WHITE CONSOLIDATED INDUSTRIES, INC. 11770 BEREA ROAD CLEVELAND, OHIO 44111-1688

TERRY V. THIELE ASSOCIATE GENERAL COUNSEL 11 March 1999



### Office of Hearings and Appeals U.S. Department of Energy 1000 Independence Avenue, S.W. Washington , DC 20585-0107 RE: Amana Appliances Petition for Exception Relief to the 7/1/01 Refrigerator/Freezer Energy Standards Due to the Potential Unavailability of HFC-245fa

Dear Sir or Madam: This is the preliminary response of White Consolidated Industries, Inc.' ("WCI"), to the Amana Appliances ("Amapa") petition submitted to the Office of Hearings and Appeals ("OHA") for exception-relief to the 7/1 /01 refrigerator/freezer energy standards promulgated by the Department of Energy under the National Appliance Energy Conservation Act. Specifically, Amana has petitioned for relief in the form of a 10% increase in allowable energy consumption for all classes of refrigerator/freezers under the pending energy standards, found at 10 CFR Part 430. Amana seeks this relief from the effective date of those standards, 1 July 2001, until 1 January.2010. WCI, through its Frigidaire Home Products division, manufactures and sells refrigerators and freezers governed by the aforementioned energy standards and, consequently, could be aggrieved by the OHA action sought by Amana. WCI reserves the right to file additional comments at a later date, as explained more fully below. WCI hereby certifies to the OHA our compliance with the notification provisions of paragraph 1003.23(d).2 Amana petitions pursuant to 17 CFR Part 1003, which establishes procedures for authorizing an exception from a Departmental rule or regulation, as provided for in § 504 (42 U.S.C. 7194) of the Department of Energy Organization Act (42 U.S.C. 7101 et seq.), based on a demonstration of serious hardship, gross inequity or unfair distribution of burdens. Amana claims that such a serious hardship will result from having to comply with the aforementioned energy standards, given the unavailability of HFC-245fa. Amana argues that the energy standard levels were justified upon the assumption that HFC-245fa would-be available and that the Department agreed to entertain petitions for relief if the commercial availability of HFC-245fa was delayed beyond 2003:

1 White Consolidated Industries, Inc., is a wholly owned subsidiary of AB Electrolux, headquartered in Stockholm, Sweden.
2 10 CFR Part 1003 - Sec. 1003

.23 Notice. (a) The applicant shall send by United States mail a copy of the application and any subsequent amendments or other documents relating to the application, or a copy from which confidential information has been deleted in accordance with § 1003.9(f), to each person who is reasonably ascertainable by the applicant as a person who would be aggrieved by the OHA action sought. (d) Any person submitting written comments to the 0HA with respect to an application filed under this subpart shall send a copy of the comments, or a copy from which confidential information has been deleted in accordance with § 1003.9(f), to the applicant. The person shall certify to the OHA that he has complied with the requirements of this paragraph. The OHA may notify other persons participating in the proceeding of such comments and provide an opportunity for such persons to respond.

P.O. BOX 110036 • TELEPHONE (216) 252-8376 • FAX (216) 252-8158

WHITE CONSOLIDATED INDUSTRIES, INC.
11770 BEREA ROAD

TERRY v. THIELE ASSOCIATE GENERAL COUNSEL



### Office of Hearings and Appeals U.S. Department of Energy 1000 Independence Avenue, SW. Washington, DC 20585-0107 CLEVEL.A..r-.;O, OHIO 44111-1688

11 March 1999



### RE: Amana Appliances Petition for Exception Reliefto the 7/1/01 

### Refrigerator/Freezer Energy Standards Due to the Potential Unavailability of HFC-245fa

Dear Sir or Madam: This is the preliminary response of White Consolidated Industries, Inc. 1 

### ("WC!"),to the Amana Appliances ("Amana") petition submitted to the Office of Hearings and Appeals ("aHA") for exception" relief to the 7/1/01 

### refrigerator/freezer energy standards promulgated by the Department of Energy under the National Appliance Energy Conservation Act. Specifically, Amana has petitioned for relief in the form of a 10% increase in allowable energy consumption for all classes of refrigerator/freezers under the pending energy standards, found at 10 CFR Part 430. Amana seeks this relieffrom the effective date ofthose standards, 1 July 2001, until 1January 2010. WCI, through its Frigidaire Home Products division, manufactures and sells refrigerators and freezers govemed by the aforementioned energy standards and, consequently, could be aggrieved by the aHA action sought by Amana. WCI reserves the right to file additional comments at a later date, as explained more fully below. WCI hereby certifies to the aHA our compliance with the notification provisions of paragraph 1003.23(d).2 Amana petitions pursuant to 17 CFR Part 1003, which establishes procedures for authorizing an exception from a Departmental rule or regulation, as provided for in 

### § 504 (42 U.S.C. 7194) of the Department of Energy Organization Act (42 U.S.C. 7101 et seq.), based on a demonstration of serious hardship,gross inequity or unfair distribution of burdens. Amana claims that such aserious hardship will result from having to comply with the aforementioned energy standards, given the unavailability of HFC-245fa. Amana argues • that the energy standard leve1s were justified upon the assumption that HFC-245fa would.be available and that the Department agreed to entertain petitions for relief if the commercial availability of HFC-245fa was delayed beyond 2003:

, White Consolidated Industries, Inc., is awholly owned subsidiary ofAS Electrolux, headquartered in Stockholm, Sweden.
210 CFR Part 1003·Sec. 1003.23 Notice. (a) The applicant shall send by United States mail a copy of the application and any subsequent amendments or other documents relating to the application, or a copy from which confidential information has been deleted in accordance with § 1003.9(f), to each person who is reasonably ascertainable by the applicant as a person who would be aggrieved by the OHA action sought. (d) Any person submitting written comments to the OHA with respect to an application filed under this subpart shall send acopy of the comments, or acopy from which confidential information has been deleted in accordance with § 1003.9(f), to the applicant. The person shall certify to the OHA that he has complied with the requirements of this paragraph. The OHA may notify other persons partiCipating in the proceeding ofsuch comments and provide an opportunity for such persons to respond.

P.O. BOX 110036 • TELEPHONE (216) 252-8376 • FAX (216) 252-815B 

# 3

..**~** <'"**-~**.


### ......WHITE CONSOLIDATED INDUSTRIES, INC.



### DOE recognizes that some uncertainty still exists about the ultimate acceptability of HFC

-245fa or other comparable blowing agents, as well as some uncertainty regarding the timing of commercial production of such a product.... Consequently, it is still possible ... that [HFC

-245fa's] commercial availability will be delayed beyond 2003

. Under such conditions, DOE may grant manufacturers exception relief. Section 504 of the Department of Energy Organization Act authorizes DOE to make adjustment of any rule or order issued under the Energy Policy and Conservation Act, consistent with the other purposes of the Act, if necessary to prevent special hardship, inequity, or unfair distribution of burdens

. 42 U.S.C. Section 7194(a). 62 Fed

. Reg. 23102, 23108 (April 28, 1997).

WCI offers comments to the following statements made by Amana in support of its petition. We reserve the right to offer additional comments as developments in the near future may warrant:

"HFC-245fa availability is at high risk. There is currently no manufacturing facility anywhere in the world that has the capabilities to produce HFC-245fa." We agree with this characterization of the current risk vis-a -vis HFC-245fa availability. "Allied Signal

, working through AHAM (Association of Home Appliance Manufacturers), is working to obtain a commitment by 3/99 from the appliance industry such that Allied Signal can move forward and commercialize HFC-245fa and start building a manufacturing facility to produce the chemical." We agree with this statement. "HFC-245fa would have a sole supplier ( Allied Signal

); and therefore, there would be no competition to further drive the cost of this blowing agent downward as time continues to go along." We agree with this statement. "Allied Signal owns the license from Bayer. The license contract expiration from Bayer is unknown at this time. We agree with this statement. "HFC-245fa would be produced in a single manufacturing facility (Allied Signal), and there is no backup chemical that is easily converted in a refrigerator / freezer factory orfrom a product performance standpoint if a natural disaster occurs such as a flood, tornado, fire, and so forth." We infer that Amana is alluding to a disruption in supply of HFC-245fa resulting from a natural disaster. Given that clarification, we agree with this statement. "It is unlikely that the members of AHAM will sign up and agree to the business commitments or terms and conditions that Allied Signal has presented to the AHAM members

. The proposal is a long-term take or pay contract which minimizes any risk to Allied Signal. We submit that the veracity of this statement will be known within the next 30 days

. However, it is premature to draw such a conclusion as of this date. "HFC-245fa price increases in the future are a possibility

. The cost of HFC-245fa is extremely high now, and price increases in the future would make it even more uneconomical. The increase in the cost of each refrigerator would be approximately $9 to $12 depending upon the size of the refrigerator and the amount

2 WHITE CONSOLIDATED INDUSTRIES, INC.
DOE recognizes that some uncertainty still exists about the ultimate acceptability of HFC-245fa or other comparable blowing agents, as well as some uncertainty regarding the timing of commercial production of such a product.

... Consequently, it is still possible

... that [HFC-245fa's] commercial availability will be delayed beyond 2003. Under such conditions, DOE may grant manufacturers exception relief. Section 504 of the Department of Energy Organization Act authorizes DOE to make adjustment of any rule or order issued under the Energy Policy and Conservation Act, consistent with the other purposes of the Act, if necessary to prevent special hardship, inequity, or unfairdistribution of burdens. 42 U.S.C. Section 7194(a). 62 Fed. Beg. 23102, 23108 (April 28, 1997).

WCI offers comments to the following statements made by Amana in support of its petition. We reserve the right to offer additional comments as developments in the near future may warrant:

"HFC-245fa availability is at high risk. There is currently no manufacturing facility anywhere in the world thathas the capabilities to produce HFC-245fa. If We agree with this characterization ofthe current risk vis-a-vis HFC-245fa availability. "Allied Signal, working through AHAM (Association ofHome Appliance Manufacturers), is working to obtain 

### a commitment by 

### 3/99 from the appliance industry such that Allied Signal can move forward and commercialize HFC-245fa andstartbuilding

### amanufacturing facility

### to produce the chemical. n We agree with this statement. uHFC-245fa would have a sole supplier (Allied Signal); and therefore, there would be no competition to furtherdrive the costofthis blowing agentdownwardas time continues to go along. n We agree with this statement. "Allied Signal owns the license from Bayer. The license contract expiration from Bayeris unknown at this time. n We agree with this statement. "HFC-245fa would be produced in 

### a single manufacturing facility (Allied Signal), and there is no backup chemical that is easilyconvertedin 

### a refrigeratorlfreezerfactoryorfrom 

### a productperformance standpoint ifanaturaldisasteroccurs such as aflood, tomado, fire, andso forth. If We infer that Amana is alluding to a disruption in supply of HFC-245fa resulting from a natural disaster. Given that clarification, we agree with this statement. 

### "Itis unlikely that the members ofAHAM willsign up andagree to the business commitments orterms and conditions thatAlliedSignalhaspresentedto theAHAMmembers. The proposalis 

### a long-term take orpay contract which minimizes anyrisk toAlliedSignal. n We submit that the veracity of this statement will be known within the next 30 days. However, it is premature to draw such aconclusion as of this date. UHFC-245fa price increases in the future are a possibility. The cost ofHFC-245fa is extremely high now, andprice increases in the future wouldmake it even more uneconomical. The increase in the costofeach refrigerator would be approximately

### $9 to 

### $12 depending upon the size of the refrigeratorand the amount

2WHITE CONSOLIDATED INDUSTRIES, INC.



### of foam insulation that is used in each specific refrigerator. This is approximately a 4% increase in the standard manufacturing cost of a refrigerator. Price increases in the marketplace historically cannot be passed on to the consumers, and the manufacturers profit margins have been declining also." We agree with these statements. "HFC-245fa is not commercially available yet in large quantities; and therefore, significant testing with large quantities of product and field testing has not been trialed yet. Only small numbers of units have been tested. " We agree with this statement. "There are some alternatives to HFC-245fa including HFC-134a, and cyclopentane

. Neither of these blowing agents are nearly as energy efficient as HFC-245fa." We agree with this statement insofar as it characterizes the energy efficiency of HFC-134a and cyclopentane

. We note that the energy performance of other chemicals, such as R-22 or HCFC124, could present economically justifiable alternatives to HFC-245fa if long term accessibility to such chemicals was guaranteed

. We note that these chemicals are ozone depleting

-substances, the continued access to which is governed by the Environmental Protection Agency. To date, EPA has declined to ensure long term access to these chemicals for refrigeration foam applications. However, it is our understanding that EPA has grandfathered long term access for manufacturers already using such chemicals (R-22). "Internal volume is a significant market driver. For example , a 23 ft3 refrigerator provides more value to a consumer than a 21 ft3 refrigerator , especially if the price at retail is equivalent." We agree with this statement. "Refrigerator manufacturers do NOT have the luxury of increasing the outside or external cabinet dimensions

. The kitchen cabinet openings in most instances limit the dimensions to 28", 30"Y 33" or 36" wide and 62", 66" or 69"high.„ We agree with this statement. "[A]s we use less efficient blowing agents in foam insulations, the adjusted volume will be significantly reduced ; and therefore, the allowable energy consumption will be reduced." We agree with this statement.

"The lead time to qualify an alternate blowing agent is typically 3-6 years". We agree with this statement as long as Amana's definition of "qualify" includes the identification and development of the blowing agent plus the installation of all necessary plant facilities.. "Other blowing agents such as HFC-236ea, HFC-365mfc, and others have been briefly evaluated but have been unsuccessful due to poor thermal performance, chemical compatibility , cost, availability

, toxicity, etc. r We generally agree with this statement, with the exception of HCFC-124 and R-22. "Other energy reduction opportunities available to the U.S. refrigerator / freezer manufacturers are not cost effective and/or are not sufficiently reliable

. These include, but not limited to, vacuum insulation panels (VIP), ECM (electronically commutated motor ) evaporator motors, ECM condenser motors, and PSC (permanent split capacitor ) condenser motors. . . . Catastrophic failure modes may occur when an evacuated panel fails. Panels are not currently available commercially since Owens Corning ceased manufacturing several months ago. Vacuum insulation panels historically have not been cost effective.

3**.~** 

## .

WHITE CONSOLIDATED INDUSTRIES, INC.

offoam insulation that is used in each specific refrigerator. This is approximately 

### a 4% increase in the standard manufacturing cost of

### a refrigerator. Price increases in the marketplace historically cannot be passed on to the consumers, andthe manufacturersprofitmargins have been declining also. " We agree with these statements. "HFC-245fa is notcommerciallyavailable yet in large quantities; and therefore, significant testing with large quantities ofproduct and field testing has not been trialedyet. Only small numbers ofunits have been tested. "We agree with this statement. "There are some alternatives to HFC-245fa including HFC-134a, and cyclopentane. NeIther 

### of these blowing agents are nearlyas energyefficientas HFC·245fa." We agree with this statement insofar as it characterizes the energy efficiency of HFC-134a and cyclopentane. We note that the energy performance of other chemicals, such as R-22 or HCFC124, could present economically justifiable alternatives to HFC-245fa If long term accessibility to such chemicals was guaranteed. We note that these chemicals are ozone depleting-substances, the continued access to which is governed by the Environmental Protection Agency. To date, EPA has declined to ensure long term access to these chemicals for refrigeration foam applications. However, it is our understanding that EPA has grandfathered long term access for manufacturers already using such chemicals (R-22). "Internal volume is 

### a significantmarket driver. Forexample, 

### a 23 ft3 refrigeratorprovides more value to 

### a consumerthan 

### a21 ft3 refrigerator, especiallyifthe price atretailis equivalent. " We agree with this statement. "Refrigerator manufacturers do NOT have the lUXUry of increasing the outside or external cabinet dimensions. The kitchen cabinet openings in most instances limit the dimensions to 28", 30", 33" or 36" wide and62", 66" or69" high. " We agree with this statement. urAls we use less efficient blowing agents in foam insulations, the adjusted volume will be significantly reduced; andtherefore, the allowable energyconsumption willbe reduced. " We agree with this statement. UThe leadtime 

### to qualifyan altemate blowingagentis typically3-6years". We agree with this statement as long as Amana's definition of "qualify" includes the identification and development ofthe blowing agent plus the installation of all necessary plant facilities

.. "Otherblowing agents such as HFC-236ea, HFC-365mfc, and others have been brieflyevaluatedbuthave been unsuccessfuldue

### to poorthermalperformance, chemicalcompatibility, cost, availability, toxicity, etc. n We generally agree with this statement, with the exception of HCFC-124 and R-22. "Other energy reduction opportunities available to the 

### U.S. refrigeratorlfreezer manufacturers are not cost effective and/or are not sufficiently reliable. These include, but not limited to, vacuum insulation panels (VIP), ECM (electronically commutated motor) evaporator motors, ECM condenser motors, and PSC (permanent split capacitor) condenser motors.

. .. Catastrophic failure modes may occur when an evacuated panel fails. Panels are not currently available commercially since Owens Corning ceased manufacturing severalmonths ago. Vacuum insulation panels historicallyhave notbeen cost effective.

3WHITE CONSOLIDATED INDUSTRIES, INC.



### "PSC evaporator motors are not currently available in the market that can withstand the environmental requirements necessary to meet long-term reliability test standards. "PSC condenser motors are available at a high cost ($5 premium per motor).... However, depending on the allowable energy of the refrigerator and several other factors, the energy savings for a PSC motor is typically only I% to 2%." We agree with these statements. Due to the fact that the EPA regulations only ban the use of HCFC-141b in the U.S.A. after 1/1/03, Amana Appliance's competitors such as General Electric in Mexico, Whirlpool in Mexico, W.C. Wood in Canada, and General Electric in Canada, have a significant competitive advantage since they can produce product outside of the U.S.A. and export product into the U.S.A. until the year 2010 (or later) with a significantly more cost effective and a significantly more energy efficient blowing agent in HCFC-141b. This puts Amana Appliances at a tremendous competitive disadvantage when our competitors can build product across the border and very easily ship product into the U.S.A. One can assume that more and more refrigerators will be produced between now and the year 2010 and beyond in countries such as Mexico and Canada, and significant employment could be lost in the U.S.A. We agree with these statements.
We hope that our comments facilitate the OHA review of the Amana petition.
Very1ruly yours,

Terry V.'Thiele Associate General Counsel
Copy to: Alan F. Kessler, PE Vice President, Engineering & Quality Amana Appliances 2800 220th Trail Amana, Iowa 52204-0001

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WHITE COT\'SOLIDATED INDUSTRIES, INC.
"PSC evaporator motors are not currently available in the market that can withstand the environmental requirements necessaryto meetlong-term reliability teststandards. "PSC condensermotors are available at

### a high cost 

### ($5 premium permotor)

. ... However, depending on the allowable energy ofthe refrigerator and several other factors, the energy savings for 

### a PSC motor is typicallyonly 1 %to 2%." We agree with these statements. Due to the fact that the EPA regulations only ban the use ofHCFC-141b in the US.A. after 111103, Amana Appliance's competitors such as General Electric in Mexico, Whirlpool in Mexico, W.C. Wood in Canada, and General Electric in Canada, have 

### a significant competitive advantage since they can produce product outside ofthe US.A. and export product into the U.S.A. until the year 2010 (or later) with a significantly more cost effective and a significantly more energy efficient .blowing agent in HCFC-141b. This puts Amana Appliances at 

### a tremendous competitive disadvantage when our competitors can build product across the border and very easily ship product into the U. S.A. One can assume that more and more refrigerators willbe producedbetween nowand the year2010 andbeyondin countries such as Mexico and Canada, andsignificant employment couldbe lostin the US.A.**~** We agree with these statements.

We hope that our comments facilitate the OHA review of the Amana petition.

Copy to:
Alan F. Kessler, 

### PE Vice President, Engineering 

### &Quality Amana Appliances 2800 220th Trail Amana, Iowa 52204-0001 Veryjruly yours,

# "1~V~ Terry V. Thiele Associate General Counsel

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