Ron Majette

Department of Energy

Energy Efficiency and Renewable Energy

Email: PTACs@ee.doe.gov

Framework Public Meeting for PTACs/PTHPs

March 18, 2013
2

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 Remarks
3

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 remarks
4

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

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
9

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 Analysis
13

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.lnk
14

Public Meeting Topics

Energy Use; Markup Analysis

LCC and Payback Period Analyses

Shipments Analysis; NIA Analysis

NOPR Analyses

5

6

7

8

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
15

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 37
17

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 wall sleeve and test facility dividing wall

– 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 measurement
22

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

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
24

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 Analysis
25

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 safety
26

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 (AHRI)

• Alliance to Save Energy

• American Council for an Energy-Efficient Economy (ACEEE)

• American Society of Heating, Refrigeration and AirConditioning Engineering (ASHRAE)

• 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

• TXVs
31

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

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
33

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 Analysis
34

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 Costs
35

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

Replacements
36

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 9,0001 11.1 EER

Non-standard Size,

≥7,000 Btu/h and ≤15,000 Btu/h 11,0002 8.6 EER

PTHPs

Standard Size, 

≥7,000 Btu/h and ≤15,000 Btu/h 9,0001 11.3 EER

3.2 COP

Non-standard Size, 

≥7,000 Btu/h and ≤15,000 Btu/h 11,0002 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 Levels
38

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 = 7.7
40

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 = 2.5
41

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

Replacements
42

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

Replacements
43

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

Replacements
44

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 priceefficiency 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 Costs
46

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

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
49

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 Analysis
50

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 Analysis
51

• 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 - Approach
52

• 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 - Approach
53

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 Analysis
55

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 Analysis
56

Markups Analysis – Distribution Channels
57

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 Incremental
58

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

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
60

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 Analysis
61

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 Analysis
62

• 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 Cost
63

• 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 Cost
64

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 lifecycle 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

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
68

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 Analysis
69

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 Analysis
70

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 Analysis
72

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 Analysis
73

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

3 Market and Technology; Screening

4 Engineering Analysis

1 Overview; Scope of Coverage

2 Test Procedure
75

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

Rule
76

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

Rule
78

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

Rule
81

Emissions Analysis

Purpose

• Estimate impacts of potential amended energy conservation standards on 

FFC emissions of Carbon dioxide (CO2), Sulfur dioxide (SO2), Nitrogen 

oxides (NOx), Methane (CH4), Nitrous Oxide (N2O), 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 CO2 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 NOx 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

Rule
85

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

Rule
88

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

Rule
90

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: 202 586-2945
92

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