Energy Conservation Standards for Refrigerate

Energy Conservation Standards for Refrigerate

Bottled or Canned Beverage Vending Machines (B

Notice of Proposed Rulemaking (NOPRNotice of Proposed Rulemaking (NOPR

Public Meeting 

Building Technologies Program

Office of Energy y Efficienc

y and Renewable Energy

U.S. Department of Energy

June 17 2009 June 17, 2009

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/beverage

EERE-2006-STD-0125 COMMENT 55
Purpose of the Public Meeting and 

Comments From Participants

 Purposes

• To invite comment on the proposed energy conservation standard levels an

recommendations for alternatives;

• To present methodologies and characterize results for the rulemaking analy• To discuss specific issues related to each analysis;• To seek input from interested parties on methodologies, assumptions, data 

results from the analyses; and

• To describe the next steps in the rulemaking.

 Comments from Participants Comments from Participants

• Participants are invited to provide summary comments or statements; and• Participants are invited to raise additional issues for discussion today.• NOPR comment period closes July 28 2009

NOPR comment period closes July 28, 2009.

EERE-2006-STD-0125 COMMENT 55
Statutory Authority – Energy Policy and 

Conservation Act as amended

 Addresses requirements of 42 U.S.C. 6295(v)(1), (2), and (3

• (A) Not later than August 8, 2009, the Secretary shall issue, by rule

levels for beverage vending machines, with the standard levels effequipment manufactured on or after August 8, 2012. 

• This rulemaking is one of the scheduled actions described in DOE

Congress, which was prepared in response to section 141(a) of thPolicy Act of 2005 (EPACT 2005).

EERE-2006-STD-0125 COMMENT 55
DOE Actions for Beverage Vending Machine

 Test Procedures

• Final Rule published on December 8, 2006, based on American N

Standards Institute (ANSI)/American Society of Heating, RefrigeraConditioning Engineers (ASHRAE) Standard 32.1-2004, (Methods R ti V di M hi f B ttl d C d Oth S l d B R

ating 

Vending 

Machines 

for 

B

ottle

d, Canne

d or Other 

Seale

d

Be

U.S.C. 6293(b)(15)). 10 CFR 431.294.

 Energy Conservation Standards

• Framework Document published June 28 2006 71 FR 36715 Framework Document published June 28, 2006. 71 FR 36715.• Advance Notice of Public Rulemaking (ANOPR) published June 1

34094.

• Technical Support Document (TSD) posted on DOE website.• Notice of Proposed Rulemaking (NOPR) published in the Federal 

Notice of Proposed Rulemaking (NOPR) published in the Federal 

May 29, 2009. 74 FR 26020.

– Issued by DOE on May 22, 2009.– Available to stakeholders for review more than a couple weeks prior to 

meetin

g.

• Final Rule scheduled for publication by August 8, 2009.

EERE-2006-STD-0125 COMMENT 55
The Energy Policy and Conservation Act (EPCA) 

DOE to consider seven factors when setting en

conservation standards conservation standards

Factor Analysis

1. Economic impact on consumers 

d ft

Life-cycle cost analysis

an

d manu

fac

turers M ft i t li Manu

fac

turer impac

t analysis

2. Lifetime operating cost savings Life-cycle cost analysis3. Total projected energy savings National impact analysis 

4. Impact on utility or performance Screening analysis

Engineering analysis

5. Impact of any lessening of 

competition

Manufacturer impact analysis

6. Need for national energy 

conservation

National impact analysis

7. Other factors the Secretar

y Environmental assessment

considers relevant Utility impact analysis

Employment impact analysis

EERE-2006-STD-0125 COMMENT 55
Prop

Selection of Proposed Standard

 DOE considered seven trial standard levels (TSLs) for Class A eq

DOE considered seven trial standard levels (TSLs) for Class A eq

and six TSLs for Class B equipment, beginning with the most effi(TSL 7 and TSL 6, respectively) and worked down to a level where benefits of potential standards outweighed the burdens.

• DOE tentatively concludes that TSL 7 for Class A and TSLs 6, 5 and 4 for C

economically justified because the known estimated benefits (energy savingcommercial consumer average LCC savings, and emission reductions) wououtweig ( h the costs (national NPV decrease and loss of manufacturer INPV)

• DOE proposes that TSL 6 for Class A equipment and TSL 3 for Class B equ

represent the maximum improvement in energy efficiency that is technologiand economically justified and that the estimated benefits to the Nation outwcosts. Therefore, DOE is proposing TSL 6 for Class A and TSL 3 for Class B as the energy conservation standards for beverage vending machines in thi

EERE-2006-STD-0125 COMMENT 55
Prop

Proposed Amended Energy Conservation Standards fo

and Class B Equipment (TSL 6 and TSL 3, respect

Equipment Class Maximum daily energy 

consumption

kilowatt hours per day

Class A Class A 0 055 x V + 2 56 0.055 x V + 2.56Class B 0.073 x V + 3.16

EERE-2006-STD-0125 COMMENT 55
Opening Remarks 

Opening Remarks and Comments from Interes

Parties on the Proposed Energy Conservation Sta

 Opening Remarks

• At this time, DOE welcomes opening remarks from interested part

NOPR for beverage vending machines.

 In addition, DOE specifically invites comment on the propo

energy conservation standard levels for beverage vending 

EERE-2006-STD-0125 COMMENT 55
Issues for Publ

Summary of Issues on which DOE seeks comment - NO

 Industry NPV: The magnitude of the estimated decline in INPV at TSL 6, and wh

level could have on industry parties, including small businesses. Particularly 1) wmarket has not been able to capture the energy benefits proposed in TSL 6; 2) wh

what extent parties estimate they will be able to transfer costs of implementing TSconsumers; 3) whether and to what extent parties estimate distributional chain int(such as wholesalers or bottlers) will be able to absorb TSL 6 implementation cost f th t t transfer these costs to on-site consumers, wh lti t l b fit f th ho ultimately benefit from the energy 

associated with the proposed standard.

 Standards Equation: Whether the proposed linear equation used to describe the 

energy consumpti d d h ld b b d di d l i 

ion standards should be based on medium and large equipment 

points); small, medium, and large equipment (three points); or some other possiblstrategy.

 Industry Impact: What are the expected industry impacts?

EERE-2006-STD-0125 COMMENT 55
Issues for Publ

Summary of Issues on which DOE seeks comment - NOPR 

 Impact on Small Businesses: How small business manufacturers will be affecte

energy conservation standards.

 Compliance Costs: Costs of comp p liance and other impacts to small manufactur

supply the high-volume customers of beverage vending machines.

 Alternatives: Impacts on small manufacturers for possible alternatives to the pro

namely the following alternatives: 1) establishment of different compliance or reponamely the following alternatives: 1) establishment of different compliance or repo

requirements for small entities or timetables that take into account the resources aentities, 2) clarification, consolidation, or simplification of compliance and reporting for small entities, 3) use of performance rather than design standards, and 4) exe

certain small entities from coverage of the rule, in whole or in part.

 Standard Levels: Whether the energy savings and related benefits of TSL 6 outw

including potential manufacturer impacts.

EERE-2006-STD-0125 COMMENT 55
NOPR Analyses Flow Diagram

Manufacturer

Impact

Utility

Impact

TrialStandard

Revise ANOPR

Environm

Employment

Impact Impact

Analysis

Impact

Analysis

StandardLevels

ANOPR

Analyses Assessme

Impact Analysis

EngineeringAnalysis

Life-CycleCost &Pa

yback 

National

Impact

Analysis

y

PeriodAnalyses

Analysis

EERE-2006-STD-0125 COMMENT 55
Engin

 Purpose

Engineering Analysis

• To characterize manufacturer cost-efficiency relationships for higher efficien• To evaluate design options that improve efficiency relative to the baseline u• Sensitivity analysis to look at current material prices.

 Equipment classes analyzed

• DOE analyzed two equipment classes, A and B

 Design-option approach

• DOE analytically derived six cost-efficiency curves across two equipment cl

three representative sizes (volumes) analyzed in each equipment class

• Using the design-option approach, cost-efficiency relationship estimates are 

manufacturer or component supplier data or derived from engineering compmanufacturer or component supplier data or derived from engineering comp

simulation models.

EERE-2006-STD-0125 COMMENT 55
NOPR Analyses Flow Diagram

Manufacturer

Impact

Utility

Impact

TrialStandard

Revise ANOPR

Environm

Employment

Impact Impact

Analysis

Impact

Analysis

StandardLevels

ANOPR

Analyses Assessme

Impact Analysis

EngineeringAnalysis

Life-CycleCost &Pa

yback 

National

Impact

Analysis

y

PeriodAnalyses

Analysis

EERE-2006-STD-0125 COMMENT 55
 Energy Use Characterization

Purpose

Energy Use Characterization

• To develop electrical energy consumption savings estimates for s

equipment efficiency levels. 

• To validate the energy savings estimates from the engineering an

refrigerant system and whole building modeling for a diverse set orefrigerant system and whole building modeling for a diverse set o

 Markups for Equipment Price Determination

• T h t i th h l f h i t i di t ib t d f 

To characterize the channels for how equipment is distributed from 

manufacturer to the customer.

• To determine prices paid by customers based on manufacturer se

for baseline and higher efficiency equipment.

 Life-Cycle Cost and Payback Period Analyses

• To develop the customer life-cycle cost savings and payback peri

efficiency equipment.

EERE-2006-STD-0125 COMMENT 55
Markups to Determine E

Distribution Channels 

 Estimated Fraction of Equipment Shipments by Distribution Chan

(Modified from ANOPR based on public comment)

Manufacturer

Equipment Wholesaler/Distributor

Bevera

ge Vendin

g Machine Site Owner

BVM Market Shares 85% 10% 5%

g

Bottler/Distributor

g

Operator

Site Owner

EERE-2006-STD-0125 COMMENT 55
Markups to Determine E

 Inputs

Markups to Determine Equipment Price

Inputs and Outputs

• U.S. Census Bureau data (2002) for the Other Commercial Equipme

Wholesalers (North American Industry Classification System [NAICS

– Wholesalers/Distributors: U.S. Census Bureau 2002 Economic C

Sector 42: Wholesale Trade: Industry Series: Product Lines by KBusiness for the United States.

– Manufacturer Direct: No markup before sales tax.

 Outputs

• Overall weighted average baseline markups of 1 144 (1 226 in ANOP

Overall weighted average baseline markups of 1.144 (1.226 in ANOP

BVMs (including sales tax). 

• Overall weighted average incremental markups of 1.102 (1.137 in AN

BVMs (including sales tax).

EERE-2006-STD-0125 COMMENT 55
Life-Cycle Cost and Payback P

 Life-Cycle Cost (LCC) equals customer price plus the sum of ann

Life-Cycle Cost Analysis

operating costs discounted to a particular base year (2012, in this 

 Economic evaluation from the customer perspective. Analysis implemented in an Excel

® spreadsheet with add-on mac

estimate impacts in individual states.

 Results are expressed as LCC savings (baseline minus standard  Payback period (in years) is also calculated and reported in this a

Operating Expenses

Convert to 

Present 

Combine Changes 

in Costs 

Installed Cost

(Customer Price + Installation Cost)

Value

EERE-2006-STD-0125 COMMENT 55
Life-Cycle Cost and Payback P

 For the LCC anal

ysis, DOE used the EIA industrial electricit

y

prices for ave

Electricity Prices y , y p 

State electricity prices for the percentage of machines located in manufactugovernment facilities for the ANOPR and NOPR analyses.

 The prices from EIA were multiplied by a factor that adjusted the price to ac

different types of commercial customers historically having higher or lowedifferent types of commercial customers historically having higher or lowe

average. DOE used the 2003 CBECS data set to identify the average prices 

kinds of commercial businesses in this analysis pay compared with the ave

commercial customers pay. These figures were used to adjust the EIA com

 Th i dj t d b b i t These prices, adjuste

d

by 

business type, were wei ht g -averaged b th ti 

d

by the estim

beverage vending machines in each state to each prototype building type, w

a weighted average national price.

 DOE did not use seasonal variation in commercial electricity rates in its LC

because seasonal variation in electricity rates differs throughout the countutility, significantly complicating the analysis.

 In regard to electricity price trends, DOE applied the AEO 2009 reference ca

scenario and extrapolated the trend in values from 2020-2030 of the forecasscenario and extrapolated the trend in values from 2020 2030 of the forecas

prices for 2030-2042.

EERE-2006-STD-0125 COMMENT 55
Life-Cycle Cost and Payback P

 Installation costs (updated and held constant with higher efficiency lev

industr

y comments). 

Other Inputs

y )

 Discount rates (weighted average cost of capital—data updated from 2

Damodaran Online website).

 Equipment lifetime (average service life of 10 years, with 15 years as a 

 Repair costs (baseline repair cost plus increase due to higher cost com

calculated for higher efficiency level) DOE considered scenarios whecalculated for higher efficiency level). DOE considered scenarios whe

costs that varied in direct proportion with the manufacturer price of the and 2) repair costs that did not increase with efficiency.

 Maintenance costs One industry member estimated that average equ

Maintenance costs. One industry member estimated that average equ

preventative maintenance costs are $90. Industry contacts stated that are fully refurbished every 5 years at an average cost of approximately took the present value of this figure and annualized it. After adding the maintenance cost com

ponents of refurbishment and 

preventative main

p p

DOE got an overall annual maintenance cost of approximately $154 (2

EERE-2006-STD-0125 COMMENT 55
Sample Life-Cycle Cost Analysis R

Manufa

Owner's Installed Cost-LCC Tradeoff

$

8,000 

 Equipment= A-M-Indoor-Only, Fuel Price=AEO 2009 - Reference Case, Start Year= 2

$5,811 $5 707 $5 676 $5 676 $5 646 $5 650 $5 669

$6,000 $7,000 $ ,

$5,707 $5,676 $5,676 $5,646 $5,650 $5,669

$4,000 $5,000 

Cycle Cost

$2,000 $3,000 

Life 

Installed Cost-LCC Trade

$0 

$1,000 

$2,617 $2,669 $2,679 $2,741 $2,790 $2,823 $2,857 

Level 1

(Energy

Star Tier 1)

Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 

(M

Installed Cost and Efficiency Level

EERE-2006-STD-0125 COMMENT 55
Sample Life-cycle Cost A

Owner's Installed Cost-Payback Tradeoff

120.0 

 Equipment= A-M-Indoor-Only, Fuel Price=AEO 2009 - Reference Case, Start Year

100.0 

)

Installed Cost-Payback Period Tradeoff

60.0 80.0 

Period (Years)

40.0 

Payback 

2.5 3.6 3.9 4.3 4.8 0.0 2.4

20.0 

$2 669 $2 679 $2 741 $2 790 $2 823 $2 857 $2,669 $2,679 $2,741 $2,790 $2,823 $2,857 

Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 L

Installed Cost and Efficiency Level

EERE-2006-STD-0125 COMMENT 55
Sample Payback Analysis R

Manufa

Owner's Installed Cost-LCC Tradeoff

$

8,000 

 Equipment= A-M-Indoor-Only, Fuel Price=AEO 2009 - Reference Case, Start Year= 2

$5,811 $5 707 $5 676 $5 676 $5 646 $5 650 $5 669

$6,000 $7,000 $ ,

$5,707 $5,676 $5,676 $5,646 $5,650 $5,669

$4,000 $5,000 

Cycle Cost

$2,000 $3,000 

Life 

Installed Cost-LCC Trade

$0 

$1,000 

$2,617 $2,669 $2,679 $2,741 $2,790 $2,823 $2,857 

Level 1

(Energy

Star Tier 1)

Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 

(M

Installed Cost and Efficiency Level

EERE-2006-STD-0125 COMMENT 55
NOPR Analyses Flow Diagram

Manufacturer

Impact

Utility

Impact

TrialStandard

Revise ANOPR

Environm

Employment

Impact Impact

Analysis

Impact

Analysis

StandardLevels

ANOPR

Analyses Assessme

Impact Analysis

EngineeringAnalysis

Life-CycleCost &Pa

yback 

National

Impact

Analysis

y

PeriodAnalyses

Analysis

EERE-2006-STD-0125 COMMENT 55
Ship

Purpose

 Shipments Analysis Shipments Analysis

• To estimate BVM shipments over time.

 National Impact Analysis

• To estimate the National Energy Savings (NES) from BVMs at diff

standard levels, and

• T ti t th ti l i i t th ti ( th N 

To estimate the national economic impact on the nation (or the Ne

Value (NPV)) from equipment energy conservation standards at dtrial standard levels.

EERE-2006-STD-0125 COMMENT 55
Ship

Approach

 Shi t f t (2012 Shipment forecasts (2012-2042) d i d f 2042) derived from:

• Historical shipments;• Replacements based on equipment lifetimes; and• Estimates of the equipment mix of baseline and higher-efficiency technologie

and shipments.

 Shipments and stocks of equipment tracked by vintage, market (ne

replacement), equipment class, and capacity.

• In response to comments at the ANOPR stage, all future shipments assumed 

replacement only; constant number of ~90,000 units per year;

• I t t tt In response to comments at th AeNOPRt 5 s age, 55 t dt b C percent assumed to be Cl 

percent Class B equipment; and

• In response to comments at the ANOPR stage, size distribution assumed to b

medium, 25 percent large, 0 percent small for both Class A and Class B equi

EERE-2006-STD-0125 COMMENT 55
Ship

Outcomes of Shipments Forecasts: Ship

Product

Thousands of Units Shipped by Year, Equipment Class, and Unit Siz

(Small, Medium, and Large)

2012 2015 2020 2025 2030 2035 2040 2042 

A-L-Indoor-Only 12.4 12.4 12.4 12.4 12.4 12.4 12.4 12.4 

A-M-Indoor-Only 37.1 37.1 37.1 37.1 37.1 37.1 37.1 37.1 A-S-Indoor-Only - -------B-L-Indoor-Outdoor 10.1 10.1 10.1 10.1 10.1 10.1 10.1 10.1 B-M-Indoor-Outdoor 30.4 30.4 30.4 30.4 30.4 30.4 30.4 30.4 Total 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 

EERE-2006-STD-0125 COMMENT 55
National 

 National energy savings calculated for products purchased from 

2012-2042 and National NPV calculated over the lifetime of those 

Approach

products (2012-2057). 

 Base case incorporates the penetration of higher efficiency BVMs.

Example: No Amended Standard, A-M-IN

 Standards “roll up” inefficient equipment, but do not affect efficient 

E l S d d Effi i L l 4

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 Total

10.0% 90.0% 0.0% 0.0% 0% 0.0% 0% 0% 100%

Example: Standard at Efficiency =Level 4

 Once a standard is in place old equipment goes out of the inventory 

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 Total

0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0% 0% 100%

Once a standard is in place, old equipment goes out of the inventory 

the base case efficiency mix. New equipment is sold to replace equiaccording to the new efficiency mix.

 Use national average customer prices, annual energy use, energy pr

repair and maintenance expenditures from LCC analysis. Streams oand total costs calculated over analysis time periods and costs discpresent. 

EERE-2006-STD-0125 COMMENT 55
NOPR Analyses Flow Diagram

Manufacturer

Impact

Utility

Impact

TrialStandard

Revise ANOPR

Environm

Employment

Impact Impact

Analysis

Impact

Analysis

StandardLevels

ANOPR

Analyses Assessme

Impact Analysis

EngineeringAnalysis

Life-CycleCost &Pa

yback 

National

Impact

Analysis

y

PeriodAnalyses

Analysis

EERE-2006-STD-0125 COMMENT 55
Trial S

 Purpose

Selection of Trial Standard Levels

• To develop a list of standard levels from which impacts are weighed and a pro

level is selected.

– Each trial standard level consists of a set of potential minimum efficiency 

all i t l d b t i t l d ll equipment classes, and may vary between equipment classes; and

– NOPR analyses assess impacts for trial standard levels (not equipment 

 Method 

• Trial standard levels were developed in the NOPR.

– Analyzed standard levels cover a range of efficiencies and can include:

 Most energy efficient level (max tech);

 Effi i l l ith th l t lif Efficiency level with the lowest life-cycl t e cos ; Efficiency level with a payback period of three years or less; Efficiency levels with noteworthy technologies; and Efficiency levels that fill in large gaps between candidate standard 

– Each trial standard level consists of the analyzed standard level from ea

class that meets one of the above criteria.

EERE-2006-STD-0125 COMMENT 55
Trial S

Trial Standard Levels for the NOPR

Trial Standard Trial Standard

Level Test Metric Class A Class 

Baseline kWh/day MDEC = 0.019 x V + 6.09 MDEC = 0.068 

TSL 1 kWh/day MDEC = 0.062 x V + 4.12 MDEC = 0.066 TSL 2 kWh/day MDEC = 0.044 x V + 4.26 MDEC = 0.080 TSL 3 kWh/day MDEC = 0.044 x V + 3.76 0.044 x V + 3.76 MDEC = 0.073 

0.073 

TSL 4 kWh/day MDEC = 0.062 x V + 2.80 MDEC = 0.073 TSL 5 kWh/day MDEC = 0.058 x V + 2.66 MDEC = 0.070 TSL 6 kWh/day MDEC = 0.055 x V + 2.56 MDEC = 0.068 

TSL 7 kWh/day MDEC = 0.045 x V + 2.42 n/a*

EERE-2006-STD-0125 COMMENT 55
Trial 

NPV Results by TSL

 For Class A equipment, TSL 6 provides the maximum NPV of $0.1

at 7 percent discount rate, all trial standard levels lower than TSL 

positive NPV positive NPV.

 For Class B equipment, TSL 3 provides NPV of $ 0.0 billion (less t

million) at 7 percent discount rate all trial standard levels lower tmillion) at 7 percent discount rate, all trial standard levels lower t

with positive NPV.

EERE-2006-STD-0125 COMMENT 55
Trial 

Issues for which DOE seeks comments

DOE ifi ll i it DOE specifically invites comment th d t i l 

 on the proposed trial s

levels, TSL 6 for Class A and TSL 3 for Class B equipmen

EERE-2006-STD-0125 COMMENT 55
Life-Cycle Cost Su

LCC Subgroup Analysis

 Purpose

• To evaluate the economic impacts of standards on customer subgroups who 

disproportionately impacted compared with the general user population.

 Method

• DOE identified disadvantaged businesses, exemplified by independent manuf

th t th BVM t th i it Th that own the BVMs at their sites. These owners experi th hi h t fi 

ence the highest financ

the lowest financial savings.

• DOE used the LCC spreadsheet model to determine the impact on this BVM c

subgroup.

 Output

• LCC savings and simple payback period (in years) for the identified customer • The independent manufacturing site was not disproportionately impacted by t

The independent manufacturing site was not disproportionately impacted by t

EERE-2006-STD-0125 COMMENT 55
Manufacturer I

Manufacturer Impact Analysis

 Purpose

• To assess the impacts of standards on BVM manufacturers;• To identify and estimate impacts on manufacturer sub To identify and estimate impacts on manufacturer sub-groups that may be mo

groups that may be mo

impacted than the industry as a whole; and

• To examine the impact of cumulative regulatory burdens on the industry.

 Method 

• Analyze industry cash flow and net present value through use of the Governm

Regulatory Impact Model (GRIM); and

• Interview manufacturers to refine inputs to the GRIM, develop sub-group ana

address qualitative issues.

EERE-2006-STD-0125 COMMENT 55
Manufacturer I

Manufacturer Impact Analysis Process

 The MIA consists of three phases: The MIA consists of three phases:

Phase 1 Phase 2 Phase 3

Industry profile

Develop strawman GRIM*

Develop interview guide

Interviews 

& industrywide/ 

subgroup 

analyses

Assess direct employment, competition, cumulative burden

analyses burden 

* Government Regulatory Impact Model (GRIM)

Government Regulatory Impact Model (GRIM)

EERE-2006-STD-0125 COMMENT 55
Utility I

 Purpose

Utility Impact Analysis

• To investigate the effects on utilities from reduced energy sales and peak load 

potential standards.

 Method 

• U N ti l E S i R lt d Use National Energy Savings Results; and• Use the EIA’s National Energy Modeling System (NEMS-BT) tailored for DOE

Technologies Program.

 Output

• Change in electricity sales and price by region;• Ch i th i f l t i it ti d

Change in the mix of electricity generation; and

• Change in installed capacity and generation.

EERE-2006-STD-0125 COMMENT 55
Employment I

 Purpose

Employment Impact Analysis

• To report net jobs created or eliminated nationally as a consequence of new or 

energy conservation standards. Employment impacts include direct and indirec

 Method 

• Uses the Impact of Sector Energy Technologies (ImSET) model to assess the i

employment impacts;

• Estimate changes in employment, industry output, and wage income in the ove

States economy resulting from changes in expenditures in the various sectors economy;

• Estimate changes in costs and benefits using the NES analysis; and• Direct employment impacts are addressed in the Manufacturer Impact Analysis 

Direct employment impacts are addressed in the Manufacturer Impact Analysis 

 Output

• Change in employment in national economy, other than in the manufacturing se

regulated as a consequence of the amended energy conservation standardsregulated, as a consequence of the amended energy conservation standards.

EERE-2006-STD-0125 COMMENT 55
Environment

 P rpose

Environmental Assessment

Purpose

• To report environmental impacts as a consequence of the amended energy co

standards, gg including changes in p p owerlant emissions.

 Output

• Calculated the reduction in power plant emissions of carbon dioxide (CO2), oxi

(NOX) and mercury (Hg), using the NEMS-BT computer model.

• Sulfur dioxide (SO2) emission was not included due to the emission cap set by 

Act Amendments of 1990. Impact on SO2 emissions changes was estimated a

affect value of emissions allowances under the cap.

• Monetized value of reductions in CO2, NOX, and Hg.

EERE-2006-STD-0125 COMMENT 55
Regulatory I

 Purpose

Regulatory Impact Analysis

• To investigate the national impacts due to non-regulatory alternatives compa

mandatory energy conservation standards.

• The non-regulatory alternatives that DOE analyzed include: 

– N N R l t A ti No New Regulatory Action;

– Commercial Customer Rebates;– Commercial Customer Tax Credits; and– Voluntary Energy-Efficiency Targets—ENERGY STAR.

 Method

• A qualitative analysis was conducted of the non-regulatory alternatives to ru

 Conclusion

• A qualitative analysis showed that the BVM market structure did not allow fo

A qualitative analysis showed that the BVM market structure did not allow fo

quantitative analysis of non-regulatory alternatives on usage of energy-effic

EERE-2006-STD-0125 COMMENT 55
How to Submit Comments...

 Public Meeting Public Meeting

– Oral comments will be captured in the transcript and 

Oral comments will be captured in the transcript and 

part of the public record.

 Written comments – NOPR comment period open until July 28, 2009.

Reference docket #: EERE–2006–STD–0125 and/or RIN #: 1904–AB

Email: beveragevending.rulemaking@ee.doe.govMail: Ms. Brenda Edwards

U S Department of Energy U.S. Department of EnergyBuilding Technologies Program, Mailstop EE–2J1000 Independence Avenue, SW.Washington, DC 20585–0121.Telephone: (202) 586–2945.

Courier: Ms. Brenda Edwards

U.S. Department of EnergyBuilding Technologies Program

950 L’Enfant Plaza SW 6th Floor950 L Enfant Plaza, SW., 6th Floor,

Washington, DC 20024.

EERE-2006-STD-0125 COMMENT 55
B k Slid Bac

kup Slides

EERE-2006-STD-0125 COMMENT 55
Summary of Results for Class A Equipment Based Upon the AEO2009 Reference Case Energy 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 

Primary Energy Saved quads 0.004 0.019 0.043 0.068 0.080 0.0

7% Discount Rate 0.001 0.006 0.013 0.020 0.024 0.0

3% Discount Rate 0.002 0.011 0.025 0.038 0.045 0.0Generation Capacity Reduction GW** 0.002 0.009 0.020 0.031 0.037 0.0

NPV 2008$billion:

7% Discount Rate3% Discount Rate

0.009 0.038 0.062 0.098 0.108 0.10.020 0.084 0.149 0.235 0.263 0.2

Industry ImpactsIndustry NPV 2008$ million

0 (0.2) – (0.4) (1.9) – (2.6) (2.1) – (3.1) (8.8) – (9.9) (12.4) – 

Industry NPV % change 0.1 (0.6) – (1.0) (5.5) – (7.4) (5.9) – (8.8) (25.0) – (28.1) (35.1) – 

Cumulative Emissions Impacts† Cumulative Emissions Impacts :†CO2 Reductions Mt 0.23 1.01 2.27 3.56 4.19 4.6

Value of CO2 Reductions at 7% 

Discount Rate million 2007$ 0 – 2.2 0 – 9.7 0 – 21.9 0 – 34.3 0 – 40.4 0 – 4

Value of CO2 Reductions at 3% 

Discount Rate million 2007$ 0 – 4.3 0 – 18.9 0 – 42.5 0 – 66.6 0 – 78.5 0 – 8Discount Rate million 2007$

NOx Reductions kt 0.03 0.14 0.31 0.48 0.57 0.6

Value of NOx Reductions at 7% 

Discount Rate thousand 2007$ 5 – 50 21 – 221 48 – 497 76 – 778 89 – 918 98 – 

Value of NOx Reductions at 3% 

i $ 8 – 85 37

– 377 83

– 849 129

– 1330 153

– 1568 168

– 

Discount Rate thousand 2007

$ 8 85 37 377 83 849 129 1330 153 1568 168 

* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated.** Change in installed generation capacity by the year 2042 based on AEO2009 Reference Case. † CO2 emissions impacts include physical reductions at power plants. NOx emissions impacts include physical reductions at power plants as well as 

production of emissions allowance credits where NOx emissions are subject to emissions caps. 

EERE-2006-STD-0125 COMMENT 55
Summary of Results for Class A Equipment Based Upon the AEO2009 Reference Case Energy 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Hg Reductions tons 0 –0.004 0 –0.017 0 –0.038 0 –0.059 0 –0.069 

Value of Hg Reductions at 7% Discount Rate 

thousand 2007$ 0 – 44 0 – 196 0 – 441 0 – 690 0 – 814 

Value of Hg reductions at 3% Discount Rate 

thousand 2007$ 0 – 76 0 – 338 0 – 761 0 – 1192 0 – 1405 thousand 2007$

Life-Cycle CostNet Savings % 10 100 100 100 100 

Net Increase % 0 0 0 0 0 

No Change % 90 0 0 0 0 

Mean LCC Savings 2008$ 154 204 245 307 322 

Mean PBP years 2.0 2.1 2.9 3.1 3.4 

Direct Domestic Employment Impacts (2012) jobs 0 2 8 12 15 

Indirect Employment Impacts (2042) jobs 14 64 146 226 265 

* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated.** Change in installed generation capacity by the year 2042 based on AEO2009 Reference Case. † CO2 emissions impacts include physical reductions at power plants. NOx emissions impacts include physical reductions at power plants as well as 

production of emissions allowance credits where NOx emissions are subject to emissions caps. 

EERE-2006-STD-0125 COMMENT 55
Summary of Results for Class B Equipment Based Upon the AEO2009 Reference Case Energy 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Primary Energy Saved (quads) 0.001 0.002 0.010 0.012 0.031 

7% Discount Rate 0.000 0.001 0.003 0.003 0.009 

3% Discount Rate 0.001 0.001 0.006 0.007 0.018 

Generation Capacity Reduction (GW)** 0.001 0.001 0.005 0.005 0.014 NPV (2008$billion):

7% Discount Rate

3% Discount Rate

0.002 0.003 0.000 (0.004) (0.256

3% Discount Rate 0 005 . 0 007 . 0 008 . 0 001 . (0 442

(0.442

Industry Impacts

Industry NPV (2008$ million) 0 0 (0.8) – (0.9) (1.3) – (1.3) (9.7) – (1

Industry NPV (% Change) 0 - (0.1) 0.1 - (0.1) (3.7) – (4.2) (5.7) – (6.1) (44.0) – (6

Cumulative Emissions Impacts†:

CO2 R d ti (Mt) Reductions (Mt) 0 07 . 0 11 . 0 53 . 0 61 . 1 64 . Value of CO2 reductions at 7% discount 

rate (million 2007$) 0 – 0.7 0 – 1 0 – 5.1 0 – 5.9 0 – 15

Value of CO2 reductions at 3% discount 

rate (million 2007$) 0 – 1.3 0 – 2 0 – 10 0 – 11.4 0 – 30

( $)

NOx Reductions (kt) 0.01 0.01 0.07 0.08 0.22 

Value of NOx reductions at 7% discount rate 

(thousand 2007$) 2 – 16 2 – 23 11 – 116 13 – 133 35 – 35

Value of NOx reductions at 3% discount rate 

( h d 2007$) 3 – 27 4 – 40 19 – 199 22 – 227 60 – 61(thousand 2007$) 3 27 4 40 19 199 22 227 60 61

* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated.** Change in installed generation capacity by the year 2042 based on AEO2008 Reference Case. † CO2 emissions impacts include physical reductions at power plants. NOx emissions impacts include physical reductions at power plants as 

well as production of emissions allowance credits where NOx emissions are subject to emissions caps.

EERE-2006-STD-0125 COMMENT 55
Summary of Results for Class B Equipment Based Upon the AEO2009 Reference Case Energy Pr

TSL 1 TSL 2 TSL 3 TSL 4 

Hg Reductions (t) 0-0.001 0-0.002 0-0.009 0-0.010 Value of Hg reductions at 7% discount rate (thousand 

2007$) 0 – 14 0 – 21 0 – 103 0 – 118 

Value of Hg reductions at 3% discount rate (thousand

0 24

0 36

0 1 8

0 204

Value of Hg reductions at 3% discount rate (thousand 2007$) 

0 – 24

0 – 36

0 – 17

8

0 – 204

Life-Cycle CostNet Savings (%) 10 100 90 80 Net Increase (%) 0 11 21 32 No Change (%)

900 0 0 

Mean LCC Savings (2008$) 47 56 49 39 Mean PBP (years) Mean PBP (years) 3 1. 4 1. 6 0. 6 9. Direct Domestic Employment Impacts (2012) (jobs) 0 0 3 4 Indirect Em

plo

yment Im

pacts (2042)(jobs) 4 6 33 38 

p y p ( )(j )

* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated.** Change in installed generation capacity by the year 2042 based on AEO2008 Reference Case. † CO2 emissions impacts include physical reductions at power plants. NOx emissions impacts include physical reductions at power plants as well as production of emissions allowance credits where NOx emissions are subject to emissions caps.

EERE-2006-STD-0125 COMMENT 55
Market and Technolo

Market Characteristics

 Three manufacturers account for the majority of domestic mark

for beverage vending machines These are: for beverage vending machines. These are:

 Crane Merchandising/Dixie-Narco, Inc. Royal Vendors, Inc. Sanden-Vendo America

 Approximately 342,000 units covered by this rulemaking were 

y ( pp g ) ear 2003 (Appliance Ma

gazine data).

 The installed base of units is as follows (Arthur D. Little, Inc., 1

 Cans – 2,400,000 Bottles – 1,125,000 Other – 186,000

EERE-2006-STD-0125 COMMENT 55
Market and Technolo

Maximum Technologically Feasible Levels

Equipment Class Maximum daily energy 

consumption

kilowatt hours per day

Class A Class

A MDEC

= 0 045 x V 0.045

x

V

+ 2 42 .

Class B MDEC = 0.068 x V + 2.63

EERE-2006-STD-0125 COMMENT 55
Scr

Screening Analysis Method

 D i ti es gn options screened i th f ll i it i d using the following criteria:

• Technological feasibility; Technological feasibility;• Practicability to manufacture, install and service;• Adverse impacts on product utility or product availability; and Adverse impacts on product utility or product availability; and• Adverse impacts on health or safety.

EERE-2006-STD-0125 COMMENT 55
Scr

Technologies Selected for Further Considerat

Technologies that can improve daily energy consumption (D

• higher-efficiency lighting• higher-efficiency lighting ballasts• higher-efficiency evaporator fan motors• evaporator fan motor controllers• higher-efficiency evaporator fan blades• improved evaporator design• low-pressure differential evaporators• improved or thicker insulation• defrost mechanism• hi hg er-effi i c ency compressors

• improved condenser design

• higher-efficiency condenser fan motors

• higher-efficiency condenser fan blades

efficiency condenser fan blades

• improved glass pack design (for Class A machines)

EERE-2006-STD-0125 COMMENT 55
Engin

Purpose of the Engineering Analysis

C t Effi i

 Characterize the relationship between manufacturer cost and daily ene

consumption (DEC)

Downstream Ana

• Life-Cycle Cost an

Cost – Efficiency 

Relationship

ost y

Payback Period

• National Impacts cremental acturing C

• Manufacturer Imp

Analysis

Inc

Manufa

DEC (kWh/day)

EERE-2006-STD-0125 COMMENT 55
Markups to Determine E

Baseline and Incremental Markups

 Markups relate customer price to cost of goods sold (COGS) relate customer price to cost of goods sold (COGS) Baseline markups relate price to cost prior to a change in efficiency

• Baseline markups indicate a customer price that covers all of a wholesaler’s or contractor

profit.

• Direct labor costs (salaries, payroll, rental and occupancy) are included.

 Incremental markups relate the incremental change in customer price to the 

change in COGS beyond baseline

• Some distribution costs remain constant with COGS increases.• Incremental markups cover only expenses that vary with an increase in equipment efficie

– For example, direct labor costs (salaries, payroll), rental, and occupancy do not vary 

induced changes in COGS.

• DOE assumes other operating costs and profit will scale proportionally with COGS

DOE assumes other operating costs and profit will scale proportionally with COGS.

EERE-2006-STD-0125 COMMENT 55
Life-Cycle Cost and Payback P

LCC Calculation Flowchart Baseline Manufacturer

Price

Std-Level

Manufacturer

P i

From 

Engineering 

Analysis

(Price is a 

Function of 

Efficiency)

Price

Total Installed

Cost

Efficiency)

From Marku

ps 

Distributor

Markup

Customer

Price

p Cost

for Equipment 

Price 

Determination 

Analysis

Payback

Sales Tax

ContractorMarkup Installation

Cost

Annual Energy

E

Annual

Operatin

g

Lifetime

Operating From Energy Use

Payback

Period

Expense

Repair Cost

Mit

g

Expense

Lifetime

Discount Rate

Expense Use Characterization 

Analysis 

(Energy Use as a 

Function of 

Efficiency)

Energy

Consumption

Electricity

Prices

Maintenance

Cost

Electricity

Price Trend

EERE-2006-STD-0125 COMMENT 55
National Impact Analysis Process

LCC Anal

ysis N

E 

National Energy Savings

NationalEconomicImpacts

y

Results and Other Inputs

Ener

(

N 

Shipments Model

N

Net P

(2006 

 National energy savings calculated for period from 2012-2042 (30 ye NPV calculated for period from 2012-2057

EERE-2006-STD-0125 COMMENT 55
Ship

Shipments Model

NEMS Food Services

Bldg

Construction Forecast ARI Estimate of Shipments (2005) % Shipments by Produ

Class (2005)

Initial Shipments to New

Construction

Shipments to New

Construction 

Total 

Shipments By

Product Class

Initial Replacement

Shipments Initial CRE Stock Replacement

Shipments 

Estimated Lifetime

of CRE Stock

EERE-2006-STD-0125 COMMENT 55
Ship

Outcomes of Shipments Forecasts: Stoc

Stock of BVM Equipment

4 0003,5004,0002,5003,000

UnitsStock from Sales 2012 and 

Stock from Sales 2004 201

1,5002,000

Thousands of Stock from Sales 2004-201

Stock from Sales Before 20

500

1,000

-

20062008201020122014201620182020202220242026202820302032203420362038204020422044204620482050

EERE-2006-STD-0125 COMMENT 55
National I

NPV Results by TSL for Class A Equipmen

(Seven-Percent Discount Rate)

Trial Standard Level Trial Standard Level Present Value (Billion 2008$) Present Value (Billion 2008$)

1 0.0092 0.0383 0.0624 0.0985 0.1086 0.1057 (0.719)

N b i th i di t ti NPV (i t t)Numbers in parentheses indicate negative NPV (i.e., net cost).

EERE-2006-STD-0125 COMMENT 55
National I

NPV Results by TSL for Class B Equipmen

(Seven-Percent Discount Rate)

Trial Standard Level Present Value (Billion 2008$)

1 0.002

2 0.0033 0.0004 (0.004)5 (0.256)6 (1.013)

Numbers in parentheses indicate negative NPV (i.e., net cost).

EERE-2006-STD-0125 COMMENT 55