Ron Majette Department of Energy Energy Efficiency and Renewable Energy Email: PTACs@ee.doe.gov 

# Framework Public Meeting for PTACs/PTHPs
March 18, 20132 

# Welcome and Introduction

• Introductions

• Role of the Facilitator

• Ground Rules

– Listen as an ally

– Focus on issues

– Use short, succinct statements/keep to the point

– Hold sidebar conversations outside the room

– One person speaks at a time (raise hand to be recognized; state your name for the record)

– Set cell phones to silent/vibrate



## • Housekeeping Items

• Agenda Review

• Opening Remarks3 

# Agenda

• Welcome; Introductions; Agenda Review; Opening Remarks

• Overview and Scope of Coverage

• Test Procedure Issues

• Market and Technology Assessment and Screening Analysis

• Engineering Analysis

• Energy Use Analysis; Markup Analysis

• BREAK

• Life

- Cycle Cost (LCC) and Payback Period Analysis

• Shipments Analysis; National Impact Analysis,

• NOPR Analyses

• Other issues and comments; Closing remarks4 

# Listening Via the Webcast

• The Department is broadcasting this meeting live over the Internet.

• DOE is providing the webcast to accommodate stakeholders who are unable to attend the public meeting in person.

• The web broadcast allows stakeholders to listen in and view the slides.

• All stakeholders are encouraged to submit written comments after the public meeting.5 

# Purpose of the Public Meeting

• Present the procedural and analytical approaches to evaluate energy conservation standards for PTACs and PTHPs.

• Invite comment on the energy conservation standards framework document.

• Discuss next steps in the rulemaking.

• Encourage participants to submit data, information, summary statements, and written comments, including additional issues for discussion.6 

# Request for Comment

• Issue box numbering corresponds to the list of items published in Appendix A of the framework document, available at:

• http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/45



## • The deadline for submitting comments is March 25, 2013

. Issue Box: Although DOE invites comment on all aspects of the material presented here, several specific issues on which DOE seeks comment are set out in comment boxes like this one. DOE uses these comment boxes to highlight issues and ask specific questions regarding the approaches DOE plans to follow to conduct the analyses required for the energy conservation standards rulemaking.7 

# Opening Remarks

At this time DOE welcomes opening remarks or statements on the framework document for PTACs and PTHPs.8 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure9 

# Regulatory History

• The Energy Policy Act of 1992 (EPACT 1992) amended the Energy Policy and Conservation Act of 1975 (EPCA) to establish energy conservation standards for PTACs and PTHPs that corresponded to the levels in ASHRAE Standard 90.1

- 1992

. (42 U.S.C. 6313(a)(3))



### • EPCA, as amended, also requires that if ASHRAE modifies the required efficiency levels specified in Standard 90.1, DOE must adopt those levels as the national standard unless it determines that a more

- stringent standard would result in significant energy savings and would be technologically feasible and economically justified. (42 U.S.C. 6313(a )(6)(A))



### • DOE published a final rule on October 7, 2008, adopting more stringent standards for PTACs and PTHPs, in response to the amended ASHRAE Standard 90.1

- 1999 levels. (73 FR 58772)10 

# Regulatory History (cont.)

• DOE sets standards in terms of energy efficiency ratio (EER) for cooling efficiency for PTACs/PTHPs and coefficient of performance (COP) for heating efficiency for PTHPs

.

– EER means the ratio of the produced cooling effect to its net work input [Btu/w

- hr ].

– COP means the ratio of the produced heating effect to its net work input [W/W].

– Both are measured in accordance with the procedures outlined in AHRI 310/380

- 2004.



### • The Energy Independence and Security Act of 2007 (EISA 2007) amended EPCA to mandate that not later than 6 years after the issuance of any final rule establishing or amending an efficiency standard for ASHRAE equipment, DOE must publish a notice of determination that higher standards for such equipment are not needed or a notice of proposed rulemaking (NOPR) proposing amended standards. (42 U.S.C. 6313(a)(6 )(C))



### • Because of this requirement, DOE must publish a determination or a NOPR no later than October 7, 2014 (6 years after the publication of the 2008 final rule).11 

# PTAC and PTHP Rulemaking Schedule

2013 2016 2014 2015 2017 2018 2019

Milestone Date Framework Document February 2013 Availability of the Preliminary Analysis (projected) November 2013 Notice of Proposed Rulemaking (projected) October 2014 Final Rule (projected) October 2015 Compliance Date (projected)* October 2018

• Manufacturers are required to comply with an amended standard after a date that is the later of 3 years after the final rule publication or 6 years after the effective date of the current standard. (42 U.S.C. § 6313(a)(6)(C)( iv ))12 

# EPCA Factors
42 U.S.C. 6295(o)(2)(B)(i) directs DOE to consider seven factors when setting energy conservation standards.
EPCA Factors DOE Analysis
1. Economic impact on consumers and manufacturers Life

- Cycle Cost Analysis Manufacturer Impact Analysis 2. Lifetime operating cost savings compared to increased cost for the product Life

- Cycle Cost Analysis
3. Total projected energy savings National Impact Analysis
4. Impact on utility or performance Engineering Analysis Screening Analysis 5. Impact of any lessening of competition Manufacturer Impact Analysis
6. Need for national energy conservation National Impact Analysis

7. Other factors the Secretary considers relevant Emissions Analysis Utility Impact Analysis Employment Impact Analysis13 

# Scope of Coverage: Definitions

• Packaged Terminal Air Conditioner is a “wall sleeve and a separate unencased combination of heating and cooling assemblies specified by the builder and intended for mounting through the wall. It includes a prime source of refrigeration, separable outdoor louvers, forced ventilation, and heating availability by builder’s choice of hot water, steam, or electricity.” (42 U.S.C. 6311(10 )(A))



### • Package Terminal Heat Pump is a “a packaged terminal air conditioner that utilizes reverse cycle refrigeration as its prime heat source and should have supplementary heat source available to builders with the choice of hot water, steam, or electric resistant heat.” (42 U.S.C. 6311(10 )(B))



### • Standard size vs. non

- standard size

— standard

- size units have:

– External Wall Opening ≥16 inches in height or ≥42 inches in width, and

– Cross sectional area ≥670 square inches



### • Non

- standard size units have smaller dimensions. Launch Internet Explorer Browser.lnk14 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure15 

# Test Procedure

• The current DOE test procedure for PTACs and PTHPs incorporates by reference AHRI 310/380

- 2004 (omitting section 5.6).

• Cooling mode ratings are determined in accordance with ASHRAE 16

– 1999 or ASHRAE 37

– 1988.

• Heating mode ratings are determined in accordance with ASHRAE Standard 58

– 1999.16 

# Test Procedure

• EPCA requires DOE to conduct an evaluation of test procedures every 7 years, and to either prescribe amended test procedures or publish a notice in the Federal Register of its determination to not amend the test procedure. (42 U.S.C.

6314(a)( 1))



## • DOE last evaluated its test procedures in accordance with this requirement in 2006, so will do so in parallel with the energy conservation standards rulemaking.

• DOE identified 5 potential issues regarding the PTAC/PTHP test procedure. 1) Break

- in time 2) Sealing between wall sleeve and dividing wall 3) Water in condensate pan 4) Barometric pressure adjustment 5) ASHRAE Standard 16 vs. ASHRAE Standard 3717 

# Test Procedure Issues: Break
- In Time

• Break

- in refers to the operation of equipment prior to testing to cause preliminary compressor wear that may improve measured performance.

• DOE does not have a specified break

- in time for PTACs and PTHPs in its test procedure

.

• Adequate break

- in may depend on time and ambient temperature.18 

# Test Procedure Issues: Break
- In Time

Item 1
- 2: DOE requests detailed test data supporting: (a) selection of a specific break

- in time necessary for PTACs and PTHPs to achieve their steady

- state performance level; (b) how much improvement in efficiency typically can be achieved using a full break

- in period as compared with no break

- in period; (c) how the break

- in period varies with break

- in conditions such as temperature. DOE also requests information regarding the test burden per unit associated with a given break

- in period and with approaches that might accelerate break

- in using elevated ambient temperature. DOE requests comment on whether a break

- in period should be optional or required, and whether break

- in parameters such as minimum and/or maximum break

- in times and/or temperatures should be specified.19 

# Test Procedure Issues

• Sealing between w all s leeve and test f acility d ividing w all

– Prevents air/heat leakage from outdoor to indoor chambers external to the PTAC/PTHP wall sleeve.

– Test labs do not typically build PTAC/PTHP wall sleeves into the dividing walls.

– PTACs/PTHPs are installed in the field with a sealant between the wall sleeve and wall.



### • Adding water to the condensate drain pan

– PTACs/PTHPs transfer condensate from the evaporator to the condenser side to help cool the condenser.

– Adding water before testing may reduce the stabilization time before testing.

– The type of water added could have an effect on the test results.20 

# Test Procedure Issues

Item 1
- 3: DOE requests comment regarding the potential requirement for sealing potential leakage gaps between the PTAC or PTHP wall sleeve and the test facility partition during testing. DOE also requests comment regarding whether any additional set

- up requirements should be included in the test procedure to assure accurate and repeatable testing.

Item 1
- 4: DOE requests any available test data which would indicate whether use of city water to prefill condensate pans would affect capacity or efficiency measurements as compared with no prefilling or with the use of distilled water. DOE requests comment regarding the amount of time and labor hours saved during testing by prefilling the condensate pan. Finally, DOE requests comment on whether prefilling of the condensate pan should be allowed and/or required, and whether there is any need to require certification reports to indicate whether this step was taken.21 

# Test Procedure Issues

• Barometric pressure correction

– Section 6.1.3 of ASHRAE 16

- 1999 states, “[T]he capacity may be increased 0.8% for each in. Hg. Below 29.92 in. Hg.”

– DOE has no test data to verify that barometric pressure has a significant impact on the measured efficiency of PTACs/PTHPs.



### • ASHRAE Standard 16 vs. ASHRAE Standard 37

– Both test procedures are allowed for measuring performance, according to AHRI 310/380

- 2004. Topic ASHRAE Standard 16 ASHRAE Standard 37 Barometric Pressure Adjustment Yes No Capacity Measurement Method Heat input to balance cooling capacity Indoor

- side air flow and air enthalpy reduction Eliminates Air Recirculation No Yes (through ducted setup for indoor side air flow) Electric Power Measurement Accuracy 2.0% of measurement 0.5% of measurement22 

# Test Procedure Issues

Item 1
- 5: DOE requests detailed test data that would show the relationship between barometric pressure and cooling capacity or efficiency measurements for PTACs and PTHPs tested using ASHRAE Standard 16

- 1999 or ASHRAE Standard 37

- 1988.

Item 1
- 6: DOE requests any available data that would show whether testing using ASHRAE Standard 16

- 1999, as compared with ASHRAE Standard 37

- 1988, results in any significant differences in measured cooling capacity or efficiency. DOE requests information regarding the test burden associated with each of these test methods, including labor hours, total test time, and the cost of the required test facilities. DOE also requests information on whether manufacturers generally rate their equipment using ASHRAE Standard 16

- 1999 or 37

- 1988. Finally, DOE requests comment on whether one of these test procedures should be selected as the test procedure applicable to this equipment.23 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure24 Framework Document Preliminary Analysis NOPR Final Rule

Screening Analysis Engineering Analysis

Energy Use Characterization Shipments Analysis National Impact Analysis Life

- Cycle Cost and Payback Period Analysis Market & Technology Assessment

Markup Analysis 

# Steps in the Preliminary Analysis25 

## Purpose of the Market and Technology Assessment; Screening Analysis

• Market and Technology Assessment

– Characterize the structure of the PTAC/PTHP industry

– Determine equipment classes, efficiencies, manufacturers, and shipments

– Identify technology options to improve efficiency



## • Screening Analysis

– Screen out technology options that DOE will not consider in the engineering analysis based on: 1) technological feasibility; 2) practicability to manufacture, install, and service; 3) adverse impacts on utility to consumers or availability; and 4) adverse impacts on health or safety26 

# List of Stakeholders

Manufacturers

• Air

- Con Internationale

• Cold Point Corporation

• Comitale National, Inc.

• Eair, LLC

• ECR International

• Electrolux Home Products, Inc.

• Evergreen Products, LLC

• Friedrich Air Conditioning, Co.

• General Electrical Company

• Goodman Manufacturing Company

• Gree Electric Appliances of Zhuhai

• Haier America

• Heat Controller, Inc.

• Ice Air, LLC

• Islandaire, Inc.

• LG Electronics

• McQuay International

• Simon

- Aire, Inc.

• YMGI Group, LLC 

### Item 1
- 7: DOE seeks information concerning any entities that should be added to the interested parties list, in particular additional manufacturers, small business manufacturers, purchasers, and energy conservation and environmental advocates. Other Stakeholders

• Air

- Conditioning , Heating and Refrigeration Institute (A HRI)

• Alliance to Save Energy

• American Council for an Energy

- Efficient Economy (A CEEE)

• American Society of Heating, Refrigeration and Air

Conditioning Engineering (A SHRAE)

• Appliance Standards Awareness Project (ASAP)

• Association of Home Appliance Manufacturers (AHAM)

• Consortium for Energy Efficiency (CEE)

• Earthjustice

• Edison Electric Institute (EEI)

• National Resources Defense Council (NRDC)

• Northwest Energy Efficiency Alliances (NEEA)27 

# Equipment Classes

• DOE typically divides covered equipment into classes by:

– the type of energy used;

– capacity of the product; or

– other performance

- related features that justify different standard levels, such as features affecting consumer utility



## • DOE establishes separate energy conservation standards for each equipment class.

• In the 2008 PTAC/PTHP final rule, DOE established 12 equipment classes for PTACs and PTHPs . DOE tentatively expects to maintain the same equipment classes during this rulemaking.28 

# Equipment Classes (Current)

Equipment Type Standard or Non
- standard Size Cooling Capacity

PTAC Standard <7,000 Btu/h ≥7,000 Btu/h and ≤15,000 Btu/h >15,000 Btu/h Non

- standard <7,000 Btu/h ≥7,000 Btu/h and ≤15,000 Btu/h >15,000 Btu/h PTHP Standard <7,000 Btu/h ≥7,000 Btu/h and ≤15,000 Btu/h >15,000 Btu/h Non

- standard <7,000 Btu/h ≥7,000 Btu/h and ≤15,000 Btu/h >15,000 Btu/h



### Item 3
- 3: DOE requests feedback on the equipment classes for PTACs and PTHPs covered under this rulemaking.29 

# Technology Assessment

• Centers on understanding how equipment uses energy and what measures can reduce energy consumption of PTACs/PTHPs.

• Measures that could improve the energy efficiency of PTACs/PTHPs are called technology options, which are based on technologies used in existing products and/or working prototypes.

• DOE studies these technology options by reviewing manufacturer catalogs, trade publications, technical journals, and patent filings.30 

# Technology Options

• DOE identified 14 technology options for improving the efficiency of PTACs and PTHPs.

Item 3
- 4: What technologies or designs, if any, should be added to the above list? If certain changes to the list are not applicable to all equipment classes, what equipment classes are affected? • Scroll Compressors

• Variable

- speed Compressors

• Higher Efficiency Compressors

• Complex Control Boards

• Higher Efficiency Fan Motors

• Microchannel Heat Exchangers

• Increased Heat Exchanger Area • Hydroscopic Material Treatment of Heat Exchangers

• Re

- circuiting Heat Exchanger Coils

• Improved Air Flow and Fan Design

• Heat Pipes

• Corrosion Protection

• Clutched Motor Fans

• TXVs31 

# Screening Analysis

• DOE will consider each technology option in light of four screening criteria:

1) technological feasibility; 2) practicability to manufacture, install, and service; 3) adverse effects on product utility or availability; and 4) adverse effects on health or safety.



## • Those technology options that pass the four screening criteria are called design options; these options will be considered in the engineering analysis as ways to improve energy efficiency.
Item 4
- 1: DOE welcomes comments on the above four criteria. In addition, DOE requests comment on which technology options should be screened out, and which screening criteria would be the basis of the screening.32 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure33 Framework Document Preliminary Analysis NOPR Final Rule

Screening Analysis Engineering Analysis

Energy Use Characterization Shipments Analysis National Impact Analysis Life

- Cycle Cost and Payback Period Analysis Market & Technology Assessment

Markup Analysis 

# Steps in the Preliminary Analysis34 

# Engineering Analysis Methodology

 Choose equipment classes to be analyzed and their representative capacity

.  Identify baseline efficiency levels for each representative equipment class that will serve as reference points to assess changes due to more - stringent standard levels.  Select more efficient replacements for each baseline model based on design options.

 Develop candidate standard levels (CSLs) that range from the baseline to the maximum technologically feasible.
 Results of the engineering analysis. Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements

Develop Efficiency Levels for Analysis

Determine Costs35 

# Representative Equipment Size and Baseline Models

• DOE chooses representative equipment size to concentrate its analytical effort.

– DOE selects representative equipment size based on high market volumes or unique performance characteristics.

– DOE tentatively selected 4 equipment sizes as representative (on the next slide).



## • DOE identifies a baseline efficiency level for each representative equipment size.

– For PTACs and PTHPs, DOE chose the current energy standard as the baseline efficiency level. Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements36 

# Representative Equipment Classes and Baseline Models

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels Equipment Class Representative Cooling Capacity (Btu/h) Baseline Efficiency PTACs Standard Size, ≥7,000 Btu/h and ≤15,000 Btu/h 9,000 1 11.1 EER Non

- standard Size, ≥7,000 Btu/h and ≤15,000 Btu/h 11,000 2 8.6 EER PTHPs Standard Size, ≥7,000 Btu/h and ≤15,000 Btu/h 9,000 1 11.3 EER 3.2 COP Non

- standard Size, ≥7,000 Btu/h and ≤15,000 Btu/h 11,000 2 8.5 EER 2.6 COP

1 DOE chose 9,000 Btu/h since this capacity has the highest sales for this equipment class.
2 DOE chose 11,000 Btu/h because it’s in the middle of the range for this equipment class. Identify Higher Efficiency Replacements



### Item 5
- 8: DOE requests feedback on the suggested representative cooling capacities for PTACs and PTHPs for direct analysis.37 

# Identify Higher Efficiency Replacements

• DOE plans to use the efficiency

- level approach in combination with a cost

- assessment approach.

– Efficiency

- level approach establishes the relationship between manufacturer cost and increased efficiency at predetermined efficiency levels above the baseline.

– Cost

- assessment approach involves disassembling physical units and reverse

- engineering to develop a “bottoms

- up” cost estimate.



## • In identifying more efficient PTACs and PTHPs for analysis, DOE will use the AHRI Database of Certified Product Performance and manufacturers’ websites. The max

- tech efficiency level will be that of the most efficient available model from these sources. Identify Higher Efficiency Replacements

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels38 

# Identify Higher Efficiency Replacements

Identify Higher Efficiency Replacements

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels 

### Item 5
- 5: DOE requests feedback on the use of a combined analysis approach that uses multiple information sources to determine the relationship between manufacturer selling price and energy consumption for PTACs and PTHPs.39 

# Develop Efficiency Levels

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements 

### • The current Federal energy conservation standard for PTACs and PTHPs are a set of equations that define the EER or COP as a function of cooling capacity.

* Cap means cooling capacity in kBtu/h Equipment Type Size (Btu/h) Minimum Efficiency Standard Size PTAC <7,000 EER = 11.7 ≥7,000 and ≤15,000 EER = 13.8

– 0.3 x Cap* >15,000 EER = 9.3 Non

- standard Size PTAC <7,000 EER = 9.4 ≥7,000 and ≤15,000 EER = 10.9

– 0.213 x Cap* >15,000 EER = 7.740 

# Develop Efficiency Levels

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements

* Cap means cooling capacity in kBtu/h Equipment Type Size (Btu/h) Minimum Efficiency

Standard Size PTHP <7,000 EER = 11.9 COP = 3.3 ≥7,000 and ≤15,000 EER = 14.0

– 0.3 x Cap* COP = 3.7

– 0.052 x Cap* >15,000 EER = 9.5 COP = 2.9

Non

- standard Size PTHP <7,000 EER = 9.4 COP = 2.7 ≥7,000 and ≤15,000 EER = 10.8

– 0.213 x Cap* COP = 2.9

– 0.026 x Cap* >15,000 EER = 7.6 COP = 2.541 

# Develop Efficiency Levels

• DOE is planning to evaluate the same efficiency levels for PTHPs as for PTACs.

• For standard size PTACs and PTHPs, DOE is planning to set efficiency levels at 4% EER increases to the existing standard size PTAC energy efficiency equations.

• For PTHPs, DOE is planning to select COP levels corresponding to each EER level by calculating the median COP level that correlates with each EER level analyzed.

• For non

- standard size PTACs and PTHPs, DOE used the same method above (but using 8% EER increments). DOE gathered efficiency information from the websites of manufacturers

. Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements42 

# Develop Efficiency Levels
Standard Size PTACs and PTHPs Efficiency Levels for Analysis

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements43 

# Develop Efficiency Levels

Non
- standard Size PTACs and PTHPs Efficiency Levels for Analysis

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements44 

# Develop Efficiency Levels

Develop Efficiency Levels for Analysis

Determine Costs Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements 

### Item 5
- 10 and 5
- 11: DOE requests feedback on DOE’s method of selecting EER efficiency levels for analysis of PTACs and PTHPs. Specifically, DOE requests feedback on use of the AHRI database rating information and manufacturers’ websites as the source for this analysis. If this is not an appropriate source, DOE requests suggestions of alternative sources of efficiency information. Also, DOE requests comment on the use of the same efficiency levels for both PTACs and PTHPs. Item 5
- 9: DOE requests feedback on DOE’s method of correlating COP with EER for PTHPs. Specifically, DOE requests data on possible correlations between COP and EER for PTHPs.45 

# Results

• Equipment at each efficiency level for analysis will be either physically or virtually torn down to derive the manufacturing production costs (MPC) for each equipment class.

• Using these MPCs, DOE will calculate the manufacturer selling price (MSP) by multiplying the MPC by a manufacturer markup and adding a shipping cost.

• The result of the engineering analysis will be a set of price

efficiency curves (MSP vs. EER) for each of the representative equipment classes analyzed. Choose Representative Equipment Size

Select Baseline Efficiency Levels

Identify Higher Efficiency Replacements

Develop Efficiency Levels for Analysis

Determine Costs46 

# Issues for Discussion

Item 5
- 1: DOE seeks comment on the best ways to collect information for the engineering analysis (costs to achieve energy use reductions, shipments disaggregated by equipment class and efficiency level, etc.).

Item 5
- 2: DOE requests input on appropriate categories and questions to be included on such requests for data.

Item 5
- 3: DOE seeks recommendations regarding the potential data collection efforts made by industry participants to support this rulemaking.

Item 5
- 4: DOE is also interested in receiving equipment test data (test procedure used, rating conditions, voltage, integrated average product temperature, daily energy consumption, etc.). Test data representative of the baseline model in each equipment class is particularly important.47 

# Issues for Discussion

Item 5
- 6: DOE seeks comment on which information sources may be the best for developing estimates of manufacturer selling prices.

Item 5
- 6: Are there proprietary designs that DOE should consider in the analyses for any of the equipment under consideration by this rulemaking? If so, how should DOE acquire the cost data necessary for evaluating these designs? Conversely, are there proprietary designs that should not be considered? Which equipment uses these designs?

Item 5
- 12: Are there outside regulatory issues that DOE should consider in its engineering analysis for PTACs and PTHPs?48 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure49 Framework Document Preliminary Analysis NOPR Final Rule

Screening Analysis Engineering Analysis

Energy Use Characterization Shipments Analysis National Impact Analysis Life

- Cycle Cost and Payback Period Analysis Market & Technology Assessment

Markup Analysis 

# Steps in the Preliminary Analysis50 

### Purpose

• Calculate annual energy use of PTACs and PTHPs at considered efficiency levels for the determination of annual energy costs. Issues

• 2008 rulemaking’s whole

- building PTAC and PTHP energy use simulations utilizes an old version of CBECS.

• Cannot update the simulations because CBECS 2008 was not released.

• Require adjustments for weather, equipment efficiency, and population:

– Unit

- average energy use: Typical Meteorological Year 3 (TMY3) data vs TMY2 data.

– Efficiency levels: This rulemaking vs prior rulemaking.

– National energy use: 2010 Census population data vs 2000 Census population data. 

### Method

• Leverage outputs from prior simulations : unit

- average energy use for each efficiency level based on 239 U.S. weather stations, scaled to national energy use with 2010 Census population data. 

# Energy Use Analysis51 

## • Determine unit

- average energy use.

– Investigate existence and extent of change in monthly maximum temperatures ( T_max ) and/or monthly cooling degree days (CDD).

• Compare weather data from the newer TMY3 database with the TMY2 database.

• Regress T_max and CDD to energy use. Generate correlation. Utilize correlation to adjust energy use based on the TMY3 T_max and CDD.

• Calculate unit

- average energy use over the 239 U.S. weather stations weighted by Census 2010 population data. 

# Energy Use Analysis
- Approach52 

## • Determine energy use for the current rulemaking’s efficiency levels.

– Linearly trend energy use with efficiency level (figure).

– Extrapolate to find energy use of new efficiency levels.



## • Determine national energy use.

– Multiply unit

- average energy use for baseline and higher efficiency levels with 2010 Census population data to scale energy use to national levels. 

# Energy Use Analysis
- Approach53 

# Issues for Discussion

Item 6
- 1 : DOE seeks comment on whether the existing inputs, software, methodology, and outputs to estimate unit

- average and national energy for PTAC and PTHP equipment are adequate and appropriate for the current rulemaking.54 Framework Document Preliminary Analysis NOPR Final Rule

Screening Analysis Engineering Analysis

Energy Use Characterization Shipments Analysis National Impact Analysis Life

- Cycle Cost and Payback Period Analysis Market & Technology Assessment

Markup Analysis 

# Steps in the Preliminary Analysis55 

### Purpose

• Characterize distribution channels for PTACs and PTHPs.

• Determine markups for each of the distribution channels.

Method

• Utilize distribution channels from prior rulemaking.

• Estimate the markups for each step from manufacturer to purchaser.

• Estimate markups for baseline and higher efficiency equipment based on fixed and variable costs. 

# Markups Analysis56 

# Markups Analysis
– Distribution Channels57 

### Baseline Markups

• Baseline markups are multipliers that convert MSP of baseline units to purchaser price.

• Obtain markups for intermediary distributors and contractors from industry and trade association data and literature, such as:

– Heating, Air

- conditioning & Refrigeration Distributors International Profit Planning Report;

– Air Conditioning Contractors of America literature; and

– U.S. Census Bureau.

• Apply sales tax data obtained from the Sales Tax Clearinghouse.
Incremental Markups

• Incremental markups are multipliers for the incremental cost change in the MSP of higher

- efficiency equipment.

• Obtain data from industry and trade association data and literature for itemized fixed and variable costs. 

# Markups Analysis
– Baseline and Incremental58 

# Issues for Discussion

Item 7
- 1: DOE seeks input on whether the methodology to calculate markups for PTAC and PTHP equipment is adequate and appropriate for the current rulemaking.59 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure60 Framework Document Preliminary Analysis NOPR Final Rule

Screening Analysis Engineering Analysis

Energy Use Characterization Shipments Analysis National Impact Analysis Life

- Cycle Cost and Payback Period Analysis Market & Technology Assessment

Markup Analysis 

# Steps in the Preliminary Analysis61 

### Purpose

• Assess the life

- cycle cost (LCC) and payback period ( PBP) for purchasers of PTACs and PTHPs at the considered efficiency levels.

Method

• LCC is the installed cost plus the discounted operating cost over the equipment lifetime.

• PBP is based on first

- year operating cost savings.

• Model the uncertainty and variability of inputs using a Monte Carlo approach and with probability distributions for selected inputs.

• Perform analyses via a Crystal Ball®

- enabled MS Excel® spreadsheet. 

# Life
- Cycle Cost and Payback Period Analysis62 

### • Purchase price

– Derive purchase price for baseline and higher efficiency equipment from MSPs, markups, and sales tax.

• Installation cost

– Gather data on non

- equipment material costs, such as labor time and rates, from RS Means: Cost Works. 

# Life
- Cycle Cost and Payback Period Analysis
– Installed Cost63 

### • Energy cost

– Will develop marginal electricity prices based on utility tariffs.

– Project national electricity prices from the most recent EIA Annual Energy Outlook (AEO).

• Repair and maintenance

– DOE plans to use the same costs for all considered efficiency levels. 

# Life
- Cycle Cost and Payback Period Analysis
– Operating Cost64 

# Life
- Cycle Cost and Payback Period Analysis
– Equipment Lifetime

• DOE will use information from:

– Manufacturer literature;

– Various other literature sources such as technical reports and conference proceedings; and

– Inputs from manufacturers and other interested parties.

• Based on the prior rulemaking, DOE expects lifetime to be represented by a Weibull distribution with an average of 10 years and a maximum of 20 years.65 

# Life
- Cycle Cost and Payback Period Analysis
– Discount Rates

• The discount rate determines the present value of lifetime operating expenses
.

• DOE will derive a distribution of discount rates for businesses that frequently employ PTACs and PTHPs (primarily lodging).

– Rates are based on weighted

- average cost of equity financing and cost of debt financing.

– Equity financing rates is from financial data on companies in the Damodaran Online database.

– Debt financing rate is found from the yield on long term corporate bonds.

– The average is weighted by each company’s value and its share of equity and debt financing (from Damodaran Online).66 

# Issues for Discussion

Item 8
- 1 : DOE seeks comment on whether the methodology to calculate life

cycle costs and payback periods for PTAC and PTHP equipment is adequate and appropriate for the current rulemaking.67 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure68 Framework Document Preliminary Analysis NOPR Final Rule

Screening Analysis Engineering Analysis

Energy Use Characterization Shipments Analysis National Impact Analysis Life

- Cycle Cost and Payback Period Analysis Market & Technology Assessment

Markup Analysis 

# Steps in the Preliminary Analysis69 

### Purpose

• To project shipments of new and replacement PTACs and PTHPs.

Method

• New equipment: Project annual shipments of new equipment based on projected increases of new commercial floor space. Multiply:

– Saturation (equipment per square foot of floor space) to remain constant from prior rulemaking and in the projection years.

– Projected increases in hotel/motel, health care, and small office floor space, gathered from the most recent AEO.

• Replacement equipment: Project annual shipments of replacement equipment based on rate of failure of existing stock.

• DOE is not aware of evidence indicating that shipments would be affected by increased price of higher efficiency equipment. 

# Shipments Analysis70 

# Issues for Discussion

Item 9
- 1: DOE requests historical shipments data for each of the considered equipment classes. Item 9
- 2 : DOE seeks information on the proportions of PTAC and PTHP equipment shipped annually that replaces existing equipment. Item 9
- 3: DOE welcomes comment on the proposed shipments forecast methodology and input regarding market forces that impact shipments. Item 9
- 4: DOE welcomes comment on how amended standards for PTAC and PTHP equipment might impact shipments of the equipment.71 Framework Document Preliminary Analysis NOPR Final Rule

Screening Analysis Engineering Analysis

Energy Use Characterization Shipments Analysis National Impact Analysis Life

- Cycle Cost and Payback Period Analysis Market & Technology Assessment

Markup Analysis 

# Steps in the Preliminary Analysis72 

### Purpose

• Determine the projected national energy savings (NES) and net present value (NPV) of total purchaser benefits for each considered standard level.

Method

• NES

– Develop annual series of national energy and economic impacts over lifetime of products shipped in forecast period.

– Utilize the shipments model to estimate equipment stock each year.

– Use the LCC analysis outputs for energy savings and incremental costs.

– Project a trend in average efficiency in base case and standards case
.

– Report in primary and full

- fuel

- cycle (FFC) savings.

• FFC includes energy used in production and transport of primary fuels.



### • NPV

– Estimate present value of costs and savings using 3% and 7% discount rates. 

# National Impact Analysis73 

# Issues for Discussion

Item 10
- 1 : DOE seeks comment on whether the existing methodology to estimate national impact of amended energy efficiency standards is adequate and appropriate to evaluate for the current analysis. Item 10
- 2 : DOE seeks comment on the likely long

- term trend in average efficiency of PTAC and PTHP equipment in the absence of amended standards.74 

# Public Meeting Topics

Energy Use; Markup Analysis
LCC and Payback Period Analyses
Shipments Analysis; NIA Analysis
NOPR Analyses 5

6

7

8 Market and Technology; Screening 3
Engineering Analysis 4 1 Overview; Scope of Coverage

2 Test Procedure75 

# Steps in the NOPR

NOPR

Manufacturer

Impact Analysis Emissions Analysis and Monetization Utility Impact Analysis Purchaser Subgroup Analysis Revise Preliminary Analysis Employment Impact Analysis Regulatory Impact Analysis

Engineering Analysis Life
- Cycle Cost & Payback Period Analyses National Impact Analysis Preliminary Analysis Framework Document Final Rule76 

### Purpose

• Analyze the economic impacts of amended standards on subgroups who may be disproportionately impacted compared with the general user population.

Method

• Extend the LCC analysis to examine the impacts for defined subgroups. 

# Purchaser Subgroup Analysis

Item 11
- 1 : DOE welcomes comment on what, if any, user subgroups are appropriate in considering amended standards for PTACs and PTHPs

.77 

# Steps in the NOPR

NOPR

Manufacturer Impact Analysis Emissions Analysis and Monetization Utility Impact Analysis Purchaser Subgroup Analysis Revise Preliminary Analysis Employment Impact Analysis Regulatory Impact Analysis

Engineering Analysis Life
- Cycle Cost & Payback Period Analyses National Impact Analysis Preliminary Analysis Framework Document Final Rule78 

# Manufacturer Impact Analysis

Purpose

• Assess the impacts of amended standards on manufacturers.

• Identify and estimate impacts on manufacturer subgroups that may be more severely impacted than the industry as a whole.

• Examine the impact of cumulative regulatory burden on the industry.

Method

• Analyze industry cash flow and NPV through use of the Government Regulatory Impact Model (GRIM).

• Interview manufacturers to refine inputs to the GRIM, develop subgroup analyses, and address qualitative issues.79 

# Manufacturer Impact Analysis Method

Item 12
- 1: DOE seeks comment on appropriate subgroups for PTACs and PTHPs, if any, that DOE should consider in a manufacturer subgroup analysis. Item 12
- 2 : DOE welcomes comment on regulations or pending regulations should DOE consider in its analysis of cumulative regulatory burden ? Item 12
- 3 : DOE welcomes industry feedback on the number and names of small businesses that manufacture PTACs and PTHPs.80 

# Steps in the NOPR

NOPR

Manufacturer Impact Analysis Emissions Analysis and Monetization Utility Impact Analysis Purchaser Subgroup Analysis Revise Preliminary Analysis Employment Impact Analysis Regulatory Impact Analysis

Engineering Analysis Life
- Cycle Cost & Payback Period Analyses National Impact Analysis Preliminary Analysis Framework Document Final Rule81 

# Emissions Analysis Purpose

• Estimate impacts of potential amended energy conservation standards on FFC emissions of Carbon dioxide (CO 2 

### ), Sulfur dioxide (SO 2 

### ), Nitrogen oxides ( NO x 

### ), Methane (CH 4 

### ), Nitrous Oxide (N 2 

### O), and Mercury (Hg).

Method

• DOE will use marginal emission factors derived from EIA’s Annual Energy Outlook, supplemented by data from other sources.

• Includes emissions from power plants and also from the production and transport of primary fuels.82 

# Monetization of Emissions Reductions

• DOE uses the most current Social Cost of Carbon (SCC) values developed by US gov’t. interagency working group.

– SCC is intended to be a monetary measure of the incremental damage resulting from greenhouse gas (GHG) emissions, including but not limited to agricultural productivity loss, human health effects, property damage from rising sea level, and changes in the ecosystem.



### • The most recent interagency estimates of the potential global benefits resulting from reduced CO 2 

### emissions in 2015, expressed in 2012$, are $6.2, $ 25.9, $ 41.7, and $ 79.1 per metric ton avoided.

– For emission reductions that occur in later years, these values grow in real terms over time.



### • DOE will also estimate the monetary benefit of reduced NO x 

### emissions resulting from the considered standard levels.83 

# Issues for Discussion

Item 13
- 1 : DOE seeks input on its proposed approach to analyze emissions impacts of amended standards on PTACs and PTHPs. Item 14
- 1 : DOE invites comments on its approach to monetization of emissions.84 

# Steps in the NOPR

NOPR

Manufacturer Impact Analysis Emissions Analysis and Monetization Utility Impact Analysis Purchaser Subgroup Analysis Revise Preliminary Analysis Employment Impact Analysis Regulatory Impact Analysis

Engineering Analysis Life
- Cycle Cost & Payback Period Analyses National Impact Analysis Preliminary Analysis Framework Document Final Rule85 

# Utility Impact Analysis

Purpose

• Assess key impacts on the electric utility sector from potential energy conservation standards.

Method

• DOE plans to use factors derived from NEMS

- BT , a variant of the NEMS (National Energy Modeling System) developed and used by DOE/EIA for their Annual Energy Outlook.

• Outputs of the utility impact analysis include projections of electricity generation and capacity in the base and standards cases.86 

# Issues for Discussion

Item 15
- 1 : DOE welcomes input from stakeholders on its proposed approach to conducting the utility impact analysis.87 

# Steps in the NOPR

NOPR

Manufacturer Impact Analysis Emissions Analysis and Monetization Utility Impact Analysis Purchaser Subgroup Analysis Revise Preliminary Analysis Employment Impact Analysis Regulatory Impact Analysis

Engineering Analysis Life
- Cycle Cost & Payback Period Analyses National Impact Analysis Preliminary Analysis Framework Document Final Rule88 

# Employment Impact Analysis

Purpose

• Assess the overall impact on national employment from potential standards.

Method

• Indirect employment impacts result from shifting consumer expenditures among goods and services (“substitution effect”) and changing equipment and energy costs (“income effect”).

• Direct employment impacts are estimated in the manufacturer impact analysis.



### • DOE intends to use the ImSET (Impact of Sector Energy Technologies) model for evaluation of indirect employment impacts.
Item 16
- 1 : DOE welcomes comments on its proposed approach to assessing national employment impacts.89 

# Steps in the NOPR

NOPR

Manufacturer Impact Analysis Emissions Analysis and Monetization Utility Impact Analysis Purchaser Subgroup Analysis Revise Preliminary Analysis Employment Impact Analysis Regulatory Impact Analysis

Engineering Analysis Life
- Cycle Cost & Payback Period Analyses National Impact Analysis Preliminary Analysis Framework Document Final Rule90 

# Regulatory Impact Analysis Purpose

• To investigate the national effects of non

- regulatory alternatives compared with mandatory energy conservation standards.

• The non

- regulatory alternatives that may be considered include:

– Purchaser rebates;

– Purchaser tax credits;

– Manufacturer tax credits ;



### Item 17
- 1 : DOE seeks comment regarding programs that should be examined as non - regulatory approaches. Method

• Modify NES spreadsheet model to consider non

- regulatory scenarios.

• Estimate effects of non

- regulatory scenarios based on experience with the considered policies.

• Output will include NES and NPV of the non

- regulatory alternatives. – Voluntary efficiency targets;

– Early replacement; and

– Bulk government procurement.91 

# How to Submit Written Comments

• In all correspondence, please refer to the PTAC/PTHP rulemaking by:

– PTACs and PTHPs Energy Conservation Standard Rulemaking,

– Docket Number EERE

- 2012

- BT

- STD

- 0029 , and

– Regulatory Identification Number (RIN) 1904

- AC82

• Email : PkgTerminalAC
- HP2012STD0029@ee.doe.gov

• Comment period closes: March 25, 2013, 11:59 PM EDT

Postal : Courier : Ms. Brenda Edwards U.S. Department of Energy Building Technologies Program, Mailstop EE

- 2J 1000 Independence Avenue, SW Washington, DC 20585

- 0121 Ms. Brenda Edwards U.S. Department of Energy Building Technologies Program, Suite 600 950 L’Enfant Plaza, SW Washington, DC 20024 Tel: 202 586

- 294592 

# Relevant URLs

• DOE Appliance Standards

– http://www1.eere.energy.gov/buildings/appliance_standards/



### • PTACs and PTHPs Energy Conservation Standard and Test Procedure

– http:// www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/45

– http:// www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/64