-in panels. 
DOE has revised its regulatory flexibility analysis to more accurately 
reflect the number of large and small manufacturers identified in the 
industry.

L. Emissions Analysis

    In the emissions analysis, DOE estimated the reduction in power 
sector emissions of CO2, NOX, sulfur dioxide 
(SO2) and Hg from amended energy conservation standards for 
walk-in coolers and walk-in freezers. In addition, DOE estimates 
emissions impacts in production activities (extracting, processing, and 
transporting fuels) that provide the energy inputs to power plants. 
These are referred to as ``upstream'' emissions. Together, these 
emissions account for the full-fuel-cycle (FFC). In accordance with 
DOE's FFC Statement of Policy (76 FR 51282 (Aug. 18, 2011)) 77 FR 49701 
(August 17, 2012), the FFC analysis includes impacts on emissions of 
methane (CH4) and nitrous oxide (N2O), both of 
which are recognized as greenhouse gases.
    DOE conducted the emissions analysis using emissions factors for 
CO2 and most of the other gases derived from data in AEO 
2013, supplemented by data from other sources. DOE developed separate 
emissions factors for power sector emissions and upstream emissions. 
The method that DOE used to derive emissions factors is described in 
chapter 13 of the final rule TSD.
    EIA prepares the Annual Energy Outlook using NEMS. Each annual 
version of NEMS incorporates the projected impacts of existing air 
quality regulations on emissions. AEO 2013 generally represents current 
legislation and environmental regulations, including recent government 
actions, for which implementing regulations were available as of 
December 31, 2012.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs. Title IV of the Clean Air Act sets an annual emissions cap on 
SO2 for affected EGUs in the 48 contiguous States (42 U.S.C. 
7651 et seq.) and the District of Columbia (DC). SO2 
emissions from 28 eastern States and DC were also limited under the 
Clean Air Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which 
created an allowance-based trading program. CAIR was remanded to the 
U.S. Environmental Protection Agency (EPA) by the U.S. Court of Appeals 
for the District of Columbia but it remained in effect.\29\ In 2011, 
EPA issued a replacement for CAIR, the Cross-State Air Pollution Rule 
(CSAPR). 76 FR 48208 (Aug. 8, 2011). On August 21, 2012, the D.C. 
Circuit issued a decision to vacate CSAPR.\30\ The court ordered EPA to 
continue administering CAIR. The AEO 2013 emissions factors used for 
this final rule assume that CAIR remains a binding regulation through 
2040.
---------------------------------------------------------------------------

    \29\ See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
    \30\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38 
(D.C. Cir. 2012).
---------------------------------------------------------------------------

    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, any excess SO2 
emissions allowances resulting from the lower electricity demand caused 
by the adoption of a new or amended efficiency standard could be used 
to permit offsetting increases in SO2 emissions by any 
regulated EGU. In past rulemakings, DOE recognized that there was 
uncertainty about the effects of efficiency standards on SO2 
emissions covered by the existing cap-and-trade system, but it 
concluded that negligible reductions in power sector SO2 
emissions would occur as a result of standards.
    Beginning around 2015, however, SO2 emissions will fall 
as a result of the Mercury and Air Toxics Standards (MATS) for power 
plants. 77 FR 9304 (Feb. 16, 2012). In the final MATS rule, EPA 
established a standard for hydrogen chloride as a surrogate for acid 
gas hazardous air pollutants (HAP), and also established a standard for 
SO2 (a non-HAP acid gas) as an alternative

[[Page 32094]]

equivalent surrogate standard for acid gas HAP. The same controls are 
used to reduce HAP and non-HAP acid gas; thus, SO2 emissions 
will be reduced as a result of the control technologies installed on 
coal-fired power plants to comply with the MATS requirements for acid 
gas. AEO2013 assumes that, in order to continue operating, coal plants 
must have either flue gas desulfurization or dry sorbent injection 
systems installed by 2015. Both technologies, which are used to reduce 
acid gas emissions, also reduce SO2 emissions. Under the 
MATS, NEMS shows a reduction in SO2 emissions when 
electricity demand decreases (e.g., as a result of energy efficiency 
standards). Emissions will be far below the cap that would be 
established by CAIR, so it is unlikely that excess SO2 
emissions allowances resulting from the lower electricity demand would 
be needed or used to permit offsetting increases in SO2 
emissions by any regulated EGU. Therefore, DOE believes that energy 
efficiency standards will reduce SO2 emissions in 2015 and 
beyond.
    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia. Energy conservation standards are 
expected to have little effect on NOX emissions in those 
States covered by CAIR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
permit offsetting increases in NOX emissions. However, 
standards would be expected to reduce NOX emissions in the 
States not affected by the caps, so DOE estimated NOX 
emissions reductions from the standards considered in this final rule 
for these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. DOE estimated mercury 
emissions factors based on AEO2013, which incorporates the MATS.

M. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of the standards in this final rule, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2 and NOX that are expected to result from 
each of the TSLs considered. In order to make this calculation 
analogous to the calculation of the NPV of customer benefit, DOE 
considered the reduced emissions expected to result over the lifetime 
of equipment shipped in the forecast period for each TSL. This section 
summarizes the basis for the monetary values used for each of these 
emissions and presents the values considered in this final rule.
    For this final rule, DOE is relying on a set of values for the SCC 
that was developed by a Federal interagency process. The basis for 
these values is summarized below, and a more detailed description of 
the methodologies used is provided as an appendix to chapter 14 of the 
final rule TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide. A domestic SCC value is 
meant to reflect the value of damages in the United States resulting 
from a unit change in carbon dioxide emissions, while a global SCC 
value is meant to reflect the value of damages worldwide.
    Under section 1(b) of Executive Order 12866, agencies must, to the 
extent permitted by law, ``assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs.'' The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions. The estimates are presented with an acknowledgement 
of the many uncertainties involved and with a clear understanding that 
they should be updated over time to reflect increasing knowledge of the 
science and economics of climate impacts.
    As part of the interagency process that developed these SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of challenges. A 
report from the National Research Council \31\ points out that any 
assessment will suffer from uncertainty, speculation, and lack of 
information about (1) future emissions of GHGs; (2) the effects of past 
and future emissions on the climate system, (3) the impact of changes 
in climate on the physical and biological environment, and (4) the 
translation of these environmental impacts into economic damages. As a 
result, any effort to quantify and monetize the harms associated with 
climate change will raise questions of science, economics, and ethics 
and should be viewed as provisional.
---------------------------------------------------------------------------

    \31\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. 2009. National Academies 
Press: Washington, DC.
---------------------------------------------------------------------------

    Despite the limits of both quantification and monetization, SCC 
estimates can be useful in estimating the social benefits of reducing 
CO2 emissions. The agency can estimate the benefits from 
reduced (or costs from increased) emissions in any future year by 
multiplying the change in emissions in that year by the SCC value 
appropriate for that year. The net present value of the benefits can 
then be calculated by multiplying each of these future benefits by an 
appropriate discount factor and summing across all affected years.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. Development of Social Cost of Carbon Values
    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across Federal agencies, the Administration 
sought to develop a transparent and defensible method, specifically 
designed for the rulemaking process, to quantify avoided climate change 
damages from reduced CO2 emissions. The interagency group 
did not undertake any original analysis. Instead, it combined SCC 
estimates from the

[[Page 32095]]

existing literature to use as interim values until a more comprehensive 
analysis could be conducted. The outcome of the preliminary assessment 
by the interagency group was a set of five interim values: Global SCC 
estimates for 2007 (in 2006$) of $55, $33, $19, $10, and $5 per metric 
ton of CO2. These interim values represented the first 
sustained interagency effort within the U.S. government to develop an 
SCC for use in regulatory analysis. The results of this preliminary 
effort were presented in several proposed and final rules.
c. Current Approach and Key Assumptions
    After the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specially, the group considered public comments and further explored 
the technical literature in relevant fields. The interagency group 
relied on three integrated assessment models (IAMs) commonly used to 
estimate the SCC: The FUND, DICE, and PAGE models. These models are 
frequently cited in the peer-reviewed literature and were used in the 
last assessment of the Intergovernmental Panel on Climate Change. Each 
model was given equal weight in the SCC values that were developed.
    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models, while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: Climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four sets of SCC values for use in 
regulatory analyses. Three sets of values are based on the average SCC 
from the three IAMs, at discount rates of 2.5, 3, and 5 percent. The 
fourth set, which represents the 95th percentile SCC estimate across 
all three models at a 3-percent discount rate, was included to 
represent higher than expected impacts from temperature change further 
out in the tails of the SCC distribution. The values grow in real terms 
over time. Additionally, the interagency group determined that a range 
of values from 7 percent to 23 percent should be used to adjust the 
global SCC to calculate domestic effects,\32\ although preference is 
given to consideration of the global benefits of reducing 
CO2 emissions.
---------------------------------------------------------------------------

    \32\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
---------------------------------------------------------------------------

    Table IV.14 presents the values in the 2010 interagency group 
report,\33\ which is reproduced in appendix 14A of the final rule TSD.
---------------------------------------------------------------------------

    \33\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, February 2010. www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

                     Table IV.14--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                        [2007 Dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                           Discount rate
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2010............................................             4.7            21.4            35.1            64.9
2015............................................             5.7            23.8            38.4            72.8
2020............................................             6.8            26.3            41.7            80.7
2025............................................             8.2            29.6            45.9            90.4
2030............................................             9.7            32.8            50.0           100.0
2035............................................            11.2            36.0            54.2           109.7
2040............................................            12.7            39.2            58.4           119.3
2045............................................            14.2            42.1            61.7           127.8
2050............................................            15.7            44.9            65.0           136.2
----------------------------------------------------------------------------------------------------------------

    The SCC values used for this rule were generated using the most 
recent versions of the three integrated assessment models that have 
been published in the peer-reviewed literature.\34\ Table IV.15 shows 
the updated sets of SCC estimates in 5-year increments from 2010 to 
2050. The full set of annual SCC estimates between 2010 and 2050 is 
reported in appendix 14B of the final rule TSD. The central value that 
emerges is the average SCC across models at the 3 percent discount 
rate. However, for purposes of capturing the uncertainties involved in 
regulatory impact analysis, the interagency group emphasizes the 
importance of including all four sets of SCC values.
---------------------------------------------------------------------------

    \34\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
---------------------------------------------------------------------------

    Table IV.15 Annual SCC Values from 2013 Interagency Report, 2010-
2050 (2007 dollars per metric ton)

[[Page 32096]]

                     Table IV.15--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                          [2007 Dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                           Discount rate
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2010............................................              11              32              51              89
2015............................................              11              37              57             109
2020............................................              12              43              64             128
2025............................................              14              47              69             143
2030............................................              16              52              75             159
2035............................................              19              56              80             175
2040............................................              21              61              86             191
2045............................................              24              66              92             206
2050............................................              26              71              97             220
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The 2009 National 
Research Council report mentioned above points out that there is 
tension between the goal of producing quantified estimates of the 
economic damages from an incremental ton of carbon and the limits of 
existing efforts to model these effects. There are a number of analytic 
challenges that are being addressed by the research community, 
including research programs housed in many of the Federal agencies 
participating in the interagency process to estimate the SCC. The 
interagency group intends to periodically review and reconsider those 
estimates to reflect increasing knowledge of the science and economics 
of climate impacts, as well as improvements in modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the values from the 
2013 interagency report, adjusted to 2013$ using the GDP price 
deflator. For each of the four sets of SCC values, the values for 
emissions in 2015 were $12.0, $40.5, $62.4, and $119 per metric ton 
avoided (values expressed in 2013$). DOE derived values after 2050 
using the relevant growth rates for the 2040-2050 period in the 
interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
    In responding to the walk-in coolers and walk-in freezers NOPR, 
many commenters questioned the scientific and economic basis of the SCC 
values. These commenters made extensive comments about: the alleged 
lack of economic theory underlying the models; the sufficiency of the 
models for policy-making; potential flaws in the models' inputs and 
assumptions (including the discount rates and climate sensitivity 
chosen); whether there was adequate peer review of the three models; 
whether there was adequate peer review of the TSD supporting the 2013 
SCC values; \35\ whether the SCC estimates comply with OMB's ``Final 
Information Quality Bulletin for Peer Review'' \36\ and DOE's own 
guidelines for ensuring and maximizing the quality, objectivity, 
utility and integrity of information disseminated by DOE; and why DOE 
is considering global benefits of carbon dioxide emission reductions 
rather than solely domestic benefits. (See AHRI, No. 83; ANGA, et al./
Chamber of Commerce, No.95; Cato, No. 106; Mercatus, No. 91). Several 
other parties expressed support for the derivation and application of 
the SCC values. (EDF, et al., No. 94; ASAP, No. 113; Kopp, No. 80)
---------------------------------------------------------------------------

    \35\ Available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.
    \36\ Available at: http://www.cio.noaa.gov/services_ programs/
pdfs/OMB_Peer_Review_Bulletin_m05-03.pdf.
---------------------------------------------------------------------------

    In response to the comments on the SCC values, DOE acknowledges the 
limitations in the SCC estimates, which are discussed in detail in the 
2010 interagency group report. Specifically, uncertainties in the 
assumptions regarding climate sensitivity, as well as other model 
inputs such as economic growth and emissions trajectories, are 
discussed and the reasons for the specific input assumptions chosen are 
explained. Regarding discount rates, there is not consensus in the 
scientific or economics literature regarding the appropriate discount 
rate to use for intergenerational time horizons. The SCC estimates thus 
use a reasonable range of discount rates, from 2.5% to 5%, in order to 
show the effects that different discount rate assumptions have on the 
estimated values. More information about the choice of discount rates 
can be found in the 2010 interagency group report starting on page 17.
    Regarding peer review of the models, the three integrated 
assessment models used to estimate the SCC are frequently cited in the 
peer-reviewed literature and were used in the last assessment of the 
IPCC. In addition, new versions of the models that were used in 2013 to 
estimate revised SCC values were published in the peer-reviewed 
literature (see appendix 16B of the DOE final rule TSD for discussion).
    DOE believes that the SCC estimates comply with OMB's Final 
Information Quality Bulletin for Peer Review and DOE's own guidelines 
for ensuring and maximizing the quality, objectivity, utility and 
integrity of information disseminated by DOE.
    As to why DOE is considering global benefits of carbon dioxide 
emission reductions rather than solely domestic benefits, a global 
measure of SCC because of the distinctive nature of the climate change 
problem, which is highly unusual in at least two respects. First, it 
involves a global externality: emissions of most greenhouse gases 
contribute to damages around the world even when they are emitted in 
the United States. Second, climate change presents a problem that the 
United States alone cannot solve. The issue of global versus domestic 
measures of the SCC is further discussed in appendix 16A of the DOE 
final rule TSD.
    In November 2013, OMB announced minor technical corrections to the 
2013 SCC values and a new opportunity for

[[Page 32097]]

public comment on the interagency technical support document underlying 
the SCC estimates. See 78 FR 70586. The comment period for the OMB 
announcement closed on February 26, 2014. OMB is currently reviewing 
comments and considering whether further revisions to the 2013 SCC 
estimates are warranted to the underlying science and economic basis of 
the SCC estimates resulting from the interagency process. DOE stands 
ready to work with OMB and the other members of the interagency working 
group on further review and revision of the SCC estimates as 
appropriate.
    AHRI stated that DOE calculates the present value of the costs of 
standards to consumers and manufacturers over a 30-year period, but the 
SCC values reflect the present value of future climate related impacts 
well beyond 2100. AHRI stated that DOE's comparison of 30 years of cost 
to hundreds of years of presumed future benefits is inconsistent and 
improper. (AHRI, No. 114 at p. 6)
    For the analysis of national impacts of the proposed standards, DOE 
considered the lifetime impacts of products shipped in a 30-year 
period. With respect to energy and energy cost savings, impacts 
continue past 30 years until all of the products shipped in the 30-year 
period are retired. With respect to the valuation of CO2 
emissions reductions, DOE considers the avoided emissions over the same 
period as the energy savings. CO2 emissions have on average 
a very long residence time in the atmosphere. Thus, emissions in the 
period considered by DOE would contribute to global climate change over 
a very long time period, with associated social costs. The SCC for any 
given year represents the discounted present value, in that year and 
expressed in constant dollars, of a lengthy stream of future costs 
estimated to result from the emission of one ton of CO2. It 
is worth pointing out that because of discounting, the present value of 
costs in the distant future is very small. DOE's accounting of energy 
cost savings and the value of avoided CO2 emissions 
reductions is consistent--both consider the complete impacts associated 
with products shipped in the 30-year period.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the potential standards it considered. As 
noted above, DOE has taken into account how new or amended energy 
conservation standards would reduce NOX emissions in those 
22 States not affected by emissions caps. DOE estimated the monetized 
value of NOX emissions reductions resulting from each of the 
TSLs considered for this final rule based on estimates found in the 
relevant scientific literature. Estimates of monetary value for 
reducing NOX from stationary sources range from $476 to 
$4,893 per ton (2013$).\37\ DOE calculated monetary benefits using a 
medium value for NOX emissions of $2,684 per short ton (in 
2013$), and real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------

    \37\ The values for NOX emissions originally came 
from: U.S. Office of Management and Budget, Office of Information 
and Regulatory Affairs, 2006 Report to Congress on the Costs and 
Benefits of Federal Regulations and Unfunded Mandates on State, 
Local, and Tribal Entities, Washington, DC. In 2001$, the 
NOX values range from $370 to $3,800 per short ton. DOE 
converted the 2001$ values to 2013$ using gross domestic product 
(GDP) price deflators from the Bureau of Economic Analysis (BEA) 
(see http://research.stlouisfed.org/fred2/series/GDPDEF/).
---------------------------------------------------------------------------

    DOE is evaluating how to appropriately monetize avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. It has not included monetization of these emissions in the 
current analysis.

N. Utility Impact Analysis

    The utility impact analysis estimates several important effects on 
the utility industry of the adoption of new or amended standards. For 
this analysis, DOE used the NEMS-BT model to generate forecasts of 
electricity consumption, electricity generation by plant type, and 
electric generating capacity by plant type, that would result from each 
considered TSL. DOE obtained from the NIA the energy savings inputs 
associated with efficiency improvements made to the equipment under 
consideration. DOE conducts the utility impact analysis as a scenario 
that departs from the latest AEO Reference Case. In the analysis for 
this rule, the estimated impacts of standards are the differences 
between values forecasted by NEMS-BT and the values in the AEO2013 
Reference Case. For more details on the utility impact analysis, see 
chapter 15 of the final rule TSD.

O. Employment Impact Analysis

    Employment impacts are one of the factors that DOE considers in 
selecting an efficiency standard. Employment impacts include direct and 
indirect impacts. Direct employment impacts are any changes that affect 
the ability of walk-in equipment manufacturers, their suppliers, and 
related service firms to employ workers. Indirect impacts are changes 
in employment in the larger economy that occur because of the shift in 
expenditures and capital investment caused by the purchase and 
operation of more-efficient walk-ins. Direct employment impacts are 
analyzed as part of the MIA. Indirect impacts are assessed as part of 
the employment impact analysis.
    Indirect employment impacts from amended standards consist of the 
net jobs created or eliminated in the national economy, other than in 
the manufacturing sector being regulated, as a consequence of (1) 
reduced spending by end users on electricity; (2) reduced spending on 
new energy supplies by the utility industry; (3) increased spending on 
the purchase price of new covered equipment; and (4) the effects of 
those three factors throughout the Nation's economy. DOE expects the 
net monetary savings from amended standards to stimulate other forms of 
economic activity. DOE also expects these shifts in spending and 
economic activity to affect the demand for labor.
    In developing this analysis for these standard, DOE estimated 
indirect national employment impacts using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies, Version 3.1.1 
(ImSET). ImSET is a special-purpose version of the ``U.S. Benchmark 
National Input-Output'' (I-O) model, which was designed to estimate the 
national employment and income effects of energy-saving technologies. 
The ImSET software includes a computer-based I-O model having 
structural coefficients that characterize economic flows among the 187 
sectors. ImSET's national economic I-O structure is based on a 2002 
U.S. benchmark table, specially aggregated to the 187 sectors most 
relevant to industrial, commercial, and residential building energy 
use. DOE notes that ImSET is not a general equilibrium forecasting 
model, and understands the uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may over-estimate actual job 
impacts over the long run. For the NOPR, DOE used ImSET only to 
estimate short-term employment impacts.
    For more details on the employment impact analysis and its results, 
see chapter 16 of the final rule TSD.

V. Analytical Results

A. Trial Standard Levels

    As discussed in section III.B, DOE is setting separate performance 
standards for the refrigeration system and for the envelope's doors and 
panels. The

[[Page 32098]]

manufacturers of these components would be required to comply with the 
applicable performance standards. For a fully assembled WICF unit in 
service, the aggregate energy consumption would depend on the 
individual efficiency levels of both the refrigeration system and the 
components of the envelope.
    The refrigeration system removes heat from the interior of the 
envelope and accounts for most of the walk-in's energy consumption. 
However, the refrigeration system and envelope interact with each other 
and affect each other's energy performance. On the one hand, because 
the envelope components reduce the transmission of heat from the 
exterior to the interior of the walk-in, the energy savings benefit for 
any efficiency improvement for these envelope components depends on the 
efficiency level of the refrigeration system. Thus, any potential 
standard level for the refrigeration system would affect the energy 
that could be saved through standards for the envelope components. On 
the other hand, the economics of higher-efficiency refrigeration 
systems depend on the refrigeration load profile of the WICF unit as a 
whole, which is partially impacted by the envelope components.
    To accurately characterize the total benefits and burdens for each 
of its proposed standard levels, DOE developed TSLs that each consist 
of a combination of standard levels for both the refrigeration system 
and the set of envelope components that comprise a walk-in. Each TSL 
consists of a standard for refrigeration systems, a standard for 
panels, a standard for non-display doors, and a standard for display 
doors.
1. Trial Standard Level Selection Process
    This section describes how DOE selected the TSLs. First, DOE 
selected several potential efficiency levels for refrigeration systems 
by performing LCC and NIA analyses for refrigeration systems. Second, 
DOE selected levels for the envelope components by performing LCC and 
NIA analyses for the envelope components paired with each of the 
selected refrigeration system levels alone. Third, DOE chose three 
composite TSLs from the combinations of the potential levels for the 
refrigeration systems and the potential levels for the envelope 
components. This process accounts for the fact that, as described 
above, the choice of refrigeration efficiency level affects the energy 
savings and NPV of the envelope component levels.
    DOE enumerated up to ten potential efficiency levels for each of 
the refrigeration system classes and capacity points. Each analyzed 
capacity point in any refrigeration system had efficiency levels 
corresponding to an added applicable design option (described in 
section IV.D). DOE also analyzed three competing compressor 
technologies for each dedicated condensing refrigeration system class. 
These compressor technologies are: Hermetic reciprocating, semi-
hermetic, and scroll. (For a detailed description regarding each of 
these compressor technologies, see chapter 5 of the final rule TSD.)
    At a given efficiency level, the compressor with the lowest life-
cycle cost result was selected to represent the equipment at that 
efficiency level. From the set of possible efficiency levels for a 
given class, DOE selected three for further analysis. The first 
refrigeration system levels were based on the maximum technology from 
the engineering analysis, the second their relative energy saving 
potential while maintaining positive national net present values for 
each equipment class. The last was based on maximizing the national net 
present value (``Max NPV'').
    After the three potential efficiency levels for each refrigeration 
system class were selected as described above, DOE proceeded with the 
LCC and NIA analysis of the envelope components (panels and doors). DOE 
conducted the LCC and NIA analyses on the envelope components by 
pairing them with each refrigeration system efficiency levels. Each 
panel and door class has between four and nine potential efficiency 
levels, each corresponding to an engineering design option applicable 
to that class (described in section IV.C). These LCC and NPV results 
represent the entire range of the economic benefits to the consumer at 
various combinations of efficiency levels of the refrigeration systems 
and the envelope components. The pairing of refrigeration system 
efficiency levels with the efficiency levels of envelope component 
classes is discussed in detail in chapter 10 of the final rule TSD.
    DOE selected envelope component levels for further analysis based 
on the following criteria: maximum NPV, maximum NES with positive NPV, 
and maximum NES (Max Tech).
    Finally, DOE chose three composite TSLs by selecting from the 
combinations of the three potential levels for the refrigeration 
systems and the three potential levels for the envelope components. The 
composite TSLs and criteria for each one are shown in Table V.1. The 
composite TSLs are numbered from 1 to 3 in order of least to most 
energy savings.

         Table V.1--Criteria Description for the Composite TSLs
------------------------------------------------------------------------
                                       Component
               TSL                    requirement     System requirement
------------------------------------------------------------------------
1...............................  Max NPV @7%         Max NPV @7%
                                   discount rate.      discount rate.
2...............................  Max NES with NPV    Max NES with NPV
                                   >$0.                >$0.
3...............................  Max Tech..........  Max Tech.
------------------------------------------------------------------------
* NPV is evaluated discounted at 7%.

    TSL 3 is the max-tech level for each equipment class for all 
components. TSL 2 represents the maximum efficiency level of the 
refrigeration system equipment classes with a positive NPV at a 7-
percent discount rate, combined with the maximum efficiency level with 
a positive NPV at a 7-percent discount rate for each envelope component 
(panel, non-display door, or display door). TSL 1 corresponds to the 
efficiency level with the maximum NPV at a 7-percent discount rate for 
refrigeration system classes and components. Table V.2 shows the 
mapping of TSLs to analysis point ELs and capacity. For more details on 
the criteria for the TSLs, see chapter 10 of the final rule TSD.

[[Page 32099]]

                                                Table V.2--Mapping Between TSLs and Analytical Point ELs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Baseline                    TSL 1                      TSL 2                      TSL 3
                                    Nominal  -----------------------------------------------------------------------------------------------------------
         Equipment class              size        Compressor                 Compressor                 Compressor                 Compressor
                                    (Btu/h)       technology        EL       technology        EL       technology        EL       technology        EL
--------------------------------------------------------------------------------------------------------------------------------------------------------
DC.M.I...........................      6,000  HER...............      0  SEM...............      6  SEM...............      6  SEM...............      6
DC.M.I...........................     18,000  HER...............      0  HER...............      6  HER...............      6  HER...............      6
DC.M.I...........................     54,000  SEM...............      0  SEM...............      6  SEM...............      6  SEM...............      6
DC.M.I...........................     96,000  SEM...............      0  SEM...............      6  SEM...............      6  SEM...............      6
DC.M.O...........................      6,000  HER...............      0  SEM...............      4  SEM...............      7  SEM...............      7
DC.M.O...........................     18,000  HER...............      0  HER...............      7  SCR...............      8  SCR...............      8
DC.M.O...........................     54,000  SEM...............      0  SCR...............      6  SCR...............     10  SCR...............     10
DC.M.O...........................     96,000  SEM...............      0  SCR...............      8  SCR...............      9  SCR...............      9
DC.L.I...........................      6,000  HER...............      0  HER...............      7  SCR...............      7  SCR...............      7
DC.L.I...........................      9,000  HER...............      0  HER...............      7  SCR...............      7  SCR...............      7
DC.L.I...........................     54,000  SEM...............      0  SEM...............      7  SEM...............      8  SEM...............      8
DC.L.O...........................      6,000  HER...............      0  HER...............      4  SCR...............     10  SCR...............     10
DC.L.O...........................      9,000  HER...............      0  HER...............      6  SCR...............     11  SCR...............     11
DC.L.O...........................     54,000  SEM...............      0  SCR...............      9  SCR...............     10  SCR...............     10
DC.L.O...........................     72,000  SEM...............      0  SEM...............      8  SEM...............     12  SEM...............     12
MC.M.N...........................      4,000  6FIN..............      0  6FIN..............      3  6FIN..............      3  6FIN..............      3
MC.M.N...........................      9,000  6FIN..............      0  6FIN..............      3  6FIN..............      3  6FIN..............      3
MC.M.N...........................     24,000  6FIN..............      0  6FIN..............      3  6FIN..............      3  6FIN..............      3
MC.L.N...........................      4,000  4FIN..............      0  4FIN..............      4  4FIN..............      4  4FIN..............      4
MC.L.N...........................      9,000  6FIN..............      0  6FIN..............      4  6FIN..............      4  6FIN..............      4
MC.L.N...........................     18,000  4FIN..............      0  4FIN..............      3  4FIN..............      5  4FIN..............      5
MC.L.N...........................     40,000  4FIN..............      0  4FIN..............      3  4FIN..............      5  4FIN..............      5
--------------------------------------------------------------------------------------------------------------------------------------------------------

    While DOE maintained the same methodology in the final rule as it 
did in the NOPR for mapping ELs to TSLs, the number of TSLs has changed 
for this final rule. In the NOPR DOE established six TSLs to 
specifically examine the impacts of a standard where (a) all compressor 
technologies could meet a minimum efficiency as a system requirement, 
and (b) only display doors had an NPV > $0 as a component requirement. 
These criteria were created in addition to the three TSL criteria used 
in this final rule, for to a total of six NOPR TSLs. The criteria for 
selecting TSL in the NOPR and this final rule are shown in Table V.3, 
as shown in this table, the NOPR TSLs 4 through 6 are equivalent to the 
final rule TSLs 1 through 3.

                            Table V.3--Comparison of NOPR to Final Rule TSL Criteria
----------------------------------------------------------------------------------------------------------------
                     NOPR TSL criteria                                     Final rule TSL criteria
----------------------------------------------------------------------------------------------------------------
                                             Component                                            Component
      TSL         System requirement        requirement         TSL     System requirement       requirement
----------------------------------------------------------------------------------------------------------------
1..............  All Compressors Max   Max NPV (all
                  NPV.                  components).
2..............  Max NPV.............  Display Doors, NPV >
                                        $0.
3..............  All Compressors NPV   Max NES, NPV > $0.
                  > $0.
4..............  Max NPV.............  Max NPV.............         1  Max NPV.............  Max NPV.
5..............  Max NES, NPV > $0...  Max NES, NPV > $0...         2  Max NES, NPV > $0...  Max NES, NPV > $0.
6..............  Max Tech............  Max Tech............         3  Max Tech............  Max Tech.
----------------------------------------------------------------------------------------------------------------

    The ``All Compressors'' NOPR refrigeration systems TSLs (TSLs 1, 
and 3) were added to the NOPR in response to stakeholder comments 
during the initial phase of the rule-making. For this final rule, the 
three TSLs considered by DOE are inclusive of all compressor types. 
Subsequently, the ``All Compressors'' TSLs are redundant in this final 
rule; and were therefore dropped from the analysis.
    The ``Display Doors, NPV > $0'' NOPR component TSL (TSL 2) was 
dropped from the final rule because Max NPV, and Max NES where NPV is 
greater than $0 only occur in this final rule under conditions where 
all components are held at the baseline except for the equipment 
classes covering display doors. Hence, for this final rule TSLs 1 and 2 
effectively use the ``Display Doors'' criterion.
2. Trial Standard Level Equations
    For panels, DOE expresses the TSLs in terms of R-value. As 
discussed in section III.B.1, DOE is no longer requiring the 
performance-based procedures to calculate a U-value of a walk-in panel. 
The Department reverted to thermal resistance, or R-value, as measured 
by ASTM C518, as the metric for establishing performance standards for 
walk-in cooler and freezer panels.
    For display and non-display doors, respectively, the normalization 
metric is the surface area of the door. The TSLs are expressed in terms 
of linear equations that establish maximum daily energy consumption 
(MEC) limits in the form of:

MEC = D x (Surface Area) + E

    Coefficients D and E were uniquely derived for each equipment class 
by plotting the energy consumption at a given performance level versus 
the surface area of the door and determining the slope of the 
relationship, D, and the offset, E, where the offset represents the 
theoretical energy consumption of a door with no surface area. (The 
offset is necessary because not all energy-consuming components of the 
door scale directly with surface area.) The

[[Page 32100]]

surface area is defined in the walk-in cooler and freezer test 
procedure final rule.
    For refrigeration systems, the TSLs are expressed as a minimum 
efficiency level (AWEF) that the system must meet. For low temperature, 
dedicated condensing systems (DC.L classes), DOE calculated the AWEF 
differently for small and large classes based on DOE's expectation that 
small-sized equipment may have difficulty meeting the same efficiency 
standard as large equipment. Specifically, DOE observed that for low 
temperature systems, higher-capacity equipment tended to be more 
efficient than lower-capacity equipment (DOE did not observe strong 
trends of this form for medium temperature equipment). DOE expressed 
the AWEF for the small capacity dedicated condensing systems as a 
linear equation normalized to the system's gross capacity, where the 
equation was based on the AWEFs for the smallest two capacities 
analyzed. DOE expressed the AWEF for large capacity dedicated 
condensing systems as a single number corresponding to a value 
continuous with the standard level for the small capacity class at the 
boundary capacity point between the classes (i.e., 9,000 Btu/h). DOE 
calculated a single minimum efficiency for each multiplex condensing 
system class because DOE found that equipment capacity did not have a 
significant effect on equipment efficiency. See chapter 10 of the final 
rule TSD for details regarding the AWEF calculations.
    Table V.4, Table V.5, Table V.6, Table V.7, Table V.8, Table V.9, 
and Table V.10 show the R-values or equations analyzed for structural 
cooler panels, structural freezer panels, freezer floor panels, display 
doors, non-display passage doors, non-display freight doors, and 
refrigeration systems, respectively. For walk-in cooler structural 
panels, DOE evaluated a market baseline R-value that is higher than the 
current energy conservation levels in TSLs 1 and 2. As explained 
further in section IV.D.3, DOE established an industry representative 
baseline for walk-in components, but this baseline assumed a specific 
insulation material and thickness while EISA established R-value 
standards irrespective of such features.
    Additionally, DOE notes that the equations and AWEFs for a 
particular class of equipment may be the same across more than one TSL. 
This occurs when the criteria for two different TSLs are satisfied by 
the same efficiency level for a particular component. For example, for 
all refrigeration classes the max-tech level has a positive NPV; thus, 
the efficiency level with the maximum energy savings with positive NPV 
(TSL 2) is the same as the efficiency level corresponding to max-tech 
(TSL 3).

        Table V.4--R-Values for All Structural Cooler Panel TSLs
------------------------------------------------------------------------
                                                        Equations for R-
                          TSL                           value  (h-ft\2\-
                                                           [deg]F/Btu)
------------------------------------------------------------------------
Baseline..............................................                28
TSL 1.................................................                28
TSL 2.................................................                28
TSL 3.................................................                90
------------------------------------------------------------------------

        Table V.5--R-Values for All Structural Freezer Panel TSLs
------------------------------------------------------------------------
                                                        Equations for R-
                          TSL                           value  (h-ft\2\-
                                                           [deg]F/Btu)
------------------------------------------------------------------------
Baseline..............................................                32
TSL 1.................................................                32
TSL 2.................................................                32
TSL 3.................................................                90
------------------------------------------------------------------------

          Table V.6--R-Values for All Freezer Floor Panel TSLs
------------------------------------------------------------------------
                                                          Equations for
                                                         maximum R-value
                          TSL                           (h-ft\2\-[deg]F/
                                                              Btu)
------------------------------------------------------------------------
Baseline..............................................                28
TSL 1.................................................                28
TSL 2.................................................                28
TSL 3.................................................                90
------------------------------------------------------------------------

                                 Table V.7--Equations for All Display Door TSLs
----------------------------------------------------------------------------------------------------------------
                                                   Equations for maximum energy  consumption (kWh/day)
                  TSL                   ------------------------------------------------------------------------
                                                         DD.M                                DD.L
----------------------------------------------------------------------------------------------------------------
Baseline...............................  0.14 x Add + 0.82                    0.04 x Add + 0.88
TSL 1..................................  0.05 x Add + 0.39                    0.09 x Add + 1.9
TSL 2..................................  0.04 x Add + 0.41                    0.15 x Add + 0.29
TSL 3..................................  0.008 x Add + 0.29                   0.11 x Add + 0.32
----------------------------------------------------------------------------------------------------------------
*Add represents the surface area of the display door.

                                 Table V.8--Equations for All Passage Door TSLs
----------------------------------------------------------------------------------------------------------------
                                                   Equations for maximum energy  consumption (kWh/day)
                  TSL                   ------------------------------------------------------------------------
                                                         PD.M                                PD.L
----------------------------------------------------------------------------------------------------------------
Baseline...............................  0.05 x And + 1.7                     0.14 x And + 4.8
TSL 1..................................  0.05 x And + 1.7                     0.14 x And + 4.8
TSL 2..................................  0.05 x And + 1.7                     0.14 x And + 4.8
TSL 3..................................  0.04 x And + 1.6                     0.13 x And + 3.9
----------------------------------------------------------------------------------------------------------------
*And represents the surface area of the non-display door.

[[Page 32101]]

                                 Table V.9--Equations for All Freight Door TSLs
----------------------------------------------------------------------------------------------------------------
                                                   Equations for maximum energy  consumption (kWh/day)
                  TSL                   ------------------------------------------------------------------------
                                                         FD.M                                FD.L
----------------------------------------------------------------------------------------------------------------
Baseline...............................  0.04 x And + 1.9                     0.12 x And + 5.6
TSL 1..................................  0.04 x And + 1.9                     0.12 x And + 5.6
TSL 2..................................  0.04 x And + 1.9                     0.12 x And + 5.6
TSL 3..................................  0.03 x And + 1.9                     0.09 x And + 5.2
----------------------------------------------------------------------------------------------------------------
*And represents the surface area of the non-display door.

                                                   Table V.10--AWEFs for All Refrigeration System TSLs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Equations for minimum AWEF (Btu/W-h)*
         Equipment class         -----------------------------------------------------------------------------------------------------------------------
                                            Baseline                        TSL 1                         TSL 2                         TSL 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
DC.M.I, =9,000.................  3.51                          5.61                          5.61                          5.61
DC.M.O, =9,000.................  3.14                          6.99                          7.60                          7.60
DC.L.I, =9,000.................  2.23                          2.78                          3.10                          3.10
DC.L.O, =9,000.................  2.57                          4.17                          4.79                          4.79
MC.M............................  6.11                          10.89                         10.89                         10.89
MC.L............................  3.29                          5.58                          6.57                          6.57
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Q represents the system gross capacity as calculated in AHRI 1250.

B. Economic Justification and Energy Savings

1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
    Customers affected by new or amended standards usually incur higher 
purchase prices and experience lower operating costs. DOE evaluates 
these impacts on individual consumers by calculating changes in LCC and 
the PBP associated with the TSLs. Using the approach described in 
section IV.F, DOE calculated the LCC impacts and PBPs for the 
efficiency levels considered in this final rule. Inputs used for 
calculating the LCC include total installed costs (i.e., equipment 
price plus installation costs), annual energy savings, and average 
electricity costs by consumer, energy price trends, repair costs, 
maintenance costs, equipment lifetime, and consumer discount rates. DOE 
based the LCC and PBP analyses on energy consumption under conditions 
of actual equipment use. DOE created distributions of values for some 
inputs, with probabilities attached to each value, to account for their 
uncertainty and variability. DOE used probability distributions to 
characterize equipment lifetime, discount rates, sales taxes and 
several other inputs to the LCC model.
    Table V.11 through Table V.19 show key results of the LCC and PBP 
analysis for each equipment class. Each table presents the mean LCC, 
mean LCC savings, median PBP, and distribution of customer impacts in 
the form of percentages of customers who experience net cost, no 
impact, or net benefit. Generally, customers who currently buy 
equipment in the base case scenario at or above the level of 
performance specified by the TSL under consideration would be 
unaffected if the amended standard were to be set at that TSL. 
Customers who buy equipment below the level of the TSL under 
consideration would be affected if the amended standard were to be set 
at that TSL. Among these affected customers, some may benefit (lower 
LCC) and some may incur net cost (higher LCC).

              Table V.11--Summary LCC and PBP Results for Medium Temperature Dedicated Condensing Refrigeration Systems--Outdoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Mean values 2013$                          Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------    Median
                                        Energy                                                              Customers that experience          payback
                TSL                  consumption   Installed      Annual                   Average   ---------------------------------------    period
                                        kWh/yr        cost      operating       LCC        savings                  No  impact  Net benefit     years
                                                                   cost                     2013$     Net cost  %       %             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        13484        11153         2172        28825         6382            0            0          100          1.1
2..................................        12414        12060         2087        29036         6533            0            0          100          2.2
3..................................        12414        12060         2087        29036         6533            0            0          100          2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 32102]]

               Table V.12--Summary LCC and PBP Results for Medium-Temperature Dedicated Condensing Refrigeration Systems--Indoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Mean values  2013$                         Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------    Median
                                        Energy                                                               Customer that experience          payback
                TSL                  consumption   Installed      Annual                   Average   ---------------------------------------    period
                                        kWh/yr        cost      operating       LCC        savings                  No impact   Net benefit     years
                                                                   cost                     2013$     Net cost  %       %             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................         7550         5997         1512        18320         1485            0            0          100          2.8
2..................................        16396        11484         2560        32218         5942            2            0           98          3.5
3..................................        16396        11484         2560        32218         5942            2            0           98          3.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

              Table V.13--Summary of LCC and PBP Results for Low-Temperature Dedicated-Condensing Refrigeration Systems--Outdoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Mean values  2013$                         Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------    Median
                                        Energy                                                               Customer that experience          payback
                TSL                  consumption   Installed      Annual                   Average   ---------------------------------------    period
                                        kWh/yr        cost      operating       LCC        savings                              Net benefit     years
                                                                   cost                     2013$      Net cost %  No impact %       %
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        18598         9408         2712        31375         6463            0            0          100          1.0
2..................................        16396        11484         2560        32218         5942            2            0           98          3.5
3..................................        16396        11484         2560        32218         5942            2            0           98          3.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

               Table V.14--Summary of LCC and PBP Results for Low-Temperature Dedicated-Condensing Refrigeration Systems--Indoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Mean values  2013$                         Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------    Median
                                        Energy                                                               Customer that experience          payback
                TSL                  consumption   Installed      Annual                   Average   ---------------------------------------    period
                                        kWh/yr        cost      operating       LCC        savings                  No impact   Net benefit     years
                                                                   cost                     2013$     Net cost  %       %             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................        11958         5452         1974        21483         2157            0            0          100          1.7
2..................................        11497         5882         1948        21697         2078            0            0          100          1.6
3..................................        11497         5882         1948        21697         2078            0            0          100          1.6
--------------------------------------------------------------------------------------------------------------------------------------------------------

                             Table V.15--Summary LCC and PBP Results for Medium-Temperature Multiplex Refrigeration Systems
                                                                   [Unit coolers only]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Mean values  2013$                         Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------    Median
                                        Energy                                                               Customer that experience          payback
                TSL                  consumption   Installed      Annual                   Average   ---------------------------------------    period
                                        kWh/yr        cost      operating       LCC        savings                              Net benefit     years
                                                                   cost                     2013$      Net cost %  No impact %       %
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................         5634         2288         1214        12931          362            0            0          100          3.1
2..................................         5634         2288         1214        12931          362            0            0          100          3.1
3..................................         5634         2288         1214        12931          362            0            0          100          3.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

                               Table V.16--Summary LCC and PBP Results for Low-Temperature Multiplex Refrigeration Systems
                                                                   [Unit coolers only]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Mean values  2013$                         Life-cycle cost savings
                                                 -------------------------------------------------------------------------------------------    Median
                                        Energy                                                               Customer that experience          payback
                TSL                  consumption   Installed      Annual                   Average   ---------------------------------------    period
                                        kWh/yr        cost      operating       LCC        savings                  No impact   Net benefit     years
                                                                   cost                     2013$     Net cost  %       %             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................         9264         2381         1577        16143          598            0            0          100          2.7
2..................................         9240         2453         1575        16195          547            0            0          100          3.1
3..................................         9240         2453         1575        16195          547            0            0          100          3.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 32103]]

                                         Table V.17--Summary LCC and PBP Results for Structural and Floor Panels
                                                                       [per ft\2\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Life-cycle cost  2013$                   Life-cycle cost savings  2013$
                                                 -------------------------------------------------------------------------------------------    Median
                                       Energy                                                               Consumers that  experience         payback
                TSL                  consumption   Installed    Discounted                 Average   ---------------------------------------    period
                                       kWh/yr         cost      operating       LCC        savings                  No impact   Net benefit     years
                                                                   cost                               Net cost  %       %             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Medium Temperature Structural Panel
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................           0           15.0          0.2         16.4           --            0          100            0           --
2.................................           0           15.0          0.1         16.3           --            0          100            0           --
3.................................           0.5         36.5          0.0         36.9        -20.7          100            0            0        238.6
�����������������������������������
                                                            Low Temperature Structural Panel
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................           0           15.5          0.6         21.2           --            0          100            0           --
2.................................           0           15.5          0.6         20.7           --            0          100            0           --
3.................................           2           36.6          0.2         38.4        -17.7          100            0            0         58.8
�����������������������������������
                                                               Low Temperature Floor Panel
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................           0           15.9          0.6         20.9           --            0          100            0           --
2.................................           0           15.9          0.5         20.5           --            0          100            0           --
3.................................           2           37.6          0.2         39.0        -18.6          100            0            0         64.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: ``--'' indicates no impact because all purchases are at or above the given TSL in the base case.

                                                Table V.18--Summary LCC and PBP Results for Display Doors
                                                          [Per unit, weighted across all sizes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost  2013$                    Life-cycle cost savings  2013$
                                                --------------------------------------------------------------------------------------------    Median
                                       Energy                                                               Consumers that  experience         payback
                TSL                 consumption   Installed    Discounted                  Average   ---------------------------------------    period
                                       kWh/yr        cost       operating       LCC        savings                  No impact   Net benefit     years
                                                                  cost                                Net cost  %       %             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Medium Temperature Display Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................          572        1,228          62.8        1,782          460            0           30           69          2.4
2.................................          466        1,480          51.8        1,936          143           41            0           59          7.3
3.................................          193        4,270          23.3        4,476       -2,396          100            0            0         39.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Low Temperature Display Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................         2142        2,626         235          4,698          976            4         0.00           96          4.2
2.................................         1578        3,071         177          4,629          902           10         0.00           90          5.4
3.................................         1277        4,331         145          5,611          -79           59         0.00           41          9.6
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                              Table V.19--Summary LCC and PBP Results for Non-Display Doors
                                                          [Per unit, weighted across all sizes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Life-cycle cost  2013$                   Life-cycle cost savings  2013$
                                                 -------------------------------------------------------------------------------------------    Median
                                        Energy                                                              Consumers that  experience         payback
                TSL                  consumption   Installed    Discounted                 Average   ---------------------------------------    period
                                        kWh/yr        cost      operating       LCC        savings                  No impact   Net benefit     years
                                                                   cost                               Net cost  %       %             %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Medium Temperature Passage Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................            0          868          156        1,827           --            0          100            0           --
2..................................            0          868          152        1,803           --            0          100            0           --
3..................................         1193        2,299          531        5,315        -2000          100            0            0         30.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Low Temperature Passage Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................            0        2,053          552        5,449           --            0          100            0           --

[[Page 32104]]

 
2..................................            0        2,053          531        5,315           --            0          100            0           --
3..................................         4099        4,590          443        7,313       -1,998          100            0            0         30.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Medium Temperature Freight Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................            0        1,750          230        3,164           --            0          100            0           --
2..................................            0        1,750          224        3,126           --            0          100            0           --
3..................................          175        4,577          198        5,795       -2,668          100            0            0        115.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Low Temperature Freight Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................            0        1,945          861        7,239           --            0          100            0           --
2..................................            0        1,945          826        7,023           --            0          100            0           --
3..................................         6350        4,617          678        8,784       -1,761          100            0            0         19.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: ``--'' indicates no impact because all purchases are at or above the given TSL in the base case.

b. Customer Subgroup Analysis
    As described in section IV.I, DOE estimated the impact of potential 
amended efficiency standards for walk-ins for the representative 
customer subgroup: Full-service restaurants.
    Table V.20 and Table V.21 presents the comparison of mean LCC 
savings for the subgroup with the values for all WICF customers. For 
all TSLs in all equipment classes, the LCC savings for this subgroup 
are not significantly different, less than 10 percent higher than the 
national average values. The equipment class that shows the most 
substantial change is DD.L, it shows decrease in LCC savings, when 
compared to national average values. (Chapter 11 of the final rule TSD 
presents the percentage change in LCC savings compared to national 
average values.)

            Table V.20--Subgroup Mean Life-Cycle Cost Savings for WICF Refrigeration Systems (2013$)
----------------------------------------------------------------------------------------------------------------
            Equipment class                       Group                TSL 1           TSL 2           TSL 3
----------------------------------------------------------------------------------------------------------------
DC.L.I................................  Full-service Restaurants            2157            2157            2078
                                        All Business Types......            2096            2096            2020
DC.L.O................................  Full-service Restaurants            6463            6463            5942
                                        All Business Types......            2096            2096            2020
DC.M.I................................  Full-service Restaurants            1485            1485            5942
                                        All Business Types......            1445            1445            5793
DC.M.O................................  Full-service Restaurants            6382            6382            6533
                                        All Business Types......            6244            6244            6386
----------------------------------------------------------------------------------------------------------------
*Multiplex refrigeration systems are not typically used in small restaurants.

   Table V.21--Subgroup Median Life-Cycle Cost Savings for WICF Envelope Components (Panels and Doors) (2223$)
----------------------------------------------------------------------------------------------------------------
            Equipment Class                       Group                TSL1            TSL2            TSL3
----------------------------------------------------------------------------------------------------------------
SP.M..................................  Full-service Restaurants              --              --             -23
                                        All Business Types......              --              --             -21
SP.L..................................  Full-service Restaurants              --              --             -20
                                        All Business Types......              --              --             -18
FP.L..................................  Full-service Restaurants              --              --             -21
                                        All Business Types......              --              --             -19
DD.M..................................  Full-service Restaurants             434             107           -2612
                                        All Business Types......             460             143           -2396
DD.L                                    Full-service Restaurants             873             761            -306
                                        All Business Types......             976             902             -79
PD.M                                    Full-service Restaurants              --              --              --
                                        All Business Types......              --              --              --
PD.L                                    Full-service Restaurants              --              --           -2157
                                        All Business Types......              --              --           -1998
FD.M                                    Full-service Restaurants              --              --           -2844
                                        All Business Types......              --              --           -2668
FD.L                                    Full-service Restaurants              --              --           -1930

[[Page 32105]]

 
                                        All Business Types......              --              --           -1761
----------------------------------------------------------------------------------------------------------------
Note: Dashes represent components at baseline efficiency and therefore do not have a payback period. Numbers in
  parentheses indicate negative values.

                Table V.22--Subgroup Median Payback Period for WICF Refrigeration Systems (Years)
----------------------------------------------------------------------------------------------------------------
            Equipment class                       Group                TSL1            TSL2            TSL3
----------------------------------------------------------------------------------------------------------------
DC.L.I................................  Full-service Restaurants             1.7             1.7             1.6
                                        All Business Types......             1.6             1.6             1.6
DC.L.O................................  Full-service Restaurants             1.0             1.0             3.5
                                        All Business Types......             1.0             1.0             1.0
DC.M.I................................  Full-service Restaurants             2.8             2.8             3.5
                                        All Business Types......             2.7             2.7             2.7
DC.M.O................................  Full-service Restaurants             1.1             1.1             2.2
                                        All Business Types......             1.1             1.1             1.1
----------------------------------------------------------------------------------------------------------------
* Multiplex refrigeration systems are not typically used in small restaurants.

       Table V.23--Subgroup Median Payback Period for WICF Envelope Components (Panels and Doors) (Years)
----------------------------------------------------------------------------------------------------------------
            Equipment class                       Group                TSL1            TSL2            TSL3
----------------------------------------------------------------------------------------------------------------
SP.M..................................  Full-service Restaurants              --              --           253.1
                                        All Business Types......              --              --           238.6
SP,L..................................  Full-service Restaurants              --              --            62.4
                                        All Business Types......              --              --            58.8
FP.L..................................  Full-service Restaurants              --              --            68.7
                                        All Business Types......              --              --            64.7
DD.M..................................  Full-service Restaurants             2.5             7.3            39.9
                                        All Business Types......             2.4             7.3            39.5
DD.L..................................  Full-service Restaurants             4.3             5.5             9.7
                                        All Business Types......             4.2             5.4             9.6
PD.M..................................  Full-service Restaurants              --              --              --
                                        All Business Types......              --              --              --
PD.L..................................  Full-service Restaurants              --              --            31.3
                                        All Business Types......              --              --            30.7
FD.M..................................  Full-service Restaurants              --              --           117.8
                                        All Business Types......              --              --           115.5
FD.L..................................  Full-service Restaurants              --              --            19.5
                                        All Business Types......              --              --            19.1
----------------------------------------------------------------------------------------------------------------
Note: Dashes represent components at baseline efficiency and therefore do not have a payback period.

c. Rebuttable Presumption Payback
    As discussed in section IV.G.12, EPCA provides a rebuttable 
presumption that a given standard is economically justified if the 
increased purchase cost of equipment that meets the standard is less 
than three times the value of the first-year energy savings resulting 
from the standard. However, DOE routinely conducts a full economic 
analysis that considers the full range of impacts, including those to 
the customer, manufacturer, Nation, and environment, as required under 
42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(a). The results of this 
analysis serve as the basis for DOE to evaluate definitively the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). Therefore, if the rebuttable presumption is 
not met, DOE may justify its standard on another basis. Table V.24 
shows the rebuttable payback periods analysis for each equipment class 
at each TSL.

  Table V.24--Summary of Results for Walk-In Coolers and Freezers TSLs:
                        Rebuttable Payback Period
                                 [years]
------------------------------------------------------------------------
                          Median payback period
-------------------------------------------------------------------------
              Equipment class                 TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................      1.7      1.6        1.6
DC.L.O.....................................      1.0      3.4        3.4
DC.M.I.....................................      2.7      3.4        3.4
DC.M.O.....................................      1.1      2.1        2.1
MC.L.......................................      2.7      3.1        3.1
MC.M.......................................      3.1      3.1        3.1
SP.M.......................................  .......  .......      234.6
SP.L.......................................  .......  .......       58.4
FP.L.......................................  .......  .......       63.5
DD.M.......................................      2.4      7.5       39.3
DD.L.......................................      4.7      5.4        9.4
PD.M.......................................  .......  .......  .........
PD.L.......................................  .......  .......       31.0
FD.M.......................................  .......  .......      113.4
FD.L.......................................  .......  .......       19.3
------------------------------------------------------------------------

[[Page 32106]]

2. Economic Impacts on Manufacturers
    DOE performed a manufacturer impact analysis (MIA) to estimate the 
impact of new energy conservation standards on manufacturers of walk-in 
cooler and freezer refrigeration, panels, and doors. The section below 
describes the expected impacts on manufacturers at each considered TSL. 
Chapter 12 of the TSD explains the analysis in further detail.
a. Industry Cash-Flow Analysis Results
    Table V.25 through Table V.27 depict the financial impacts on 
manufacturers and the conversion costs DOE estimates manufacturers 
would incur at each TSL. The financial impacts on manufacturers are 
represented by changes in industry net present value (INPV).
    The impact of energy efficiency standards were analyzed under two 
markup scenarios: (1) The preservation of gross margin percentage and 
(2) the preservation of operating profit. As discussed in section 
IV.K.2.b, DOE considered the preservation of gross margin percentage 
scenario by applying a uniform ``gross margin percentage'' markup 
across all efficiency levels. As production cost increases with 
efficiency, this scenario implies that the absolute dollar markup will 
increase. DOE assumed the nonproduction cost markup--which includes 
SG&A expenses; research and development expenses; interest; and profit 
to be 1.32 for panels, 1.50 for solid doors, 1.62 for display doors, 
and 1.35 for refrigeration. These markups are consistent with the ones 
DOE assumed in the engineering analysis and the base case of the GRIM. 
Manufacturers have indicated that it is optimistic to assume that as 
their production costs increase in response to an efficiency standard, 
they would be able to maintain the same gross margin percentage markup. 
Therefore, DOE assumes that this scenario represents a high bound to 
industry profitability under an energy-conservation standard.
    The preservation of earnings before interest and taxes (EBIT) 
scenario reflects manufacturer concerns about their inability to 
maintain their margins as manufacturing production costs increase to 
reach more-stringent efficiency levels. In this scenario, while 
manufacturers make the necessary investments required to convert their 
facilities to produce new standards-compliant equipment, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue.
    Each of the modeled scenarios results in a unique set of cash flows 
and corresponding industry values at each TSL. In the following 
discussion, the INPV results refer to the difference in industry value 
between the base case and each standards case that result from the sum 
of discounted cash flows from the base year 2013 through 2046, the end 
of the analysis period. To provide perspective on the short-run cash 
flow impact, DOE includes in the discussion of the results a comparison 
of free cash flow between the base case and the standards case at each 
TSL in the year before new standards take effect.
    Table V.25 through Table V.27 show the MIA results for each TSL 
using the markup scenarios described above for WICF panel, door and 
refrigeration manufacturers, respectively.

                        Table V.25--Manufacturer Impact Analysis Results for WICF Panels
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                     Units        Base case  ---------------------------------------------------
                                                                   1            2                   3
----------------------------------------------------------------------------------------------------------------
INPV.........................  2012 $M.........       381.94       381.94       381.94  97.41 to 670.62.
Change in INPV...............  2012 $M.........  ...........            0            0  -284.53 to 288.68.
                               %...............  ...........            0            0  -74.49 to 75.58.
Capital Conversion Costs.....  2012 $M.........  ...........            0            0  162.77.
                                                              ...........  ...........
Product Conversion Costs.....  2012 $M.........  ...........            0            0  35.41.
                                                                           ...........
Total Investment Required....  2012 $M.........  ...........            0            0  198.18.
                                                              ...........  ...........
----------------------------------------------------------------------------------------------------------------

                                             Table V.26--Manufacturer Impact Analysis Results for WICF Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Trial standard level
                                      Units           Base case   --------------------------------------------------------------------------------------
                                                                                1                            2                            3
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................  2012 $M..........          484.85  475.67 to 506.50...........  457.34 to 545.60...........  245.50 to 1233.63.
Change in INPV................  2012 $M..........  ..............  -9.19 to 21.64.............  -27.51 to 60.74............  (239.35) to 748.48.
                                %................  ..............  -1.89 to 4.46..............  -5.67 to 12.53.............  (49.37) to 154.43.
Capital Conversion Costs......  2012 $M..........  ..............  0.04.......................  0.15.......................  85.99.
Product Conversion Costs......  2012 $M..........  ..............  0.13.......................  0.22.......................  14.63.
Total Investment Required.....  2012 $M..........  ..............  0.18.......................  0.37.......................  100.62.
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                     Table V.27--Manufacturer Impact Analysis Results for WICF Refrigeration Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Trial standard level
                                     Units         Base case   -----------------------------------------------------------------------------------------
                                                                              1                             2                             3
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................         2012 $M          424.37  404.15 to 434.60............  398.99 to 443.82............  398.99 to 443.82.
Change in INPV................         2012 $M  ..............  -20.22 to 10.24.............  -25.38 to 19.46.............  -25.38 to 19.46.
                                           (%)  ..............  -4.76 to 2.41...............  -5.98 to 4.59...............  -5.98 to 4.59.
Capital Conversion Costs......         2012 $M  ..............  13.18.......................  14.50.......................  14.50.
Product Conversion Costs......         2012 $M  ..............  15.55.......................  18.74.......................  18.74.
Total Investment Required.....         2012 $M  ..............  28.73.......................  33.23.......................  33.23.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 32107]]

Walk-In Cooler and Freezer Panel MIA Results
    At all TSLs, the evaluated efficiency levels for walk-in panel 
equipment classes are at the baseline level. The baseline represents 
the most common, least efficient products that can legally be purchased 
on the market today. To meet a baseline standard, walk-in panel 
manufacturers should not have to integrate any new technologies or 
design options into existing operations. As a result, capital 
conversion costs and product conversion costs are expected to be zero. 
At TSL 1 and TSL 2, INPV remains the same as in the base case. There is 
no change from the base case value of $381.94 million.
    For TSL 3, DOE models the change in INPV for panels to range from -
$284.53 million to $288.68 million, or a change in INPV of -74.49 
percent to 75.58 percent. At this standard level, door industry free 
cash flow is estimated to decrease by as much as $74.45 million, or -
226.84 percent compared to the base case value of $37.49 million in the 
year before the compliance date.
Walk-In Cooler and Freezer Door MIA Results
    For TSL 1, DOE models the change in INPV for doors to range from -
$9.19 million to $21.64 million, or a change in INPV of -1.89 percent 
to 4.46 percent. At this standard level, door industry free cash flow 
is estimated to decrease by as much as $0.06 million, or -0.15 percent 
compared to the base case value of $37.49 million in the year before 
the compliance date.
    At TSL 2, DOE estimates the impacts on door INPV to range from -
$27.51 million to $60.74 million, or a change in INPV of -5.67 percent 
to 12.53 percent. At this level, door industry free cash flow is 
estimated to decrease by $0.13 million in the year before the 
compliance year, or -0.33 percent compared to the base case value of 
$37.49 million in the year before the compliance date.
    At TSL 3, DOE estimates the impacts on door INPV to range from -
239.95 to 748.48, or a change in INPV of -49.37 percent to 154.43 
percent. At this level, door industry free cash flow is estimated to 
decrease by as much as 38.66 million in the year before the compliance 
year, or -103.13 percent compared to the base case value of $37.49 
million in the year before the compliance date.
Walk-in Cooler and Freezer Refrigeration MIA Results
    At TSL 1, DOE estimates impacts on refrigeration INPV to range from 
-$20.22 million to $10.24 million, or a change in INPV of -4.76 percent 
to 2.41 percent. At this level, refrigeration industry free cash flow 
is estimated to decrease by as much as $9.53 million, or -26.47 percent 
compared to the base-case value of $36.02 million in 2016, the year 
before the compliance year.
    At TSL 2 and TSL 3, DOE estimates impacts on refrigeration INPV to 
range from -$25.38 million to $19.46 million, or a change in INPV of -
5.98 percent to 4.59 percent. At this level, refrigeration industry 
free cash flow is estimated to decrease by as much as $10.93 million, 
or -30.35 percent compared to the base-case value of $36.02 million in 
the year before the compliance date.
b. Impacts on Direct Employment
Methodology
    To quantitatively assess the impacts of energy conservation 
standards on employment, DOE used the GRIM to estimate the domestic 
labor expenditures and number of employees in the base case and at each 
TSL from 2013 through 2046. DOE used statistical data from the U.S. 
Census Bureau's 2011 Annual Survey of Manufacturers (ASM), the results 
of the engineering analysis, and interviews with manufacturers to 
determine the inputs necessary to calculate industry-wide labor 
expenditures and domestic employment levels. Labor expenditures related 
to manufacturing of the product are a function of the labor intensity 
of the product, the sales volume, and an assumption that wages remain 
fixed in real terms over time. The total labor expenditures in each 
year are calculated by multiplying the MPCs by the labor percentage of 
MPCs.
    The total labor expenditures in the GRIM were then converted to 
domestic production employment levels by dividing production labor 
expenditures by the annual payment per production worker (production 
worker hours multiplied by the labor rate found in the U.S. Census 
Bureau's 2011 ASM). The estimates of production workers in this section 
cover workers, including line supervisors who are directly involved in 
fabricating and assembling a product within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor. DOE's estimates only account for 
production workers who manufacture the specific products covered by 
this rulemaking. To further establish a lower bound to negative impacts 
on employment, DOE reviewed design options, conversion costs, and 
market share information to determine the maximum number of 
manufacturers that would leave the industry at each TSL.
    In evaluating the impact of energy efficiency standards on 
employment, DOE performed separate analyses on all three walk-in 
component manufacturer industries: panels, doors and refrigeration 
systems.
    Using the GRIM, DOE estimates in the absence of new energy 
conservation standards, there would be 2,878 domestic production 
workers for walk-in panels, 1,302 domestic production workers for walk-
in doors, and 415 domestic production workers for walk-in refrigeration 
systems in 2017.
    Table V.28, Table V.29, and Table V.30 show the range of the 
impacts of energy conservation standards on U.S. production workers in 
the panel, door, and refrigeration system markets, respectively. 
Additional detail on the analysis of direct employment can be found in 
chapter 12 of the TSD.

Table V.28--Potential Changes in the Total Number of Domestic Production
                       Workers in 2017 for Panels
------------------------------------------------------------------------
             TSL                    1           2              3
------------------------------------------------------------------------
Potential Changes in Domestic  0 to 0....  0 to 0....  -863 to 738
 Production Workers 2017.
(from a base case employment
 of 2,878).
------------------------------------------------------------------------

[[Page 32108]]

Table V.29--Potential Changes in the Total Number of Domestic Production
                        Workers in 2017 for Doors
------------------------------------------------------------------------
             TSL                    1           2              3
------------------------------------------------------------------------
Potential Changes in Domestic  0 to 101..  0 to 200..  -132 to 1,979
 Production Workers 2017.
(from a base case employment
 of 1,318).
------------------------------------------------------------------------

Table V.30--Potential Changes in the Total Number of Domestic Production
                Workers in 2017 for Refrigeration Systems
------------------------------------------------------------------------
             TSL                    1           2              3
------------------------------------------------------------------------
Potential Changes in Domestic  -64 to 56.  -161 to 88  -161 to 88
 Production Workers 2017.
(from a base case employment
 of 424).
------------------------------------------------------------------------

    The employment impacts shown in Table V.28 through Table V.30 
represent the potential production employment changes that could result 
following the compliance date of these energy conservation standards. 
The upper end of the results in the table estimates the maximum 
increase in the number of production workers after the implementation 
of new energy conservation standards and it assumes that manufacturers 
would continue to produce the same scope of covered products within the 
United States. The lower end of the range represents the maximum 
decrease to the total number of U.S. production workers in the industry 
due to manufacturers leaving the industry. However, in the long-run, 
DOE would expect the manufacturers that do not leave the industry to 
add employees to cover lost capacity and to meet market demand. Please 
note that DOE does not propose any increase in energy conservation 
standards for Walk-in Panels, medium and low temperature solid doors, 
therefore there would likely be no significant change in employment in 
these industries.
    The employment impacts shown are independent of the employment 
impacts from the broader U.S. economy, which are documented in the 
Employment Impact Analysis, chapter 13 of the TSD.
c. Impacts on Manufacturing Capacity
Panels
    Manufacturers indicated that design options that necessitate 
thicker panels could lead to longer production times for panels. In 
general, every additional inch of foam increases panel cure times by 
roughly 20 minutes. A standard that necessitates 6-inch thick panels 
for any of the panel equipment classes would require manufacturers to 
add equipment to maintain throughput due to longer curing times or to 
purchase all new tooling to enable production if the manufacturer's 
current equipment cannot accommodate 6-inch panels. Given that the only 
efficiency level considered for panels in this rule is baseline, DOE 
does not anticipate any changes in production techniques or new 
capacity constraints resulting from this rulemaking.
Doors
    Display door manufacturers did not identify any design options 
which would lead to capacity constraints. However, manufacturers 
commented on differences between the two types of low-emittance 
coatings analyzed: hard low emittance coating (``hard-coat''), the 
baseline option, and soft low emittance coating (``soft-coat''), the 
corresponding design option. Hard-coat is applied to the glass pane at 
high temperatures during the formation of the pane and is extremely 
durable, while soft-coat is applied in a separate step after the glass 
pane is formed and is less durable than hard low emittance coating but 
has better performance characteristics. Manufacturers indicated that 
soft-coat is significantly more difficult to work with and may require 
new conveyor equipment. As manufacturers adjust to working with soft-
coat, longer lead times may occur.
    The production of solid doors is very similar to the production of 
panels. Similar to panels, DOE is only considering the baseline 
efficiency level for passage and freight doors. The Department does not 
expect capacity challenges for the production of solid doors as a 
result of this rule.
Refrigeration
    DOE did not identify any significant capacity constraints for the 
design options being evaluated for this rulemaking. For most 
refrigeration manufacturers, the walk-in market makes up a relatively 
small percentage of their overall revenues. Additionally, most of the 
design options being evaluated are available as product options today. 
As a result, the industry should not experience capacity constraints 
directly resulting from an energy conservation standard.
d. Impacts on Small Manufacturer Sub-Group
    As discussed in section IV.I.1, using average cost assumptions to 
develop an industry cash-flow estimate may not be adequate for 
assessing differential impacts among manufacturer sub-groups. Small 
manufacturers, niche equipment manufacturers, and manufacturers 
exhibiting a cost structure substantially different from the industry 
average could be affected disproportionately. DOE used the results of 
the industry characterization to group manufacturers exhibiting similar 
characteristics. Consequently, DOE analyzes small manufacturers as a 
sub-group.
    DOE evaluated the impact of new energy conservation standards on 
small manufacturers, specifically ones defined as ``small businesses'' 
by the SBA. The SBA defines a ``small business'' as having 750 
employees or less for NAICS 333415, ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' Based on this definition, DOE identified two 
refrigeration system manufacturers, forty-two panel manufacturers, and 
five door manufacturers in the WICF industry that are small businesses. 
DOE describes the differential impacts on these small businesses in 
this rule at section VI.B, Review Under the Regulatory Flexibility Act.
e. Cumulative Regulatory Burden
    While any one regulation may not impose a significant burden on 
manufacturers, the combined effects of several impending regulations 
may have serious consequences for some manufacturers, groups of 
manufacturers, or an entire industry. Assessing the impact of a single 
regulation may overlook this cumulative regulatory burden. Multiple 
regulations affecting

[[Page 32109]]

the same manufacturer can strain profits and can lead companies to 
abandon product lines or markets with lower expected future returns 
than competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance and equipment efficiency.
    For the cumulative regulatory burden analysis, DOE looks at other 
regulations that could affect walk in cooler and freezer manufacturers 
that will take effect approximately 3 years before or after the 
compliance date of new energy conservation standards for these 
products. In addition to the new energy conservation regulations on 
walk-ins, several other Federal regulations apply to these products and 
other equipment produced by the same manufacturers. While the 
cumulative regulatory burden focuses on the impacts on manufacturers of 
other Federal requirements, DOE also describes a number of other 
regulations in section VI.B because it recognizes that these 
regulations also impact the products covered by this rulemaking.
    Companies that produce a wide range of regulated products may be 
faced with more capital and product development expenditures than 
competitors with a narrower scope of products. Regulatory burdens can 
prompt companies to exit the market or reduce their product offerings, 
potentially reducing competition. Smaller companies in particular can 
be affected by regulatory costs since these companies have lower sales 
volumes over which they can amortize the costs of meeting new 
regulations. DOE discusses below the regulatory burdens manufacturers 
could experience, mainly, DOE regulations for other products or 
equipment produced by walk-in manufacturers and other Federal 
requirements including the United States Clean Air Act, the Energy 
Independence and Security Act of 2007. While this analysis focuses on 
the impacts on manufacturers of other Federal requirements, in this 
section DOE also describes a number of other regulations that could 
also impact the WICF equipment covered by this rulemaking: Potential 
climate change and greenhouse gas legislation, State conservation 
standards, and food safety regulations. DOE discusses these and other 
requirements, and includes the full details of the cumulative 
regulatory burden, in chapter 12 of the final rule TSD.
DOE Regulations for Other Products Produced by Walk-In Cooler and 
Freezer Manufacturers
    In addition to the new energy conservation standards on walk in 
cooler and freezer equipment, several other Federal regulations apply 
to other products produced by the same manufacturers. DOE recognizes 
that each regulation can significantly affect a manufacturer's 
financial operations. Multiple regulations affecting the same 
manufacturer can strain manufacturers' profits and possibly cause an 
exit from the market. DOE is conducting an energy conservation standard 
rulemaking for commercial refrigeration equipment and cannot include 
the costs of this rulemaking in its cumulative analysis because the 
rulemaking is not yet complete and no cost estimates are available.
Federal Clean Air Act
    The Clean Air Act defines the EPA's responsibilities for protecting 
and improving the nation's air quality and the stratospheric ozone 
layer. The most significant of these additional regulations is the EPA-
mandated phase-out of hydrochlorofluorocarbons (HCFCs). The Act 
requires that, on a quarterly basis, any person who produced, imported, 
or exported certain substances, including HCFC refrigerants, report the 
amount produced, imported and exported. Additionally--effective January 
1, 2015--selling, manufacturing, and using any such substance is banned 
unless such substance (1) has been used, recovered, and recycled; (2) 
is used and entirely consumed in the production of other chemicals; or 
(3) is used as a refrigerant in appliances manufactured prior to 
January 1, 2020. Finally, production phase-outs will continue until 
January 1, 2030 when such production will be illegal. These bans could 
trigger design changes to natural or low global warming potential 
refrigerants and could impact the insulation used in equipment covered 
by this rulemaking.
State Conservation Standards
    Since 2004, the State of California has had established energy 
standards for walk-in coolers and freezers. California's Code of 
Regulations (Title 20, Section 1605) prescribe requirements for 
insulation levels, motor types, and use of automatic door-closers used 
for WICF applications. These requirements have since been amended and 
mirror those standards that Congress prescribed as part of EISA 2007. 
Other States, notably, Connecticut, Maryland, and Oregon, have recently 
established energy efficiency standards for walk-ins that are also 
identical to the ones contained in EPCA. These standards would not be 
preempted until any Federal standards that DOE may adopt take effect. 
See 42 U.S.C. 6316(h)(2). Once DOE's standards are finalized, all other 
State standards that are in effect would be pre-empted. As a result, 
these State standards do not pose any regulatory burden above that 
which has already been established in EPCA.
Food Safety Standards
    Manufacturers expressed concern regarding Federal, State, and local 
food safety regulations. A walk-in must perform to the standards set by 
NSF, state, country, and city health regulations. There is general 
concern among manufacturers about conflicting regulation scenarios as 
new energy conservation standards may potentially prevent or make it 
more difficult for them to comply with food safety regulations.
3. National Impact Analysis
a. Energy Savings
    DOE estimated the NES by calculating the difference in annual 
energy consumption for the base-case scenario and standards-case 
scenario at each TSL for each equipment class and summing up the annual 
energy savings over the lifetime of all equipment purchased in 2017-
2046.
    Table V.31 presents the primary NES (taking into account losses in 
the generation and transmission of electricity) for all equipment 
classes and the sum total of NES for each TSL. Table V.32 presents 
estimated FFC energy savings for each considered TSL. The total FFC NES 
progressively increases from 2.506 quads at TSL 1 to 3.883 quads at TSL 
3.

     Table V.31--Cumulative National Primary Energy Savings in Quads
------------------------------------------------------------------------
                                              TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................    0.030    0.035      0.035
DC.L.O.....................................    0.832    1.077      1.077
DC.M.I.....................................    0.069    0.069      0.069
DC.M.O.....................................    1.028    1.279      1.279
MC.L.N.....................................    0.016    0.016      0.016
MC.M.......................................    0.046    0.046      0.046
SP.M.......................................    0.000    0.000      0.044
SP.L.......................................    0.000    0.000      0.064
FP.L.......................................    0.000    0.000      0.017
DD.M.......................................    0.329    0.423      0.643
DD.L.......................................    0.116    0.154      0.174
PD.M.......................................    0.000    0.000      0.076
PD.L.......................................    0.000    0.000      0.245
FD.M.......................................    0.000    0.000      0.009

[[Page 32110]]

 
FD.L.......................................    0.000    0.000      0.027
                                            ----------------------------
  Total....................................    2.466    3.099      3.821
------------------------------------------------------------------------
* For DC refrigeration systems, results include all capacity ranges.

 Table V.32--Cumulative National Full-Fuel Cycle Energy Savings in Quads
------------------------------------------------------------------------
                                              TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................    0.031    0.036      0.036
DC.L.O.....................................    0.846    1.094      1.094
DC.M.I.....................................    0.070    0.070      0.070
DC.M.O.....................................    1.045    1.300      1.300
MC.L.N.....................................    0.016    0.017      0.017
MC.M.......................................    0.046    0.046      0.046
SP.M.......................................    0.000    0.000      0.045
SP.L.......................................    0.000    0.000      0.065
FP.L.......................................    0.000    0.000      0.018
DD.M.......................................    0.334    0.429      0.653
DD.L.......................................    0.118    0.157      0.177
PD.M.......................................    0.000    0.000      0.077
PD.L.......................................    0.000    0.000      0.249
FD.M.......................................    0.000    0.000      0.009
FD.L.......................................    0.000    0.000      0.027
                                            ----------------------------
  Total....................................    2.506    3.149      3.883
------------------------------------------------------------------------

    Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. For this rulemaking, DOE undertook 
a sensitivity analysis using nine, rather than 30, years of equipment 
shipments. The choice of a 9-year period is a proxy for the timeline in 
EPCA for the review of certain energy conservation standards and 
potential revision of and compliance with such revised standards.\38\ 
The review timeframe established in EPCA is generally not synchronized 
with the equipment lifetime, equipment manufacturing cycles or other 
factors specific to walk-in coolers and walk-in freezers. Thus, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology. The primary 
and full-fuel cycle NES results based on a 9-year analysis period are 
presented in Table V.33 and Table V.34, respectively. The impacts are 
counted over the lifetime of equipment purchased in 2017-2025.
---------------------------------------------------------------------------

    \38\ Section 325(m) of EPCA requires DOE to review its standards 
at least once every 6 years, and requires, for certain products, a 
3-year period after any new standard is promulgated before 
compliance is required, except that in no case may any new standards 
be required within 6 years of the compliance date of the previous 
standards. While adding a 6-year review to the 3-year compliance 
period adds to 9 years, DOE notes that it may undertake reviews at 
any time within the 6-year period, and that the 3 year compliance 
date may yield to the 6-year backstop. A 9-year analysis period may 
not be appropriate given the variability that occurs in the timing 
of standards reviews and the fact that, for some consumer products, 
the compliance period is 5 years rather than 3 years.

    Table V.33--Cumulative National Primary Energy Savings for 9-Year
                             Analysis Period
                   [Equipment purchased in 2017-2025]
------------------------------------------------------------------------
                                              TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................      0.0      0.0        0.0
DC.L.O.....................................      0.2      0.3        0.3
DC.M.I.....................................      0.0      0.0        0.0
DC.M.O.....................................      0.3      0.3        0.3
MC.L.N.....................................      0.0      0.0        0.0
MC.M.......................................      0.0      0.0        0.0
SP.M.......................................      0.0      0.0        0.0
SP.L.......................................      0.0      0.0        0.0
FP.L.......................................      0.0      0.0        0.0
DD.M.......................................      0.1      0.1        0.2
DD.L.......................................      0.0      0.0        0.1
PD.M.......................................      0.0      0.0        0.0
PD.L.......................................      0.0      0.0        0.1
FD.M.......................................      0.0      0.0        0.0
FD.L.......................................      0.0      0.0        0.0
                                            ----------------------------
  Total....................................      0.6      0.8        1.1
------------------------------------------------------------------------

  Table V.34--Cumulative Full Fuel Cycle National Energy Savings for 9-
                          Year Analysis Period
                   [Equipment purchased in 2017-2025]
------------------------------------------------------------------------
                                              TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................      0.0      0.0        0.0
DC.L.O.....................................      0.2      0.3        0.3
DC.M.I.....................................      0.0      0.0        0.0
DC.M.O.....................................      0.3      0.3        0.3
MC.L.N.....................................      0.0      0.0        0.0
MC.M.......................................      0.0      0.0        0.0
SP.M.......................................      0.0      0.0        0.0
SP.L.......................................      0.0      0.0        0.0
FP.L.......................................      0.0      0.0        0.0
DD.M.......................................      0.1      0.1        0.2
DD.L.......................................      0.0      0.0        0.1
PD.M.......................................      0.0      0.0        0.0
PD.L.......................................      0.0      0.0        0.1
FD.M.......................................      0.0      0.0        0.0
FD.L.......................................      0.0      0.0        0.0
                                            ----------------------------
  Total....................................      0.7      0.8        1.1
------------------------------------------------------------------------

b. Net Present Value of Customer Costs and Benefits
    DOE estimated the cumulative NPV to the Nation of the net savings 
for WICF customers that would result from potential standards at each 
TSL. In accordance with OMB guidelines on regulatory analysis (OMB 
Circular A-4, section E, September 17, 2003), DOE calculated NPV using 
both a 7-percent and a 3-percent real discount rate.
    Table V.35 and Table V.36 show the customer NPV results for each of 
the TSLs DOE considered for walk-in coolers and walk-in freezers at 7-
percent and 3-percent discount rates, respectively. The impacts cover 
the expected lifetime of equipment purchased in 2017-2046.
    Efficiency levels for TSL 3 were chosen to represent the maximum 
technology for both refrigeration equipment, and envelope components, 
as such the NPV results at a 7-percent discount rate are mixed, they 
are negative for all envelope component equipment classes, while 
positive for refrigeration systems. TSL 2 was chosen to correspond to 
the highest efficiency level with a positive NPV at a 7-percent 
discount rate for each equipment class. The criterion for TSL 1 was to 
select efficiency levels with the highest NPV at a 7-percent discount 
rate. Consequently, the total NPV is highest for TSL 1. TSL 2 shows the 
second highest total NPV at a 7-percent discount rate.

    Table V.35--Net Present Value in Billions (2013$) at a 7-Percent
                Discount Rate for Units Sold in 2017-2046
------------------------------------------------------------------------
                                              TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................      0.1      0.1        0.1
DC.L.O.....................................      2.2      1.0        1.0
DC.M.I.....................................      0.1      0.1        0.1
DC.M.O.....................................      2.8      2.5        2.5
MC.L.N.....................................      0.0      0.0        0.0
MC.M.......................................      0.1      0.1        0.1
SP.M.......................................      0.0      0.0      -18.9
SP.L.......................................      0.0      0.0       -6.6
FP.L.......................................      0.0      0.0       -2.0
DD.M.......................................      0.7      0.0      -10.0
DD.L.......................................      0.1      0.1       -0.2
PD.M.......................................      0.0      0.0       -5.1
PD.L.......................................      0.0      0.0       -4.1
FD.M.......................................      0.0      0.0       -0.6
FD.L.......................................      0.0      0.0       -0.2
                                            ----------------------------
  Total....................................     6.24     3.98     -43.92
------------------------------------------------------------------------
* For DC refrigeration systems, results include all capacity ranges.

    Table V.36--Net Present Value in Billions (2013$) at a 3-Percent
                Discount Rate for Units Sold in 2017-2046
------------------------------------------------------------------------
                                              TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................      0.2      0.1        0.1
DC.L.O.....................................      4.8      2.8        2.8
DC.M.I.....................................      0.3      0.3        0.3
DC.M.O.....................................      5.9      5.5        5.5
MC.L.N.....................................      0.1      0.1        0.1
MC.M.......................................      0.2      0.2        0.2
SP.M.......................................      0.0      0.0      -33.2
SP.L.......................................      0.0      0.0      -11.6

[[Page 32111]]

 
FP.L.......................................      0.0      0.0       -3.5
DD.M.......................................      1.6      0.5      -17.1
DD.L.......................................      0.3      0.3       -0.2
PD.M.......................................      0.0      0.0       -8.9
PD.L.......................................      0.0      0.0       -7.0
FD.M.......................................      0.0      0.0       -1.1
FD.L.......................................      0.0      0.0       -0.4
                                            ----------------------------
  Total....................................    13.38     9.90     -73.93
------------------------------------------------------------------------
* For DC refrigeration systems, results include all capacity ranges.

    The NPV results based on the aforementioned 9-year analysis period 
are presented in Table V.37 and Table V.38. The impacts are counted 
over the lifetime of equipment purchased in 2017-2025. As mentioned 
previously, this information is presented for informational purposes 
only and is not indicative of any change in DOE's analytical 
methodology or decision criteria.

    Table V.37 --Net Present Value in Millions (2013$) at a 7-Percent
                Discount Rate for Units Sold in 2017-2025
------------------------------------------------------------------------
                                                TSL 1    TSL 2    TSL 3
------------------------------------------------------------------------
DC.L.I.......................................      0.0      0.0      0.0
DC.L.O.......................................      1.0      0.4      0.4
DC.M.I.......................................      0.1      0.1      0.1
DC.M.O.......................................      1.3      1.1      1.1
MC.L.N.......................................      0.0      0.0      0.0
MC.M.........................................      0.0      0.0      0.0
SP.M.........................................      0.0      0.0     -9.1
SP.L.........................................      0.0      0.0     -3.2
FP.L.........................................      0.0      0.0     -1.0
DD.M.........................................      0.2     -0.1     -5.1
DD.L.........................................      0.0      0.0     -0.2
PD.M.........................................      0.0      0.0     -2.5
PD.L.........................................      0.0      0.0     -2.0
FD.M.........................................      0.0      0.0     -0.3
FD.L.........................................      0.0      0.0     -0.1
                                              --------------------------
  Total......................................      2.7      1.6    -21.7
------------------------------------------------------------------------

    Table V.38--Net Present Value in Millions (2013$) at a 3-Percent
                Discount Rate for Units Sold in 2017-2025
------------------------------------------------------------------------
                                              TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................      0.0      0.0        0.0
DC.L.O.....................................      1.5      0.8        0.8
DC.M.I.....................................      0.1      0.1        0.1
DC.M.O.....................................      2.0      1.8        1.8
MC.L.N.....................................      0.0      0.0        0.0
MC.M.......................................      0.1      0.1        0.1
SP.M.......................................      0.0      0.0      -11.7
SP.L.......................................      0.0      0.0       -4.0
FP.L.......................................      0.0      0.0       -1.2
DD.M.......................................      0.5      0.1       -6.2
DD.L.......................................      0.1      0.1       -0.1
PD.M.......................................      0.0      0.0       -3.1
PD.L.......................................      0.0      0.0       -2.5
FD.M.......................................      0.0      0.0       -0.4
FD.L.......................................      0.0      0.0       -0.2
                                            ----------------------------
  Total....................................      4.4      3.0      -26.5
------------------------------------------------------------------------

c. Indirect Employment Impacts
    In addition to the direct impacts on manufacturing employment 
discussed in section V.B.2, DOE develops general estimates of the 
indirect employment impacts of amended standards on the economy. As 
discussed above, DOE expects energy amended conservation standards for 
walk-in coolers and walk-in freezers to reduce energy bills for 
commercial customers, and the resulting net savings to be redirected to 
other forms of economic activity. DOE also realizes that these shifts 
in spending and economic activity by walk-in owners could affect the 
demand for labor. Thus, indirect employment impacts may result from 
expenditures shifting between goods (the substitution effect) and 
changes in income and overall expenditure levels (the income effect) 
that occur due to the imposition of amended standards. These impacts 
may affect a variety of businesses not directly involved in the 
decision to make, operate, or pay the utility bills for walk-in coolers 
and walk-in freezers. To estimate these indirect economic effects, DOE 
used an input/output model of the U.S. economy as described in section 
IV.K of this notice.
    Customers who purchase more-efficient equipment pay lower amounts 
towards utility bills, which results in job losses in the electric 
utilities sector. However, in the input/output model, the dollars saved 
on utility bills are re-invested in economic sectors that create more 
jobs than are lost in the electric utilities sector. Thus, the amended 
energy conservation standards for walk-in coolers and walk-in freezers 
are likely to slightly increase the net demand for labor in the 
economy. As shown in chapter 16 of the final rule TSD, DOE estimates 
that net indirect employment impacts from amended walk-in standards are 
very small relative to the national economy. The net increase in jobs 
might be offset by other, unanticipated effects on employment. Neither 
the BLS data nor the input/output model used by DOE includes the 
quality of jobs.
4. Impact on Utility or Performance of Equipment
    In performing the engineering analysis, DOE considers design 
options that would not lessen the utility or performance of the 
individual classes of equipment. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 
6316(a)) As presented in the screening analysis (chapter 4 of the final 
rule TSD), DOE eliminates from consideration any design options that 
reduce the utility of the equipment. For this final rule, DOE concluded 
that none of the efficiency levels considered for walk-in coolers and 
walk-in freezers would reduce the utility or performance of the 
equipment.
5. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition that is 
likely to result from standards. It also directs the Attorney General 
of the United States (Attorney General) to determine the impact, if 
any, of any lessening of competition likely to result from a proposed 
standard and to transmit such determination to the Secretary within 60 
days of the publication of a direct final rule and simultaneously 
published proposed rule, together with an analysis of the nature and 
extent of the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To 
assist the Attorney General in making a determination for WICF 
standards, DOE provided the Department of Justice (DOJ) with copies of 
the NOPR and the TSD for review. On behalf of the Attorney General, the 
DOJ's Antitrust Division concluded that the standard levels proposed by 
DOE (which are the same ones being adopted in this final rule) would 
not be likely to have an adverse impact on competition.
6. Need of the Nation To Conserve Energy
    An improvement in the energy efficiency of the equipment subject to 
this final rule is likely to improve the security of the Nation's 
energy system by reducing overall demand for energy. Reduced 
electricity demand may also improve the reliability of the electricity 
system. Reductions in national electric generating capacity estimated 
for each considered TSL are reported in chapter 14 of the final rule 
TSD.
    Energy savings from amended standards for walk-in coolers and walk-
in freezers could also produce environmental benefits in the form of 
reduced emissions of air pollutants and GHGs associated with 
electricity production.

[[Page 32112]]

    Table V.72 provides DOE's estimate of cumulative emissions 
reductions projected to result from the TSLs considered in this rule. 
The table includes both power sector emissions and upstream emissions. 
DOE reports annual emissions reductions for each TSL in chapter 13 of 
the final rule TSD.

Table V.39--Cumulative Emissions Reduction Estimated for Walk-In Coolers
     and Walk-In Freezers TSLs for Equipment Purchased in 2017-2046
------------------------------------------------------------------------
                                                    TSL
                                  --------------------------------------
                                        1            2            3
------------------------------------------------------------------------
                         Power Sector Emissions
------------------------------------------------------------------------
CO2 (million metric tons)........        118.9        149.5        184.0
SO2 (thousand tons)..............        180.7        227.1        279.8
NOX (thousand tons)..............         95.9        120.5        149.3
Hg (tons)........................          0.2          0.3          0.3
N2O (thousand tons)..............          2.7          3.4          4.2
CH4 (thousand tons)..............         16.1         20.3         25.0
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
CO2 (million metric tons)........          7.7          9.7         12.0
SO2 (thousand tons)..............          1.7          2.1          2.6
NOX (thousand tons)..............        106.6        133.9        165.1
Hg (tons)........................          0.0          0.0          0.0
N2O (thousand tons)..............          0.1          0.1          0.1
CH4 (thousand tons)..............        646.7        812.8       1001.8
------------------------------------------------------------------------
                           Total FFC Emissions
------------------------------------------------------------------------
CO2 (million metric tons)........        126.7        159.2        196.0
SO2 (thousand tons)..............        182.4        229.2        282.4
NOX (thousand tons)..............        202.5        254.4        314.4
Hg (tons)........................          0.2          0.3          0.3
N2O (thousand tons)..............          2.8          3.5          4.4
CH4 (thousand tons)..............        662.9        833.0       1026.8
------------------------------------------------------------------------

    As part of the analysis for this final rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that were estimated for each of the TSLs considered. 
As discussed in section IV.M, for CO2, DOE used values for 
the SCC developed by a Federal interagency process. The interagency 
group selected four sets of SCC values for use in regulatory analyses. 
Three sets are based on the average SCC from three integrated 
assessment models, at discount rates of 2.5 percent, 3 percent, and 5 
percent. The fourth set, which represents the 95th-percentile SCC 
estimate across all three models at a 3-percent discount rate, is 
included to represent higher-than-expected impacts from temperature 
change further out in the tails of the SCC distribution. The four SCC 
values for CO2 emissions reductions in 2015, expressed in 
2013$, are $12.0, $40.5, $62.4, and $119 per metric ton of 
CO2. The values for later years are higher due to increasing 
emissions-related costs as the magnitude of projected climate change 
increases.
    Table V.40 presents the global value of CO2 emissions 
reductions at each TSL. DOE calculated domestic values as a range from 
7 percent to 23 percent of the global values, and these results are 
presented in chapter 14 of the final rule TSD.

        Table V.40--Global Present Value of CO2 Emissions Reduction for Walk-In Coolers and Freezers TSLs
----------------------------------------------------------------------------------------------------------------
                                                                           SCC Scenario
                                                 ---------------------------------------------------------------
                       TSL                                                                          3% discount
                                                    5% discount     3% discount    2.5% discount    rate, 95th
                                                   rate, average   rate, average   rate, average    percentile
----------------------------------------------------------------------------------------------------------------
                                                  million 2013$
----------------------------------------------------------------------------------------------------------------
                                             Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             894            3965            6255           12221
2...............................................            1124            4983            7861           15358
3...............................................            1379            6119            9655           18856
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................              56             252             399             778
2...............................................              70             316             501             977
3...............................................              86             389             616            1201
----------------------------------------------------------------------------------------------------------------

[[Page 32113]]

 
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             950            4217            6654           12999
2...............................................            1194            5299            8362           16336
3...............................................            1464            6507           10271           20057
----------------------------------------------------------------------------------------------------------------

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to evolve rapidly. Thus, any value placed in 
this final rule on reducing CO2 emissions is subject to 
change. DOE, together with other Federal agencies, will continue to 
review various methodologies for estimating the monetary value of 
reductions in CO2 and other GHG emissions, including HFCs. 
This ongoing review will consider the comments on this subject that are 
part of the public record for this final rule and other rulemakings, as 
well as other methodological assumptions and issues. However, 
consistent with DOE's legal obligations, and taking into account the 
uncertainty involved with this particular issue, DOE has included in 
this final rule the most recent values and analyses resulting from the 
ongoing interagency review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emission reductions 
anticipated to result from amended walk-in standards. Table V.42 shows 
the present value of cumulative NOX emissions reductions for 
each TSL calculated using the average dollar-per-ton values and 7-
percent and 3-percent discount rates.

Table V.41--Cumulative Present Value of NOX Emissions Reduction for Walk-
                      In Coolers and Freezers TSLs
------------------------------------------------------------------------
                                                3% discount  7% discount
                      TSL                           rate         rate
------------------------------------------------------------------------
                              Million 2013$
------------------------------------------------------------------------
                         Power Sector Emissions
------------------------------------------------------------------------
1.............................................        138.1         70.0
2.............................................        173.5         88.0
3.............................................        213.6        108.3
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.............................................        153.3         76.0
2.............................................        192.6         95.5
3.............................................        236.3        117.2
------------------------------------------------------------------------
                           Total FFC Emissions
------------------------------------------------------------------------
1.............................................        291.3        146.0
2.............................................        366.1        183.5
3.............................................        450.0        225.5
------------------------------------------------------------------------

7. Summary of National Economic Impact
    The NPV of the monetized benefits associated with emission 
reductions can be viewed as a complement to the NPV of the customer 
savings calculated for each TSL considered in this final rule. Table 
V.42 presents the NPV values that result from adding the estimates of 
the potential economic benefits resulting from reduced CO2 
and NOX emissions in each of four valuation scenarios to the 
NPV of customer savings calculated for each TSL, at both a 7-percent 
and a 3-percent discount rate. The CO2 values used in the 
table correspond to the four scenarios for the valuation of 
CO2 emission reductions discussed above.

Table V.42--Net Present Value of Customer Savings Combined With Net Present Value of Monetized Benefits From CO2
                                          and NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
                                                   SCC Value of    SCC Value of    SCC Value of    SCC Value of
                                                   $12.0/metric    $40.5/metric    $62.4/metric     $119/metric
                       TSL                         ton CO2 * and   ton CO2 * and   ton CO2 * and   ton CO2 * and
                                                   medium value    medium value    medium value    medium value
                                                      for NOX         for NOX         for NOX         for NOX
----------------------------------------------------------------------------------------------------------------
                    Customer NPV at 3% Discount Rate added with Value of Emissions Based on:
                                                  billion 2013$
----------------------------------------------------------------------------------------------------------------
1...............................................            14.7            18.2            20.8            27.6
2...............................................            11.5            15.9            19.3            27.8
3...............................................           -71.9           -66.5           -62.4           -51.9
----------------------------------------------------------------------------------------------------------------
                    Customer NPV at 7% Discount Rate added with Value of Emissions Based on:
                                                  billion 2013$
----------------------------------------------------------------------------------------------------------------
1...............................................             7.4            10.9            13.5            20.3
2...............................................             5.4             9.8            13.2            21.7
3...............................................           -42.1           -36.7           -32.6           -22.1
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2015, in 2013$. The present values have been calculated with
  scenario-consistent discount rates.

[[Page 32114]]

    Although adding the value of customer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. customer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC are performed with different methods that use quite different 
time frames for analysis. The national operating cost savings is 
measured for the lifetime of equipment shipped in 2017-2046. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one metric ton of 
CO2 in each year. These impacts continue well beyond 2100.
8. Other Factors
    EPCA allows the Secretary, in determining whether a standard is 
economically justified, to consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) and 
6316(a)) DOE has not considered other factors in development of the 
standards in this final rule.

C. Conclusions

    Any new or amended energy conservation standard for any type (or 
class) of covered product must be designed to achieve the maximum 
improvement in energy efficiency that the Secretary determines is 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A) and 6316(a)) In determining whether a standard is 
economically justified, the Secretary must determine whether the 
benefits of the standard exceed its burdens to the greatest extent 
practicable, considering the seven statutory factors discussed 
previously. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) The new or amended 
standard must also result in a significant conservation of energy. (42 
U.S.C. 6295(o)(3)(B) and 6316(a))
    For this rulemaking, DOE considered the impacts of potential 
standards at each TSL, beginning with the maximum technologically 
feasible level, to determine whether that level met the evaluation 
criteria. If the max-tech level was not justified, DOE then considered 
the next most efficient level and undertook the same evaluation until 
it reached the highest efficiency level that is both technologically 
feasible and economically justified and saves a significant amount of 
energy.
    To aid the reader in understanding the benefits and/or burdens of 
each TSL, tables in this section summarize the quantitative analytical 
results for each TSL, based on the assumptions and methodology 
discussed herein. The efficiency levels contained in each TSL are 
described in section V.A. In addition to the quantitative results 
presented in the tables below, DOE also considers other burdens and 
benefits that affect economic justification. These include the impacts 
on identifiable subgroups of consumers who may be disproportionately 
affected by a national standard, and impacts on employment. Section 
V.B.1.b presents the estimated impacts of each TSL for the considered 
subgroups. DOE discusses the impacts on employment in WICF 
manufacturing in section V.B.2.b and discusses the indirect employment 
impacts in section IV.O.
1. Benefits and Burdens of Trial Standard Levels Considered for Walk-in 
Coolers and Walk-In Freezers
    Table V.43 through Table V.46 summarize the quantitative impacts 
estimated for each TSL for WICFs.

                         Table V.43--Summary of Results for Walk-In Coolers and Freezers
----------------------------------------------------------------------------------------------------------------
          Category                       TSL 1                       TSL 2                       TSL 3
----------------------------------------------------------------------------------------------------------------
                                       Cumulative National Energy Savings
                                                      quads
----------------------------------------------------------------------------------------------------------------
Primary.....................  2.466.....................  3.099.....................  3.821
Full-fuel cycle.............  2.506.....................  3.149.....................  3.883
----------------------------------------------------------------------------------------------------------------
                                       Cumulative NPV of Customer Benefits
                                                  2013$ billion
----------------------------------------------------------------------------------------------------------------
3% discount rate............  13.38.....................  9.90......................  -73.93
7% discount rate............  6.24......................  3.98......................  -43.92
----------------------------------------------------------------------------------------------------------------
                                                Industry Impacts
----------------------------------------------------------------------------------------------------------------
Change in Industry NPV        -29.41 to 31.88...........  -52.89 to 80.20...........  -549.26 to 1056.92
 (2013$ million).
Change in Industry NPV (%)..  -2.28 to 2.47.............  -4.1 to 6.21..............  -42.54 to 81.86
----------------------------------------------------------------------------------------------------------------
                                       Cumulative Emissions Reductions **
----------------------------------------------------------------------------------------------------------------
CO2 (Mt)....................  126.7.....................  159.2.....................  196.0
SO2 (kt)....................  182.4.....................  229.2.....................  282.4
NOX (kt)....................  202.5.....................  254.4.....................  314.4
Hg (t)......................  0.22......................  0.27......................  0.34
N2O (kt)....................  2.8.......................  3.5.......................  4.4
N2O (kt CO2eq)..............  662.9.....................  833.0.....................  1026.8
CH4 (kt)....................  126.7.....................  159.2.....................  196.0
CH4 (kt CO2eq)..............  182.4.....................  229.2.....................  282.4
----------------------------------------------------------------------------------------------------------------
                                Monetary Value of Cumulative Emissions Reductions
                                             2013$ million [dagger]
----------------------------------------------------------------------------------------------------------------
CO2.........................  949.7 to 12,999...........  1,193.5 to 16336..........  1,464.4 to 20,0576
NOX--3% discount rate.......  291.3.....................  366.1.....................  450.0

[[Page 32115]]

 
NOX--7% discount rate.......  146.0.....................  183.5.....................  225.5
----------------------------------------------------------------------------------------------------------------
** ``Mt'' stands for million metric tons; ``kt'' stands for kilotons; ``t'' stands for tons. CO2eq is the
  quantity of CO2 that would have the same global warming potential (GWP).
[dagger] Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced
  CO2 emissions.

  Table V.44--Summary of Results for Walk-In Coolers and Freezers TSLs:
                            Mean LCC Savings
------------------------------------------------------------------------
                        Mean LCC Savings * 2013$
-------------------------------------------------------------------------
         Equipment class              TSL 1        TSL 2        TSL 3
------------------------------------------------------------------------
DC.L.I...........................         2157         2078         2078
DC.L.O...........................         6463         5942         5942
DC.M.I...........................         1485         5942         5942
DC.M.O...........................         6382         6533         6533
MC.L.............................          598          547          547
MC.M.............................          362          362          362
SP.M.............................           --           --          -21
SP.L.............................           --           --          -18
FP.L.............................           --           --          -19
DD.M.............................          460          143        -2396
DD.L.............................          976          902          -79
PD.M.............................           --           --        -2000
PD.L.............................           --           --        -1998
FD.M.............................           --           --        -2668
FD.L.............................           --           --        -1761
------------------------------------------------------------------------
* ``--'' indicates no impact because there is no change in the
  standards.

  Table V.45--Summary of Results for Walk-In Coolers and Freezers TSLs:
                          Median Payback Period
------------------------------------------------------------------------
                   Median payback period *  (in years)
-------------------------------------------------------------------------
              Equipment class                 TSL 1    TSL 2     TSL 3
------------------------------------------------------------------------
DC.L.I.....................................      1.7      1.6        1.6
DC.L.O.....................................      1.0      3.5        3.5
DC.M.I.....................................      2.8      3.5        3.5
DC.M.O.....................................      1.1      2.2        2.2
MC.L.......................................      2.7      3.1        3.1
MC.M.......................................      3.1      3.1        3.1
SP.M.......................................       --       --      238.6
SP.L.......................................       --       --       58.8
FP.L.......................................       --       --       64.7
DD.M.......................................      2.4      7.3       39.5
DD.L.......................................      4.2      5.4        9.6
PD.M.......................................       --       --       30.8
PD.L.......................................       --       --       30.7
FD.M.......................................       --       --      115.5
FD.L.......................................       --       --       19.1
------------------------------------------------------------------------
* ``--'' indicates no impact because there is no change in the
  standards.

  Table V.46--Summary of Results for Walk-In Coolers and Freezers TSLs:
                  Distribution of Customer LCC Impacts
------------------------------------------------------------------------
         Equipment class             TSL 1 *      TSL 2 *      TSL 3 *
------------------------------------------------------------------------
DC.L.I:
    Net Cost (%).................            0            0            0
    No Impact (%)................            0            0            0
    Net Benefit (%)..............          100          100          100
DC.L.O:
    Net Cost (%).................            0            2            2
    No Impact (%)................            0            0            0
    Net Benefit (%)..............          100           98           98
DC.M.I:
    Net Cost (%).................            0            2            2
    No Impact (%)................            0            0            0
    Net Benefit (%)..............          100           98           98
DC.M.O:
    Net Cost (%).................            0            0            0
    No Impact (%)................            0            0            0
    Net Benefit (%)..............          100          100          100
MC.L:
    Net Cost (%).................            0            0            0

[[Page 32116]]

 
    No Impact (%)................            0            0            0
    Net Benefit (%)..............          100          100          100
MC.M:
    Net Cost (%).................            0            0            0
    No Impact (%)................            0            0            0
    Net Benefit (%)..............          100          100          100
SP.M:
    Net Cost (%).................            0            0          100
    No Impact (%)................          100          100            0
    Net Benefit (%)..............            0            0            0
SP.L:
    Net Cost (%).................            0            0          100
    No Impact (%)................          100          100            0
    Net Benefit (%)..............            0            0            0
FP.L:
    Net Cost (%).................            0            0          100
    No Impact (%)................          100          100            0
    Net Benefit (%)..............            0            0            0
DD.M:
    Net Cost (%).................            0           41          100
    No Impact (%)................           30            0            0
    Net Benefit (%)..............           69           59            0
DD.L:
    Net Cost (%).................            4           10           59
    No Impact (%)................            0            0            0
    Net Benefit (%)..............           96           90           41
PD.M:
    Net Cost (%).................            0            0          100
    No Impact (%)................          100          100            0
    Net Benefit (%)..............            0            0            0
PD.L:
    Net Cost (%).................            0            0          100
    No Impact (%)................          100          100            0
    Net Benefit (%)..............            0            0            0
FD.M:
    Net Cost (%).................            0            0          100
    No Impact (%)................          100          100            0
    Net Benefit (%)..............            0            0            0
FD.L:
    Net Cost (%).................            0            0          100
    No Impact (%)................          100          100            0
    Net Benefit (%)..............            0            0            0
------------------------------------------------------------------------
* In some cases the percentages may not sum to 100 percent due to
  rounding.

    TSL 3 corresponds to the max-tech level for all the equipment 
classes and offers the potential for the highest cumulative energy 
savings. The estimated energy savings from TSL 3 is 3.883 quads, an 
amount DOE deems significant. TSL 3 shows a net negative NPV for 
customers with estimated increased costs valued at $-43.92 billion at a 
7-percent discount rate. Estimated emissions reductions are 196.0 Mt of 
CO2, 314.4 thousand tons of NOX, 282.4 thousand 
tons of SO2, 1026.8 thousand tons of methane, and 0.34 tons 
of Hg. The CO2 emissions have an estimated value of $1.5 
billion to $20.1 billion and the NOX emissions have an 
estimated value of $225.5 million at a 7-percent discount rate.
    For TSL 3 the mean LCC savings for all equipment classes are 
positive for refrigeration systems, and negative for all refrigeration 
components, implying an increase in LCC in all component cases. The 
median PBP is longer than the lifetime of the equipment for all 
refrigeration component equipment classes. Similarly, the mean LCC 
savings for panels, which require the use of vacuum insulated panels at 
TSL 3, are negative with median PBP as high as nearly 240 years. As a 
result, DOE's analysis does not project that there would be any 
benefits from setting a standard at TSL 3 for any of the affected 
components.
    At TSL 3, manufacturers may expect diminished profitability due to 
large increases in equipment costs, capital investments in equipment 
and tooling, and expenditures related to engineering and testing. The 
projected change in INPV ranges from a decrease of $549.3 million to an 
increase of $1056.9 million based on DOE's manufacturer markup 
scenarios. The upper bound gain of $1056.9 million in INPV is 
considered an optimistic scenario for manufacturers because it assumes 
manufacturers can fully pass on substantial increases in equipment 
costs and upfront investments. DOE recognizes the risk of large 
negative impacts on industry if manufacturers' expectations concerning 
reduced profit margins are realized. TSL 3 could reduce walk-in INPV by 
up to 42.5 percent if impacts reach the lower bound of the range.
    After carefully considering the analytical results and weighing the 
benefits and burdens of TSL 3, DOE finds that the benefits to the 
Nation from TSL 3, in the form of energy savings and emissions 
reductions, including environmental and monetary

[[Page 32117]]

benefits, are small compared to the burdens, in the form of a decrease 
in customer NPV. DOE concludes that the burdens of TSL 3 outweigh the 
benefits and, therefore, does not find TSL 3 to be economically 
justifiable.
    TSL 2 corresponds to the highest efficiency level, in each 
equipment class, which maximized energy savings, while maintaining a 
positive NPV at a 7-percent discount rate for each equipment class. The 
estimated energy savings from TSL 2 is 3.149 quads, an amount DOE deems 
significant. TSL 2 shows a net positive NPV for all customers with 
estimated at $9.90 billion at a 7-percent discount rate. Estimated 
emissions reductions are 159.2 Mt of CO2, 254.4 thousand 
tons of NOX, 229.2 thousand tons of SO2, 833.0 
thousand tons of methane, and 0.27 tons of Hg. The CO2 
emissions have an estimated value of $1.2 billion to $16.3 billion and 
the NOX emissions have an estimated value of $183.5 million 
at a 7-percent discount rate.
    At TSL 2, the projected change in INPV ranges from a decrease of 
$52.9 million to an increase of $80.2 million. At TSL 2, DOE recognizes 
the risk of negative impacts if manufacturers' expectations concerning 
reduced profit margins are realized. If the lower bound of the range of 
impacts is reached, as DOE expects, TSL 2 could result in a net loss of 
4.10 percent in total INPV for manufacturers of walk-in refrigeration 
systems, panels, and doors.
    For TSL 2 the mean LCC savings for all equipment classes are 
positive for refrigeration systems, and l refrigeration components, 
implying an reduction in LCC in all cases. The median PBP is shorter 
than the lifetime of the equipment for all equipment classes.
    After careful consideration of the analytical results, weighing the 
benefits and burdens of TSL 3, and comparing them to those of TSL 2, 
the Secretary concludes that TSL 2 will offer the maximum improvement 
in efficiency that is technologically feasible and economically 
justified and will result in the significant conservation of energy. 
Therefore, DOE today is adopting standards at TSL 2 for walk-in coolers 
and walk-in freezers. The energy conservation standards for walk-in 
coolers and walk-in freezers are shown in Table V.47. DOE notes that 
instead of adopting the baseline R-value represented in TSL 2 for 
panels, the Agency is adopting the current Federal standard levels. DOE 
is not amending the standards for panels at this time but is continuing 
to require that these components satisfy the current panel energy 
conservation standards that Congress enacted. DOE has decided to retain 
the current panel energy conservation levels because it determined from 
its analysis that there is no TSL level that shows that higher panel 
standards are economically justified. While DOE's analysis reveals that 
a portion of the market has already surpassed the current Federal 
energy conservation standards for certain types of panels at the 
representative thickness and material analyzed, DOE's analysis does not 
provide the economic justification needed to amend the Federal 
standards for all types of WICF panels. Thus, DOE is retaining the 
current Federal standards, which establish a single R-value level that 
is independent of material properties or thickness and is continuing to 
allow manufacturers to have the flexibility to optimize both material 
properties and thickness at their discretion to meet the Federal 
standards.

               Table V.47--Energy Conservation Standards for Walk-In Coolers and Walk-In Freezers
----------------------------------------------------------------------------------------------------------------
             Class descriptor                                                        Standard level
------------------------------------------            Class           ------------------------------------------
          Refrigeration systems                                                 Minimum AWEF (Btu/W-h) *
----------------------------------------------------------------------------------------------------------------
Dedicated Condensing, Medium,              DC.M.I, h
 Capacity.
Dedicated Condensing, Medium Temperature,  DC.M.I, >=9,000...........  5.61
 Indoor System, >=9,000 Btu/h Capacity.
Dedicated Condensing, Medium Temperature,  DC.M.O, h Capacity.
Dedicated Condensing, Medium Temperature,  DC.M.O, >=9,000...........  7.60
 Outdoor System, >=9,000 Btu/h Capacity.
Dedicated Condensing, Low Temperature,     DC.L.I, h Capacity.
Dedicated Condensing, Low Temperature,     DC.L.I, >=9,000...........  3.10
 Indoor System, >=9,000 Btu/h Capacity.
Dedicated Condensing, Low Temperature,     DC.L.O, h Capacity.
Dedicated Condensing, Low Temperature,     DC.L.O, >=9,000...........  4.79
 Outdoor System, >=9,000 Btu/h Capacity.
Multiplex Condensing, Medium Temperature.  MC.M......................  10.89
Multiplex Condensing, Low Temperature....  MC.L......................  6.57
----------------------------------------------------------------------------------------------------------------
Panels                                                                 Minimum R-value (h-ft\2\-[deg]/Btu)
----------------------------------------------------------------------------------------------------------------
Structural Panel, Medium Temperature.....  SP.M......................  25
Structural Panel, Low Temperature........  SP.L......................  32
Floor Panel, Low Temperature.............  FP.L......................  28
----------------------------------------------------------------------------------------------------------------
Non-Display Doors                                                      Maximum Energy Consumption (kWh/day) **
----------------------------------------------------------------------------------------------------------------
Passage Door, Medium Temperature.........  PD.M......................  0.05 x And + 1.7
Passage Door, Low Temperature............  PD.L......................  0.14 x And + 4.8
Freight Door, Medium Temperature.........  FD.M......................  0.04 x And + 1.9
Freight Door, Low Temperature............  FD.L......................  0.12 x And + 5.6
----------------------------------------------------------------------------------------------------------------
 

[[Page 32118]]

 
Display Doors                                                          Maximum Energy Consumption (kWh/
                                                                        day)[dagger]
----------------------------------------------------------------------------------------------------------------
Display Door, Medium Temperature.........  DD.M......................  0.04 x Add + 0.41
Display Door, Low Temperature............  DD.L......................  0.15 x Add + 0.29
----------------------------------------------------------------------------------------------------------------
** Q represents the system gross capacity as calculated in AHRI 1250.
** And represents the surface area of the non-display door.
[dagger] Add represents the surface area of the display door.

2. Summary of Benefits and Costs (Annualized) of the Standards
    The benefits and costs of these standards, for equipment sold in 
2017-2046, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value of the benefits from operating the equipment (consisting 
primarily of operating cost savings from using less energy, minus 
increases in equipment purchase and installation costs, which is 
another way of representing consumer NPV), plus (2) the annualized 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\39\
---------------------------------------------------------------------------

    \39\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2014, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2017 through 2046) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Estimates of annualized benefits and costs of these standards are 
shown in Table V.48. The results under the primary estimate are as 
follows. Using a 7-percent discount rate for benefits and costs other 
than CO2 reduction, for which DOE used a 3-percent discount 
rate along with the average SCC series that uses a 3-percent discount 
rate, the cost of the standards in this rule is $511 million per year 
in increased equipment costs, while the benefits are $879 million per 
year in reduced equipment operating costs, $287 million in 
CO2 reductions, and $16.93 million in reduced NOX 
emissions. In this case, the net benefit amounts to $671 million per 
year. Using a 3-percent discount rate for all benefits and costs and 
the average SCC series, the cost of the standards in this rule is $528 
million per year in increased equipment costs, while the benefits are 
$1,064 million per year in reduced operating costs, $287 million in 
CO2 reductions, and $19.82 million in reduced NOX 
emissions. In this case, the net benefit amounts to $842 million per 
year.

 Table V.48--Annualized Benefits and Costs of New and Amended Standards for Walk-In Coolers and Walk-In Freezers
----------------------------------------------------------------------------------------------------------------
                                                      Primary estimate  Low net benefits     High net benefits
                                      Discount rate           *            estimate *           estimate *
----------------------------------------------------------------------------------------------------------------
                                                                          million 2013$/year
                                                     -----------------------------------------------------------
Benefits:
    Operating Cost Savings........  7%..............  879.............  854.............  1901
                                    3%..............  1064............  1027............  1115
    CO2 Reduction at ($12.0/t       5%..............  86..............  86..............  86
     case)**.
    CO2 Reduction at ($40.5/t       3%..............  287.............  287.............  287
     case)**.
    CO2 Reduction at ($62.4/t       2.5%............  420.............  420.............  420
     case)**.
    CO2 Reduction at ($117/t        3%..............  884.............  884.............  884
     case)**.
    NOX Reduction at ($2,684/       7%..............  16.93...........  16.93...........  16.93
     ton)**.
                                    3%..............  19.82...........  19.82...........  19.82
    Total Benefits [dagger].......  7% plus CO2       981 to 1,780....  957 to 1,755....  1,020 to 1,818
                                     range.
                                    7%..............  1,183...........  1,158...........  1,221
                                    3% plus CO2       1,169 to 1,968..  1,133 to 1,931..  1,221 to 2,019
                                     range.
                                    3%..............  1,371...........  1,334...........  1,422
Costs:
    Incremental Equipment Costs...  7%..............  511.............  501.............  522
                                    3%..............  528.............  515.............  541
Net Benefits:
Total [dagger]....................  7% plus CO2       470 to 1,269....  456 to 1,255....  498 to 1,296
                                     range.
                                    7%..............  671.............  657.............  699
                                    3% plus CO2       641 to 1,440....  617 to 1,416....  680 to 1,478
                                     range.

[[Page 32119]]

 
                                    3%..............  842.............  818.............  881
----------------------------------------------------------------------------------------------------------------
 * This table presents the annualized costs and benefits associated with walk-in coolers and walk-in freezers
  shipped in 2017-2046. These results include benefits to customers which accrue after 2046 from the equipment
  purchased in 2017-2046. The results account for the incremental variable and fixed costs incurred by
  manufacturers due to the amended standard, some of which may be incurred in preparation for the final rule.
  The primary, low, and high estimates utilize projections of energy prices from the AEO 2013 Reference case,
  Low Estimate, and High Estimate, respectively. In addition, incremental equipment costs reflect a medium
  decline rate for projected equipment price trends in the Primary Estimate, a low decline rate for projected
  equipment price trends in the Low Benefits Estimate, and a high decline rate for projected equipment price
  trends in the High Benefits Estimate.
 ** The CO2 values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of
  the updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%,
  and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
  calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The
  value for NOX is the average of the low and high values used in DOE's analysis.
 [dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding
  to average SCC with 3-percent discount rate, which is the $40.5/t CO2 reduction case. In the rows labeled ``7%
  plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are calculated using the
  labeled discount rate, and those values are added to the full range of CO2 values.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that these standards address are as follows:

    (1) There are external benefits resulting from improved energy 
efficiency of commercial refrigeration equipment that are not 
captured by the users of such equipment. These benefits include 
externalities related to environmental protection and energy 
security that are not reflected in energy prices, such as reduced 
emissions of greenhouse gases. DOE attempts to quantify some of the 
external benefits through use of Social Cost of Carbon values.

    In addition, DOE has determined that this regulatory action is an 
``economically significant regulatory action'' under section 3(f)(1) of 
Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
this rule and that the Office of Information and Regulatory Affairs 
(OIRA) in the Office of Management and Budget (OMB) review this rule. 
DOE presented to OIRA for review the draft rule and other documents 
prepared for this rulemaking, including the RIA, and has included these 
documents in the rulemaking record. The assessments prepared pursuant 
to Executive Order 12866 can be found in the technical support document 
for this rulemaking.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563 
is supplemental to and explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, agencies are required by 
Executive Order 13563 to: (1) Propose or adopt a regulation only upon a 
reasoned determination that its benefits justify its costs (recognizing 
that some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
DOE believes that this final rule is consistent with these principles, 
including the requirement that, to the extent permitted by law, 
benefits justify costs and that net benefits are maximized.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601, et seq.) requires 
preparation of a final regulatory flexibility analysis (FRFA) 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 rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site (http://energy.gov/gc/office-general-counsel).
    For manufacturers of walk-in coolers and walk-in freezers, the 
Small Business Administration (SBA) has set a size threshold, which 
defines those entities classified as ``small businesses'' for the 
purposes of the statute. DOE used the SBA's small business size 
standards to determine whether any small entities would be subject to 
the requirements of the rule. 65 FR 30836, 30848 (May 15, 2000), as 
amended at 65 FR 53533, 53544 (Sept. 5, 2000) and codified at 13 CFR 
part 121. The size standards are listed by North American Industry 
Classification System (NAICS) code and industry description and are 
available at

[[Page 32120]]

http://www.sba.gov/content/small-business-size-standards. Walk-in 
manufacturing is classified under NAICS 333415, ``Air-Conditioning and 
Warm Air Heating Equipment and Commercial and Industrial Refrigeration 
Equipment Manufacturing.'' The SBA sets a threshold of 750 employees or 
less for an entity to be considered as a small business for this 
category. Based on this threshold, DOE present the following FRFA 
analysis:
1. Description and Estimated Number of Small Entities Regulated
    During its market survey, DOE used available public information to 
identify potential small manufacturers. DOE's research involved 
industry trade association membership directories (including AHRI 
Directory,\40\ and NAFEM \41\), public databases (e.g. the SBA 
Database,\42\) individual company Web sites, and market research tools 
(e.g.,, Dunn and Bradstreet reports \43\ and Hoovers reports \44\) to 
create a list of companies that manufacture or sell equipment covered 
by this rulemaking. DOE also asked stakeholders and industry 
representatives if they were aware of any other small manufacturers 
during manufacturer interviews and at DOE public meetings. DOE reviewed 
publicly available data and contacted select companies on its list, as 
necessary, to determine whether they met the SBA's definition of a 
small business manufacturer of covered walk-in coolers and walk-in 
freezers. DOE screened out companies that do not offer equipment 
covered by this rulemaking, do not meet the definition of a ``small 
business,'' or are foreign owned.
---------------------------------------------------------------------------

    \40\ See www.ahridirectory.org/ahriDirectory/pages/home.aspx.
    \41\ See http://www.nafem.org/find-members/MemberDirectory.aspx.
    \42\ See http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm.
    \43\ See www.dnb.com/.
    \44\ See www.hoovers.com/.
---------------------------------------------------------------------------

    Based on this information, DOE identified forty-seven panel 
manufacturers and found forty-two of the identified panel manufacturers 
to be small businesses. As part of the MIA interviews, the Department 
interviewed nine panel manufacturers, including three small business 
operations. During MIA interviews, multiple manufacturers claimed that 
there are ``hundreds of two-man garage-based operations'' that produce 
WICF panels in small quantities. They asserted that these small 
manufacturers do not typically comply with EISA 2007 standards and do 
not obtain UL or NSF certifications for their equipment. DOE was not 
able to identify these small businesses and did not consider them in 
its analysis. This rule sets the energy conservation standard for walk-
in panels at the baseline efficiency level. Based on manufacturer 
comments in the NOPR public meeting, DOE expects that all manufacturers 
will be able to meet the baseline efficiency level without product 
changes, implementation of new design options, or investments in 
capital equipment. As a result, DOE certifies that the standard would 
not have a significant impact on small businesses with respect to the 
walk-ins panel industry.
    DOE identified forty-nine walk-in door manufacturers. Forty-five of 
those produce solid doors and four produce display doors. Of the forty-
five solid door manufacturers, forty-two produce panels as their 
primary business and are considered in the category of panel 
manufacturers above. The remaining three solid door manufacturers are 
all considered to be small businesses. Of the four display door 
manufacturers, two are considered small businesses. Therefore, of the 
seven manufacturers that exclusively produce WICF doors (three 
producing solid doors and four producing display doors), DOE determined 
that five are small businesses. As part of the MIA interviews, the 
Department interviewed six door manufacturers, including four small 
business operations. Based on an analysis of the anticipated conversion 
costs relative to the size of the small businesses in the door market, 
DOE certifies that the proposed standards would not have a significant 
impact on a large number of small businesses with respect to the door 
industry. The complete analysis of small door manufacturer is presented 
below in section VI.B.2.
    DOE identified nine refrigeration system manufacturers in the WICF 
industry. Two of those companies are foreign-owned. Based on publicly 
available information, two of the remaining seven domestic 
manufacturers are small businesses. One small business focuses on large 
warehouse refrigeration systems, which are outside the scope of this 
rulemaking. However, at its smallest capacity, this company's units can 
be sold to the walk-in market. The other small business specializes in 
building evaporators and unit coolers for a range of refrigeration 
applications, including the walk-in market. As part of the MIA 
interviews, the Department interviewed five refrigeration 
manufacturers, including the two small business operations. Both small 
businesses expressed concern that the rulemaking would negatively 
impact their businesses and one small business indicated it would exit 
the walk-in industry as a result of any standard that would directly 
impact walk-in refrigeration system energy efficiency. However, due to 
the small number of small businesses that manufacture WICF 
refrigeration systems and the fact that only one of two focuses on WICF 
refrigeration as a key market segment and constitutes a very small 
share of the overall walk-in market, DOE certifies that the proposed 
standards would not have a significant impact on a substantial number 
of small businesses with respect to the refrigeration equipment 
industry.
2. Description and Estimate of Compliance Requirements
    Given the significant role of small businesses in the walk-ins door 
industries, DOE provides a detailed analysis of the impacts of the 
standard on the industry. For the walk-in door industry, DOE identified 
seven small manufacturers that produce doors as their primary product, 
as described in section VI.B.1. Three companies produce solid doors and 
four companies produce display doors.
    All three manufacturers of customized passage doors and freight 
doors are small. This rule sets the energy conservation standard for 
the passage and freight door equipment classes at the baseline 
efficiency level. DOE expects that manufacturers will not need to make 
capital equipment investments or product conversion investments as 
result of this standard. As a result, DOE certifies that the standards 
set for passage and freight doors would not have a significant impact 
on small businesses manufacturers.
    In the display door market, two of the four manufacturers are 
small. If conversion costs for display door manufacturers were large, 
the small manufacturers could be at a disadvantage due to the necessary 
capital and product conversion costs, which do not necessarily scale 
with size or sales volume. However, as illustrated in Table VI.1, 
conversion costs for display door manufacturers are negligible for most 
TSLs. This is because the considered design options primarily consist 
of component swaps and relatively straight-forward

[[Page 32121]]

component additions. Also, manufacturers will have between three and 
five years from the publication date of the final rule to make the 
necessary equipment and production line changes.

                                      Table VI.1--Impacts of Conversion Costs on a Small Display Door Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Capital conversion    Product conversion                           Total conversion
                                                                  cost as a percentage  cost as a percentage    Total conversion    cost as a percentage
                                                                    of annual capital       of annual R&D     cost as a percentage   of annual operating
                                                                      expenditures             expense          of annual revenue          income
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...........................................................                     4                    10                     0                     2
TSL 2...........................................................                    52                    17                     1                     4
TSL 3...........................................................                   817                    30                     4                    33
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                      Table VI.2--Impacts of Conversion Costs on a Large Display Door Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Capital conversion    Product conversion                           Total conversion
                                                                  cost as a percentage  cost as a percentage    Total conversion    cost as a percentage
                                                                    of annual capital       of annual R&D     cost as a percentage  of  annual operating
                                                                      expenditures             expense         of  annual revenue           income
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...........................................................                     1                     2                     0                     0
TSL 2...........................................................                     9                     3                     0                     1
TSL 3...........................................................                   144                     5                     1                     6
--------------------------------------------------------------------------------------------------------------------------------------------------------

    At the standard set in this rule (TSL 2), the engineering analysis 
suggests that manufacturers would need to purchase more efficient 
components, such as LED lights; incorporate anti-sweat heater 
controllers; and include lighting controls. Furthermore, for low-
temperature applications, manufacturers may need to incorporate special 
coatings and krypton gas fills to reduce energy loss through display 
doors. Manufacturers noted in interviews they would likely purchase 
glass packs that already have the appropriate glass layers and coatings 
to meet the standard. Most manufacturers are able to apply gas fillings 
to their products today, though they may need to invest in additional 
stations for krypton gas. Based on DOE's analysis, the capital 
conversion costs and product conversion costs appear to be manageable 
for both small and large display door manufacturers. As a result, DOE 
certifies that these standards would not have a significant impact on a 
substantial number of small display door manufacturers.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being adopted today.
4. Significant Alternatives to the Rule
    The discussion above analyzes impacts on small businesses that 
would result from DOE's amended standards. In addition to the other 
TSLs being considered, the rulemaking TSD includes a regulatory impact 
analysis (RIA). For walk-in coolers and walk-in freezers, the RIA 
discusses the following policy alternatives: (1) No change in standard; 
(2) consumer rebates; (3) consumer tax credits; and (4) manufacturer 
tax credits; (5) voluntary energy efficiency targets; and (6) bulk 
government purchases. While these alternatives may mitigate to some 
varying extent the economic impacts on small entities compared to the 
standards, DOE determined that the energy savings of these alternatives 
are significantly smaller than those that would be expected to result 
from adoption of the amended standard levels. (See chapter 17 of the 
final rule TSD for the analysis supporting this determination.) 
Accordingly, DOE is declining to adopt any of these alternatives and is 
adopting the standards set forth in this rulemaking.

C. Review Under the Paperwork Reduction Act

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

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
DOE has determined that the rule fits within the category of actions 
included in Categorical Exclusion (CX) B5.1 and otherwise meets the 
requirements for application of a CX. See 10 CFR Part 1021, App. B, 
B5.1(b); 1021.410(b) and Appendix B, B(1)-(5). The rule fits within the 
category of actions because it is a rulemaking that establishes energy 
conservation standards for consumer products or industrial equipment, 
and for which none of the exceptions identified in CX B5.1(b) apply. 
Therefore, DOE has made a CX determination for this rulemaking, and DOE 
does not need to prepare an Environmental Assessment or Environmental 
Impact Statement for

[[Page 32122]]

this rule. DOE's CX determination for this rule is available at http://cxnepa.energy.gov/.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism.'' 64 FR 43255 (Aug. 10, 1999) 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the equipment that are the subject of this final rule. 
States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No 
further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

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

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For an amended regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy 
statement is also available at http://energy.gov/gc/office-general-counsel.
    DOE has concluded that this final rule would likely require 
expenditures of $100 million or more on the private sector. Such 
expenditures may include: (1) Investment in research and development 
and in capital expenditures by walk-in coolers and walk-in freezers 
manufacturers in the years between the final rule and the compliance 
date for the new standards, and (2) incremental additional expenditures 
by consumers to purchase higher-efficiency walk-in coolers and walk-in 
freezers, starting at the compliance date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the final rule. 2 U.S.C. 1532(c). The content requirements 
of section 202(b) of UMRA relevant to a private sector mandate 
substantially overlap the economic analysis requirements that apply 
under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the notice of final rulemaking and 
the ``Regulatory Impact Analysis'' section of the TSD for this final 
rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. 2 U.S.C. 1535(a). DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule unless DOE publishes an 
explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(d), 
(f), and (o), 6313(e), and 6316(a), this final rule would establish 
energy conservation standards for walk-in coolers and walk-in freezers 
that are designed to achieve the maximum improvement in energy 
efficiency that DOE has determined to be both technologically feasible 
and economically justified. A full discussion of the alternatives 
considered by DOE is presented in the ``Regulatory Impact Analysis'' 
section of the TSD for this final rule.

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

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

I. Review Under Executive Order 12630

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

[[Page 32123]]

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

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

K. Review Under Executive Order 13211

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

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as scientific information the 
agency reasonably can determine will have, or does have, a clear and 
substantial impact on important public policies or private sector 
decisions. 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs and/or projects. The ``Energy Conservation Standards 
Rulemaking Peer Review Report'' dated February 2007 has been 
disseminated and is available at the following Web site: 
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is a ``major rule'' as 
defined by 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final 
rule.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Intergovernmental relations, Reporting and recordkeeping requirements, 
and Small businesses.

    Issued in Washington, DC, on May 8, 2014.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons stated in the preamble, DOE amends part 431 of 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations, to read as set forth below:

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

0
1. The authority citation for part 431 continues to read as follows:

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

0
2. Section 431.302 is amended by revising the definition for ``Display 
door'' and adding, in alphabetical order, definitions for ``Freight 
door'' and ``Passage door'' to read as follows:

Sec.  431.302  Definitions concerning walk-in coolers and freezers.

* * * * *
    Display door means a door that:
    (1) Is designed for product display; or
    (2) Has 75 percent or more of its surface area composed of glass or 
another transparent material.
* * * * *
    Freight door means a door that is not a display door and is equal 
to or larger than 4 feet wide and 8 feet tall.
* * * * *
    Passage door means a door that is not a freight or display door.
* * * * *

0
3. In Sec.  431.304, revise paragraph (a) to read as follows:

Sec.  431.304  Uniform test method for the measurement of energy 
consumption of walk-in coolers and walk-in freezers.

    (a) Scope. This section provides test procedures for measuring, 
pursuant to EPCA, the energy consumption of walk-in coolers and walk-in 
freezers.
* * * * *

0
4. In Sec.  431.306, revise paragraph (a)(3), and add paragraphs (c), 
(d), and (e) to read as follows:

Sec.  431.306  Energy conservation standards and their effective dates.

    (a) * * *
    (3) Contain wall, ceiling, and door insulation of at least R-25 for 
coolers and R-32 for freezers, except that this paragraph shall not 
apply to:
    (i) Glazed portions of doors not to structural members and
    (ii) A walk-in cooler or walk-in freezer component if the component 
manufacturer has demonstrated to the satisfaction of the Secretary in a 
manner

[[Page 32124]]

consistent with applicable requirements that the component reduces 
energy consumption at least as much as if such insulation requirements 
of subparagraph (a)(3) were to apply.
* * * * *
    (c) Walk-in cooler and freezer display doors. All walk-in cooler 
and walk-in freezer display doors manufactured starting June 5, 2017, 
must satisfy the following standards:

----------------------------------------------------------------------------------------------------------------
                                                                               Equations for  maximum energy
              Class descriptor                          Class                    consumption  (kWh/day) *
----------------------------------------------------------------------------------------------------------------
Display Door, Medium Temperature...........  DD.M.......................  0.04 x Add + 0.41.
Display Door, Low Temperature..............  DD.L.......................  0.15 x Add + 0.29.
----------------------------------------------------------------------------------------------------------------
*Add represents the surface area of the display door.

    (d) Walk-in cooler and freezer non-display doors. All walk-in 
cooler and walk-in freezer non-display doors manufactured starting on 
June 5, 2017, must satisfy the following standards:

----------------------------------------------------------------------------------------------------------------
                                                                               Equations for  maximum energy
              Class descriptor                          Class                    consumption  (kWh/day) *
----------------------------------------------------------------------------------------------------------------
Passage door, Medium Temperature...........  PD.M.......................  0.05 x And + 1.7.
Passage Door, Low Temperature..............  PD.L.......................  0.14 x And + 4.8.
Freight Door, Medium Temperature...........  FD.M.......................  0.04 x And + 1.9.
Freight Door, Low Temperature..............  FD.L.......................  0.12 x And + 5.6.
----------------------------------------------------------------------------------------------------------------
*And represents the surface area of the non-display door.

    (e) Walk-in cooler and freezer refrigeration systems. All walk-in 
cooler and walk-in freezer refrigeration systems manufactured starting 
on June 5, 2017, must satisfy the following standards:

----------------------------------------------------------------------------------------------------------------
            Class descriptor                        Class               Equations for minimum AWEF (Btu/W-h)*
----------------------------------------------------------------------------------------------------------------
Dedicated Condensing, Medium              DC.M.I, 
 h Capacity.
Dedicated Condensing, Medium              DC.M.I, >=9,000..........  5.61
 Temperature, Indoor System, >=9,000 Btu/
 h Capacity.
Dedicated Condensing, Medium              DC.M.O, 
 h Capacity.
Dedicated Condensing, Medium              DC.M.O, >=9,000..........  7.60
 Temperature, Outdoor System, >=9,000
 Btu/h Capacity.
Dedicated Condensing, Low Temperature,    DC.L.I, h Capacity.
Dedicated Condensing, Low Temperature,    DC.L.I, >=9,000..........  3.10
 Indoor System, >=9,000 Btu/h Capacity.
Dedicated Condensing, Low Temperature,    DC.L.O, h Capacity.
Dedicated Condensing, Low Temperature,    DC.L.O, >=9,000..........  4.79
 Outdoor System, >=9,000 Btu/h Capacity.
Multiplex Condensing, Medium Temperature  MC.M.....................  10.89
Multiplex Condensing, Low Temperature...  MC.L.....................  6.57
----------------------------------------------------------------------------------------------------------------
* Q represents the system gross capacity as calculated by the procedures set forth in AHRI 1250.

[FR Doc. 2014-11489 Filed 6-2-14; 8:45 am]
BILLING CODE 6450-01-P
```