41162 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

DEPARTMENT OF ENERGY 

Office of Energy Efficiency and 

Renewable Energy 

10 CFR Part 431 

[Docket No. EE–2006–STD–0126] 

RIN 1904–AB59 

Energy Conservation Program for 

Commercial and Industrial Equipment: 

Energy Conservation Standards for 

Commercial Ice-Cream Freezers; for 

Self-Contained Commercial 

Refrigerators, Commercial Freezers, 

and Commercial Refrigerator-Freezers 

without Doors; and for Remote 

Condensing Commercial Refrigerators, 

Commercial Freezers, and Commercial 

Refrigerator-Freezers 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Advance notice of proposed 

rulemaking and notice of public 

meeting. 

SUMMARY: The Energy Policy and 

Conservation Act (EPCA) authorizes the 

Department of Energy (DOE) to establish 

energy conservation standards for 

various consumer products and 

commercial and industrial equipment, 

including commercial ice-cream 

freezers; self-contained commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers without 

doors; and remote condensing 

commercial refrigerators, commercial 

freezers, and commercial refrigeratorfreezers, if DOE determines that energy 

conservation standards would be 

technologically feasible and 

economically justified, and would result 

in significant energy savings. DOE 

publishes this Advance Notice of 

Proposed Rulemaking (ANOPR) to 

consider establishing energy 

conservation standards for the 

categories of commercial refrigeration 

equipment mentioned above, and to 

announce a public meeting to receive 

comments on a variety of issues. 

DATES: DOE will hold a public meeting 

on August 23, 2007, from 9 a.m. to 5 

p.m. in Washington, DC. DOE must 

receive requests to speak at the public 

meeting no later than 4 p.m., August 3, 

2007. DOE must receive a signed 

original and an electronic copy of 

statements to be given at the public 

meeting no later than 4 p.m., August 9, 

2007. DOE will accept comments, data, 

and information regarding this ANOPR 

no later than October 9, 2007. See 

section IV, ‘‘Public Participation,’’ of 

this ANOPR for details. 

ADDRESSES: The public meeting will be 

held at the U.S. Department of Energy, 

Forrestal Building, Room 1E–245, 1000 

Independence Avenue, SW., 

Washington, DC. Please note that 

foreign nationals visiting DOE 

Headquarters are subject to advance 

security screening procedures, requiring 

a 30-day advance notice. If you are a 

foreign national and wish to participate 

in the public meeting, please inform 

DOE of this fact as soon as possible by 

contacting Ms. Brenda Edwards-Jones at 

(202) 586–2945 so that the necessary 

procedures can be completed. 

You may submit comments identified 

by docket number EE–2006–STD–0126 

and/or Regulatory Information Number 

(RIN) 1904–AB59 using any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: commercial

refrigeration.rulemaking@ee.doe.gov. 

Include EE–2006–STD–0126 and/or RIN 

1904–AB59 in the subject line of your 

message. 

• Postal Mail: Ms. Brenda EdwardsJones, U.S. Department of Energy, 

Building Technologies Program, 

Mailstop EE–2J, 1000 Independence 

Avenue, SW., Washington, DC 20585– 

0121. Telephone: (202) 586–2945. 

Please submit one signed paper original. 

• Hand Delivery/Courier: Ms. Brenda 

Edwards-Jones, U.S. Department of 

Energy, Building Technologies Program, 

Room 1J–018, 1000 Independence 

Avenue, SW., Washington, DC 20585– 

0121. Please submit one signed original 

paper copy. 

For detailed instructions on 

submitting comments and additional 

information on the rulemaking process, 

see section IV, ‘‘Public Participation,’’ of 

this document. 

Docket: For access to the docket to 

read background documents or 

comments received, go to the U.S. 

Department of Energy, Forrestal 

Building, Room 1J–018 (Resource Room 

of the Building Technologies Program), 

1000 Independence Avenue, SW., 

Washington, DC, (202) 586–2945, 

between 9 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

Please call Ms. Brenda Edwards-Jones at 

the above telephone number for 

additional information regarding 

visiting the Resource Room. Please note: 

DOE’s Freedom of Information Reading 

Room (Room 1E–190 at the Forrestal 

Building) no longer houses rulemaking 

materials. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Charles Llenza, U.S. Department of 

Energy, Building Technologies Program, 

EE–2J, 1000 Independence Avenue, 

SW., Washington, DC 20585–0121, (202) 

586–2192. E-mail: 

Charles.Llenza@ee.doe.gov, or Ms. 

Francine Pinto, Esq., U.S. Department of 

Energy, Office of General Counsel, GC– 

72, 1000 Independence Avenue, SW., 

Washington, DC 20585, (202) 586–9507. 

E-mail: Francine.Pinto@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

A. Purpose of the Advance Notice of 

Proposed Rulemaking 

B. Summary of the Analysis 

1. Engineering Analysis 

2. Markups To Determine Equipment Price 

3. Energy Use Characterization 

4. Life-Cycle Cost and Payback Period 

Analyses 

5. National Impact Analysis 

C. Authority 

D. Background 

1. History of Standards Rulemaking for 

Commercial Refrigeration Equipment 

2. Rulemaking Process 

3. Miscellaneous Rulemaking Issues 

a. Federal Preemption 

b. State Exemptions from Federal 

Preemption 

c. Equipment Class Prioritization 

4. Test Procedure 

II. Commercial Refrigeration Equipment 

Analyses 

A. Market and Technology Assessment 

1. Definitions of Commercial Refrigeration 

Equipment Categories 

a. Coverage of Equipment Excluded From 

American National Standards Institute/ 

Air-Conditioning and Refrigeration 

Institute Standard 1200–2006 

b. Coverage of Equipment Not Designed for 

Retail Use 

c. Remote Condensing Commercial 

Refrigerators, Commercial Freezers, and 

Commercial Refrigerator-Freezers 

d. Secondary Coolant Applications 

e. Self-Contained Commercial 

Refrigerators, Commercial Freezers, and 

Commercial Refrigerator-Freezers 

Without Doors 

f. Commercial Ice-Cream Freezers 

2. Equipment Classes 

3. Normalization Metric 

4. Extension of Standards 

5. Market Assessment 

6. Technology Assessment 

B. Screening Analysis 

C. Engineering Analysis 

1. Approach 

2. Equipment Classes Analyzed 

3. Analytical Models 

a. Cost Model 

b. Energy Consumption Model 

4. Baseline Models 

5. Cost-Efficiency Results 

D. Markups To Determine Equipment Price 

E. Energy Use Characterization 

F. Rebuttable Presumption Payback Periods 

G. Life-Cycle Cost and Payback Period 

Analyses 

1. Approach 

2. Life-Cycle Cost Analysis Inputs 

3. Baseline Manufacturer Selling Price 

4. Increase in Selling Price 

5. Markups 

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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 41163 

1These types of equipment are referred to 

collectively hereafter as ‘‘commercial refrigeration 

equipment.’’

6. Installation Costs 

7. Energy Consumption 

8. Electricity Prices 

9. Electricity Price Trends 

10. Repair Costs 

11. Maintenance Costs 

12. Lifetime 

13. Discount Rate 

14. Payback Period 

15. Life-Cycle Cost and Payback Period 

Results 

H. Shipments Analysis 

I. National Impact Analysis 

1. Approach 

2. Base Case and Standards Case 

Forecasted Efficiencies 

3. National Impact Analysis Inputs 

4. National Impact Analysis Results 

J. Life-Cycle Cost Sub-Group Analysis 

K. Manufacturer Impact Analysis 

1. Sources of Information for the 

Manufacturer Impact Analysis 

2. Industry Cash Flow Analysis 

3. Manufacturer Sub-Group Analysis 

4. Competitive Impacts Assessment 

5. Cumulative Regulatory Burden 

6. Preliminary Results for the Manufacturer 

Impact Analysis 

L. Utility Impact Analysis 

M. Employment Impact Analysis 

N. Environmental Assessment 

O. Regulatory Impact Analysis 

III. Candidate Energy Conservation Standards 

Levels 

IV. Public Participation 

A. Attendance at Public Meeting 

B. Procedure for Submitting Requests to 

Speak 

C. Conduct of Public Meeting 

D. Submission of Comments 

E. Issues on Which DOE Seeks Comment 

1. Equipment Class Prioritization and 

Extending Analyses 

2. Air-Curtain Angle 

3. Door Angle 

4. Equipment Classes for Equipment With 

Doors 

5. Equipment Classes 

6. Case Lighting Operating Hours 

7. Operation and Maintenance Practices 

8. Equipment Lifetime 

9. Life-Cycle Cost Baseline Level 

10. Characterizing the National Impact 

Analysis Base Case 

11. Base Case and Standards Case Forecasts 

12. Differential Impact of New Standards 

on Future Shipments by Equipment 

Classes 

13. Selection of Candidate Standard Levels 

for Post-Advance Notice of Proposed 

Rulemaking Analysis 

14. Approach to Characterizing Energy 

Conservation Standards 

15. Standards for Commercial RefrigeratorFreezers 

V. Regulatory Review and Procedural 

Requirements: Executive Order 12866 

VI. Approval of the Office of the Secretary 

I. Introduction 

A. Purpose of the Advance Notice of 

Proposed Rulemaking 

The purpose of this Advance Notice 

of Proposed Rulemaking (ANOPR) is to 

provide interested persons with an 

opportunity to comment on: 

1. The equipment classes that the 

Department of Energy (DOE) is planning 

to analyze in this rulemaking; 

2. The analytical framework, models, 

and tools (e.g., life-cycle cost (LCC) and 

national energy savings (NES) 

spreadsheets) that DOE has been using 

to perform analyses of the impacts of 

energy conservation standards for 

commercial ice-cream freezers; selfcontained commercial refrigerators, 

commercial freezers, and commercial 

refrigerator-freezers without doors; and 

remote condensing commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers; 1

3. The results of the preliminary 

engineering analyses, the markups 

analysis to determine equipment price, 

the energy use characterization, the LCC 

and payback period (PBP) analyses, and 

the NES and national impact analyses as 

presented in the ANOPR Technical 

Support Document (TSD): Energy 

Efficiency Standards for Commercial 

and Industrial Equipment: Commercial 

Ice-Cream Freezers; Self-Contained 

Commercial Refrigerators, Freezers, and 

Refrigerator-Freezers without Doors; and 

Remote Condensing Commercial 

Refrigerators, Freezers, and RefrigeratorFreezers, and summarized in this 

ANOPR; and 

4. The candidate energy conservation 

standard levels that DOE has developed 

from these analyses. 

B. Summary of the Analysis 

The Energy Policy and Conservation 

Act, as amended, (EPCA) authorizes 

DOE to establish minimum energy 

conservation standards for various 

consumer products and commercial and 

industrial equipment, including 

commercial refrigeration equipment, 

which are the subject of this ANOPR. 

(42 U.S.C. 6291 et seq.) DOE conducted 

in-depth technical analyses for this 

ANOPR in the following areas: 

engineering, markups to determine 

equipment price, energy use 

characterization, LCC and PBP, and NES 

and net present value (NPV). The 

ANOPR discusses the methodologies 

and assumptions for each of these 

analyses. Table I.1 identifies the 

sections in this document that contain 

the results of each of the analyses, and 

summarizes the methodologies, key 

inputs and assumptions for the 

analyses. DOE consulted with interested 

parties and stakeholders in developing 

these analyses, and invites further input 

from interested parties and stakeholders 

on these topics. Obtaining that input is 

a primary purpose of this ANOPR. Thus, 

the results of the preliminary analyses 

presented in this ANOPR are subject to 

revision following review and input 

from stakeholders and other interested 

parties. The final rule will contain the 

results of the final analyses. 

TABLE I.1.—IN-DEPTH TECHNICAL ANALYSES CONDUCTED FOR THE ADVANCE NOTICE OF PROPOSED RULEMAKING

Analysis area Methodology Key inputs Key assumptions ANOPR section for 

results 

TSD section 

for results 

Engineering (TSD Chapter 5).Efficiency level approach supplemented 

with design option 

analysis.

Component cost data 

and performance values.

Component performance improvements 

are estimated using 

ANSI/ARI Standard 

1200–2006.

Section II.C.5 ............. Chapter 5, 

section 

5.10, and 

appendix 

B. 

Markups to Determine 

Equipment Price (TSD 

Chapter 6).

Assessment of company 

financial reports to develop markups to 

transform manufacturer prices into customer prices.

Distribution channels; 

market shares across 

the different channels; 

State sales taxes; and 

shipments to different 

States.

Markups for baseline 

and more efficient 

equipment are different.

Section II.D ................ Chapter 6, 

section 

6.7. 

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41164 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

TABLE I.1.—IN-DEPTH TECHNICAL ANALYSES CONDUCTED FOR THE ADVANCE NOTICE OF PROPOSED RULEMAKING—

Continued 

Analysis area Methodology Key inputs Key assumptions ANOPR section for 

results 

TSD section 

for results 

Energy Use Characterization (TSD Chapter 

7).

Energy use estimates 

from the engineering 

analysis, validated 

using whole-building 

annual simulation for 

selected climates.

Component energy use 

and refrigerant load 

(from engineering 

analysis); and condenser rack performance data.

Case lighting operates 

for 24 hours a day; 

and supermarket is 

used as building prototype.

Section II.E ................ Chapter 7, 

section 

7.4.4, and 

appendix 

D. 

LCC and Payback Period (TSD Chapter 8).Analysis of a representative sample of commercial customers by 

building-type and location.

Manufacturer selling 

prices; markups (including sales taxes); 

installation price; energy consumption; 

electricity prices and 

future trends; maintenance costs; repair 

costs; equipment lifetime; and discount 

rate.

Baseline efficiency level 

is Level 1; average 

electricity prices are 

by customer-type and 

State; Annual Energy 

Outlook (AEO) 2006 

is used as reference 

case for future trends; 

equipment lifetime is 

10 years; and discount rate is estimated by weighted 

average cost of capital by customer type.

Section II.G.15 .......... Chapter 8, 

section 

8.4, and 

appendix 

G. 

Shipments (TSD Chapter 9).Projection of linear footage of total sales by 

equipment class for 

new and replacement 

markets.

Wholesaler markups 

from company balance-sheet data and 

mechanical markups 

from U.S. Census Bureau data; current 

shipments data by 

equipment class; average equipment lifetime; construction 

forecasts for food 

sales buildings; and 

shipments by equipment size.

Market shares by equipment class are constant; saturation by 

building type is constant; and shipments 

do not change in response to standards.

Section II.H ................ Chapter 9, 

section 

9.4. 

National Impact (TSD 

Chapter 10).

Forecasts of commercial 

refrigeration equipment costs, annual 

energy consumption 

and operating costs to 

the year 2042.

Shipments; effective 

date of standard; 

base case efficiencies; shipmentweighted market 

shares; annual energy 

consumption, total installed cost and repair 

& maintenance costs, 

all on a per linear foot 

basis; escalation of 

electricity prices; electricity site-to-source 

conversion; discount 

rate; and present year.

Annual shipments are 

from shipments 

model; annual weighted-average energy efficiency and installed 

cost are a function of 

energy efficiency 

level; annual weighted-average repair and 

maintenance costs 

are constant with energy consumption 

level; AEO2006 is 

used for electricity 

price escalation; National Energy Modeling System (NEMS) 

is used for site-tosource conversion; 

discount rates are 3 

percent and 7 percent 

real; and future costs 

are discounted to 

present year: 2007.

Section II.I.4 .............. Chapter 10, 

section 

10.4, and 

appendix 

I. 

1. Engineering Analysis 

The engineering analysis establishes 

the relationship between the cost and 

efficiency of commercial refrigeration 

equipment. This relationship serves as 

the basis for cost and benefit 

calculations for individual commercial 

consumers, manufacturers, and the 

Nation. The engineering analysis 

identifies representative baseline 

equipment, which is the starting point 

for analyzing technologies that provide 

energy efficiency improvements. 

Baseline equipment here refers to a 

model or models having features and 

technologies typically found in 

equipment currently offered for sale. 

The baseline model in each equipment 

class represents the characteristics of 

equipment in that class. After 

identifying baseline models, DOE 

estimated manufacturer selling prices 

(MSPs) through an analysis of 

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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 41165 

2An efficiency-level approach establishes the 

relationship between manufacturer cost and 

increased efficiency at predetermined efficiency 

levels above the baseline. Under this approach, 

manufacturers typically provide incremental 

manufacturer cost data for incremental increases in 

efficiency. 

3A design-options approach uses individual or 

combinations of design options to identify increases 

in efficiency. Under this approach, estimates are 

based on manufacturer or component supplier data, 

or through the use of engineering computer 

simulation models. Individual design options, or 

combinations of design options, are added to the 

baseline model in ascending order of costeffectiveness. 

manufacturer costs and manufacturer 

markups. Manufacturer markups are the 

multipliers used to determine the MSPs 

based on manufacturing cost. 

The engineering analysis uses 4 

industry-supplied cost-efficiency 

curves, which are based on an 

efficiency-level approach, and 15 costefficiency curves derived from DOE 

analysis, which are based on a designoptions approach.2 3 DOE also discusses 

in the engineering analysis the 

equipment classes analyzed, the 

methodology used to extend the 

analysis to equipment classes that have 

low volumes of shipments, an analysis 

of sensitivity to material prices, and the 

use of alternative refrigerants. 

2. Markups To Determine Equipment 

Price 

DOE determines customer prices for 

commercial refrigeration equipment 

from MSP and equipment price 

markups using industry balance sheet 

data and U.S. Census Bureau data. To 

determine price markups, DOE 

identifies distribution channels for 

equipment sales and determines the 

existence and amounts of markups 

within each distribution channel. For 

each distribution channel, DOE 

distinguishes between ‘‘baseline 

markups’’ applied to the MSP for 

baseline equipment and ‘‘incremental 

markups’’ applied to the incremental 

increase in MSP for higher efficiency 

equipment. Overall baseline and overall 

incremental markups are calculated 

separately based on the product of all 

baseline markups at each step within a 

distribution channel or the product of 

all incremental markups at each step 

within a distribution channel, 

respectively. The combination of the 

overall baseline markup applied to the 

baseline MSP and the incremental 

markups applied to the incremental 

increase in MSP for higher efficiency 

equipment, including sales tax, 

determines the final customer price. 

3. Energy Use Characterization 

The energy use characterization 

provides estimates of annual energy 

consumption for commercial 

refrigeration equipment, which are used 

in the subsequent LCC and PBP analyses 

and the national impact analysis (NIA). 

DOE developed energy consumption 

estimates for the 15 classes of 

equipment analyzed in the engineering 

analysis. DOE validated these estimates 

with simulation modeling of energy 

consumption on an annual basis for 

selected equipment classes and 

efficiency levels. 

4. Life-Cycle Cost and Payback Period 

Analyses 

The LCC and PBP analyses determine 

the economic impact of potential 

standards on individual commercial 

consumers. The LCC is the total 

consumer expense for a piece of 

equipment over the life of the 

equipment. The LCC analysis compares 

the LCCs of equipment designed to meet 

more stringent energy conservation 

standards with the LCC of the 

equipment likely to be installed in the 

absence of standards. DOE determines 

LCCs by considering: (1) Total installed 

cost to the purchaser (which consists of 

MSP, sales taxes, distribution channel 

markups, and installation cost), (2) the 

operating expenses of the equipment 

(energy cost and maintenance and repair 

cost), (3) equipment lifetime, and (4) a 

discount rate that reflects the real 

consumer cost of capital and puts the 

LCC in present value terms. The PBP 

represents the number of years needed 

to recover the increase in purchase price 

(including installation cost) of more 

efficient equipment through savings in 

the operating cost of the equipment. The 

PBP is the increase in total installed cost 

due to increased efficiency divided by 

the (undiscounted) decrease in annual 

operating cost from increased efficiency. 

5. National Impact Analysis 

The NIA estimates the NES, and the 

NPV of total national customer costs 

and savings, expected to result from 

new standards at specific efficiency 

levels. DOE calculated the NES and 

NPV for each standard level for 

commercial refrigeration equipment as 

the difference between a base case 

forecast (without new standards) and 

the standards case forecast (with new 

standards). For the NES, DOE 

determined national annual energy 

consumption by multiplying the 

number of commercial refrigeration 

equipment units in use (by vintage) by 

the average unit energy consumption 

(also by vintage). DOE then computed 

cumulative energy savings, which is the 

sum of each annual NES determined 

from the year 2012 to 2042. The national 

NPV is the sum over time of the 

discounted net savings each year, which 

consists of the difference between total 

operating cost savings and the increase 

in total installed costs. Critical inputs to 

the NIA include shipments projections, 

rates at which users retire equipment 

(based on estimated equipment 

lifetimes), and estimates of changes in 

shipments and retirement rates in 

response to changes in equipment costs 

due to new standards. 

C. Authority 

Title III of EPCA, 42 U.S.C. 6311–

6317, as amended by the Energy Policy 

Act of 2005 (EPACT 2005), Pub. L. 109–

58, provides an energy conservation 

program for certain commercial and 

industrial equipment. Further, EPACT 

2005 prescribes new or amended energy 

conservation standards and test 

procedures, and directs DOE to 

undertake rulemakings to promulgate 

such requirements. In particular, section 

136(c) of EPACT 2005 directs DOE to 

prescribe energy conservation standards 

for commercial refrigeration equipment. 

(42 U.S.C. 6313(c)(4)(A)) 

Before DOE prescribes any such 

standards, however, it must first solicit 

comments on proposed standards. 

Moreover, DOE must design each new 

standard for commercial refrigeration 

equipment to achieve the maximum 

improvement in energy efficiency that is 

technologically feasible and 

economically justified, and will result 

in significant conservation of energy. 

(42 U.S.C. 6295(o)(2)(A), (o)(3)) To 

determine whether a standard is 

economically justified, DOE must, after 

receiving comments on the proposed 

standard, determine whether the 

benefits of the standard exceed its 

burdens to the greatest extent 

practicable, considering the following 

seven factors: 

(1) The economic impact of the 

standard on manufacturers and 

consumers of each of the products 

subject to the standard; 

(2) The savings in operating costs 

throughout the estimated average life of 

the covered products in the type (or 

class) compared with any increase in 

the price, initial charges, or 

maintenance expenses for the covered 

products which are likely to result from 

the imposition of the standard; 

(3) The total projected amount of 

energy savings likely to result directly 

from the imposition of the standard; 

(4) Any lessening of the utility or the 

performance of the covered products 

likely to result from the imposition of 

the standard; 

(5) The impact of any lessening of 

competition, as determined in writing 

by the Attorney General, that is likely to 

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41166 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

4 ‘‘(9)(A) The term ‘commercial refrigerator, 

freezer, and refrigerator-freezer’ means refrigeration 

equipment that—

(i) Is not a consumer product (as defined in 

section 321 of EPCA [42 U.S.C. 6291(1)]); 

(ii) Is not designed and marketed exclusively for 

medical, scientific, or research purposes; 

(iii) Operates at a chilled, frozen, combination 

chilled and frozen, or variable temperature; 

(iv) Displays or stores merchandise and other 

perishable materials horizontally, semivertically, or 

vertically; 

(v) Has transparent or solid doors, sliding or 

hinged doors, a combination of hinged, sliding, 

transparent, or solid doors, or no doors; 

(vi) Is designed for pull-down temperature 

applications or holding temperature applications; 

and 

(vii) Is connected to a self-contained condensing 

unit or to a remote condensing unit.’’ (42 U.S.C. 

6311(9)(A)). 

‘‘(B) The term ‘holding temperature application’

means a use of commercial refrigeration equipment 

other than a pull-down temperature application, 

except a blast chiller or freezer.’’ (42 U.S.C. 

6311(9)(B)). 

‘‘(D) The term ‘pull-down temperature 

application’ means a commercial refrigerator with 

doors that, when fully loaded with 12 ounce 

beverage cans at 90 degrees Fahrenheit (F), can cool 

those beverages to an average stable temperature of 

38 degrees F in 12 hours or less.’’ (42 U.S.C. 

6311(9)(D)). 

‘‘(E) The term ‘remote condensing unit’ means a 

factory-made assembly of refrigerating components 

designed to compress and liquefy a specific 

refrigerant that is remotely located from the 

refrigerated equipment and consists of 1 or more 

refrigerant compressors, refrigerant condensers, 

condenser fans and motors, and factory supplied 

accessories.’’ (42 U.S.C. 6311(9)(E)). 

‘‘(F) The term ‘self-contained condensing unit’

means a factory-made assembly of refrigerating 

components designed to compress and liquefy a 

specific refrigerant that is an integral part of the 

refrigerated equipment and consists of 1 or more 

refrigerant compressors, refrigerant condensers, 

condenser fans and motors, and factory supplied 

accessories.’’ (42 U.S.C. 6311(9)(F)). 

result from the imposition of the 

standard; 

(6) The need for national energy 

conservation; and 

(7) Other factors the Secretary of 

Energy (Secretary) considers relevant. 

(42 U.S.C. 6295(o)(2)(B)(i)). 

Other statutory requirements are set 

forth in 42 U.S.C. 6295 (o)(1)–(2)(A), 

(2)(B)(ii)–(iii), and (3)–(4), and 42 U.S.C. 

6316(e). 

D. Background 

1. History of Standards Rulemaking for 

Commercial Refrigeration Equipment 

Section 136(c) of EPACT 2005 

amended section 342 of EPCA, in part, 

by adding new subsection 342(c)(4)(A), 

(42 U.S.C. 6313(c)(4)(A)) which directs 

the Secretary to issue, by rule, no later 

than January 1, 2009, energy 

conservation standards for the following 

equipment, manufactured on or after 

January 1, 2012: commercial ice-cream 

freezers; self-contained commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers without 

doors; and remote condensing 

commercial refrigerators, commercial 

freezers, and commercial refrigeratorfreezers. This equipment, which has 

never before been regulated at the 

Federal level, is the subject of this 

rulemaking. 

Section 136(a)(3) of EPACT 2005 

amended section 340 of EPCA, in part 

by adding the definitions for 

‘‘commercial refrigerator, freezer, and 

refrigerator-freezer,’’ ‘‘holding 

temperature application,’’ ‘‘pull-down 

temperature application,’’ ‘‘remote 

condensing unit,’’ and ‘‘self-contained 

condensing unit.’’ 4

EPCA does not explicitly define the 

terms ‘‘self-contained commercial 

refrigerator, freezer, or refrigeratorfreezer’’ and ‘‘remote condensing 

commercial refrigerator, freezer, or 

refrigerator-freezer,’’ which delineate 

two of the categories of equipment 

covered by this rulemaking. DOE 

construes these two terms to mean 

‘‘commercial refrigerator, freezer, or 

refrigerator-freezer that is connected to 

a self-contained condensing unit’’ and 

‘‘commercial refrigerator, freezer, or 

refrigerator-freezer that is connected to 

a remote condensing unit,’’ respectively. 

On April 25, 2006, DOE published in 

the Federal Register a notice of public 

meeting and availability of the 

Rulemaking Framework for Commercial 

Refrigeration Equipment Including IceCream Freezers; Self-Contained 

Commercial Refrigerators, Freezers, and 

Refrigerator-Freezers without doors; and 

Remote Condensing Commercial 

Refrigerators, Freezers, and RefrigeratorFreezers (Framework Document) that 

describes the procedural and analytical 

approaches that DOE anticipates using 

to evaluate energy conservation 

standards for commercial refrigeration 

equipment. 71 FR 23876. This 

document is available at http:// 

www.eere.energy.gov/buildings/ 

appliance_standards/commercial/ 

refrigeration_equipment.html. DOE held 

a Framework public meeting on May 16, 

2006, to discuss the procedural and 

analytical approaches for use in the 

rulemaking, and to inform and facilitate 

stakeholders’ involvement in the 

rulemaking process. The analytical 

framework presented at the public 

meeting described different analyses, 

such as LCC and PBP, the proposed 

methods for conducting them, and the 

relationships among the various 

analyses. The ANOPR TSD describes the 

analytical framework in detail. 

Statements received after publication 

of the Framework Document and at the 

May 16, 2006, Framework public 

meeting helped identify issues involved 

in this rulemaking and provided 

information that has contributed to 

DOE’s proposed resolution of these 

issues. Many of the statements are 

quoted or summarized in this ANOPR. 

A parenthetical reference at the end of 

a quotation or passage provides the 

location index in the public record. 

2. Rulemaking Process 

Table I.2 sets forth a list of the 

analyses DOE has conducted and 

intends to conduct in its evaluation of 

standards for commercial refrigeration 

equipment. Until recently, DOE 

performed the manufacturer impact 

analysis (MIA) in its entirety between 

the ANOPR and notice of proposed 

rulemaking (NOPR) during energy 

conservation standards rulemakings. As 

noted in the table, DOE has performed 

a preliminary MIA for this ANOPR. DOE 

believes this change will improve the 

rulemaking process. 

TABLE I.2.—COMMERCIAL REFRIGERATION EQUIPMENT ANALYSIS

ANOPR NOPR Final Rule * 

• Market and technology assessment ............. • Revised ANOPR analyses ............................ • Revised NOPR analyses. 

• Screening analysis ........................................ • Life-cycle cost sub-group analysis.

• Engineering analysis ..................................... • Manufacturer impact analysis.

• Energy use characterization .......................... • Utility impact analysis.

• Markups to determine equipment price ........ • Employment impact analysis.

• Life-cycle cost and payback period analyses • Environmental assessment.

• Shipments analysis ....................................... • Regulatory impact analysis.

• National impact analysis. 

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5A notation in the form ‘‘Public Meeting 

Transcript, No. 3.4 at p. 80’’ identifies an oral 

comment that DOE received during the May 16, 

2006, Framework public meeting and which was 

recorded in the public meeting transcript in the 

docket for this rulemaking (Docket No. EE–2006–

STD–0126), maintained in the Resource Room of 

the Building Technologies Program This particular 

notation refers to a comment (1) made during the 

public meeting, (2) recorded in document number 

3.4, which is the public meeting transcript that is 

filed in the docket of this rulemaking, and (3) which 

appears on page 80 of document number 3.4. 

6A notation in the form ‘‘Joint Comment’’, No. 9 

at p. 3’’ identifies a written comment that DOE has 

received and has included in the docket of this 

rulemaking. This particular notation refers to (1) A 

joint comment, (2) in document number 9 in the 

docket of this rulemaking, and (3) appearing on 

page 3 of document number 9. 

TABLE I.2.—COMMERCIAL REFRIGERATION EQUIPMENT ANALYSIS—Continued 

ANOPR NOPR Final Rule * 

• Preliminary manufacturer impact analysis. 

* During the Final Rule phase, DOE considers the comments submitted by the U.S. Department of Justice in the NOPR phase concerning the 

impact of any lessening of competition that is likely to result from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(v)). 

The analyses in Table I.2 include the 

development of economic models and 

analytical tools. If timely new data, 

models, or tools that enhance the 

development of standards become 

available, DOE will incorporate them 

into this rulemaking. 

3. Miscellaneous Rulemaking Issues 

a. Federal Preemption 

During the Framework public 

meeting, the Air-Conditioning and 

Refrigeration Institute (ARI) stated that 

it interpreted EPACT 2005 as 

authorizing DOE to conduct a 

rulemaking for commercial refrigeration 

equipment, and to exempt certain 

categories from the standards DOE 

adopts. (Public Meeting Transcript, No. 

3.4 at p. 80) 5 The Appliance Standards 

Awareness Project (ASAP) responded 

that setting a ‘‘no-standard’’ standard 

that preempts the States is problematic. 

(Public Meeting Transcript, No. 3.4 at 

pp. 81–82) However, ASAP agrees with 

ARI’s basic view that DOE should 

address opportunities for energy 

savings, and should not necessarily 

have standards for every unit in the 

marketplace, because the objective is to 

save energy in a cost-effective way. Id. 

The American Council for an EnergyEfficient Economy (ACEEE), in apparent 

agreement with ARI and ASAP, 

expressed doubt that States would seek 

to set energy conservation standards for 

equipment that are truly niche 

equipment. (Public Meeting Transcript, 

No. 3.4 at p. 82) The Alliance to Save 

Energy, ACEEE, ASAP, Natural 

Resources Defense Council (NRDC), 

Northeast Energy Efficiency 

Partnerships (NEEP), and Northwest 

Power and Conservation Council 

(hereafter ‘‘Joint Comment’’) strongly 

opposed any suggestion that States be 

preempted from setting standards for 

equipment for which DOE does not 

itself set standards. (Joint Comment, No. 

9 at p. 3) 6

DOE is evaluating all commercial 

refrigeration equipment—i.e., all 

commercial ice-cream freezers, selfcontained commercial refrigerators, 

commercial freezers, and commercial 

refrigerator-freezers without doors, and 

remote condensing commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers—for the 

development of standards. DOE will 

evaluate all relevant equipment classes 

during this evaluation. This equipment 

has a large number of classes, however, 

and DOE intends to prioritize the 

technical analyses based on shipment 

data and only to conduct a full technical 

analysis on classes with the highest 

numbers of shipments for this ANOPR. 

In accordance with 42 U.S.C. 6316(e)(1), 

DOE intends to adopt standards for all 

equipment for which standards would 

satisfy the criteria in 42 U.S.C. 6295(o). 

DOE is not aware of any basis for it to 

exclude from this rule any commercial 

refrigeration equipment for which a 

standard would meet the statutory 

criteria above. Furthermore, the extent 

to which States will be barred from 

regulating the efficiency of any 

commercial refrigeration equipment for 

which the final rule in this rulemaking 

omits standards, will be governed by the 

relevant provisions of EPCA as to 

preemption, 42 U.S.C. 6297 and 

6316(e)(3)–(4). 

b. State Exemptions From Federal 

Preemption 

Southern Company Services 

(Southern Company) and Edison 

Electric Institute (EEI) believe that the 

standards for commercial refrigeration 

equipment should be a ‘‘50-state’’ rule 

without exemptions from Federal 

preemption. They claim that 

exemptions would complicate the 

regulation of this equipment and 

increase costs to both manufacturers 

and consumers. (Southern Company, 

No. 6 at p. 1 and EEI, No. 8 at p. 1) 

DOE fully intends that any standards 

it adopts in this rulemaking will apply 

uniformly in all of the States. In 

addition, any such Federal standards 

would, on the date of publication of the 

final rule, preempt any State standards 

that apply to the equipment covered by 

the Federal standards. In the event any 

State or local standard is issued before 

the date of publication of the final rule 

by the Secretary, that State or local 

standard shall not be preempted until 

the Federal standards take effect. (42 

U.S.C. 6297 and 6316(e)(3)(A)) 

However, EPCA allows the States to 

petition DOE for waivers of preemption 

with regard to specific State standards, 

and DOE to grant such waiver 

applications if the statutory criteria are 

met. (42 U.S.C. 6297(d)) DOE does not 

have the authority to preclude States 

from seeking waivers or to decree in 

advance that it will not grant them, 

either generally or for any particular 

type of equipment. 

c. Equipment Class Prioritization 

ARI stated that it strongly 

recommends that DOE focus its 

rulemaking efforts on the commercial 

refrigeration equipment classes with the 

highest energy savings potential, and 

not spend its scarce resources 

establishing standards for equipment 

with limited shipment volume and/or 

energy consumption. (ARI, No. 7 at p. 1) 

Because of the large number of 

equipment classes included in this 

rulemaking, for the ANOPR phase of the 

rulemaking DOE has focused on 

conducting a thorough examination of 

the equipment classes with the greatest 

energy savings potential. To determine 

which equipment classes have the 

greatest energy savings potential, DOE 

relied on industry-supplied shipment 

data and addressed equipment classes 

with the highest shipment values first. 

To address low-shipment equipment 

classes, DOE could, for the NOPR phase 

of the rulemaking, either conduct a full 

technical analysis of these equipment 

classes, or develop correlations to 

extend analyses or standard levels. DOE 

explored the approach of developing 

correlations by conducting a ‘‘focused 

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41168 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

7The ‘‘focused matched-pair analysis’’ establishes 

a correlation between rating temperature levels and 

energy consumption by quantifying the differences 

in energy consumption for matched pairs of 

equipment classes that are very similar in features 

and dimensions, but have different operating 

temperatures. 

8 DOE incorporated by reference the ANSI/ARI 

Standard 1200–2006 test procedure in section 

431.64 of 10 CFR Part 431. 71 FR 71340 (December 

8, 2006). 

matched-pair analysis.’’ 7 This 

methodology is described in further 

detail in chapter 5 of the TSD. DOE 

specifically seeks feedback on its 

approach to equipment-class 

prioritization and the approach to 

extend the technical analysis from highshipment equipment classes to lowshipment equipment classes. This is 

identified as Issue 1 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

IV.E of this ANOPR. 

4. Test Procedure 

A test procedure outlines the method 

by which manufacturers will determine 

the efficiency of their commercial 

refrigeration equipment, and thereby 

assess compliance with an energy 

conservation standard. 

Section 136(f)(1)(B) of EPACT 2005 

amended section 343 of EPCA (42 

U.S.C. 6314) by adding new subsections 

343(a)(6)(A)–(D) (42 U.S.C. 

6314(a)(6)(A)–(D)), which direct the 

Secretary to develop test procedures for 

commercial refrigeration equipment. On 

December 8, 2006, DOE published a 

final rule (the December 2006 final rule) 

in which it adopted American National 

Standards Institute (ANSI)/ARI 

Standard 1200–2006, Performance 

Rating of Commercial Refrigerated 

Display Merchandisers and Storage 

Cabinets, with one modification, as the 

DOE test procedure for this equipment. 

71 FR 71340, 71369–70.8 ANSI/ARI 

Standard 1200–2006 contains rating 

temperature specifications of 38 °F 

(±2 °F) for commercial refrigerators and 

refrigerator compartments, 0 °F (±2 °F) 

for commercial freezers and freezer 

compartments, and ¥5 °F (±2 °F) for 

commercial ice-cream freezers, and 

requires performance tests to be 

conducted according to the American 

Society of Heating, Refrigerating, and 

Air-Conditioning Engineers (ASHRAE) 

Standard 72–2005, Method of Testing 

Commercial Refrigerators and Freezers, 

test method. The one modification DOE 

made in adopting ANSI/ARI Standard 

1200–2006 was to adopt in the final rule 

¥15 °F (±2 °F) as the rating temperature 

for commercial ice-cream freezers, 

instead of ¥5 °F (±2 °F). 71 FR 71370. 

In addition, DOE adopted ANSI/ 

Association of Home Appliance 

Manufacturers (AHAM) Standard HRF–

1–2004, Energy, Performance and 

Capacity of Household Refrigerators, 

Refrigerator-Freezers and Freezers, for 

determining compartment volumes for 

this equipment. 71 FR 71369–70. 

As mentioned above, on April 25, 

2006, DOE published a Framework 

Document that describes the procedural 

and analytical approaches to evaluate 

energy conservation standards for 

commercial refrigeration equipment and 

presented this analytical framework to 

stakeholders during the Framework 

public meeting held on May 16, 2006. 

During the Framework public meeting, 

the Food Products Association (FPA) 

suggested, in lieu of climate-adjusted 

standards, climate conditions be part of 

the test method. FPA stated that DOE 

should specify the range of conditions 

that are expected for efficiency testing, 

and pointed out that most grocery stores 

across the country operate in a 65 °F to 

70 °F range. (Public Meeting Transcript, 

No. 3.4 at pp. 158–159) ANSI/ARI 

Standard 1200–2006 requires that 

testing be in accordance with ASHRAE 

Standard 72–2005, which requires 

ambient conditions during testing of 

75.2 °F (±1.8 °F) for dry bulb 

temperature and 64.4 °F (±1.8 °F) for 

wet bulb temperature. Although this is 

not the range recommended by FPA, it 

is close to FPA’s recommended range, 

these temperatures have been widely 

used for testing commercial refrigeration 

equipment, and they provide ambient 

test temperatures that are typical of the 

conditions in which this equipment 

generally operates. Therefore, DOE’s test 

procedure for commercial refrigeration 

equipment does include ambient rating 

conditions that represent normal 

operation conditions for commercial 

refrigeration equipment. 

During the Framework public meeting 

and Framework comment period, DOE 

received comments on the inclusion of 

‘‘application temperatures’’ for 

commercial refrigeration equipment, 

which are rating temperatures other 

than the standard rating temperatures 

prescribed by DOE’s test procedures (38 

°F for commercial refrigerators, 0 °F for 

commercial freezers, and ¥15 °F for 

commercial ice-cream freezers). Hill 

Phoenix stated that manufacturers of 

commercial refrigeration equipment 

occasionally produce a piece of 

equipment (usually at the customer’s 

request) that is designed to operate at a 

temperature significantly different from 

one of the three standard temperatures. 

(Public Meeting Transcript, No. 3.4 at 

pp. 74–76) ARI commented that DOE 

should analyze the shipment data and 

determine whether it would be worth 

regulating equipment that operates at 

application temperatures if shipments 

for these units are very low. (Public 

Meeting Transcript, No. 3.4 at p. 79) ARI 

also asserted that allowing for an 

application temperature category is 

essential because operating temperature 

plays a key role in equipment energy 

consumption. (ARI, No. 7 at p. 4) The 

Joint Comment pointed out that the 

application temperature category should 

be reserved for equipment that cannot 

operate at 0 °F or at 38 °F, that DOE 

should not regulate equipment that has 

a small shipments volume, and that 

appropriate Federal standards and 

rating temperatures should be 

developed if shipments are large. (Joint 

Comment, No. 9 at p. 3) 

DOE analyzed the shipments data 

provided by ARI during the Framework 

comment period. Excluding equipment 

for which EPACT 2005 amended EPCA 

to set standards (self-contained 

commercial refrigerators and 

commercial freezers with doors), there 

were 170,949 units of remote 

condensing commercial refrigerators 

and commercial freezers, self-contained 

commercial refrigerators and 

commercial freezers without doors, and 

commercial ice-cream freezers shipped 

in 2005. Shipments of commercial 

refrigerator-freezers were not reported, 

but are considered to be very small. Of 

the total shipments (both self-contained 

and remote condensing), only 1.7 

percent were equipment that operate at 

45 °F, 20 °F, 10 °F, or ¥30 °F 

(application temperatures), and 98.3 

percent were equipment that operate at 

38 °F, 0 °F, or ¥15 °F. By far, the 

application temperature with the largest 

number of units shipped is the 45 °F 

category (typically ‘‘wine chillers’’), and 

these were predominately remote 

condensing equipment. There were 

1,834 units of remote condensing wine 

chillers shipped in 2005. 

Comparatively, in 2005 there were 

85,001 units of remote condensing 

refrigerators that operate at 38 °F. 

As stated above, DOE’s test procedure 

for commercial refrigeration equipment 

requires that all equipment, including 

equipment designed to operate at 

application temperatures, be tested at 

one of the three rating temperatures: 

38 °F for refrigerators, 0 °F for freezers, 

and ¥15 °F for ice-cream freezers. Given 

the relatively low shipment volumes of 

equipment that operates at application 

temperatures, as well as DOE’s 

understanding that some of this 

equipment already can operate and be 

tested at one of the standard rating 

temperatures and that manufacturers 

might be able to redesign other 

equipment in relatively minor ways to 

have these capabilities, DOE believes 

this requirement will not place an 

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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 41169 

9 ‘‘Commercial refrigerators, commercial freezers, 

and commercial refrigerator-freezers’’ is a type of 

covered commercial equipment. For purposes of 

discussion only in this proceeding, DOE uses the 

term ‘‘categories’’ to designate groupings of 

‘‘commercial refrigeration equipment.’’ The 

categories of equipment are: self-contained 

commercial refrigerators, commercial freezers, and 

commercial refrigerator-freezers without doors; 

remote condensing commercial refrigerators, 

commercial freezers, and commercial refrigeratorfreezers; and commercial ice-cream freezers. DOE 

will analyze specific equipment classes that fall 

within these general categories and set appropriate 

standards. 

unreasonable burden on manufacturers. 

In addition, if necessary, manufacturers 

could seek waivers from the DOE test 

procedure, pursuant to 10 CFR 431.401. 

For these reasons, DOE does not intend 

to develop separate standards for 

equipment that operates at application 

temperatures. 

II. Commercial Refrigeration 

Equipment Analyses 

This section addresses the analyses 

DOE has performed and intends to 

perform for this rulemaking. A separate 

subsection addresses each analysis, and 

contains a general introduction that 

describes the analysis and a discussion 

of comments received from interested 

parties. 

A. Market and Technology Assessment 

When DOE begins a standards 

rulemaking, it develops information that 

provides an overall picture of the 

market for the equipment concerned, 

including the nature of the equipment, 

the industry structure, and the market 

characteristics for the equipment. This 

activity consists of both quantitative and 

qualitative efforts based primarily on 

publicly available information. The 

subjects addressed in the market and 

technology assessment for this 

rulemaking include definitions, 

equipment classes, manufacturers and 

market shares, shipments of covered 

equipment, regulatory and nonregulatory programs, and technologies 

that could be used to improve the 

efficiency of covered commercial 

refrigeration equipment. This 

information serves as resource material 

for use throughout the rulemaking. 

1. Definitions of Commercial 

Refrigeration Equipment Categories 

Section 136(c) of EPACT 2005 

amended section 342 of EPCA to 

include new subsection (c)(4)(A), which 

mandates that DOE issue standards for 

three categories of commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers.9

Accordingly, pursuant to this provision, 

the three categories of equipment 

addressed by this rulemaking are: 

remote condensing commercial 

refrigerators, commercial freezers and 

commercial refrigerator-freezers; selfcontained commercial refrigerators, 

commercial freezers, and commercial 

refrigerator-freezers without doors; and 

commercial ice-cream freezers. These 

categories of equipment are referred to 

collectively as ‘‘commercial 

refrigeration equipment.’’

a. Coverage of Equipment Excluded 

From American National Standards 

Institute/Air-Conditioning and 

Refrigeration Institute Standard 1200–

2006 

During the Framework comment 

period, ARI stated that the ANSI/ARI 

Standard 1200–2006 test procedure 

specifically excludes ice-cream 

‘‘dipping cabinets,’’ but recommended 

that DOE include this equipment under 

this rulemaking as commercial freezers. 

(ARI, No. 7 at p. 3) ARI also appeared 

to suggest, however, that this and 

certain other equipment excluded from 

ANSI/ARI Standard 1200–2006, such as 

floral merchandisers, are excluded from 

coverage under EPCA because they are 

not considered commercial display 

merchandisers or storage cabinets. (ARI, 

No. 7 at p. 7) 

EPCA directs DOE to set standards for 

commercial refrigeration equipment 

(i.e., the three categories of equipment 

identified above). Any equipment that 

meets the EPCA definition of a 

‘‘commercial refrigerator, freezer, or 

refrigerator-freezer’’ (see section I.D and 

the preceding section) and falls under 

one of these three categories will be 

covered by this rulemaking. In the 

December 2006 final rule, DOE 

incorporated by reference certain 

sections of ANSI/ARI Standard 1200–

2006 as the test procedure for 

commercial refrigeration equipment, but 

did not reference section 2.2, which 

provides exclusions for certain 

equipment such as ice-cream dipping 

cabinets and floral display 

merchandisers. The equipment 

excluded in this section of ANSI/ARI 

Standard 1200–2006 will only be 

excluded from this rulemaking if they 

do not meet the EPACT 2005 definition 

of a ‘‘commercial refrigerator, freezer, or 

refrigerator-freezer.’’

b. Coverage of Equipment Not Designed 

for Retail Use 

During the Framework comment 

period, several stakeholders commented 

on whether this rulemaking applies to 

equipment not designated for retail use. 

FPA commented that DOE needs to 

distinguish between ‘‘industrial’’ and 

‘‘commercial.’’ FPA believes that the 

EPCA requirements for commercial 

refrigeration equipment were intended 

for ‘‘point-of-sale’’ equipment that is 

found in convenience stores and 

supermarkets. FPA continued that, in 

the food industry, ‘‘refrigeration’’

includes the industrial equipment found 

in manufacturing and processing 

facilities, not just the equipment in 

retail stores. (Public Meeting Transcript, 

No. 3.4 at pp. 23–24) Southern 

Company stated that the language 

‘‘storing or displaying or dispensing’’ in 

DOE’s definition of ‘‘ice-cream freezer’’

is ambiguous because it could include 

some industrial equipment the size of a 

tractor-trailer compartment. Southern 

Company believes there needs to be 

language to clarify that this rulemaking 

covers equipment used at the retail 

level. (Public Meeting Transcript, No. 

3.4 at pp. 35–36) Southern Company 

and EEI both stated that a literal reading 

of DOE’s proposed equipment classes 

appears to include industrial 

refrigeration equipment, which is not 

used for the display of merchandise for 

sale to the consumer. Southern 

Company and EEI believe that the 

inclusion of this equipment would 

unnecessarily complicate the analysis 

and the development of test procedures. 

They also stated that this equipment is 

not covered by EPCA and only 

commercial equipment is covered. They 

suggest that DOE define which 

equipment is for commercial purposes 

and which is for industrial purposes. 

Southern Company and EEI suggest that 

DOE define commercial refrigeration 

equipment as ‘‘refrigeration equipment 

which would normally be used in a 

commercial business which sells 

products to ultimate consumers.’’

Further, the definition ‘‘should not 

include equipment which is normally 

used only in refrigerated warehouses or 

manufacturing facilities.’’ (Southern 

Company, No. 6 at pp. 1–2; EEI, No. 8 

at p. 1) 

DOE understands that industrial 

refrigeration equipment consists of 

equipment used to process, 

manufacture, transport, or store chilled 

or frozen food and other perishable 

items. Industrial refrigeration 

equipment used to process or 

manufacture chilled or frozen food 

primarily includes equipment used to 

flash-freeze or chill food on an assembly 

line or in a batch manufacturing 

process. Industrial refrigeration 

equipment used to transport chilled or 

frozen food or other perishable items 

primarily includes refrigerated rail cars 

and tractor-trailers. In industrial 

buildings, temporary storage of chilled 

or frozen food is also necessary, as the 

manufactured product is often held at 

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41170 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

10Test procedures are found at 10 CFR 431.64. 

11The EPCA provision that requires this 

rulemaking identifies ‘‘ice-cream freezers’’

separately from ‘‘self-contained commercial 

refrigerators, commercial freezers, and commercial 

refrigerator-freezers without doors’’ and ‘‘remote 

condensing commercial refrigerators, commercial 

freezers, and commercial refrigerator-freezers.’’ (42 

U.S.C. 6313(c)(4)(A), added by EPACT 2005, section 

136(c)) Since the Act neither specifies nor indicates 

that ‘‘ice-cream freezers’’ are limited to equipment 

with a particular type of condensing unit (i.e., 

remote or self-contained), equipment that has a 

remote condensing unit and also meets DOE’s 

definition of ‘‘ice-cream freezer’’ would be 

considered an ‘‘ice-cream freezer.’’

the manufacturing facility for processing 

or while awaiting transport. Industrial 

refrigeration equipment used to store 

chilled or frozen food is accomplished 

with refrigerated warehouses and/or 

refrigerated walk-in rooms (‘‘walk-ins’’). 

The term ‘‘commercial refrigerator, 

freezer, and refrigerator-freezer’’ is 

defined as refrigeration equipment that, 

in part, ‘‘displays or stores merchandise 

and other perishable materials’’ (see 

section I.D of this ANOPR). DOE 

interprets this language to mean that 

equipment used in the processing, 

manufacture or transport of chilled or 

frozen food is not considered 

commercial refrigeration equipment 

because it is not used to ‘‘display or 

store.’’ However, equipment that is used 

to store chilled or frozen food is 

considered covered equipment. This 

language does not make mention of the 

intended destination of the equipment, 

so DOE believes that walk-ins are 

covered under the definition because 

they store chilled or frozen food, 

regardless of whether the application is 

commercial or industrial. However, it is 

unclear whether this rulemaking would 

be the appropriate place to address 

walk-ins. The test procedures for selfcontained commercial refrigerators, 

commercial freezers, and commercial 

refrigerator-freezers with doors specified 

in EPCA section 343(a)(6)(A)(ii) 

specifically exclude walk-ins and 

therefore DOE believes that the 

standards in EPCA sections 342(c)(2) 

and (3) do not apply to walk-ins. Since 

the test procedures DOE adopted for 

equipment covered under this 

rulemaking also specifically exclude 

walk-ins, DOE believes that the 

standards being developed in this 

rulemaking under EPCA section 

342(c)(4)(A) also do not apply to walkins.10 DOE could, however, address 

walk-ins under EPCA section 

342(c)(4)(B), which states that DOE may 

issue standard levels, by rule, for other 

categories of commercial refrigerators, 

commercial freezers and commercial 

refrigerator-freezers. 

c. Remote Condensing Commercial 

Refrigerators, Commercial Freezers, and 

Commercial Refrigerator-Freezers 

Under EPCA, this equipment includes 

commercial refrigerators, commercial 

freezers, and commercial refrigeratorfreezers that have a remote condensing 

unit, except for any remote condensing 

equipment that would meet DOE’s 

definition of ‘‘ice-cream freezer’’ as set 

forth at 10 CFR 431.62, 71 FR 71369.11

This equipment is typically used to 

store and display merchandise for direct 

sale to the consumer, and referred to as 

‘‘display cases,’’ ‘‘display cabinets,’’ or 

‘‘merchandisers.’’ The remote 

condensing unit has at least one 

compressor and a condenser coil, and 

most remote condensing units consist of 

multiple compressors (a compressor 

‘‘rack’’) that serve multiple display 

cases. 

EPCA does not specifically define the 

term ‘‘commercial refrigerator-freezer,’’

nor is DOE aware of an existing, written 

definition for such equipment. 

Therefore, in its Framework Document, 

DOE sought feedback on use of the 

definition of ‘‘electric refrigeratorfreezer’’ for consumer products (set 

forth in 10 CFR 430.2) as a basis for 

defining the term ‘‘remote condensing 

commercial refrigerator-freezer.’’ (As 

discussed below, DOE also sought input 

on using this definition as a basis for 

defining self-contained commercial 

refrigerator-freezers.) The consumer 

product definition in 10 CFR 430.2 

states that ‘‘electric refrigerator-freezer 

means a cabinet which consists of two 

or more compartments with at least one 

of the compartments designed for the 

refrigerated storage of food at 

temperatures above 32°F. [sic] and with 

at least one of the compartments 

designed for the freezing and storage of 

food at temperatures below 8°F. [sic] 

which may be adjusted by the user to a 

temperature of 0°F. [sic] or below. The 

source of refrigeration requires single 

phase, alternating current [(AC)] electric 

energy input only.’’ During the 

Framework comment period, three 

stakeholders commented on this 

definition. (ARI, No. 7 at p. 3; Public 

Meeting Transcript, No. 3.4 at p. 45; and 

Public Meeting Transcript, No. 3.4 at 

pp. 50–53) ARI and Zero Zone believe 

the definition is inappropriate for 

commercial equipment. ARI proposed 

that a remote condensing commercial 

refrigerator, freezer, or refrigeratorfreezer be defined as ‘‘a cabinet cooled 

by a remote refrigerating system for 

displaying and/or storing chilled and/or 

frozen food to be maintained within 

prescribed temperature limits. The 

cabinet is connected to one or more 

power sources ranging from 120 to 240 

volts AC.’’ (ARI, No. 7 at p. 3) During 

the Framework public meeting, ASAP 

indicated that DOE should look at the 

detailed definition given in EPACT 2005 

for refrigerator-freezers. (Public Meeting 

Transcript, No. 3.4 at p. 53) 

Based on the comments, DOE now 

believes that it need not adopt a 

definition of ‘‘remote condensing 

commercial refrigerator-freezer.’’ The 

comments by Zero Zone indicate the 

difficulties of adapting the residential 

product definition of refrigerator-freezer 

to the commercial setting. ARI did not 

comment on the need for a definition of 

commercial refrigerator-freezer discrete 

from definitions of refrigerator and 

freezer, and its suggested definition of 

‘‘commercial refrigerator, commercial 

freezer, and commercial refrigeratorfreezer’’ both duplicates and, in some 

ways, is inconsistent with the EPCA 

definition of this term. For example, one 

inconsistency is that the ARI definition 

states that the cabinet is connected to 

one or more power sources ranging from 

120 to 240 volts AC, whereas the EPCA 

definition does not have any 

requirements for power sources. 

Further, ASAP did not address the fact 

that the definition in EPACT 2005 does 

not distinguish refrigerator-freezers from 

refrigerators and freezers. The 

comments by ARI and ASAP, however, 

indicate that they believe DOE does not 

need to adopt a separate definition for 

refrigerator-freezers. 

DOE intends to rely here on the 

definition of ‘‘commercial refrigerator, 

freezer, and refrigerator-freezer’’ in 

EPCA (42 U.S.C. 6311(9)(A), added by 

EPACT 2005, section 136(a)(3)), and on 

its understanding of the well-accepted 

meaning of ‘‘refrigerator-freezer.’’ Thus, 

DOE construes the EPCA term ‘‘remote 

condensing commercial refrigeratorfreezer’’ (see 42 U.S.C. 6313(c)(4)(A), 

added by EPACT 2005, section 136(c)) 

to mean refrigeration equipment that 

operates at both chilled and frozen 

temperatures and that is connected to a 

remote condensing unit. This term 

refers to equipment with two or more 

separate compartments, at least one of 

which is capable of maintaining food or 

other perishable items at temperatures 

above freezing and at least one of which 

maintains its contents frozen. By 

contrast, refrigerators operate only at 

temperatures above freezing, and 

freezers only at or below freezing 

temperatures. 

In its Framework Document, DOE 

pointed out that EPCA defines a ‘‘selfcontained condensing unit,’’ in part, as 

an assembly of refrigerating components 

‘‘that is an integral part of the 

refrigerated equipment * * * ’’ (42 

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12Secondary coolant systems use a direct 

expansion refrigeration cycle to cool a secondary 

single-phase fluid, which is pumped to heat 

exchangers in remote condensing display cases and 

is used to cool food or other perishable items. 

U.S.C. 6311(9)(F), added by EPACT 

2005, section 136(a)(3)) EPCA also 

defines a ‘‘remote condensing unit,’’ in 

part, as an assembly of refrigerating 

components ‘‘that is remotely located 

from the refrigerated equipment * * *.’’

(42 U.S.C. 6311(9)(E), added by EPACT 

2005, section 136(a)(3)) DOE also stated 

in the Framework Document that this 

difference in the definitions may mean 

that, under EPCA, remote condensing 

units are not a part of the refrigerated 

equipment and that energy conservation 

standards for remote condensing 

commercial refrigerators, commercial 

freezers, and commercial refrigeratorfreezers would apply only to the 

refrigerated equipment (i.e., storage 

cabinets and display cases), but not to 

the remote condensing units. DOE 

specifically requested stakeholder 

comments on this topic. 

ARI asserted that it was responsible 

for the language in EPACT 2005 on this 

subject and the intent was to cover the 

display case and storage cabinet only, 

not the remote condensing unit. (Public 

Meeting Transcript, No. 3.4 at pp. 47–

48, 49) ACEEE responded by stating that 

it may be worth trying to cover the 

remote condensing unit so that the 

whole system is regulated. (Public 

Meeting Transcript, No. 3.4 at p. 48) 

Zero Zone pointed out that regulating 

the remote condensing unit would 

prove to be difficult because of the wide 

range of design differences in 

compressors and condensing units, and 

recommended not regulating them now. 

(Public Meeting Transcript, No. 3.4 at p. 

48) ARI stated that it agreed with DOE’s 

interpretation of EPACT 2005 that the 

rulemaking should be limited to the 

refrigerated display merchandisers and 

storage cabinets only. Furthermore, ARI 

asserted that including the remote 

condensing unit in this rulemaking 

would significantly complicate the 

analysis and likely delay the completion 

date, and it recommended that DOE 

reassess the situation in the future to 

determine whether energy conservation 

standards should be established for 

remote condensing equipment. (ARI, 

No. 7 at p. 3) Finally, the Joint Comment 

stated that DOE should cover remote 

condensing units under this rulemaking 

because it would provide more 

opportunity for energy savings and for 

manufacturers to trade off performance 

between different parts of the system. 

However, if DOE determines that 

including the entire system in this 

rulemaking is impractical, then the 

balance of the system should not be 

included under ‘‘covered’’ equipment 

for now, but instead, DOE should 

consider such coverage in a subsequent 

revision to the standard. (Joint 

Comment, No. 9 at p. 5). 

Clearly, stakeholders differed on 

whether a remote condensing unit is 

considered part of the equipment to 

which it is connected, and whether such 

units are covered by the EPCA directive 

that DOE set standards for remote 

condensing commercial refrigerators, 

commercial freezers, and commercial 

refrigerator-freezers. (42 U.S.C. 

6313(c)(4)(A), added by EPACT 2005, 

section 136(c)) ARI indicated that it 

believes EPCA does not authorize 

application of standards to remote 

condensing units, while ACEEE and the 

Joint Comment argued that remote 

condensing units should be covered but 

not necessarily in this rulemaking. 

However, DOE agrees with the 

stakeholders who stated that including 

remote condensing units in the present 

rulemaking would significantly 

complicate the rulemaking. There 

would be many difficulties in 

establishing standards for the display 

cases and the remote condensing units 

as a system. For example, display cases 

and remote condensing units are 

typically purchased from different 

manufacturers and installed at the site. 

Multiple display cases may be 

connected to one or more remote 

condensing units through an extensive 

network of refrigerant piping. Since 

each system is custom designed for its 

location, each individual system will 

have unique aspects to its design and 

operation (e.g., number of display cases, 

variation in temperature control, use of 

heat recovery, etc.). Further, because the 

intended configuration of the final 

system design is not known when the 

components are manufactured, it would 

be difficult, if not impossible, to set an 

energy conservation standard for the 

entire system at the point of 

manufacture. 

For these reasons, the energy 

conservation standards DOE intends to 

develop in this rulemaking for remote 

condensing commercial refrigeration 

equipment will apply to display cases 

only, not to the remote condensing 

units. DOE will address at a later time 

whether and to what extent it has the 

authority to regulate remote condensing 

units and, if so, whether standards that 

address these units are warranted and 

feasible. 

d. Secondary Coolant Applications 

In its Framework Document, DOE 

stated that it construed the language in 

section 136(a)(3) of EPACT 2005, 42 

U.S.C. 6311(9)(A)(vii), the definition for 

‘‘commercial refrigerator, freezer, and 

refrigerator-freezer,’’ to mean that socalled ‘‘secondary-coolant applications’’

are not covered under this rulemaking. 

DOE stated that it believed this 

interpretation of EPACT 2005 was 

consistent with ANSI/ARI Standard 

1200–2006, which explicitly excludes 

secondary-coolant applications. 

During the Framework comment 

period, several stakeholders commented 

on the coverage of equipment that uses 

secondary coolant systems.12 ACEEE 

stated that DOE should have a broad 

scope of coverage and should in general 

cover as much as possible in the 

rulemaking. (Public Meeting Transcript, 

No. 3.4 at p. 26) ARI stated that it agrees 

with the interpretation DOE expressed 

in the Framework Document that 

secondary coolant applications should 

not be covered under this rulemaking. 

ARI explained that these systems 

represent a very small percentage of 

currently installed commercial 

refrigeration systems in the United 

States, and that there are no test 

procedures currently available for 

measuring the energy consumption of 

such systems. ARI noted, however, that 

DOE should revisit the secondary 

coolant issue in the next three to four 

years. (ARI, No. 7 at p. 2) Hill Phoenix 

stated that based on its experience, 

display cases that use secondary coolant 

make up less than five percent of what 

it sells and that this statistic is probably 

representative of the market in general. 

(Public Meeting Transcript, No. 3.4 at p. 

30) Further, Southern Company stated, 

and EEI agreed, that it opposes the 

inclusion of secondary-coolant systems 

in this rulemaking because of timing 

and complexity. Since ANSI/ARI 

Standard 1200–2006 excludes 

secondary-coolant applications, their 

inclusion would complicate the 

development of a test procedure for 

commercial refrigeration equipment. 

Also, Southern Company and EEI 

oppose the inclusion of secondary 

coolant systems based on the small size 

of the secondary coolant market. 

(Southern Company, No. 6 at p. 2 and 

EEI, No. 8 at p. 1) The Joint Comment 

stated that they do not object to DOE’s 

interpretation that secondary-coolant 

equipment is not covered under this 

rulemaking, provided that this 

equipment in fact accounts for no more 

than five percent of remote equipment 

sold, as asserted by Hill Phoenix. (Joint 

Comment, No. 9 at p. 5) 

Section 340(9)(A)(vii) of EPCA (42 

U.S.C. 6311((9)(A)(vii), added by EPACT 

2005, section 136(a)(3)), states that the 

term ‘‘commercial refrigerator, freezer, 

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and refrigerator-freezer means 

equipment that ‘‘is connected to a selfcontained condensing unit or to a 

remote condensing unit.’’ (See section 

I.D.1 of this ANOPR.) In the Framework 

Document, DOE stated that it construes 

this language to mean that secondary 

coolant applications are not covered 

under this rulemaking. As indicated in 

the Framework Document, equipment 

using such applications are not directly 

connected to a self-contained or remote 

condensing unit. DOE further stated that 

it believed its interpretation to be 

consistent with ANSI/ARI Standard 

1200–2006. DOE has considered the 

comments it received, but continues to 

believe that the language in section 

340(9)(A)(vii) of EPCA means that 

equipment using secondary coolant 

systems are not covered under this 

rulemaking because they are not directly 

connected to a self-contained or remote 

condensing unit and, therefore, do not 

fit within the definition of ‘‘commercial 

refrigerator, freezer, and refrigeratorfreezer’’ in EPCA. 

e. Self-Contained Commercial 

Refrigerators, Commercial Freezers, and 

Commercial Refrigerator-Freezers 

Without Doors 

Under EPCA, this equipment includes 

all types of commercial refrigerators, 

commercial freezers, and commercial 

refrigerator-freezers that have a selfcontained condensing unit and have no 

doors, except for self-contained 

equipment that meets DOE’s definition 

of ‘‘ice-cream freezer’’ as set forth at 10 

CFR 431.62. 71 FR 71369. As with 

remote condensing equipment, selfcontained equipment is typically used 

to store and display merchandise for 

direct sale to the consumer, and is 

commonly referred to as a ‘‘refrigerated 

display case,’’ ‘‘display cabinet,’’ or 

‘‘merchandiser.’’ Self-contained 

equipment is defined as having an 

integral condensing unit (i.e., the 

condensing unit is not remote from the 

refrigerated cabinet). (See 42 U.S.C. 

6311(9)(F), added by EPACT 2005, 

section 136(a)(3)) The 2006 ASHRAE 

Refrigeration Handbook (see chapter 47, 

p. 47.1) defines ‘‘reach-in’’ refrigerators 

or freezers as being upright and box 

shaped, and having hinged or sliding 

doors. Given this definition, selfcontained reach-in commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers (i.e., 

self-contained units with doors) are not 

covered in this rulemaking because the 

rulemaking only covers self-contained 

equipment without doors. 

In its Framework Document, as with 

the term ‘‘remote condensing 

commercial refrigerator-freezers,’’ DOE 

sought feedback on use of the definition 

of ‘‘electric refrigerator-freezer’’ for 

consumer products (as set forth in 10 

CFR 430.2) as a basis for defining the 

term ‘‘self-contained commercial 

refrigerator-freezer.’’ The comments on 

this subject were virtually identical to 

those received with respect to the 

remote condensing equipment, which 

are discussed above in section II.A.1.c, 

and DOE has reached the same 

conclusion here as it reached with 

respect to that equipment. Specifically, 

DOE does not intend at this point to 

adopt a definition for ‘‘self-contained 

commercial refrigerator-freezer without 

doors.’’ Rather, DOE intends to rely on 

EPCA’s definition of ‘‘commercial 

refrigerator, freezer, and refrigeratorfreezer,’’ and on its understanding of the 

well-accepted meaning of ‘‘refrigeratorfreezer.’’ DOE construes the EPCA term 

‘‘self-contained commercial refrigeratorfreezer without doors’’ (see 42 U.S.C. 

6313(c)(4)(A), added by EPACT 2005, 

section 136(c)) to mean refrigeration 

equipment that operates at both chilled 

and frozen temperatures, is connected to 

a self-contained condensing unit, and 

has no doors. Such equipment has two 

or more separate compartments, at least 

one of which is capable of maintaining 

food or other perishable items at 

temperatures above freezing and at least 

one of which maintains its contents 

frozen. 

f. Commercial Ice-Cream Freezers 

The EPCA provision that requires this 

rulemaking identifies ‘‘ice-cream 

freezers’’ separately from ‘‘selfcontained commercial refrigerators, 

freezers, and refrigerator-freezers 

without doors’’ and ‘‘remote condensing 

commercial refrigerators, freezers, and 

refrigerator-freezers.’’ (42 U.S.C. 

6313(c)(4)(A), added by EPACT 2005, 

section 136(c)) EPCA neither specifies 

nor indicates that ‘‘ice-cream freezers’’

are limited to equipment with a 

particular door configuration (e.g., with 

or without doors) or type of condensing 

unit (i.e., remote or self-contained). 

Thus, pursuant to EPCA’s definition of 

‘‘commercial refrigerator, freezer, and 

refrigerator-freezer’’ (42 U.S.C. 

6311(9)(A), added by EPACT 2005, 

section 136(a)(3)), DOE believes 

commercial ice-cream freezers include 

equipment with all door types (i.e., solid 

doors, transparent doors, or no doors) 

and configurations (e.g., vertical or 

horizontal), as well as equipment with 

either integral or remote condensing 

units (i.e., self-contained or remote 

condensing). 

During the Framework comment 

period, several stakeholders commented 

on the definition of commercial icecream freezer. ARI stated that the 

majority of equipment intended for ice 

cream operates at ¥5 °F or 0 °F, with 

a minority that operates at ¥30 °F, and 

stated that DOE should focus on those 

ice-cream freezers with high shipment 

volumes. (Public Meeting Transcript, 

No. 3.4 at pp. 32–33) Zero Zone stated 

that there are many interpretations of 

what an ice-cream freezer is. Zero Zone 

asserted that California and Canada 

define an ice-cream freezer ‘‘along the 

lines of a dipping cabinet.’’ (Public 

Meeting Transcript, No. 3.4 at p. 35) 

Zero Zone further commented that the 

display-type freezers it sells for ice 

cream and frozen food are the same, that 

these cases have adjustable 

temperatures, and that the user sets the 

temperature of the equipment a little 

lower when it uses the equipment for 

ice cream. Typically, the equipment has 

two ratings, one for use of frozen food 

and for ice cream, because customers 

want to know the energy use for each. 

Zero Zone also characterized as ‘‘true 

ice-cream cabinets’’ those which have 

specific functions for the processing and 

storage of ice cream, rather than its 

display, and asserted that comparatively 

few of these are sold. (Public Meeting 

Transcript, No. 3.4 at p. 38) Zero Zone 

asserted that the term ‘‘ice-cream 

freezer’’ cannot be specifically defined 

because ice cream can be stored or 

displayed in a number of cabinets that 

have different cabinet styles and that 

may also be used to store other, non-icecream equipment. In addition, it stated 

that not all ice cream is stored at the 

same temperature. Zero Zone 

recommended that freezers be divided 

into three categories: ice-cream dipping 

cabinets, 0 °F to ¥15 °F, and below 

¥15 °F. (Zero Zone, No. 5 at p. 1) Hill 

Phoenix stated that its freezer cases also 

can operate at either 0 °F or ¥5 °F, but 

there is no distinction in the design of 

the case used for ice cream and that 

used for frozen food, only in how the 

customer uses it. Hill Phoenix added 

that because these two temperatures are 

so close, there is a linear relationship 

between temperature and energy usage. 

Hill Phoenix also stated there is a 

category of cases that operate at ¥15 °F 

to ¥30 °F, called ‘‘hardening’’ cabinets, 

which have a different design than 

typical freezer cases. (Public Meeting 

Transcript, No. 3.4 at p. 41) Both 

Southern Company and EEI stated that 

it is important that DOE develop 

definitions for commercial freezer and 

ice-cream freezer that are all-inclusive, 

and do not leave any loopholes for 

States to regulate. (Southern Company, 

No. 6 at p. 2; EEI, No. 8 at p. 1) ARI 

stated that there is very little difference 

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13For this rulemaking, equipment class 

designations consist of a combination (in sequential 

order separated by periods) of an (1) equipment 

family code (VOP=vertical open, SVO=semivertical 

open, HZO=horizontal open, VCT=vertical 

transparent doors, VCS=vertical solid doors, 

HCT=horizontal transparent doors, HCS=horizontal 

solid doors, or SOC=service over counter), (2) an 

operating mode code (RC=remote condensing or 

SC=self-contained), and (3) a rating temperature 

code (M=medium temperature (38 °F), L=low 

temperature (0 °F), or I=ice-cream temperature 

(¥15 °F)). For example, ‘‘VOP.RC.M’’ refers to the 

‘‘vertical open, remote condensing, medium 

temperature’’ equipment class. See discussion 

below and chapter 3 of the TSD, market and 

technology assessment, for a more detailed 

explanation of the equipment class terminology. 

between freezers designed to operate at 

0 °F and ¥5 °F, both in terms of features 

and in terms of energy consumption. 

ARI added that a recent survey of its 

members revealed that a significant 

number of ice-cream freezers operate at 

¥15 °F. It requested that freezers that 

operate at ¥5 °F be included in the 

freezer category. ARI intends to amend 

ANSI/ARI Standard 1200–2006 to 

reflect an ice-cream freezer temperature 

of ¥15 °F. In addition, ARI proposed 

that specialty freezers, such as 

hardening cabinets that operate far 

below the ice-cream freezer 

temperature, be excluded from this 

rulemaking. (ARI, No. 7 at p. 2) The 

Joint Comment agreed with ARI that 

freezers that operate at ¥5 °F be tested 

at 0 °F, and that testing at ¥5 °F will 

only be for information purposes, not 

for setting standards. (Joint Comment, 

No. 9 at p. 3) 

As part of the December 8, 2006 final 

rule, in which it adopted test 

procedures for commercial refrigeration 

equipment, DOE adopted the following 

definition for ‘‘ice-cream freezer:’’ ‘‘a 

commercial freezer that is designed to 

operate at or below ¥5 °F (¥21 °C) and 

that the manufacturer designs, markets, 

or intends for the storing, displaying, or 

dispensing of ice cream.’’ 71 FR 71369; 

10 CFR 431.62. In addition, this final 

rule prescribed the rating temperature at 

¥15 °F for ice-cream freezers. 71 FR 

71370; 10 CFR 431.64. 

Under this definition, unless 

equipment is designed, marketed, or 

intended specifically for the storage, 

display or dispensing of ice cream, it 

would not be considered an ‘‘ice-cream 

freezer.’’ Multi-purpose commercial 

freezers, manufactured for storage and 

display, for example, of frozen foods as 

well as ice cream would not meet this 

definition, and DOE would not treat 

them as commercial ice-cream freezers 

in this rulemaking. This is in accord 

with the comments listed above, which 

indicated that DOE should not classify 

such freezers as ice-cream freezers. On 

the other hand, any commercial freezer 

that is specifically manufactured for 

storing, displaying or dispensing ice 

cream, and that is designed so that in 

normal operation it can operate at or 

below ¥5 °F (¥21 °C), would meet the 

definition. This includes equipment that 

some stakeholders referred to as true 

ice-cream cabinets—freezers designed to 

operate considerably below ¥5 °F and 

that are sometimes referred to as 

‘‘hardening’’ cabinets and are 

specifically designed for ice cream 

storage, for example—as well as those 

ice-cream dipping cabinets that are 

designed to operate at least to some 

extent below ¥5 °F. DOE intends to 

classify and address these types of 

equipment as commercial ice-cream 

freezers in this rulemaking. 

2. Equipment Classes 

In general, when evaluating and 

establishing energy conservation 

standards, DOE divides covered 

equipment into equipment classes by 

the type of energy used, capacity or 

other performance-related features that 

affect efficiency, and factors such as the 

utility of the equipment to users. (See 42 

U.S.C. 6295(q).) Different energy 

conservation standards may apply to 

different equipment classes. 

Commercial refrigeration equipment 

can be divided into various equipment 

classes categorized by physical 

characteristics that affect the efficiency 

of the equipment. Most of these 

characteristics affect the merchandise 

that the equipment can be used to 

display, and how that merchandise can 

be accessed by the customer. Key 

physical characteristics are the 

operating temperature, the presence or 

absence of doors (i.e., closed cases or 

open cases), the type of doors used (i.e., 

transparent or solid), the angle of the 

door or air curtain (i.e., horizontal, 

semivertical, or vertical) and the type of 

condensing unit (i.e., remote or selfcontained). ARI agreed that definitions 

for the terms horizontal, semivertical, 

and vertical be based upon the angle of 

the air curtain. (ARI, No. 7 at p. 7) 

DOE could not identify an existing 

industry definition of air-curtain angle, 

but developed a preliminary definition 

for consideration. DOE is considering 

defining air-curtain angle as the angle 

between a vertical line and the line 

formed by the points at the center of the 

discharge air grille and the center of the 

return air grille, when viewed in crosssection. DOE specifically seeks feedback 

on this definition of air-curtain angle. 

This is identified as Issue 2 under 

‘‘Issues on Which DOE Seeks Comment’’

in section IV.E of this ANOPR. 

DOE proposed an organization of 

equipment classes in its Framework 

Document based on the equipment 

classes for self-contained commercial 

refrigerators, commercial freezers and 

commercial refrigerator-freezers with 

doors described in section 136(c)(2) of 

EPACT 2005. Another organization of 

equipment classes for commercial 

refrigeration equipment was proposed 

by ARI during the Framework comment 

period, and presented by DOE during 

the Framework public meeting. ARI 

organized commercial refrigeration 

equipment by equipment family (where 

equipment family is considered as broad 

groups of covered equipment that have 

similar geometric characteristics), 

condensing unit type, and operating 

temperature.13 (ARI, No. 7 at pp. 5–7) 

During the public meeting, DOE noted 

that ARI’s equipment families included 

a ‘‘service over counter’’ equipment 

family, which was absent from DOE’s 

equipment class organization. DOE 

understands that the service over 

counter equipment family is unique in 

that access to merchandise on display is 

provided only to sales personnel from 

the rear of the cabinet. ARI noted that 

DOE did not categorize equipment with 

doors based on whether the doors are 

solid or transparent, and ARI explained 

that this is a necessary distinction. (ARI, 

No. 7 at p. 7) The Joint Comment stated 

that the equipment families proposed by 

ARI are reasonable. (Joint Comment, No. 

9 at p. 3) 

DOE agrees with ARI that the 

characteristics of the service over 

counter design affect efficiency, and is 

proposing an equipment class 

organization that includes a service over 

counter equipment family. DOE also 

agrees with ARI that the energy 

consumption of commercial 

refrigeration equipment with doors is 

affected by whether the doors are solid 

or transparent, and is proposing to 

include this distinction in its equipment 

class organization. 

In its Framework Document, DOE 

suggested that equipment without doors 

be divided into equipment classes based 

on air-curtain angles of 0° to 30° 

(vertical), 30° to 60° (semivertical), and 

60° to 90° (horizontal) from the vertical. 

During the Framework public meeting, 

DOE asked for comments on these 

proposed ranges of air-curtain angle. 

Hill Phoenix stated that the industry 

defines these as 0° to 10° for vertical, 

10° to 80° for semivertical, and 80° to 

90° for horizontal. (Public Meeting 

Transcript, No. 3.4 at p. 86) The Joint 

Comment stated that the ranges for 

vertical and semivertical should be 

closer to those used in DOE’s proposal. 

Specifically, the Joint Comment stated 

that because vertical equipment will 

tend to be more efficient and thus likely 

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14See Table II.1 through Table II.3, which set 

forth the meaning of the equipment class lettering 

designations. Also, see chapter 3 of the TSD for 

more details on the equipment class lettering 

designations. For example, ‘‘VOP.RC.M’’ refers to 

the ‘‘vertical open, remote condensing, medium 

temperature’’ equipment class. 

15The market data that DOE collected represents 

equipment offerings of major commercial 

refrigeration equipment manufacturers as of 2006. 

Each data point represents a particular model 

offered, not a piece of equipment shipped, and is 

not intended to represent shipments of equipment 

in the VOP.RC.M, SVO.RC.M, and HZO.RC.M 

equipment classes. However, in the absence of 

detailed shipment information broken down by 

energy use and air-curtain angle, DOE believes this 

market data provides a reasonable estimate of the 

distribution of equipment by energy use and aircurtain angle within these equipment classes. 

to have more stringent standards, if the 

equipment family delineations allow 

manufacturers to substitute semivertical 

for vertical, they could unintentionally 

shift the market to the less efficient 

standard. Therefore, the Joint Comment 

stated that DOE should determine a 

divide between vertical and semivertical 

that will not result in one type of 

equipment being substituted for the 

other. (Joint Comment, No. 9 at pp. 

3–4) 

The cost-efficiency data DOE received 

from ARI for four covered equipment 

classes were based on the industry 

definitions of 0° to 10° for vertical 

equipment, 10° to 80° for semivertical 

equipment, and 80° to 90° for horizontal 

equipment, as measured from the 

vertical. Therefore, DOE conducted its 

analyses for the ANOPR based on these 

definitions of equipment families, but 

recognizes the concern raised by the 

Joint Comment that these delineations 

may result in one type of equipment 

being substituted for another. To 

investigate the relationship of aircurtain angle to energy consumption for 

remote condensing medium temperature 

open display cases (VOP.RC.M, 

SVO.RC.M, and HZO.RC.M equipment 

classes), DOE collected market data, 

which is documented in the market and 

technology assessment (see chapter 3 of 

the TSD).14 15 These data show 

significant clusters of equipment 

divided by air-curtain angles of 10°, 30° 

and 65° from the vertical. The most 

significant cluster of equipment is in the 

range of 0° to 10° from the vertical (this 

cluster corresponds to the VOP.RC.M 

equipment class as currently defined), 

with less significant clusters between 

10° and 30°, 30° and 65°, and 65° and 

90° from the vertical. The large cluster 

of equipment between 0° to 10° from the 

vertical has a high frequency of units at 

6° to 9° from the vertical. With the 

delineation between vertical and 

semivertical equipment families at an 

angle of 10°, if the SVO.RC.M 

equipment class had a less stringent 

standard than the VOP.RC.M equipment 

class, DOE is concerned that 

manufacturers may adjust their 

equipment designs slightly to take 

advantage of the lower standard for 

SVO.RC.M equipment. A piece of 

equipment could be redesigned with a 

small change in air-curtain angle (e.g., 

from 9° to 11° from the vertical), that 

would not significantly affect energy 

consumption or utility. This redesign 

would move the equipment from the 

VOP.RC.M equipment class to the 

SVO.RC.M equipment class, where it 

would not be subject to as stringent a 

standard. 

DOE understands that there is the 

potential for manufacturers to redesign 

equipment to move from one equipment 

class to another regardless of where the 

air-curtain angle delineation is made. 

However, the concern raised above is 

heightened by the concentration of 

equipment in the 0° to 10° from the 

vertical range, and the potential for 

mass redesign of the majority of 

equipment currently classified as 

VOP.RC.M in order to be classified as 

SVO.RC.M. According to DOE’s market 

data, there is a clear region of low 

density at an air-curtain angle of 30° 

from the vertical, and DOE believes that 

drawing the delineation between the 

VOP and SVO equipment families here 

could potentially result in less 

equipment migration from the 

VOP.RC.M equipment class to the 

SVO.RC.M equipment class. 

Additionally, DOE’s market data 

provides little support for delineating 

the SVO.RC.M and the HZO.RC.M 

equipment families at 80° from the 

vertical. A significant group of 

equipment with similar characteristics 

(but clearly distinguished from the 

SVO.RC.M and VOP.RC.M equipment 

classes) is present with air curtain 

angles of 65° to 90° from the vertical. 

This supports drawing the SVO.HZO 

equipment family delineation at 60° to 

65° from the vertical. In light of this 

market data, DOE welcomes any 

additional data or feedback regarding 

the proposed ranges of air-curtain angles 

or shipments of equipment in the 

VOP.RC.M, SVO.RC.M and HZO.RC.M 

equipment classes broken down by 

energy use and air-curtain angle. 

DOE believes that the orientation of 

doors affects the energy consumption of 

commercial refrigeration equipment 

with doors and that this equipment can 

be broadly categorized by the angle of 

the door. DOE did not receive 

stakeholder feedback on how to define 

the door angle for equipment with 

doors, but is considering defining door 

angle as ‘‘the angle between a vertical 

line and the line formed by the plane of 

the door, when viewed in crosssection.’’ DOE specifically seeks 

feedback on this definition of door 

angle. This is identified as Issue 3 under 

‘‘Issues on Which DOE Seeks Comment’’

in section IV.E of this ANOPR. 

During the Framework comment 

period, no objections were raised to the 

proposal of equipment families of 

‘‘horizontal’’ and ‘‘vertical’’ equipment 

with doors. In addition, Hill Phoenix 

commented that ARI eliminated the 

‘‘semivertical with doors’’ equipment 

family (doors with an angle that 

deviated substantially from 0° or 90° 

with respect to the vertical) because no 

manufacturers could identify any 

shipments of semivertical equipment 

with doors. (Public Meeting Transcript, 

No. 3.4 at p. 63) Therefore, for 

equipment with solid and transparent 

doors, DOE is considering defining two 

equipment families each, based on door 

angles of 0° to 45° (vertical) and 45° to 

90° (horizontal). DOE specifically seeks 

feedback on these ranges of door angles 

for equipment with doors. This is 

identified as Issue 4 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

IV.E of this ANOPR. 

Based on the above information, DOE 

intends to use eight equipment families, 

which are shown in Table II.1. 

TABLE II.1.—EQUIPMENT FAMILY DESIGNATIONS

Equipment family Description 

Vertical Open (VOP) .......................................... Equipment without doors and an air-curtain angle greater than or equal to 0° and less than 10° 

from the vertical. 

Semivertical Open (SVO) ................................... Equipment without doors and an air-curtain angle greater than or equal to 10 and less than 

80° from the vertical. 

Horizontal Open (HZO) ...................................... Equipment without doors and an air-curtain angle greater than or equal to 80° from the 

vertical. 

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16Table II.4 identifies 48 classes of commercial 

refrigeration equipment. Of the 48 classes, 10 

classes are identified by asterisks. EPCA has already 

established energy conservation standards for these 

10 classes. (42 U.S.C. 6313(c)(2)–(3)) Therefore, 

these 10 classes are not covered under this 

rulemaking. 

TABLE II.1.—EQUIPMENT FAMILY DESIGNATIONS—Continued 

Equipment family Description 

Vertical Closed Transparent (VCT) .................... Equipment with hinged or sliding transparent doors and a door angle less than 45°. 

Horizontal Closed Transparent (HCT) ................ Equipment with hinged or sliding transparent doors and a door angle greater than or equal to 

45°. 

Vertical Closed Solid (VCS) ............................... Equipment with hinged or sliding solid (opaque) doors and a door angle less than 45°. 

Horizontal Closed Solid (HCS) ........................... Equipment with hinged or sliding solid (opaque) doors and a door angle greater than or equal 

to 45°. 

Service Over Counter (SOC) ............................. Equipment with sliding or hinged doors intended for use by sales personnel and fixed or 

hinged glass for displaying merchandise. 

Within each of these eight equipment 

families are equipment that have one of 

the two condensing unit configurations 

shown in Table II.2. 

TABLE II.2.—CONDENSING UNIT CONFIGURATION DESIGNATIONS

Condensing unit configuration Description 

Remote condensing (RC) ................................... Condensing unit is remotely located from the refrigerated equipment and consists of one or 

more refrigerant compressors, refrigerant condensers, condenser fans and motors, and factory-supplied accessories. 

Self-contained (SC) ............................................ Condensing unit is an integral part of the refrigerated equipment and consists of one or more 

refrigerant compressors, refrigerant condensers, condenser fans and motors, and factorysupplied accessories. 

Equipment classes would also be 

organized based on the three rating 

temperatures shown in Table II.3. 

TABLE II.3.—RATING TEMPERATURE DESIGNATIONS

Rating temperature Description 

38 °F (M) ............................................................ Medium temperature (refrigerators). 

0 °F (L) ............................................................... Low temperature (freezers). 

¥15 °F (I) ........................................................... Ice-cream temperature (ice-cream freezers). 

Based on stakeholder feedback, DOE 

is considering 38 of the 48 equipment 

classes shown in Table II.4.16 The 

equipment classes are organized by 

equipment family, compressor operating 

mode, and rating temperature. The right 

hand column in Table II.4, which has 

the heading ‘‘Equipment Class 

Designation,’’ identifies each of the 48 

equipment classes with a particular set 

of letters. The first three letters for each 

class represent the equipment family for 

that class, the next two letters represent 

the condensing unit configuration, and 

the last letter represents the rating 

temperature. Table II.1 through Table 

II.3 set forth the meaning of the 

equipment class lettering designations. 

(Also, see chapter 3 of the TSD for more 

details on the equipment class lettering 

designations.) 

TABLE II.4.—COMMERCIAL REFRIGERATION EQUIPMENT CLASSES

Equipment family Condensing unit 

configuration 

Rating 

temperature 

(°F) 

Equipment class 

designation 

Vertical Open ................................................................... Remote ................................................................... 38 VOP.RC.M. 

0 VOP.RC.L. 

¥15 VOP.RC.I 

Self-Contained ........................................................ 38 VOP.SC.M. 

0 VOP.SC.L. 

¥15 VOP.SC.I. 

Semivertical Open ........................................................... Remote ................................................................... 38 SVO.RC.M. 

0 SVO.RC.L. 

¥15 SVO.RC.I. 

Self-Contained ........................................................ 38 SVO.SC.M. 

0 SVO.SC.L. 

¥15 SVO.SC.I. 

Horizontal Open .............................................................. Remote ................................................................... 38 HZO.RC.M. 

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TABLE II.4.—COMMERCIAL REFRIGERATION EQUIPMENT CLASSES—Continued 

Equipment family Condensing unit 

configuration 

Rating 

temperature 

(°F) 

Equipment class 

designation 

0 HZO.RC.L. 

¥15 HZO.RC.I. 

Self-Contained ........................................................ 38 HZO.SC.M. 

0 HZO.SC.L. 

¥15 HZO.SC.I. 

Vertical Closed Transparent ............................................ Remote ................................................................... 38 VCT.RC.M. 

0 VCT.RC.L. 

¥15 VCT.RC.I. 

Self-Contained ........................................................ 38 VCT.SC.M.* 

0 VCT.SC.L.* 

¥15 VCT.SC.I. 

Horizontal Closed Transparent ....................................... Remote ................................................................... 38 HCT.RC.M. 

0 HCT.RC.L. 

¥15 HCT.RC.I. 

Self-Contained ........................................................ 38 HCT.SC.M.* 

0 HCT.SC.L.* 

¥15 HCT.SC.I. 

Vertical Closed Solid ....................................................... Remote ................................................................... 38 VCS.RC.M. 

0 VCS.RC.L. 

¥15 VCS.RC.I. 

Self-Contained ........................................................ 38 VCS.SC.M.* 

0 VCS.SC.L.* 

¥15 VCS.SC.I. 

Horizontal Closed Solid ................................................... Remote ................................................................... 38 HCS.RC.M. 

0 HCS.RC.L. 

¥15 HCS.RC.I. 

Self-Contained ........................................................ 38 HCS.SC.M.* 

0 HCS.SC.L.* 

¥15 HCS.SC.I. 

Service Over Counter ...................................................... Remote ................................................................ 38 SOC.RC.M. 

0 SOC.RC.L. 

¥15 SOC.RC.I. 

Self-Contained ........................................................ 38 SOC.SC.M.* 

0 SOC.SC.L.* 

¥15 SOC.SC.I. 

* These equipment classes have standards established by EPCA and are therefore not covered under this rulemaking. (42 U.S.C. 6313(c)(2)–

(3)). 

EPCA contains standards for selfcontained commercial refrigerators, 

commercial freezers and commercial 

refrigerator-freezers with doors (42 

U.S.C. 6313(c)(2)–(3)); therefore this 

equipment is not included in this 

rulemaking. Table II.5 identifies, by sets 

of letters, 10 potential equipment 

classes for this equipment. DOE has 

based the designations of these possible 

equipment classes on the equipment 

class designations presented in Table 

II.1 through Table II.3. Because these 

equipment classes are not included in 

this rulemaking, they are indicated with 

an asterisk in Table II.4. 

TABLE II.5.—POTENTIAL EQUIPMENT CLASSES NOT INCLUDED IN THIS RULEMAKING

VCT.SC.M ......................... VCS.SC.M ......................... HCT.SC.M ......................... HCS.SC.M ......................... SOC.SC.M. 

VCT.SC.L .......................... VCS.SC.L .......................... HCT.SC.L .......................... HCS.SC.L .......................... SOC.SC.L. 

During the Framework public 

meeting, Hill Phoenix asserted that 

equipment with separate refrigerator 

and freezer compartments (i.e., 

refrigerator-freezers) is custom built and 

is a low shipment-volume type of 

equipment. Hill Phoenix believes that 

spending time on these equipment 

categories might unnecessarily slow the 

rulemaking. (Public Meeting Transcript, 

No. 3.4 at p. 52) Based on this comment 

and DOE’s own analysis of the 

shipments data, DOE has not 

established equipment classes for 

remote condensing commercial 

refrigerator-freezers or self-contained 

commercial refrigerator-freezers without 

doors (also called ‘‘dual temperature’’

units). DOE addresses how it might set 

standards for this equipment in sections 

III and IV.E.1. 

In sum, Table II.6 presents the 

equipment classes covered under this 

rulemaking organized by the three 

equipment categories, in accordance 

with EPCA section 325(p)(1)(A). (42 

U.S.C. 6295(p)(1)(A)) Pursuant to EPCA 

section 325(p)(1)(B), DOE specifically 

seeks feedback on these equipment 

classes and invites interested persons to 

submit written presentations of data, 

views, and arguments. (42 U.S.C. 

6295(p)(1)(B)) This is identified as Issue 

5 under ‘‘Issues on Which DOE Seeks 

Comment’’ in section IV.E of this 

ANOPR. 

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TABLE II.6.—COMMERCIAL REFRIGERATION EQUIPMENT CLASSES BY CATEGORY

Equipment 

category Condensing unit configuration Equipment family 

Rating 

temperature 

(°F) 

Equipment class 

designation 

Remote Condensing Commercial 

Refrigerators, Commercial 

Freezers, and Commercial Refrigerator-Freezers.

Remote .......................................... Vertical Open ................................

Semivertical Open 

Horizontal Open ............................

Vertical Closed Transparent .........

Horizontal Closed Transparent .....

Vertical Closed Solid .....................

Horizontal Closed Solid ................

Service Over Counter ...................

38 

0 

38 

0 

38 

0 

38 

0 

38 

0 

38 

0 

38 

0 

38 

0 

VOP.RC.M. 

VOP.RC.L. 

SVO.RC.M. 

SVO.RC.L. 

HZO.RC.M. 

HZO.RC.L. 

VCT.RC.M. 

VCT.RC.L. 

HCT.RC.M. 

HCT.RC.L. 

VCS.RC.M. 

VCS.RC.L. 

HCS.RC.M. 

HCS.RC.L. 

SOC.RC.M. 

SOC.RC.L. 

Self-Contained Commercial Refrigerators, Commercial Freezers, 

and Commercial RefrigeratorFreezers without Doors.

Self-Contained .............................. Vertical Open ................................

Semivertical Open .........................

Horizontal Open ............................

38 

0 

38 

0 

38 

0 

VOP.SC.M. 

VOP.SC.L. 

SVO.SC.M. 

SVO.SC.L. 

HZO.SC.M. 

HZO.SC.L. 

Commercial Ice-Cream Freezers .. Remote .......................................... Vertical Open ................................ ¥15 VOP.RC.I. 

Semivertical Open ......................... ¥15 SVO.RC.I. 

Horizontal Open ............................ ¥15 HZO.RC.I. 

Vertical Closed Transparent ......... ¥15 VCT.RC.I. 

Horizontal Closed Transparent ..... ¥15 HCT.RC.I. 

Vertical Closed Solid ..................... ¥15 VCS.RC.I. 

Horizontal Closed Solid ................ ¥15 HCS.RC.I. 

Service Over Counter ................... ¥15 SOC.RC.I. 

Self-Contained .............................. Vertical Open ................................ ¥15 VOP.SC.I. 

Semivertical Open ......................... ¥15 SVO.SC.I. 

Horizontal Open ............................ ¥15 HZO.SC.I. 

Vertical Closed Transparent ......... ¥15 VCT.SC.I. 

Horizontal Closed Transparent ..... ¥15 HCT.SC.I. 

Vertical Closed Solid ..................... ¥15 VCS.SC.I. 

Horizontal Closed Solid ................ ¥15 HCS.SC.I. 

Service Over Counter ................... ¥15 SOC.SC.I. 

3. Normalization Metric 

The standards being developed in this 

rulemaking must apply to equipment of 

varying size and capacity within an 

equipment class, so they must be 

normalized by some factor that is 

representative of the varying energy use 

of the equipment. A ‘‘normalization 

metric’’ is a measure of capacity or 

utility that allows comparison of energy 

use of various sizes of equipment on a 

unit capacity basis. During the 

Framework public meeting, DOE asked 

what normalization metric would be 

most appropriate for the equipment in 

this rulemaking—total display area 

(TDA), refrigerated volume, or length. 

ARI commented that in remote 

condensing equipment, the trend has 

been to use TDA, not only in the United 

States, but in Europe as well. ARI is 

trying to align itself with standards like 

those from the International Standards 

Organization (ISO) that use TDA, and 

wants DOE to be consistent with these 

ISO standards. ARI’s certification 

program will be based on TDA, and that 

is how the data will be listed in its 

certification directory. (Public Meeting 

Transcript, No. 3.4 at pp. 95–96) ARI 

also proposed that daily energy 

consumption be calculated as a function 

of the refrigerated volume for selfcontained equipment with doors, and as 

a function of TDA for self-contained 

equipment without doors, because these 

respective normalization metrics are 

most representative of the energy 

consumption of these two types of 

equipment. (ARI, No. 7 at p. 9) ARI also 

stated that it will collect and analyze 

data for daily energy consumption as a 

function of refrigerated volume and 

TDA for remote condensing equipment 

in order to develop an appropriate 

recommendation for that type of 

equipment. (ARI, No. 7 at p. 9) The Joint 

Comment stated that they do not agree 

with DOE’s proposal to use TDA as the 

metric for cases without doors, because, 

they assert, such an approach would 

favor ‘‘shallow’’ and ‘‘tall’’ equipment 

over ‘‘deeper’’ and ‘‘shorter’’ equipment 

of equivalent volume. The Joint 

Comment proposed that DOE instead 

use volume, length, or potentially a 

combination of TDA and volume. One 

compromise would be to use a multiple 

regression equation that would consider 

both refrigerated volume and length or 

refrigerated volume and TDA. (Joint 

Comment, No. 9 at p. 5, and Public 

Meeting Transcript, No. 3.4 at pp. 94–

95) 

In this rulemaking, DOE intends to 

establish standards for remote 

condensing commercial refrigerators, 

commercial freezers and commercial 

refrigerator-freezers, as well as 

commercial ice-cream freezers, with 

solid or transparent doors. Equipment 

with transparent doors is subject to 

significant radiation loads (as much as 

50 percent of the total refrigeration load) 

as well as loads due to anti-sweat 

heaters that are required to keep the 

door free of condensation. In addition, 

transparent doors are inherently poorer 

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41178 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

17Standards for self-contained commerical 

refrigerators, commercial freezers, and commercial 

refrigerator-freezers with doors were added to 42 

U.S.C. 6313(c)(2), by EPACT 2005, section 136(c). 

insulators than solid doors with an 

insulation value of roughly R–2 

compared with R–16, respectively, for a 

typical freezer. For equipment with 

transparent doors, TDA is a good 

indicator of the magnitude of the 

radiation load, the anti-sweat load, and 

the conduction load through the door. 

Additionally, TDA is representative of 

the ability of the equipment to display 

merchandise, which is a measure of its 

utility or usefulness to the owner. Thus, 

DOE believes that TDA is an appropriate 

normalization metric for all remote 

condensing refrigerators and freezers 

with transparent doors, as well as all 

commercial ice-cream freezers with 

transparent doors. Remote condensing 

commercial refrigerators, commercial 

freezers and commercial refrigeratorfreezers with solid doors and 

commercial ice-cream freezers with 

solid doors (i.e., ‘‘storage cabinets’’) 

inherently have no TDA, since there is 

no visible product and thus no glass or 

other transparent opening. Therefore, 

DOE believes refrigerated volume is an 

appropriate normalization metric for 

this equipment. This is consistent with 

the fact that EPCA sets standards for 

self-contained units with solid doors in 

the form of upper limits on daily energy 

consumption using refrigerated volume 

as the normalization metric (42 U.S.C. 

6313(c)(2), added by EPACT 2005, 

section 136(c)). DOE also believes that 

length is not an appropriate metric for 

equipment with solid or transparent 

doors because it does not capture the 

physical relationship between heat 

loads and equipment capacity as 

accurately as either TDA or volume. 

DOE will also establish in this 

rulemaking standards for remote 

condensing and self-contained 

commercial refrigerators, commercial 

freezers and commercial refrigeratorfreezers, and commercial ice-cream 

freezers, without doors. The physical 

relationship between heat loads and 

energy consumption is fundamentally 

different for this equipment than for the 

equipment that has standards set by 

EPCA (i.e., self-contained commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers with 

doors).17 Equipment without doors is 

subject to large loads due to infiltration 

of warm moist air from the area around 

the equipment. These loads are typically 

25 percent to 85 percent of the total 

refrigeration load (depending on the aircurtain angle and other factors), while 

the conduction loads experienced by 

equipment without doors are typically 

less than 5 percent and are rarely more 

than 25 percent. TDA is a much better 

indicator of infiltration load than 

volume because the open area of the 

equipment is directly related to the 

amount of infiltrated air. Current 

standards in Europe (EUROVENT—

CECOMAF), the United Kingdom 

(Enhanced Capital Allowance Program), 

and Australia (Australian Greenhouse 

Office Minimum Energy Performance 

Standards) use TDA as a normalization 

metric for equipment without doors. 

Moreover, similar to equipment with 

transparent doors, TDA is representative 

of the ability of equipment without 

doors to display merchandise, which is 

a measure of its utility or usefulness to 

the owner. Thus, DOE believes that TDA 

should be the normalization metric for 

all remote condensing and selfcontained commercial refrigerators, 

commercial freezers and commercial 

refrigerator-freezers without doors, and 

all commercial ice-cream freezers 

without doors. DOE also believes that 

length is not an appropriate metric for 

equipment without doors because it 

does not capture the physical 

relationship between heat loads and 

equipment capacity as accurately as 

TDA. 

4. Extension of Standards 

During the Framework public 

meeting, DOE asked stakeholders if it 

would be appropriate to extend the 

standards prescribed for self-contained 

refrigeration equipment with doors in 

EPCA to similar remote condensing 

equipment with doors and commercial 

ice-cream freezers with doors covered in 

this rulemaking, and if so, what 

methodology would be appropriate. ARI 

commented that it would not be 

appropriate to extend the standards 

from self-contained equipment because 

that equipment is normalized by 

volume, and the remote condensing 

equipment industry uses TDA or some 

other metric. (Public Meeting 

Transcript, No. 3.4 at p. 89) Hill 

Phoenix commented that as DOE has the 

opportunity to look at energy data, it 

will see that for remote condensing 

cases, energy consumption would be 

lower than for the self-contained cases. 

However, Hill Phoenix did not explain 

how to make the comparison. (Public 

Meeting Transcript No. 3.4 at p. 91) ARI 

also asserted that an extension of the 

EPCA standards for self-contained 

commercial refrigeration equipment 

with doors to remote condensing 

commercial refrigeration equipment 

with doors is not appropriate. ARI 

explained that the interior volume of 

self-contained equipment is calculated 

using the ANSI/AHAM Standard HRF–

1–2004, whereas the interior volume of 

remote condensing equipment should 

be calculated according to ANSI/ARI 

Standard 1200–2006. (ARI, No. 7 at p. 

8) 

Because of the differences in energy 

consumption, and calculation of interior 

volume, DOE will not apply the 

standards prescribed by EPCA for selfcontained equipment with doors to 

remote condensing equipment with 

doors. Instead, DOE will perform an 

analysis of the impacts of potential 

standards and will adopt levels that 

meet the requirements of EPCA section 

325(o). (42 U.S.C. 6295(o)) As to 

commercial ice-cream freezers with 

doors, in the market and technology 

assessment (see chapter 3 of the TSD), 

DOE identified 16 commercial ice-cream 

freezer equipment classes. During the 

engineering analysis (see chapter 5 of 

the TSD), DOE developed costefficiency curves directly for 3 of the 16 

commercial ice-cream freezer 

equipment classes (HCT.SC.I, VCT.SC.I, 

and VCS.SC.I) because of their high 

shipment volumes. For these three 

classes, this eliminated the issue of 

extending standards from self-contained 

commercial freezers with doors. For the 

remaining 13 equipment classes, DOE is 

considering use of the cost-efficiency 

curves (or standards) developed in this 

rulemaking for certain equipment 

classes of remote condensing 

commercial freezers and self-contained 

commercial freezers without doors, for 

equivalent equipment classes of 

commercial ice-cream freezers. For a 

portion of these 13 low-shipmentvolume commercial ice-cream freezer 

equipment classes (as well as other lowshipment-volume equipment classes) 

DOE is also considering use of the 

EPACT 2005 standards for selfcontained commercial freezers with 

doors. The intent of this approach is to 

save time and resources by eliminating 

direct analysis of equipment classes that 

have low shipment volumes and lower 

overall potential energy savings. At this 

point in the rulemaking, DOE only 

demonstrated this approach with two 

commercial ice-cream freezer 

equipment classes, as well as one other 

commercial refrigeration equipment 

class, (see chapter 5 of the TSD) and not 

the full set of covered equipment 

classes. DOE specifically seeks feedback 

on this approach to extending costefficiency curves (or standards) from 

high-shipment-volume equipment 

classes to low-shipment-volume 

equipment classes, and of extending 

EPCA standards to equipment classes in 

this rulemaking. This is identified as 

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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 41179 

Issue 1 under ‘‘Issues on Which DOE 

Seeks Comment’’ in section IV.E of this 

ANOPR. 

5. Market Assessment 

In the market assessment, DOE 

develops a qualitative and quantitative 

characterization of the commercial 

refrigeration equipment industry and 

market structure based on publicly 

available information and data and 

information submitted by manufacturers 

and other stakeholders. 

DOE identified 34 manufacturers of 

commercial refrigeration equipment. 

Four of these companies hold 

approximately 85 percent of the 

domestic market share of refrigerated 

display cases. These four manufacturers 

produce self-contained commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers without 

doors and commercial ice-cream 

freezers, although their primary 

business is in remote condensing 

commercial refrigerators and 

commercial freezers with and without 

doors. Like most industries, there exists 

a second tier of smaller, but well-known 

manufacturers. These other 

manufacturers make up the remaining 

15 percent of U.S. market share. See 

chapter 3 of the TSD for more 

information regarding manufacturers of 

commercial refrigeration equipment. 

DOE is considering the possibility 

that small businesses would be 

particularly impacted by the 

promulgation of energy conservation 

standards for commercial refrigeration 

equipment. The Small Business 

Administration (SBA) defines small 

business manufacturing enterprises for 

commercial refrigeration equipment as 

those having 750 employees or fewer. 

SBA lists small business size standards 

for industries as they are described in 

the North American Industry 

Classification System (NAICS). The size 

standard for an industry is the largest 

that a for-profit concern can be in that 

industry and still qualify as a small 

business for Federal Government 

programs. These size standards are 

generally expressed in terms of the 

average annual receipts or the average 

employment of a firm. For commercial 

refrigeration equipment, the size 

standard is matched to NAICS code 

333415, Air-Conditioning and Warm Air 

Heating Equipment and Commercial 

and Industrial Refrigeration Equipment 

Manufacturing, and is 750 employees. 

DOE will study the potential impacts on 

these small businesses in detail during 

the MIA, which will be conducted as a 

part of the NOPR analysis. See chapter 

3 of the TSD for more information 

regarding commercial refrigeration 

equipment for small businesses. 

ARI submitted annual shipment data 

by equipment class for its member 

companies. (ARI, No. 7 Exhibit B at p. 

1) DOE understands that these data do 

not include the entire industry, since 

not all major manufacturers are 

represented by ARI (most notably, True 

Manufacturing, which DOE understands 

has a large market share of selfcontained commercial equipment with 

doors and commercial ice-cream 

freezers). However, because these data 

cover the vast majority of the 

commercial refrigeration equipment 

sold, and because no other detailed data 

were available, the ARI shipment data 

became the basis of DOE’s analysis. 

The market and technology 

assessment (see chapter 3 of the TSD) 

provides detailed shipment information 

from ARI for each category of 

commercial refrigeration equipment by 

equipment class for 2005. The ARI data 

included shipments for equipment that 

operates at an ‘‘application’’

temperature (e.g., wine chillers that 

operate at 45°F and freezers that operate 

at ¥30°F). However, DOE only 

considered shipments of equipment at 

the three operating temperatures 

considered in this rulemaking (38°F, 

0°F, and ¥15°F). The shipments of 

equipment that operate at one of these 

three temperatures constitute 

approximately 98 percent of the 

shipments reported by ARI. See chapter 

3 of the TSD for more information 

regarding commercial refrigeration 

equipment shipments. 

DOE reviewed available literature and 

consulted with experts on commercial 

refrigeration equipment in order to 

establish typical equipment lifetimes. 

The literature and individuals consulted 

estimated a wide range of typical 

equipment lifetimes. Based on the 

literature reviewed and discussions 

with industry experts and other 

stakeholders, DOE concluded that a 

typical lifetime of 10 years is 

appropriate for commercial refrigeration 

equipment. See chapter 3 of the TSD for 

more information regarding equipment 

lifetimes. 

DOE characterized commercial 

refrigeration equipment energy 

consumption by conducting a survey of 

existing remote condensing refrigeration 

equipment from major manufacturers 

and compiling a performance database. 

The primary source of information for 

the database was equipment data sheets 

that were publicly available on 

manufacturers’ websites. From these 

data sheets, equipment information 

such as total refrigeration load, 

evaporator temperature, lighting power 

draw, defrost power draw, and motor 

power draw allowed determination of 

calculated daily energy consumption 

(CDEC) according to the test procedure 

in ANSI/ARI Standard 1200–2006. See 

chapter 3 of the TSD for more 

information regarding the performance 

data for selected remote condensing 

equipment classes. 

6. Technology Assessment 

In the technology assessment, DOE 

identified technologies and design 

options that could improve the 

efficiency of commercial refrigeration 

equipment. This assessment provides 

the technical background and structure 

on which DOE bases its screening and 

engineering analyses. For commercial 

refrigeration equipment, DOE based its 

list of technologically feasible design 

options on input from manufacturers, 

industry experts, component suppliers, 

trade publications, and technical 

papers. See chapter 3 of the TSD for 

additional detail on the technology 

assessment and technologies analyzed. 

B. Screening Analysis 

The purpose of the screening analysis 

is to evaluate the technologies that 

improve the efficiency of equipment, to 

determine which technologies to 

consider further and which options to 

screen out. DOE consulted with 

industry, technical experts, and other 

interested parties to develop a list of 

technologies for consideration. DOE 

then applied the following four 

screening criteria to determine which 

technologies are unsuitable for further 

consideration in the rulemaking (10 CFR 

Part 430, Subpart C, Appendix A at 

4(a)(4) and 5(b)): 

1. Technological feasibility. 

Technologies incorporated in 

commercial equipment or in working 

prototypes will be considered 

technologically feasible. 

2. Practicability to manufacture, 

install, and service. If mass production 

of a technology in commercial 

equipment and reliable installation and 

servicing of the technology could be 

achieved on the scale necessary to serve 

the relevant market at the time of the 

effective date of the standard, then that 

technology will be considered 

practicable to manufacture, install and 

service. 

3. Adverse impacts on equipment 

utility or equipment availability. If a 

technology is determined to have 

significant adverse impact on the utility 

of the equipment to significant 

subgroups of consumers, or result in the 

unavailability of any covered equipment 

type with performance characteristics 

(including reliability), features, sizes, 

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18The four equipment classes with the highest 

shipment volumes are: vertical closed transparent, 

remote condensing, low temperature (VCT.RC.L); 

vertical open, remote condensing, medium 

temperature (VOP.RC.M); semivertical open, remote 

condensing, medium temperature (SVO.RC.M); and 

horizontal open, remote condensing, low 

temperature (HZO.RC.L). 

19The VOP.RC.L equipment class was reported as 

having zero shipments in the ARI shipment data, 

but was included in the analysis based on a 

recommendation from a manufacturer during the 

preliminary manufacturer impact analysis 

interviews. This manufacturer estimated that 

shipments of the VOP.RC.L equipment class are 

actually around 2500 units per year. Regardless of 

the actual shipment volume, DOE believes it is 

unlikely that this equipment class has zero annual 

shipments, and likely has more than 100 annual 

capacities, and volumes that are 

substantially the same as equipment 

generally available in the United States 

at the time, it will not be considered 

further. 

4. Adverse impacts on health or 

safety. If it is determined that a 

technology will have significant adverse 

impacts on health or safety, it will not 

be considered further. 

DOE eliminated five of the 

technologies considered in the market 

and technology assessment. The specific 

technologies that were eliminated are: 

(1) Air-curtain design, (2) 

thermoacoustic refrigeration, (3) 

magnetic refrigeration, (4) electrohydrodynamic heat exchangers, and (5) 

copper rotor motors. Because all five of 

these technologies are in the research 

stage, DOE believes that they would not 

be practicable to manufacture, install 

and service on the scale necessary to 

serve the relevant market at the time of 

the effective date of the standard. In 

addition, because these technologies are 

in the research stage, DOE cannot assess 

whether they will have any adverse 

impacts on utility to significant 

subgroups of consumers, result in the 

unavailability of any types of 

equipment, or present any significant 

adverse impacts on health or safety. 

Therefore, DOE will not consider these 

technologies as design options for 

improving the energy efficiency of 

commercial refrigeration equipment. 

For more details on how DOE 

developed the technology options and 

the process for screening these options, 

refer to the market and technology 

assessment (see chapter 3 of the TSD) 

and the screening analysis (see chapter 

4 of the TSD). 

C. Engineering Analysis 

The purpose of the engineering 

analysis is to establish the relationship 

between the cost and efficiency of 

commercial refrigeration equipment. For 

each equipment class, this relationship 

estimates the baseline manufacturer 

cost, as well as the incremental cost for 

equipment at efficiency levels above a 

baseline. In determining the 

performance of higher efficiency 

equipment, DOE considers technologies 

and design option combinations not 

eliminated in the screening analysis. 

The output of the engineering analysis 

is a set of cost-efficiency ‘‘curves’’ that 

are used in downstream analyses (i.e., 

the LCC and PBP analyses and the NIA). 

DOE typically structures its 

engineering analysis around one of three 

methodologies. These are: (1) The 

design-option approach, which 

calculates the incremental costs of 

adding specific design options to a 

baseline model; (2) the efficiency-level 

approach, which calculates the relative 

costs of achieving increases in energy 

efficiency levels; and (3) the reverseengineering or cost-assessment 

approach, which involves a ‘‘bottomsup’’ manufacturing cost assessment 

based on a detailed bill of materials 

derived from commercial refrigeration 

equipment tear-downs. 

1. Approach 

In this rulemaking, DOE is adopting 

an efficiency-level approach, 

supplemented by a design-option 

approach. For the four equipment 

classes with the highest shipment 

volumes, DOE used industry-supplied 

cost-efficiency curves developed using 

an efficiency-level approach in 

downstream analyses.18 These industrysupplied curves are qualified using 

analytically derived curves developed 

by DOE using a design-option approach. 

In addition, for the equipment classes 

where industry-supplied curves were 

not available, DOE used the analytically 

derived curves developed using a 

design-option approach in the 

downstream analyses. 

In the Framework Document, DOE 

requested feedback on the use of an 

efficiency-level approach supported, as 

needed, by a design-option approach to 

determine the cost-efficiency 

relationship for commercial 

refrigeration equipment. ACEEE 

expressed concern about the use of an 

efficiency-level approach because it 

effectively creates a ‘‘black box’’ that 

does not allow for any independent 

analyses. ACEEE prefers the designoption approach because of its 

transparency and the ability to be 

independently verified. ACEEE noted 

that in the past, DOE has taken both 

approaches simultaneously. By doing 

both, DOE can calibrate one approach 

against another and have data that are 

publicly available so all parties can 

comment. (Public Meeting Transcript, 

No. 3.4 at p. 110) ASAP stated that the 

design-option approach remains very 

important because it validates the data 

and shows the benefits of different 

technical options. (Public Meeting 

Transcript, No. 3.4 at p. 119) ARI stated 

that it supports DOE’s suggested 

approach for determining the costefficiency relationship for commercial 

refrigeration equipment. (ARI, No. 7 at 

p. 9) The Joint Comment stated that it 

supports the use of an efficiency-level 

approach, provided that the estimates 

used are sufficiently supported with 

design-option data for purposes of both 

qualification and adding transparency to 

the ‘‘black box’’ of the efficiency-level 

data. In particular, the Joint Comment 

pointed out that this will require DOE 

to qualify multiple points for each 

equipment class, carrying out further 

design-option analysis as necessary to 

identify the most reasonable costs to use 

if the design-options and efficiencylevel data are not in alignment. (Joint 

Comment, No. 9 at p. 1) 

As previously described, DOE used an 

efficiency-level approach supported by 

a design-option approach. DOE 

supplemented the industry-supplied 

data with its own design-option 

analysis, which involved consultation 

with outside experts, review of publicly 

available cost and performance 

information, and modeling of 

equipment cost and energy 

consumption. The supplemental designoption analysis provides validation of 

the industry efficiency-level data, 

transparency of assumptions and 

results, and the ability to perform 

independent analyses for verification. In 

addition, the supplemental designoption analysis allows analytically 

derived cost-efficiency curves to be 

generated for equipment classes where 

no industry-supplied curves are 

available. The methodology used to 

perform the design-option analysis is 

described in detail in chapter 5 of the 

TSD. 

2. Equipment Classes Analyzed 

Because of the large number of 

equipment classes in this rulemaking 

(see Table II.6), DOE did not directly 

analyze all equipment classes in the 

engineering analysis for this ANOPR. 

Instead, DOE prioritized the engineering 

analysis by examining only the 

equipment classes with shipment 

volumes greater than 100 units per year. 

Table II.7 lists the 15 equipment classes 

that DOE directly analyzed in the 

engineering analysis. This table 

includes the 14 equipment classes with 

greater than 100 annual unit shipments, 

as well as the VOP.RC.L equipment 

class.19 According to the 2005 ARI 

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shipments. DOE believes this warrants inclusion of 

the VOP.RC.L equipment class in the analysis. 

shipments data, these 15 equipment 

classes represent 98 percent of the 

shipments of covered commercial 

refrigeration equipment. 

TABLE II.7.—EQUIPMENT CLASSES DIRECTLY ANALYZED IN THE ENGINEERING ANALYSIS

Equipment class Description 

VOP.RC.M ......... Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature. 

VOP.RC.L .......... Vertical Freezer without Doors with a Remote Condensing Unit, Low Temperature. 

SVO.RC.M ......... Semi-Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature. 

HZO.RC.M ......... Horizontal Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature. 

HZO.RC.L .......... Horizontal Freezer without Doors with a Remote Condensing Unit, Low Temperature. 

VCT.RC.M ......... Vertical Refrigerator with Transparent Doors with a Remote Condensing Unit, Medium Temperature. 

VCT.RC.L .......... Vertical Freezer with Transparent Doors with a Remote Condensing Unit, Low Temperature. 

SOC.RC.M ......... Service Over Counter Refrigerator with a Remote Condensing Unit, Medium Temperature. 

VOP.SC.M ......... Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature. 

SVO.SC.M ......... Semi-Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature. 

HZO.SC.M ......... Horizontal Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature. 

HZO.SC.L .......... Horizontal Freezer without Doors with a Self-Contained Condensing Unit, Low Temperature. 

VCT.SC.I ........... Vertical Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature. 

VCS.SC.I ........... Vertical Ice-Cream Freezer with Solid Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature. 

HCT.SC.I ........... Horizontal Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, Ice-Cream Temperature. 

3. Analytical Models 

In the design-option approach, DOE 

used models to develop estimates of 

cost and energy consumption for each 

equipment class at each efficiency level. 

A cost model was used to estimate the 

manufacturer production cost (MPC) in 

dollars, and an energy consumption 

model was used to estimate the daily 

energy consumption in kilowatt hours 

(kWh) of covered commercial 

refrigeration equipment. 

a. Cost Model 

Development of the cost model 

involved the disassembly of a selfcontained refrigerator with transparent 

doors, an analysis of the materials and 

manufacturing processes, and the 

development of a parametric 

spreadsheet model flexible enough to 

cover all equipment classes. The 

manufacturing cost model estimated 

MPC and reported it in aggregated form 

to maintain confidentiality of sensitive 

cost data. DOE obtained input from 

stakeholders on the MPC estimates and 

assumptions to confirm accuracy. The 

cost model was used for 7 of the 15 

examined equipment classes and the 

results were extended to 6 of the 

remaining examined equipment classes. 

The cost of the remaining two 

equipment classes was estimated using 

available manufacturer list price (MLP) 

information discounted to MPC. Details 

of the cost model are provided in 

chapter 5 of the TSD. 

A manufacturer markup is applied to 

the MPC estimates to arrive at the MSP. 

This is the price of equipment sold at 

which the manufacturer can recover 

both production and non-production 

costs, and earn a profit. A market-shareweighted average industry markup was 

developed by examining several major 

commercial refrigeration equipment 

manufacturers’ gross margin 

information from annual reports and 

Securities and Exchange Commission 

(SEC) 10–K reports. The manufacturers 

whose gross margin information was 

examined by DOE represent 

approximately 80 percent of the 

commercial refrigeration equipment 

market, and each of these companies is 

a subsidiary of a more diversified parent 

company that manufactures equipment 

other than commercial refrigeration 

equipment. Because the SEC 10–K 

reports do not provide gross margin 

information at the subsidiary level, the 

estimated markups represent the 

average markups that the parent 

company applies over its entire range of 

offerings. 

Markups were evaluated for the years 

2000 to 2005, inclusively. The 

manufacturer markup is calculated as 

100/(100¥average gross margin), where 

gross margin is calculated as 

revenue¥cost of goods sold (COGS). To 

validate the SEC 10–K and annual 

report information, Internal Revenue 

Service industry statistics were used as 

a check. DOE estimated the average 

manufacturer markup within the 

industry as 1.39. 

DOE received industry-supplied 

curves from ARI in the form of daily 

energy consumption versus MLP, (both 

normalized by TDA). Since DOE’s 

analytically derived curves were 

developed in the form of CDEC versus 

MSP (both normalized by TDA), it was 

necessary for DOE to estimate an 

industry list price markup so that 

comparisons between the two sets of 

curves could be made. The industry list 

price markup is a markup to the 

production cost that provides the list 

price. To make comparisons between 

the analytically derived cost-efficiency 

curves and the industry-supplied costefficiency curves, DOE discounted the 

industry data with the list price markup 

and normalized the analytically derived 

curves by TDA. 

DOE understands that manufacturers 

typically offer a discount off the MLP, 

which depends on various factors such 

as the relationship with the customer 

and the volume and type of equipment 

being purchased. For the estimate of list 

price markup, DOE relied on 

information gathered on self-contained 

commercial refrigeration equipment, 

since list price information is readily 

available and typically published by 

self-contained equipment manufacturers 

for this equipment. A review of the data 

for self-contained equipment shows that 

the list price markup is typically 2.0 

(i.e., manufacturers will typically sell 

their equipment for 50 percent off the 

published list price). DOE further 

verified the estimate by obtaining list 

price quotes from several remote 

condensing equipment manufacturers. 

During manufacturer interviews, some 

commercial refrigeration equipment 

manufacturers agreed with the 2.0 

markup estimate, while others stated the 

estimate was somewhat high. Because 

the list price markup can vary 

significantly from manufacturer to 

manufacturer and from customer to 

customer, DOE applied the same 

estimated list price markup across each 

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equipment class to simplify the 

analysis. 

b. Energy Consumption Model 

The energy consumption model 

estimates the daily energy consumption 

of commercial refrigeration equipment 

at various performance levels using a 

design-options approach. The model is 

specific to the categories of equipment 

covered under this rulemaking, but is 

sufficiently generalized to model the 

energy consumption of all covered 

equipment classes. For a given 

equipment class, the model estimates 

the daily energy consumption for the 

baseline and the energy consumption of 

several levels of performance above the 

baseline. The model is used to calculate 

each performance level separately. For 

the baseline level, a corresponding cost 

is calculated using the cost model, and 

for each level above the baseline, the 

cost increases resulting from the 

addition of various design options are 

used to recalculate the cost. 

In the market and technology 

assessment (see chapter 3 of the TSD), 

DOE defined an initial list of 

technologies that can reduce the energy 

consumption of commercial 

refrigeration equipment. In the 

screening analysis, DOE screened out 

technologies based on four screening 

criteria: Technological feasibility, 

practicability to manufacture, changes 

to product utility, and safety. The 

remaining list of technologies becomes 

one of the inputs to the engineering 

analysis. However, for reasons noted 

below, DOE did not incorporate all of 

these technologies in the energy 

consumption model. Technologies that 

were not used include: Remote lighting 

ballast location, evaporator fan motor 

controllers, higher efficiency evaporator 

and condenser fan blades, insulation 

increases or improvements, low 

pressure differential evaporators, defrost 

cycle controls, and defrost mechanisms. 

Relocation of fluorescent lamp 

ballasts outside the refrigerated space 

can reduce energy consumption by 

lessening the refrigeration load on the 

compressor. However, for the majority 

of commercial refrigeration equipment 

currently manufactured, ballasts are 

already located in electrical trays 

outside of the refrigerated space, in 

either the base or top of the equipment. 

The notable exceptions are the 

equipment classes in the VCT 

equipment family, where ballasts are 

most often located on the interior of 

each door mullion. Most commercial 

refrigeration equipment manufacturers 

purchase doors for VCT units that are 

preassembled with the entire lighting 

system in place rather than configured 

for separate ballasts. DOE believes that 

most commercial refrigeration 

equipment manufacturers choose doors 

this way because it would be labor 

intensive and time consuming to 

relocate these ballasts at the factory, and 

because of the additional cost and labor 

of wiring separate ballasts. In addition, 

the potential energy savings are small, 

since modern electronic ballasts are 

very efficient and typically contribute 

only a few watts each to the 

refrigeration load. Therefore, DOE did 

not consider remote relocation of 

ballasts as a design option. 

Evaporator fan motor controllers 

allow fan motors to run at variable 

speed, to match changing conditions in 

the case. For evaporator fan motor 

controllers, there is some opportunity 

for savings as the buildup and removal 

of frost creates differing pressure drops 

across the evaporator coil. Theoretically, 

less fan power is required when the coil 

is free of frost. Additionally, the coil 

would operate at a more stable 

temperature during the period of frost 

build-up. However, the effectiveness of 

the air curtain in equipment without 

doors is very sensitive to changes in 

airflow, so fan motor controllers could 

disrupt the air curtain. The potential of 

disturbance to the air curtain, which 

could lead to higher infiltration loads, 

does not warrant the use of evaporator 

fan motor controllers in equipment 

without doors, even if there were some 

reduction in fan energy use. In addition, 

DOE believes that savings from 

evaporator fan motor controllers in all 

equipment types would be small. 

Therefore, DOE did not consider 

evaporator fan motor controllers as a 

design option. 

Higher efficiency evaporator and 

condenser fan blades reduce motor shaft 

power requirements by moving air more 

efficiently. Current technology used in 

commercial refrigeration equipment is 

stamped sheet metal or plastic axial fan 

blades. These fan blades are lightweight 

and inexpensive. DOE was not able to 

identify any axial fan blade technology 

that is significantly more efficient than 

what is currently used, but did identify 

one alternative fan blade technology 

that could potentially improve 

efficiency: Tangential fan blades. 

Tangential fan blades can produce a 

wide, even airflow, and have the 

potential to allow for increased 

saturated evaporator temperature (SET) 

through improved air distribution across 

the evaporator coil, which would reduce 

compressor power. However, tangential 

fan blades in small sizes are themselves 

less efficient at moving air, and thus 

require greater motor shaft power. 

Because of these competing effects, DOE 

did not consider tangential fan blades as 

a design option. 

Increases in or improvements to 

insulation thickness reduce the heat 

load due to conduction and thus reduce 

compressor power. Increases in the 

thickness of foam insulation are 

problematic because they must either 

borrow volume from the refrigerated 

space or increase the overall size of the 

equipment cabinet. Because the outer 

dimensions of commercial refrigeration 

equipment are limited, it is often not 

practical to increase the overall size of 

the cabinet (i.e., case exterior 

dimensions are optimized for packing 

equipment into freight and shipping 

containers). In addition, reducing the 

size of the refrigerated space would 

reduce the utility of the equipment. 

Therefore, increasing the thickness of 

foam insulation is not practical. 

Furthermore, many display cases do not 

have significant conduction loads, so 

insulation improvements do not offer 

large energy savings. Improvements to 

insulation material include better 

polyurethane foams and vacuum panels. 

In consultation with insulation material 

manufacturers, DOE determined that 

there are no significant differences in 

‘‘grades’’ of insulation material, so most 

equipment manufacturers are already 

using the best commercially available 

foam materials in their equipment. 

Vacuum panels are an alternative form 

of insulation; however, they may 

degrade in performance in time as small 

leaks develop. In addition, vacuum 

panels cannot be penetrated by 

fasteners, and do not provide the 

rigidity of ‘‘foamed-in-place’’ panels 

that polyurethane insulation creates. 

Therefore, DOE did not consider 

insulation thickness increases or 

improvements as a design option. DOE 

did, however, consider improvements to 

the efficiency (e.g., thermal 

conductance) of doors in the design 

options analysis. Higher efficiency 

doors reduce the overall heat gain to the 

case by using better frame materials, 

more panes of glass and better (or more) 

insulation in the doorframe. 

Low pressure differential evaporators 

reduce energy consumption by reducing 

the power of evaporator fan motors. 

However, in space-constrained 

equipment such as commercial 

refrigeration equipment, this reduction 

usually comes from a decrease in 

evaporator coil surface area, which 

generally requires a lower SET to 

achieve the same discharge air 

temperature and cooling potential. This, 

in turn, results in a reduction in 

compressor efficiency. Because of these 

competing effects, DOE did not consider 

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20 Improvements to the condensing unit are not 

considered for remote condensing equipment, since 

the test procedure and standard apply only to the 

cabinet and not the condensing unit. 

21Test procedures are found at 10 CFR 431.64. 

22The ANSI ARI Standard 1200–2006 test 

procedure uses CDEC as the metric for remote 

condensing equipment and total daily energy 

consumption (TDEC) as the metric for selfcontained equipment. In the engineering analysis, 

DOE used CDEC as the metric for both equipment 

Continued 

low pressure differential evaporators as 

a design option. 

Defrost cycle control can reduce 

energy consumption by reducing the 

frequency and duration of defrost 

periods. The majority of equipment 

currently manufactured already uses 

partial defrost cycle control in the form 

of cycle termination control. However, 

defrost cycle initiation is still scheduled 

at regular intervals. Full defrost cycle 

control would involve a method of 

detecting frost buildup and initiating 

defrost. As described in the market and 

technology assessment (see chapter 3 of 

the TSD), this could be accomplished 

through an optical sensor or sensing the 

temperature differential across the 

evaporator coil. However, both of these 

methods are unreliable due to problems 

with fouling of the coil due to dust and 

other surface contaminants. This 

becomes more of an issue as the display 

case ages. Because of these issues, DOE 

did not consider defrost cycle control as 

a design option. 

Defrosting for medium temperature 

equipment is typically accomplished 

with off-cycle defrost. Because off-cycle 

defrost uses no energy (and decreases 

compressor on-time) there is no defrost 

design option capable of reducing 

defrost energy in cases that use off-cycle 

defrost. Some medium temperature 

equipment and all low temperature and 

ice-cream temperature equipment use 

supplemental heat for defrost. 

Commonly, electric resistance heating 

(electric defrost) is used in this 

equipment. An alternative to electric 

defrost in equipment that requires 

supplemental defrost heat is hot-gas 

defrost. Hot-gas defrost is most often 

used in remote condensing equipment 

and involves the use of the hot 

compressor discharge gas to warm the 

evaporator from the refrigerant side. The 

test procedure for commercial 

refrigeration equipment is not capable of 

quantifying the energy expenditure of 

the compressor during a hot-gas defrost 

cycle. Therefore, DOE did not consider 

it as a design option. 

The design options DOE considered 

in the engineering analysis are: 

• Higher efficiency lighting and 

ballasts for the VOP, SVO, HZO, and 

SOC equipment families (horizontal 

fixtures); 

• Higher efficiency lighting and 

ballasts for the VCT equipment family 

(vertical fixtures); 

• Higher efficiency evaporator fan 

motors; 

• Increased evaporator surface area; 

• Improved doors for the VCT 

equipment family, low temperature; 

• Improved doors for the VCT 

equipment family, medium temperature; 

• Improved doors for the HCT 

equipment family, ice-cream 

temperature; 

• Improved doors for the SOC 

equipment family, medium temperature; 

• Higher efficiency condenser fan 

motors (for self-contained equipment 

only); 

• Increased condenser surface area 

(for self-contained equipment only); and 

• Higher efficiency compressors (for 

self-contained equipment only).20

In developing the energy 

consumption model, DOE made certain 

assumptions including general 

assumptions about the analysis 

methodology as well as specific 

numerical assumptions regarding load 

components and design options. DOE 

based its energy consumption estimates 

on new equipment tested in a 

controlled-environment chamber 

subjected to ANSI/ARI Standard 1200–

2006, which references the ANSI/ 

ASHRAE Standard 72–2005 test 

method.21 Manufacturers that are 

certifying their equipment to comply 

with Federal standards will be required 

to test new units with this test method, 

which specifies a certain ambient 

temperature, humidity, light level, and 

other requirements. One specification 

which DOE noted was absent from this 

standard is the operating hours of the 

display case lighting in a 24-hour 

period. DOE considered the operating 

hours to be 24 hours (i.e., that lights are 

on continuously). Other commercial 

refrigeration equipment considerations 

are detailed in chapter 5 of the TSD. 

The energy consumption model 

calculates CDEC as two major 

components: compressor energy 

consumption and component energy 

consumption (expressed as kilowatt 

hours per day (kWh/day)). Component 

energy consumption is a sum of the 

direct electrical energy consumption of 

fan motors, lighting, defrost and drain 

heaters, anti-sweat heaters, and pan 

heaters. Compressor energy 

consumption is calculated from the total 

refrigeration load (expressed as British 

thermal units per hour (Btu/h)) and one 

of two compressor models: one version 

for remote condensing equipment and 

one for self-contained equipment. The 

total heat load is a sum of the 

component load and the non-electric 

load. The component load is a sum of 

the heat emitted by evaporator fan 

motors, lighting, defrost and drain 

heaters, and anti-sweat heaters inside 

and adjacent to the refrigerated space 

(condenser fan motors and pan heaters 

are outside of the refrigerated space and 

do not contribute to the component heat 

load). The non-electric load is a sum of 

the heat contributed by radiation 

through glass and openings, heat 

conducted through walls and doors, and 

sensible and latent loads from warm, 

moist air infiltration through openings. 

Details of component energy 

consumption, compressor energy 

consumption, and load models are 

shown in chapter 5 of the TSD. 

4. Baseline Models 

As mentioned above, the engineering 

analysis estimates the incremental costs 

for equipment with efficiency levels 

above the baseline in each equipment 

class. DOE was not able to identify a 

voluntary or industry standard that 

provided a minimum baseline efficiency 

requirement for commercial 

refrigeration equipment. Therefore, it 

was necessary for DOE to establish 

baseline specifications for each 

equipment class to define the energy 

consumption and cost of the typical 

baseline equipment. These 

specifications include dimensions, 

number of components, temperatures, 

nominal power ratings, and other case 

features that affect energy consumption, 

as well as a basic case cost (the cost of 

a piece of equipment not including the 

major efficiency-related components 

such as lights, fan motors, and 

evaporator coils). 

DOE established baseline 

specifications for each of the equipment 

classes modeled in the engineering 

analysis by reviewing available 

manufacturer data, selecting several 

representative units from available 

manufacturer data, and then aggregating 

the physical characteristics of the 

selected units. This process created a 

representative unit for each equipment 

class with average characteristics for 

physical parameters (e.g., volume, 

TDA), and minimum performance of 

energy-consuming components (e.g., 

fans, lighting). The cost model was used 

to develop the basic case cost for each 

equipment class. See appendix B of the 

TSD for these specifications. 

5. Cost-Efficiency Results 

The results of the engineering analysis 

are reported as cost-efficiency data (or 

‘‘curves’’) in the form of CDEC22 (in 

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41184 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

types, but will refer to each equipment type’s specific metric when developing standard 

equations. 

kWh) versus MSP (in dollars), which 

form the basis for subsequent analyses 

in the ANOPR. DOE created 15 costefficiency curves and received 4 

industry aggregated curves from ARI. 

The industry-supplied curves are in the 

form of CDEC versus MLP, both 

normalized by TDA. To compare the 

analytically derived curves to the 

industry-supplied curves, DOE 

discounted the industry data with the 

list price markup and normalized the 

analytically derived curves by TDA. For 

the four equipment classes with the 

highest shipment volumes DOE used the 

industry-supplied cost-efficiency curves 

in the downstream analyses. For the 

equipment classes where industrysupplied curves were not available, DOE 

used the analytically derived curves in 

the downstream analyses. See chapter 5 

for additional detail on the engineering 

analysis and appendix B of the TSD for 

complete cost-efficiency results. 

D. Markups To Determine Equipment 

Price 

This section explains how DOE 

developed the supply chain markups to 

determine installed prices for 

commercial refrigeration equipment (see 

chapter 6 of the TSD). DOE used the 

supply chain markups it developed 

(along with sales taxes and installation 

costs) in conjunction with the MSPs 

developed from the engineering analysis 

to arrive at the final installed equipment 

prices for baseline and higher efficiency 

equipment. As shown in Table II.8, DOE 

defined three distribution channels for 

commercial refrigeration equipment to 

describe how the equipment passes 

from the manufacturer to the customer. 

In the first distribution channel, the 

manufacturer sells the equipment 

directly to the customer through a 

national account. In the second and 

third distribution channels, the 

manufacturer sells the commercial 

refrigeration equipment to a wholesaler, 

who in turn may sell it directly to the 

customer or sell it to a mechanical 

contractor who may sell it and its 

installation to the customer. The 

wholesaler in this case can be a 

refrigeration wholesaler focusing on 

commercial refrigeration equipment, or 

a grocery warehouser (supply chain 

distributor) who sells food and retail 

store equipment to the retailer. Table 

II.8 also gives the estimated distribution 

channel shares (in percentage of total 

sales) through each of the three 

distribution channels. 

TABLE II.8.—DISTRIBUTION CHANNELS AND SHARES FOR COMMERCIAL REFRIGERATION EQUIPMENT

Channel 1 Channel 2 Channel 3 

Manufacturer ........................ Manufacturer, Wholesaler ............................................... Manufacturer, Wholesaler, Contractor. 

Customer ............................. Customer ......................................................................... Customer.

86 percent ............................ 7 percent ......................................................................... 7 percent. 

For each of the steps in the 

distribution channels presented above, 

DOE estimated a baseline markup and 

an incremental markup. A baseline 

markup is applied to the purchase of 

equipment with the baseline efficiency. 

An incremental markup is applied to 

the incremental increase in MSP for the 

purchase of higher efficiency 

equipment. The overall baseline or 

overall incremental markup is then 

given by the product of all the markups 

at each step in the distribution channel 

plus sales tax. Overall baseline or 

overall incremental markups for the 

entire commercial refrigeration 

equipment market can be determined 

using the shipment weights through 

each distribution channel and the 

corresponding overall baseline markup 

or the corresponding overall 

incremental markup, respectively, for 

each distribution channel including the 

applicable sales tax. 

Markups for each step of the 

distribution channel were developed 

based on available financial data. DOE 

based the wholesaler markups on firm 

balance-sheet data from the Heating, 

Airconditioning & Refrigeration 

Distributors International (HARDI), the 

trade association representing 

wholesalers of refrigeration and heating, 

ventilating and air-conditioning (HVAC) 

equipment. DOE used median financial 

statistics reported by the controls and 

refrigeration industry segment of this 

trade association in HARDI’s 2005 Profit 

Planning Report. DOE based the 

mechanical contractor markups on U.S. 

Census Bureau financial data for the 

plumbing, heating, and air conditioning 

industry as a whole. Average markups 

for sales through national accounts were 

estimated as one-half that of the 

wholesaler to customer distribution 

channel. 

Baseline markups for wholesalers and 

for contractors are calculated as total 

revenue (equal to all expenses paid plus 

profit) divided by the COGS. Expenses 

include direct costs for equipment, labor 

expenses, occupancy expenses, and 

other operating expenses (e.g., 

insurance, advertising). Some of these 

are presumed to be fixed costs (labor, 

occupancy) that do not change with the 

distribution of higher efficiency 

equipment. Other expenses are variable 

costs that may change in response to 

changes in COGS. In developing 

incremental markup, DOE considered 

the labor and occupancy costs to be 

fixed, and the other operating costs and 

profit to scale with the MSP. 

The overall markup is the product of 

all the markups plus sales tax within a 

distribution channel. Both baseline and 

incremental overall markups were 

calculated for each distribution channel. 

Sales taxes were calculated based on 

State-by-State sales tax data reported by 

the Sales Tax Clearinghouse. Both 

contractor costs and sales tax vary by 

State, so the markup analysis develops 

distributions of markups within each 

distribution channel as a function of 

State and business type (e.g., 

supermarket, convenience store, 

convenience store with gas station, or 

superstore). Because the State-by-State 

distribution of commercial refrigeration 

equipment units varies by business type 

(e.g., supermarkets may be more 

prevalent relative to convenience stores 

in one part of the country than another), 

a national level distribution of the 

markups is different for each business 

type. 

Average overall markups in each 

distribution channel can be calculated 

using estimates of the shipments of 

commercial refrigeration equipment 

units by business type and by State. The 

ANOPR analysis used estimates of 

relative total frozen and refrigerated 

food sales by State and each business 

type as reported by the U.S. Census 

Bureau as a proxy for relative shipments 

of commercial refrigeration equipment. 

Overall baseline and incremental 

markups for sales to supermarkets 

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within each distribution channel are 

shown in Table II.9 and Table II.10. 

TABLE II.9.—BASELINE MARKUPS BY DISTRIBUTION CHANNEL INCLUDING SALES TAX FOR SUPERMARKETS

Wholesaler 

Mechanical contractor (includes 

wholesaler) 

National account 

(manufacturerdirect) Overall 

Distributor(s) Markup ....................................................................... 1.436 2.182 1.218 1.301 

Sales Tax ......................................................................................... 1.068 1.068 1.068 1.068 

Overall Markup ................................................................................ 1.533 2.330 1.300 1.389 

TABLE II.10.—INCREMENTAL MARKUPS BY DISTRIBUTION CHANNEL INCLUDING SALES TAX FOR SUPERMARKETS

Wholesaler 

Mechanical contractor (includes 

wholesaler) 

National account 

(manufacturerdirect) Overall 

Distributor(s) Markup ....................................................................... 1.107 1.362 1.054 1.079 

Sales Tax ......................................................................................... 1.068 1.068 1.068 1.068 

Overall Markup ................................................................................ 1.182 1.454 1.125 1.152 

Additional detail on markups can be 

found in chapter 6 of the TSD. 

E. Energy Use Characterization 

The energy use characterization 

estimates the annual energy 

consumption of commercial 

refrigeration equipment systems 

(including remote condensing units). 

This estimate is used in the subsequent 

LCC and PBP analyses (see chapter 8 of 

the TSD) and NIA (see chapter 10 of the 

TSD). DOE estimated the energy 

consumption of the 15 equipment 

classes analyzed in the engineering 

analysis (see chapter 5 of the TSD) using 

the relevant test procedure. These 

energy consumption estimates were 

then validated with annual simulation 

modeling of selected equipment classes 

and efficiency levels. 

ANSI/ARI Standard 1200–2006, 

which references ANSI/ASHRAE 

Standard 72–2005, is an industrydeveloped test procedure for measuring 

the energy consumption of commercial 

refrigeration equipment. ANSI/ARI 

Standard 1200–2006 provides a method 

for estimating the daily energy 

consumption for a piece of commercial 

refrigeration equipment under steadystate conditions. ANSI/ARI Standard 

1200–2006 treats remote condensing 

and self-contained commercial 

refrigeration equipment differently. In 

the case of remote condensing 

equipment, the test procedure measures 

the energy use of each component (e.g., 

fans and lights) as well as the total 

refrigeration load of the equipment. The 

total refrigeration load is used to 

calculate compressor energy 

consumption based on a standardized 

relationship of evaporator temperature 

and compressor energy efficiency ratio. 

In the case of self-contained commercial 

equipment, the test procedure measures 

the total energy use of the equipment as 

a whole, including both component 

energy use and compressor energy use. 

The resulting daily energy consumption 

estimate is either CDEC for remote 

condensing equipment or TDEC for selfcontained equipment. Both metrics 

represent the sum of compressor energy 

consumption and the energy 

consumption of all other energy 

consuming components in the 

equipment (i.e., evaporator fan motors, 

lighting, anti-sweat heaters, defrost and 

drain heaters, and condensate 

evaporator pan heaters). 

Several options were considered to 

provide estimates of the energy 

consumption of commercial 

refrigeration equipment. These options 

include: using a whole building 

simulation which would analyze case, 

compressor, and HVAC impacts; using 

an existing simulation program that 

would analyze display case and 

compressor energy use on an annual 

basis; and using estimates of energy 

consumption for various categories of 

equipment as developed in the 

engineering analysis. For the ANOPR, 

DOE used energy consumption 

estimates from the engineering analysis 

directly in the LCC analysis. To validate 

these estimates, DOE conducted a whole 

building energy use simulation for 

seven equipment classes at selected 

design-option levels. 

A whole building simulation was the 

option first considered by DOE and was 

discussed during DOE?s Framework 

public meeting. During that meeting 

Southern Company and ARI commented 

that a whole building analysis is the 

desired approach (Public Meeting 

Transcript No. 3.4 at p. 151). The 

Northwest Power Planning Council 

(NWPPC) and ASAP were concerned 

about the additional difficulty and 

complexity of the resulting analysis 

(Public Meeting Transcript No. 3.4 at p. 

161 and Public Meeting Transcript No. 

3.4 at p. 155). The approach taken by 

DOE was to use energy estimates 

developed from the engineering analysis 

but to validate those estimates with 

whole building simulation of 

supermarkets, which included 

simulation of the refrigeration system. 

There were four reasons for adopting 

this approach. 

1. The energy consumption ratings 

provided by ANSI/ARI Standard 1200–

2006 do not distinguish between energy 

consumption by the compressor (which 

may vary as a function of environmental 

conditions) and energy consumption by 

other components in the case (e.g., 

lighting), which do not vary as a 

function of environmental conditions. 

These two types of energy consumption 

are roughly similar in magnitude, and it 

is difficult to assess where the energy 

savings are coming from or what the 

impact on a building HVAC load might 

be. 

2. The initial engineering analysis (see 

chapter 5 of the TSD) did not suggest 

design options that would provide 

significant changes to the building load 

relative to the commercial refrigeration 

system energy consumption. 

3. The net interaction between the 

refrigeration system and HVAC energy 

consumption is a function of the 

variation in HVAC designs. HVAC 

system designs for food sales buildings, 

like supermarkets, may incorporate such 

features as separate dehumidification 

and refrigerant condenser reheat 

systems, which make assessing overall 

HVAC impact complicated. Also, 

detailed data on the relative prevalence 

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of different HVAC system designs 

incorporating these features is not 

readily available. 

4. The interaction between the 

refrigeration and overall HVAC energy 

consumption is a function of the ratio of 

the total heat removed from the space by 

the display cases relative to the other 

internal loads (lighting, occupancy, and 

plug load) and external loads (building 

envelope and ventilation driven) in the 

building. This ratio determines the 

fraction of the year that the building is 

either in heating or cooling mode. 

However, the balance of refrigerationdriven space loads to the other space 

loads is impacted by the efficiency 

levels for all commercial refrigeration 

equipment classes, complicating the 

analysis of each equipment class 

individually. For the equipment classes 

with the largest shipment, which make 

up the largest base of equipment in a 

typical store and have the biggest 

overall impact on the space load 

balance, the industry-supplied 

efficiency curves do not provide 

information about changes in equipment 

design that could be used to assess this 

change in refrigeration-driven space 

loads. 

In its validation effort, DOE used a 

modified version of the DOE developed 

DOE–2 whole-building energy analysis 

tool, DOE–2.2 refrigeration version 

(DOE–2.2R), to model whole-building 

energy use in a typical supermarket in 

five U.S. climate locations (Baltimore, 

Chicago, Houston, Los Angeles, and 

Memphis). Each of these locations has a 

climate that typifies one of five distinct 

U.S. climate zones developed by DOE 

for use in building energy codes 

development work. These five climate 

zones taken together encompass 

approximately three-fourths of the U.S. 

population. Annual energy use for seven 

equipment classes was simulated at four 

representative efficiency levels. Data on 

refrigeration loads from the engineering 

analysis supported the development of 

the energy efficiency levels analyzed. 

These refrigeration loads included those 

from internal features (e.g., lighting and 

fans inside the case), and externally 

driven loads from radiation, convection/ 

infiltration, and conduction through the 

case wall. These loads and other direct 

energy-consuming features (e.g., fan and 

lights) were mapped to corresponding 

inputs in DOE–2.2R for the simulation 

analysis. Pull-down loads from shelving 

of food are not part of the test procedure 

and were therefore not considered. 

To examine the impacts of ambient 

relative humidity, refrigerant piping 

heat loss, and climate location on 

energy consumption of commercial 

refrigeration equipment, annual 

simulation data from the DOE 2.2R 

model was converted to average daily 

energy consumption and average daily 

refrigeration load comparison with the 

engineering analysis estimates. DOE 

also assessed the magnitude of 

interactions between the refrigeration 

system and the building HVAC system. 

The results of the whole-building 

simulation showed that climate location 

has no influence on energy 

consumption of the refrigerated case 

components for the remote condensing 

equipment classes examined. For a 

given efficiency level, the energy 

consumption of case components is the 

same for the simulation and the 

engineering analysis. In addition, 

climate location was shown to have 

relatively little influence on compressor 

energy consumption for equipment 

classes with doors, where display case 

infiltration levels are relatively low. 

Climate conditions do have a significant 

impact on compressor energy 

consumption for open equipment. 

Compressor energy consumption is 

determined by total refrigeration load 

and compressor efficiency, both of 

which are affected by climate conditions 

for remote condensing equipment. 

In general, the average daily 

refrigeration load from the DOE 2.2R 

simulations was smaller than that 

predicted by the engineering analysis, 

due to differences between the building 

space conditions throughout the year 

captured by the simulations and the 

space conditions used for the steadystate rating of equipment used in the 

engineering analysis. The actual energy 

consumption of the compressors was, 

however, generally higher than that 

predicted by the engineering analysis. 

The difference in energy consumption is 

due to the aforementioned differences in 

refrigeration loads, the fact that the 

simulation accounts for changes in 

condensing temperatures over the year 

for each climate, and the additional 

superheat loads calculated by the 

simulation software to bring the return 

refrigerant return vapor up to the 

compressor suction temperature 

conditions, which is estimated to be 

65°F (the ARI rating condition used to 

provide rated compressor performance). 

Analysis of the annual refrigeration 

system energy savings for each of 3 

efficiency levels above the baseline level 

were all within 14 percent of that 

predicted by the engineering analysis 

for 6 equipment classes across all 

efficiency levels and climates examined. 

Net energy savings averaged 8 percent 

higher for the highest efficiency level 

examined. For the remote condensing 

VOP.RC.L equipment class the annual 

energy savings deviated by as much as 

21 percent. No shipments for this 

equipment class were reported by ARI. 

Actual shipments, if any, are expected 

to be small. This suggests that for the 

majority of commercial refrigeration 

equipment, the energy savings predicted 

by the test procedure agreed reasonably 

well with the annual simulation results, 

although the impact of individual 

design options may differ. 

Estimates of whole-building energy 

consumption and refrigeration energy 

consumption were examined at selected 

efficiency levels and climate locations 

to determine if the design options 

considered in the engineering analysis 

would have a significant effect on 

building HVAC energy use. The 

influence of refrigeration equipment 

efficiency changes on HVAC system 

energy use varies depending on the 

design option. For example, improved 

display case lighting efficiency would 

reduce the energy consumption of the 

refrigeration system and potentially the 

air-conditioning system, depending on 

lighting placement. Reduced conduction 

and radiation loads in the refrigeration 

equipment would, by contrast, increase 

the air-conditioning load and 

subsequent energy consumption while 

decreasing the heating load. For all 

equipment classes and efficiency levels 

examined, the annual whole-building 

energy savings was within 10 percent of 

that calculated for the refrigeration 

system alone. For the highest efficiency 

level examined, savings were within 1.4 

percent. The simulation results suggest 

that the collective impact of the design 

options considered does not 

significantly affect the HVAC energy 

consumption. 

In the energy use characterization, 

DOE used whole-building simulation to 

explore the relative energy savings of 

refrigeration systems and wholebuilding energy use for supermarkets. 

While there were some differences in 

the annual energy use predicted by the 

whole-building simulation and that 

derived in the engineering analysis, 

DOE concludes that these differences 

were generally small. 

Both the engineering analysis and the 

whole-building simulation presumed 

that display case lighting operated 24 

hours per day. In many applications, 

display case lighting may not be 

required 24 hours per day. DOE 

conducted a sensitivity analysis to 

explore how variation in display case 

lighting operating hours affected the 

energy savings. This sensitivity analysis 

was done for all equipment classes 

using the engineering analysis 

spreadsheet and the design options 

considered for each equipment class. No 

such analysis could be done using the 

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industry-supplied efficiency curves as 

details on component energy 

consumption were not provided with 

these curves. The sensitivity analysis 

showed that energy savings were 

reduced as lighting operating hours 

were reduced for all equipment classes 

that used display case lighting. The 

magnitude of this effect depended upon 

the equipment class. For a 20-hour 

lighting time assumption, the reduction 

in energy savings was between 1 percent 

and 6 percent. For a 16-hour lighting 

time assumption, the reduction in 

energy savings was between 2 percent 

and 15 percent. DOE’s analysis suggests 

that typical lighting operating hours for 

most classes of commercial refrigeration 

equipment would fall within the range 

of 16 to 24 hours per day, depending on 

store operating hours, use of lighting 

during after-hours case stocking, and 

typical lighting operation or controls 

used for unoccupied periods. Display 

case lighting hours may also depend on 

the business type as convenience stores 

have distinctly different operating hours 

than other segments of the food retail 

industry. 

Because of the sensitivity of the 

annual energy savings to display case 

lighting hours and the lack of data on 

actual lighting use, DOE specifically 

seeks feedback on the assumption of 24 

hours for case lighting operation. This is 

identified as Issue 6 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

IV.E of this ANOPR. 

Also, DOE specifically seeks feedback 

on operation and maintenance practices 

for commercial refrigeration equipment, 

which may be prevalent in the field and 

may differ from standardized 

conditions, such as those represented in 

a test procedure. Operation and 

maintenance practices could potentially 

affect the energy consumption savings 

experienced in the field as a result of 

increased energy efficiency as compared 

to those savings estimated in the TSD’s 

energy consumption analysis under 

idealized testing conditions. These 

factors include: compressor operation 

that is inefficient due to age or some 

other condition associated with the 

compressor unit; location of a 

commercial refrigeration unit adjacent 

to an outside door or in direct sunlight; 

operation of a room-cooling fan nearby 

the commercial refrigeration unit; a unit 

routinely stocked with products that are 

significantly under or over the ambient 

room temperature; overstocking of a 

unit; frequency and promptness of 

repair/maintenance of a unit; operation 

of doors during periods of high volume 

use; frequency of cooling coil cleaning; 

maintenance of sufficient space 

surrounding a unit for proper air 

circulation or proper operation of air 

vents; and wear/tear of, or damage to, 

door seals and hinges on a unit. Such 

factors may or may not be associated 

with use of a unit in the field, and thus 

their impacts would be difficult to 

analyze in a quantitative manner. 

Nevertheless, these factors are among 

those commonly highlighted in energy 

use reduction guidelines as important to 

achieving the maximum energy 

efficiency for the given unit. Therefore, 

DOE requests comment on the 

frequency that such factors come in to 

play in energy use in the field, and 

whether and how DOE might account 

for these factors in assessing the overall 

impacts of the candidate standards 

levels for commercial refrigeration 

equipment. This is identified as Issue 7 

under ‘‘Issues on Which DOE Seeks 

Comment’’ in section IV.E of this 

ANOPR. 

In determining the reduction in 

energy consumption of commercial 

refrigeration equipment due to 

increased efficiency, DOE did not take 

into account a rebound effect. The 

rebound effect occurs when a piece of 

equipment that is made more efficient is 

used more intensively, so that the 

expected energy savings from the 

efficiency improvement do not fully 

materialize. Because commercial 

refrigeration equipment is operated 24 

hours a day, 7 days a week to maintain 

adequate conditions for the 

merchandise being retailed, a rebound 

effect resulting from increased 

refrigeration energy consumption 

seemed unlikely. The engineering 

estimates of energy use also used a 24- 

hour lighting schedule; although a 

sensitivity analysis to a reduced lighting 

schedule was performed. It is possible 

that under a reduced lighting schedule, 

lower lighting power draw resulting 

from energy conservation standards 

could lead to equipment operation 

strategies with increased lighting 

operating hours; however, DOE has no 

data with which to examine this impact 

for the commercial refrigeration 

equipment market and has not taken it 

into account in the energy use 

characterization. 

Additional detail on the energy use 

characterization can be found in chapter 

7 of the TSD. 

F. Rebuttable Presumption Payback 

Periods 

Section 345(e)(1)(A) of EPCA (42 

U.S.C. 6316(e)(1)(A)) establishes a 

rebuttable presumption for commercial 

refrigeration equipment. The rebuttable 

presumption states that a standard is 

economically justified if the Secretary 

finds that ‘‘the additional cost to the 

consumer of purchasing a product 

complying with an energy conservation 

standard level will be less than three 

times the value of the energy * * * 

savings during the first year that the 

consumer will receive as a result of the 

standard, as calculated under the 

applicable test procedure * * *.’’ (42 

U.S.C. 6295(o)(2)(B)(iii)) 

To evaluate the rebuttable 

presumption, DOE estimated the 

additional cost of a more efficient, 

standard-compliant unit, and compared 

this cost to the value of the energy saved 

during the first year of operation of the 

equipment as determined by ANSI/ARI 

Standard 1200–2006. DOE interprets 

that the increased cost of purchasing a 

standard-compliant unit includes the 

cost of installing the equipment for use 

by the purchaser. DOE calculated the 

rebuttable presumption PBP, or the ratio 

of the value of the increased installed 

price above the baseline efficiency level 

to the first year’s energy cost savings. 

When this PBP is less than three years, 

the rebuttable presumption is satisfied; 

when this PBP is equal to or more than 

three years, the rebuttable presumption 

is not satisfied. 

Rebuttable presumption PBPs were 

calculated based on a distribution of 

installed costs and energy prices that 

included four types of businesses and 

all 50 States. The rebuttable 

presumption PBPs differ from the other 

PBPs calculated in the LCC analysis (see 

section II.G.14 of this ANOPR) in that 

they do not include maintenance or 

repair costs. The baseline efficiency 

level for the rebuttable presumption 

calculation is the baseline established in 

the engineering analysis. From the range 

of efficiency levels for which cost data 

was determined in the engineering 

analysis, DOE selected up to eight 

efficiency levels in each equipment 

class, including the baseline efficiency 

level, for the LCC and subsequent 

ANOPR analysis. The selection of these 

efficiency levels is discussed in chapter 

8 and appendix F of the TSD. For each 

equipment class the rebuttable 

presumption PBP was calculated for 

each efficiency level higher than the 

baseline. 

Inputs to the PBP calculation are the 

first seven inputs shown in Table II.12 

found in section II.G.2 of this ANOPR. 

Table II.11 shows the nationally 

averaged rebuttable presumption 

paybacks calculated for all equipment 

classes and efficiency levels. The 

highest efficiency level with a rebuttable 

presumption payback of less than three 

years is also shown in Table II.11 for 

each equipment class. For all equipment 

classes analyzed in the ANOPR analysis 

with the exception of the SOC.RC.M 

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equipment class, the rebuttable 

presumption criteria were satisfied at 

either the maximum efficiency level 

examined or the next lower efficiency 

level examined. However, while DOE 

has examined the rebuttable 

presumption PBPs, DOE has not 

determined economic justification for 

any of the standard levels analyzed 

based on the ANOPR rebuttable 

presumption analysis. The setting of 

candidate standard levels (CSLs) by 

DOE will take into account the more 

detailed analysis of the economic 

impacts of increased efficiency pursuant 

to section 325(o)(2)(B)(i) of EPCA. (42 

U.S.C. 6295(o)(2)(B)(i)) 

TABLE II.11.—REBUTTABLE PRESUMPTION PAYBACK PERIODS BY EFFICIENCY LEVEL AND EQUIPMENT CLASS

Equipment type 

Rebuttable presumption payback period (years) Highest level 

with PBP <3 

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

VOP.RC.M ......................................... NA 3.2 2.8 2.6 2.7 2.8 2.9 3.1 Level 7. 

VOP.RC.L .......................................... NA 0.5 0.8 1.1 1.2 1.9 NA NA Level 6. 

VOP.SC.M ......................................... NA 0.7 0.7 0.8 1.1 1.3 2.0 2.9 Level 8. 

VCT.RC.M ......................................... NA 0.3 0.4 0.6 0.8 2.6 3.7 NA Level 6. 

VCT.RC.L .......................................... NA 1.4 1.6 1.8 2.1 2.2 2.3 2.7 Level 8. 

VCT.SC.I ........................................... NA 0.2 0.4 0.4 0.6 1.3 1.5 2.0 Level 8. 

VCS.SC.I ........................................... NA 0.3 0.6 0.6 0.7 0.7 0.8 1.2 Level 8. 

SVO.RC.M ......................................... NA 3.2 2.8 2.7 2.8 2.9 3.0 NA Level 6. 

SVO.SC.M ......................................... NA 0.8 0.8 0.9 1.1 1.3 1.7 2.3 Level 8. 

SOC.RC.M ........................................ NA 0.6 1.0 1.1 1.3 2.9 3.6 NA Level 6. 

HZO.RC.M ......................................... NA 0.8 1.2 1.5 NA NA NA NA Level 4. 

HZO.RC.L .......................................... NA 1.2 1.6 1.7 1.8 1.9 NA NA Level 6. 

HZO.SC.M ......................................... NA 0.7 1.0 1.1 1.1 1.2 1.4 1.8 Level 8. 

HZO.SC.L .......................................... NA 0.6 0.6 0.8 0.8 0.9 1.3 1.3 Level 8. 

HCT.SC.I ........................................... NA 0.7 0.7 1.3 1.4 1.4 NA NA Level 6. 

G. Life-Cycle Cost and Payback Period 

Analyses 

The LCC and PBP analyses determine 

the economic impact of potential 

standards on consumers. The effects of 

standards on individual commercial 

consumers include changes in operating 

expenses (usually lower) and changes in 

total installed cost (usually higher). DOE 

analyzed the net effect of these changes 

for commercial refrigeration equipment, 

first, by calculating the changes in 

consumers’ LCCs likely to result from a 

CSL as compared to a base case (no new 

standards). The LCC calculation 

considers total installed cost (includes 

MSP, sales taxes, distribution channel 

markups, and installation cost), 

operating expenses (energy, repair, and 

maintenance costs), equipment lifetime, 

and discount rate. DOE performed the 

LCC analysis from the perspective of the 

user of commercial refrigeration 

equipment. 

DOE calculated the LCC for all 

customers as if each would purchase a 

new commercial refrigeration 

equipment unit in the year the standard 

takes effect. The effective date is the 

future date when a new standard 

becomes operative. Section 136(c) of 

EPACT 2005 amends EPCA to add 

section 342(c)(4), 42 U.S.C. 6313(c)(4), 

which directs the Secretary to issue a 

final rule for commercial refrigeration 

equipment not later than January 1, 

2009, with the energy conservation 

standards levels effective for equipment 

manufactured on or after January 1, 

2012. Further, the Secretary may issue, 

by rule, energy conservation standards 

levels for other types of commercial 

refrigeration equipment, with the 

standard levels effective for equipment 

three or more years after a final rule is 

published. (42 U.S.C. 6313(c)(4)(B), 

added by EPACT 2005, section 136(c)) 

Consistent with EPCA, DOE used these 

dates in the ANOPR analyses. Further, 

DOE based the cost of the equipment on 

projected costs in 2012. However, all 

dollar values are expressed in 2006 

dollars. Annual energy prices are 

considered for the life of the commercial 

refrigeration equipment. 

DOE also analyzed the effect of 

changes in operating expenses and 

installed costs by calculating the PBP of 

potential standards relative to a base 

case. The PBP estimates the amount of 

time it would take the commercial 

consumer to recover the incrementally 

higher purchase expense of more energy 

efficient equipment through lower 

operating costs. Similar to the LCC, the 

PBP is based on the total installed cost 

and the operating expenses. However, 

unlike the LCC, only the first year’s 

operating expenses are considered in 

the calculation of the PBP. Because the 

PBP does not account for changes in 

operating expense over time or the time 

value of money, it is also referred to as 

a simple PBP. For more details on the 

LCC and PBP analyses, refer to chapter 

8 of the ANOPR TSD. 

1. Approach 

Recognizing that each commercial 

building that uses commercial 

refrigeration equipment is unique, DOE 

analyzed variability and uncertainty by 

performing the LCC and PBP 

calculations for two prototype 

commercial buildings (stores) and four 

types of businesses (two types of 

businesses for each prototype store). 

The first store prototype is a ‘‘large’’

grocery store, which encompasses 

supermarkets and wholesaler/retailer 

multi-line stores such as ‘‘big-box’’

stores, ‘‘warehouse’’ stores, and 

‘‘supercenters.’’ The second prototype is 

a ‘‘small’’ store, which encompasses 

convenience stores and small specialty 

stores such as meat markets, wine, beer, 

and liquor stores, and convenience 

stores associated with gasoline stations. 

Within a given prototype of store, 

various types of commercial 

refrigeration equipment can serve the 

store’s refrigeration needs. 

Aside from energy, the most 

important factors influencing the LCC 

and PBP analyses are related to the State 

to which each commercial refrigeration 

equipment unit is shipped. These 

factors include energy prices, 

installation cost, markup, and sales tax. 

The LCC analysis presented here used 

the predicted energy consumption based 

on the engineering analysis (see chapter 

5 of the TSD) and reviewed in the 

energy use characterization (see chapter 

7 of the TSD). Energy consumption of 

commercial refrigeration equipment 

calculated using this approach is not 

sensitive to climatic conditions, so 

energy consumption in the LCC analysis 

does not vary by geographical location. 

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23R.S. Means Company, Inc. 2005. Mechanical 

Cost Data 28th Annual Edition. Kingston, 

Massachusetts. 

At the national level, the analysis 

explicitly modeled both the uncertainty 

and the variability in the model’s inputs 

using probability distributions based on 

the shipment of units to different States. 

2. Life-Cycle Cost Analysis Inputs 

For each efficiency level analyzed, the 

LCC analysis requires input data for the 

total installed cost of the equipment, the 

operating cost, and the discount rate. 

Table II.12 summarizes the inputs and 

key assumptions used to calculate the 

economic impacts of various efficiency 

levels. A more detailed discussion of the 

inputs follows. 

TABLE II.12.—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LIFE-CYCLE COST ANALYSIS

Input Description 

Baseline Manufacturer Selling Price .................. Price charged by manufacturer to either a wholesaler or large customer for baseline equipment. 

Standard-Level Manufacturer Selling Price Increases.Incremental change in manufacturer selling price for equipment at each of the higher efficiency 

standard levels. 

Markups and Sales Tax ..................................... Associated with converting the manufacturer selling price to a customer price (see chapter 6 of 

TSD). 

Installation Price ................................................. Cost to the customer of installing the equipment. This includes labor, overhead, and any miscellaneous materials and parts. The total installed cost equals the customer equipment price 

plus the installation price. 

Equipment Energy Consumption ....................... Site energy use associated with the use of commercial refrigeration equipment, which includes 

only the use of electricity by the equipment itself. 

Electricity Prices ................................................. Average commercial electricity price ($/kWh) in each State and for four classes of commercial 

customers, as determined from Energy Information Administration (EIA) data for 2003 converted to 2006$. 

Electricity Price Trends ....................................... Used the AEO2006 reference case to forecast future electricity prices. 

Maintenance Costs ............................................. Labor and material costs associated with maintaining the commercial refrigeration equipment 

(e.g., cleaning heat exchanger coils, checking refrigerant charge levels, lamp replacement). 

Repair Costs ....................................................... Labor and material costs associated with repairing or replacing components that have failed. 

Equipment Lifetime ............................................. Age at which the commercial refrigeration equipment is retired from service (estimated to be 

10 years). 

Discount Rate ..................................................... Rate at which future costs are discounted to establish their present value to commercial refrigeration equipment users. 

Rebound Effect ................................................... A rebound effect was not taken into account in the LCC analysis. 

3. Baseline Manufacturer Selling Price 

The baseline MSP is the price charged 

by manufacturers to either a wholesaler/ 

distributor or very large customer for 

equipment meeting existing minimum 

efficiency (or baseline) standards. The 

MSP includes a markup that converts 

the MPC to MSP. DOE obtained the 

baseline MSPs through industry 

supplied efficiency-level data 

supplemented with a design-option 

analysis. Refer to chapter 5 of the TSD 

for details. MSPs were developed for 

equipment classes consisting of eight 

possible equipment families, two 

possible condensing unit configurations 

(remote condensing and self-contained) 

and three possible rating temperatures. 

Not all covered equipment classes have 

significant actual shipments (see 

chapter 3 of the TSD). The LCC and PBP 

analyses have been carried out on a set 

of 15 equipment classes identified 

earlier. 

DOE was not able to identify data on 

relative shipments for equipment 

classes by efficiency level, nor were 

equivalent data found by DOE in the 

literature or studies examined by DOE. 

For the equipment for which DOE 

performed a design option analysis as 

the basis for the engineering analysis, 

DOE designated the highest-energy-use 

equipment as Level 1, and selected this 

as the baseline equipment. 

4. Increase in Selling Price 

The standard-level MSP increase is 

the change in MSP associated with 

producing equipment at lower energy 

consumption levels associated with 

higher standards. DOE developed MSP 

increases associated with decreasing 

equipment energy consumption (or 

higher efficiency) levels through a 

combination of energy consumption 

level and design-option analyses. Refer 

to chapter 5 of the TSD for details. MSP 

increases as a function of equipment 

energy consumption were developed for 

each of the 15 equipment classes. 

Although the engineering analysis 

produced up to 11 energy consumption 

levels, depending on equipment type, 

only up to 8 selected energy 

consumption levels were used in the 

LCC and PBP analyses. 

5. Markups 

As discussed earlier, overall markups 

are based on one of three distribution 

channels, as well as whether the 

equipment is being purchased for the 

new construction or the replacement 

market. Based on input received by 

DOE, approximately 7 percent of 

equipment purchased by end-use 

customers is from wholesaler/ 

distributors, 7 percent is from 

mechanical contractors, and 86 percent 

is through national accounts. DOE’s 

understanding is that most equipment 

replacements are done through store 

remodels (as opposed to equipment 

failure), and that the distribution 

channels and installation process are 

similar for the new and replacement 

markets. Available information suggests 

that the fraction of equipment 

purchased through the distribution 

channels is the same for new and 

replacement equipment. 

6. Installation Costs 

DOE derived installation costs for 

commercial refrigeration equipment 

from data provided in RS Means 

Mechanical Cost Data.23 RS Means 

provides estimates on the person-hours 

required to install commercial 

refrigeration equipment and the labor 

rates associated with the type of crew 

required to install the equipment. The 

installation cost was calculated by 

multiplying the number of person-hours 

by the corresponding labor rate. RS 

Means provides specific person-hour 

and labor rate data for the installation of 

so-called ‘‘mercantile equipment’’ (CSI 

Masterformat Number 11100), which 

includes commercial refrigeration 

equipment. Labor rates vary 

significantly from region to region of the 

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country and the RS Means data provide 

the necessary information to capture 

this regional variability. RS Means 

provides cost indices that reflect the 

labor rates for 295 cities in the United 

States. Several cities in all 50 States and 

the District of Columbia are identified in 

the RS Means data. These cost indices 

were incorporated into the analysis to 

capture variation in installation cost, 

depending on the location of the 

customer. To arrive at an average index 

for each State, the city indices in each 

State were weighted by their 

population. Population weights for the 

year 2000 from the U.S. Census Bureau 

were used to calculate a weightedaverage index for each State. Further, 

since data was not available to indicate 

how installation costs vary with the 

commercial refrigeration equipment 

type or its efficiency, DOE considered 

the installation costs to be fixed, 

independent of the cost or efficiency of 

the equipment. Even though the LCC 

spreadsheet allows for alternative 

scenarios, DOE did not find a basis for 

changing its basic premise for the 

ANOPR analysis. 

As described earlier, the total 

installed cost is the sum of the 

equipment price and the installation 

cost. DOE derived the customer 

equipment price for any given standard 

level by multiplying the baseline MSP 

by the baseline markup and adding to it 

the product of the incremental MSP and 

the incremental markup. Because MSPs, 

markups, and the sales tax can all take 

on a variety of values depending on 

location, the resulting total installed 

cost for a particular standard level will 

not be a single-point value, but rather a 

distribution of values. 

7. Energy Consumption 

The electricity consumed by the 

commercial refrigeration equipment was 

based on the engineering analysis 

estimates as described previously in 

section II.C.1 after the whole-building 

simulations validation described in 

section II.E. 

8. Electricity Prices 

Electricity prices are necessary to 

convert the electric energy savings into 

energy cost savings. DOE received 

several comments on the development 

of electricity prices for its life cycle cost 

analysis. In its Framework Document, 

DOE suggested the use of average 

commercial electric prices. Comments 

received from Southern Company 

suggested that due to high load factors, 

the price of electricity for commercial 

refrigeration customers would be lower 

than the commercial average. (Southern 

Company No. 3.4 at p. 170) Pacific Gas 

& Electric Company (PG&E) commented 

it has a heavy ratcheting charge and is 

converting customers to time-of-use 

metering. The very high coincident 

demand for commercial refrigeration 

units could result in DOE 

underestimating the cost of electricity. 

(PG&E No. 3.4 at p. 171) PG&E also 

questioned how DOE would handle the 

time dependent valuation of energy. 

(PG&E No. 3.4 at p. 191) Southern 

Company responded that customers in 

its region were not exposed to marginal 

rates because it has cost-based rates. 

(Southern Company No. 3.4 at p. 193) 

Both groups supported the use of a 

sensitivity analysis by DOE in this area. 

In another area of discussion, ACEEE 

also commented that AEO electricity 

price forecasts might require revision. 

(Public Meeting Transcript No. 3.4 at p. 

174; Joint Comment, No. 9 at p. 2) In the 

latter comment received, the Joint 

Comment also suggested that DOE adopt 

the load profile and rate schedule- 

(tariff-) based approach to electricity 

prices that DOE used in the commercial 

unitary air conditioner rulemaking. 

(Joint comment, No. 9 at p. 2) 

DOE decided to use average electricity 

prices for four classes of commercial 

refrigeration equipment customers on a 

State-by-State basis. This approach will 

include the regional variations in energy 

prices and provide for estimated 

electricity prices suitable for the target 

market, yet reduce the analysis 

complexity. An effort to build tariffbased costs would have significantly 

increased the complexity and time 

needed for the analysis and it is not 

clear whether the results of the analysis 

will be improved. The development and 

use of State-average electricity prices by 

building type is described below and in 

more detail in chapter 8 of the TSD. 

9. Electricity Price Trends 

Because of the wide variation in 

electricity consumption patterns, 

wholesale costs, and retail rates across 

the country, it is important to consider 

regional differences in electricity prices. 

DOE used average effective commercial 

electricity prices at the State level from 

the Energy Information Administration 

(EIA) publication, State Energy 

Consumption, Price, and Expenditure 

Estimates. The latest available prices 

from this source are for the calendar 

year 2003. These were adjusted to 

represent 2006$ prices in two steps. 

First, national data on the reported 

average commercial electricity prices 

from the EIA website, Average Retail 

Price of Electricity to Ultimate 

Customers by End-Use Sector, were 

used to adjust the 2003 prices to 2005 

prices. Next, because actual prices were 

not yet available for the entire year of 

2006, the forecasted ratio between 2006 

and 2005 national commercial retail 

electricity prices from AEO2006 was 

used to adjust the 2005 State-level 

prices to 2006$. Furthermore, DOE 

recognized that different kinds of 

businesses typically use electricity in 

different amounts at different times of 

the day, week, and year, and therefore 

face different effective prices. To make 

this adjustment, DOE used the 2003 

Commercial Building Energy 

Consumption Survey (CBECS) data set 

to identify the average prices paid by 

the four kinds of businesses in this 

analysis compared with the average 

prices paid by all commercial 

customers. The ratios of prices paid by 

the four types of businesses to the 

national average commercial prices seen 

in the 2003 CBECS were used as 

multiplying factors to increase or 

decrease the average commercial 2006 

price data previously developed as 

necessary for each of the four kinds of 

businesses. Once the electricity prices 

for the four types of businesses have 

been adjusted, the resulting prices are 

used in the analysis. To obtain a 

weighted-average national electricity 

price, the prices paid by each business 

in each State is weighted by the 

estimated sales of frozen and 

refrigerated food products, which also 

serves as the distribution of commercial 

refrigeration equipment units in each 

state, to each prototype building. The 

State/business type weights are the 

probabilities that a given commercial 

refrigeration equipment unit shipped 

will be operated with a given electricity 

price. For evaluation purposes, the 

prices and weights can be depicted as a 

cumulative probability distribution. The 

effective electricity prices range from 

approximately 5 cents per kWh to 

approximately 14 cents per kWh. 

The electricity price trend provides 

the relative change in electricity prices 

for future years out to the year 2030. 

Estimating future electricity prices is 

difficult, especially considering that 

there are efforts in many States 

throughout the country to restructure 

the electricity supply industry. DOE 

applied the AEO2006 reference case as 

the default scenario and extrapolated 

the trend in values from the years 2020 

to 2030 of the forecast to establish prices 

in the years 2030 to 2042. This method 

of extrapolation is in line with methods 

currently being used by the EIA to 

forecast fuel prices for the Federal 

Energy Management Program (FEMP). 

DOE provides a sensitivity analysis of 

the life cycle costs saving and PBP 

results to future electricity price 

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scenarios using both the AEO2006 highgrowth and low-growth forecasts in 

chapter 8 of the TSD. 

10. Repair Costs 

The equipment repair cost is the cost 

to the consumer for replacing or 

repairing components in the commercial 

refrigeration equipment that have failed. 

DOE based the annualized repair cost 

for baseline efficiency equipment on the 

following expression: 

RC = kx EQP/LIFE 

Where: 

RC = repair cost in dollars 

k = fraction of equipment price (estimated to 

be 0.5) 

EQP = baseline equipment price in dollars, 

and 

LIFE = average lifetime of the equipment in 

years (estimated to be 10 years) 

Because data were not available for 

how the repair costs vary with 

equipment efficiency, DOE held repair 

costs constant as the default scenario for 

the LCC and PBP analyses. 

11. Maintenance Costs 

DOE estimated the annualized 

maintenance costs for commercial 

refrigeration equipment from data in RS 

Means Facilities Maintenance & Repair 

Cost Data. RS Means provides estimates 

on the person-hours, labor rates and 

materials required to maintain 

commercial refrigeration equipment on 

a semi-annual basis. DOE used a single 

figure of $156/year (2006$) for 

preventative maintenance for all classes 

of commercial refrigeration equipment. 

Because data were not available for how 

the maintenance costs vary with 

equipment efficiency, DOE held 

maintenance costs constant even as 

equipment efficiency increased. Lamp 

replacement and other lighting 

maintenance activities are required 

maintenance for commercial 

refrigeration equipment, which DOE 

considered to be separate from 

preventative maintenance, and were not 

itemized in the preventative 

maintenance activities described by RS 

Means. Different commercial 

refrigeration equipment classes have 

different numbers of lamps (and 

ballasts) and many of the efficiency 

options considered in DOE’s 

engineering analysis involved changes 

to the lighting configuration (lamp, 

ballast, or use of light emitting diode 

(LED) lighting systems). Because the 

lighting configurations can vary by 

energy consumption level, DOE 

estimated the relative maintenance costs 

for lighting by each case type for which 

a design-option analysis was performed. 

The methodology used was to estimate 

the frequency of failure and replacement 

of individual lighting components, to 

estimate the cost of replacement in the 

field, and to develop an annualized 

maintenance cost based on the sum of 

the total lighting maintenance costs (in 

2006$) over the estimated life of the 

equipment divided by the estimated life 

of the equipment. 

Costs for fluorescent lamp and ballast 

replacements were based on review of 

the original equipment manufacturer 

(OEM) costs used in the engineering 

analysis, RS Means estimates and cost 

data from Grainger, Inc., and previous 

studies. DOE estimated the costs of field 

replacement using labor cost hours from 

RS Means Electrical Cost Data for 

typical lamp or ballast replacement for 

other lighting fixtures, using a 150 

percent multiplier on OEM costs for 

lamps and ballasts (provided in the 

engineering analysis spreadsheets) to 

reflect retail pricing. 

Fluorescent lamp and ballast 

technology is mature, so DOE made no 

change in inflation-adjusted costs for 

these components. However, because of 

rapid technological improvement, costs 

for LED lamps are declining. DOE 

estimated that costs for replacing LED 

lighting fixtures (believed to occur 6 

years after the effective date of the 

standard) are 140 percent of the OEM 

installed cost of LED lighting fixtures 

today (in 2006$). These LED fixture 

replacement costs represent a 30 percent 

reduction to the current costs for in-thefield replacement. DOE recognizes that 

both life and cost estimates for LED 

replacement are speculative and 

believes it has taken a conservative 

approach to estimating price reduction 

over time for this technology. Overhead 

and profit factors from RS Means were 

not considered. 

12. Lifetime 

DOE defines lifetime as the age when 

a commercial refrigeration equipment 

unit is retired from service. DOE based 

equipment lifetime on discussions with 

industry experts and other stakeholders, 

and concluded that a typical lifetime of 

10 years is appropriate for commercial 

refrigeration equipment. Commercial 

refrigeration equipment units are 

typically replaced when stores are 

renovated—about every 10 years—

which is before the commercial 

refrigeration equipment units would 

have physically worn out. Because of 

this, there is a used-equipment market 

for commercial refrigeration equipment. 

DOE understands, however, that the 

salvage value to the original purchaser 

is very low and thus this has not been 

taken into account in the LCC. Chapter 

3 of the TSD, Market and Technology 

Assessment, contains a discussion of 

equipment life data and the sources of 

such data. 

DOE understands that the actual 

lifetime of a commercial refrigeration 

equipment unit in the field might vary 

from the estimated average 10-year 

lifetime, to some degree, by equipment 

class, variations associated with 

components and manufacturing 

methods, as well as store type where the 

unit is placed in service. Nevertheless, 

the 10-year lifetime estimate is an 

important benchmark for testing to a 

standard level of performance, making 

comparisons of different units for 

purchasing decisions, and making a 

reasonable quantitative analysis of the 

impacts that could result from different 

standard levels of efficiency. Therefore, 

DOE specifically requests feedback on 

the lifetime of commercial refrigeration 

equipment and whether, in fact, this is 

a significant issue. Where the lifetime 

data indicate a substantial variation 

from the assumed 10-year lifetime, DOE 

will perform a sensitivity analysis of 

this variable in the LCC and NES 

analyses and may adjust the best 

estimate of equipment lifetime as well. 

In particular, DOE seeks comment on 

how long these units are typically 

maintained in service, on average, either 

for all equipment covered under this 

rulemaking or by equipment class and 

store type. Also, DOE seeks comment on 

the existence of used-equipment 

markets for commercial refrigeration 

equipment, and the importance of 

considering such markets in its analysis. 

This is identified as Issue 8 under 

‘‘Issues on Which DOE Seeks Comment’’

in section IV.E of this ANOPR. 

13. Discount Rate 

The discount rate is the rate at which 

future expenditures are discounted to 

establish their present value. DOE 

received comments on the development 

of discount rates at the Framework 

Public Meeting. FPA suggested that 

DOE’s analysis should consider 

discount rates for convenience stores 

separately from other food stores, but 

considered superstores in the same 

general market as the traditional grocery 

store. (FPA No. 3.4 at p. 179) ARI 

suggested that DOE consider developing 

discount rates explicitly for 

supercenters. (ARI No. 3.4 at p. 179) 

DOE derived the discount rates for the 

LCC analysis by estimating the cost of 

capital for companies that purchase 

commercial refrigeration equipment. 

The cost of capital is commonly used to 

estimate the present value of cash flows 

to be derived from a typical company 

project or investment. Most companies 

use both debt and equity capital to fund 

investments, so their cost of capital is 

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the weighted average of the cost to the 

company of equity and debt financing. 

DOE estimated the cost of equity 

financing by using the Capital Asset 

Pricing Model (CAPM). The CAPM, 

among the most widely used models to 

estimate the cost of equity financing, 

considers the cost of equity to be 

proportional to the amount of 

systematic risk associated with a 

company. The cost of equity financing 

tends to be high when a company faces 

a large degree of systematic risk and it 

tends to be low when the company faces 

a small degree of systematic risk. To 

estimate the weighted average cost of 

capital (WACC) (including the weighted 

average cost of debt and equity 

financing) of commercial refrigeration 

equipment purchasers, DOE used a 

sample of companies involved in 

groceries and multi-line retailing drawn 

from a database of 7,319 U.S. companies 

on the Damodaran Online website. The 

WACC approach taken for the 

determination of the discount rates 

takes into account the current tax status 

of the individual firms on an overall 

corporate basis. The marginal effects of 

increased costs and thus depreciation 

due to higher cost equipment on the 

overall tax status was not evaluated. 

DOE used a sample of 23 companies 

to represent the purchasers of 

commercial refrigeration equipment. For 

each company in the sample, DOE 

derived the cost of debt, percent debt 

financing, and systematic company risk 

from information provided at the 

Damodaran Online Web site. It 

estimated the cost of debt financing 

from the long-term government bond 

rate (4.39 percent) and the standard 

deviation of the stock price. The cost of 

capital for small, independent grocers, 

convenience store franchisees, gasoline 

station owner-operators, and others with 

more limited access to capital is more 

difficult to determine. Individual creditworthiness varies considerably, and 

some franchisees have access to the 

financial resources of the franchising 

corporation. However, personal contacts 

with a sample of commercial bankers 

yielded an estimate for the small 

operator weighted cost of capital of 

about 200 to 300 basis points (2 percent 

to 3 percent) above the rates for large 

grocery chains. A central value equal to 

the weighted average of large grocery 

chains, plus 2.5 percent, was used for 

small operators. Deducting expected 

inflation from the cost of capital 

provides the estimates of the real 

discount rate by ownership category. 

The average after-tax discount rate, 

weighted by the percentage shares of 

total purchases of commercial 

refrigeration equipment, is 4.76 percent 

for large grocery stores, 5.66 percent for 

multi-line retailers, and 7.26 percent for 

convenience stores and convenience 

stores associated with gasoline stations. 

14. Payback Period 

The PBP is the amount of time it takes 

the customer to recover the 

incrementally higher purchase cost of 

more energy efficient equipment as a 

result of lower operating costs. 

Numerically, the PBP is the ratio of the 

increase in purchase cost (i.e., from a 

less efficient design to a more efficient 

design) to the decrease in annual 

operating expenditures. This type of 

calculation is known as a ‘‘simple’’ PBP, 

because it does not take into account 

changes in operating cost over time or 

the time value of money, that is, the 

calculation is done at an effective 

discount rate of zero percent. 

The equation for PBP is: 

PBP = ∆IC / ∆OC 

Where: 

PBP = payback period in years, 

DIC = difference in the total installed cost 

between the more efficient standard level 

equipment (energy consumption levels 2, 

3, etc.) and the baseline (energy 

consumption level 1) equipment, and 

DOC = difference in annual operating costs. 

PBPs are expressed in years. PBPs 

greater than the life of the equipment 

means that the increased total installed 

cost of the more efficient equipment is 

not recovered in reduced operating costs 

for the more efficient equipment. 

The data inputs to PBP analysis are 

the total installed cost of the equipment 

to the customer for each energy 

consumption level and the annual (first 

year) operating costs for each energy 

consumption level. The inputs to the 

total installed cost are the equipment 

price and the installation cost. The 

inputs to the operating costs are the 

annual energy cost, the annual repair 

cost, and the annual maintenance cost. 

The PBP uses the same inputs as the 

LCC analysis, except that electricity 

price trends and discount rates are not 

required. Since the PBP is a ‘‘simple’’

(undiscounted) payback, the required 

electricity cost is only for the year in 

which a new energy conservation 

standard is to take effect—in this case, 

the year 2012. The electricity price used 

in the PBP calculation of electricity cost 

was the price projected for 2012, 

expressed in 2006$, but not discounted 

to 2006. Discount rates are not used in 

the PBP calculation. 

15. Life-Cycle Cost and Payback Period 

Results 

This section presents the LCC and 

PBP results for the energy consumption 

levels analyzed. Because the values of 

most inputs to the LCC analysis are 

uncertain, DOE represents them as a 

distribution of values rather than a 

single-point value. Thus, DOE derived 

the LCC results also as a distribution of 

values. 

DOE provides a summary of the 

change in LCC from the baseline by 

percentile groupings of the distribution 

of results for each of the equipment 

classes in chapter 8 and appendix G of 

the TSD. A sample for one equipment 

class (VOP.RC.M) is shown in Table 

II.13. Table II.13 also shows the mean 

LCC savings and the percent of units 

with LCC savings at each of the 

efficiency levels. 

TABLE II.13.—DISTRIBUTION OF LIFE-CYCLE COST SAVINGS FROM A BASELINE LEVEL (LEVEL 1) BY EFFICIENCY LEVEL

FOR THE VERTICAL OPEN, REMOTE CONDENSING, MEDIUM TEMPERATURE (VOP.RC.M) EQUIPMENT CLASS

Efficiency level 

Decrease in LCC from baseline (Level 1) shown by percentiles of the distribution of results (2006$) 

Mean 

savings 

Percent 

of units 

with LCC 

savings 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 

Level 2 ........................................... $145 $238 $301 $340 $361 $398 $425 $509 $711 $878 $1,285 $485 100 

Level 3 ........................................... 317 471 569 634 665 730 775 911 1,238 1,512 2,169 871 100 

Level 4 ........................................... 473 686 822 911 952 1,044 1,106 1,294 1,748 2,127 3,036 1,239 100 

Level 5 ........................................... 717 1,048 1,260 1,399 1,464 1,606 1,703 1,995 2,701 3,290 4,704 1,910 100 

Level 6 ........................................... 797 1,186 1,435 1,600 1,681 1,845 1,958 2,303 3,135 3,828 5,497 2,203 100 

Level 7 ........................................... 842 1,288 1,576 1,769 1,863 2,047 2,177 2,574 3,533 4,330 6,255 2,459 100 

Level 8 ........................................... 835 1,349 1,694 1,911 2,021 2,230 2,379 2,839 3,950 4,871 7,105 2,707 100 

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As an example of how to interpret the 

information in Table II.13, here is a 

review of the results for the VOP.RC.M 

equipment class. The efficiency Level 4 

in Table II.13 (row 3) shows that the 

change in LCC (zero percentile column) 

is a minimum saving of $473. For 90 

percent of the cases studied (90th 

percentile), the change in LCC is a 

reduction of $2,127 or less. The largest 

reduction in LCC is $3,036 (100th 

percentile). The mean change in LCC is 

a net savings of $1,239. The last column 

shows that 100 percent of the sample 

have LCC savings (i.e., reductions in 

LCC greater than zero) when compared 

to the baseline efficiency level. 

Table II.14 provides the national 

average life cycle cost savings calculated 

for each efficiency level when compared 

to the baseline efficiency (Level 1) for 

all equipment classes. Review of Table 

II.14 shows that every efficiency level 

analyzed generated national average 

life-cycle cost savings compared with 

the baseline efficiency level. It should 

be pointed out that 100 percent of the 

units analyzed have positive LCC 

savings. 

TABLE II.14.—AVERAGE LIFE-CYCLE COST SAVINGS FROM A BASELINE LEVEL (LEVEL 1) BY EFFICIENCY LEVEL AND

EQUIPMENT CLASS

Equipment class 

National average LCC savings (2006$) 

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

VOP.RC.M ....................................................................... 0 485 871 1239 1910 2203 2459 2707 

VOP.RC.L ........................................................................ 0 1209 2604 3512 3470 3443 NA NA 

VOP.SC.M ........................................................................ 0 759 883 1006 1265 1328 1487 1482 

VCT.RC.M ........................................................................ 0 1046 1309 1596 1750 2362 1925 NA 

VCT.RC.L ......................................................................... 0 1179 1650 2105 2949 3333 3684 4272 

VCT.SC.I .......................................................................... 0 1371 2581 3020 3285 5313 5613 5398 

VCS.SC.I .......................................................................... 0 398 961 1383 1451 1559 1619 1609 

SVO.RC.M ....................................................................... 0 227 500 758 1000 1223 1458 NA 

SVO.SC.M ........................................................................ 0 552 588 644 824 841 1200 1186 

SOC.RC.M ....................................................................... 0 835 1779 1718 1901 1868 1540 NA 

HZO.RC.M ....................................................................... 0 208 435 490 NA NA NA NA 

HZO.RC.L ........................................................................ 0 234 591 935 1267 1459 NA NA 

HZO.SC.M ........................................................................ 0 66 286 354 381 445 466 543 

HZO.SC.L ......................................................................... 0 68 555 1071 1136 1155 1448 1457 

HCT.SC.I .......................................................................... 0 250 315 731 809 835 NA NA 

DOE specifically seeks feedback on 

the validity of selecting Level 1 as the 

baseline in the LCC analysis. Since 

higher efficiency equipment are known 

to be sold into the market, the LCC 

savings estimates presented above 

represent overestimates with respect to 

the life-cycle savings anticipated for 

base case efficiencies higher than Level 

1. DOE seeks input on whether a 

distribution of efficiencies should be 

used for the LCC analysis baseline 

(instead of a single efficiency level), and 

if so, what data could be used to 

populate this distribution. This is 

identified as Issue 9 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

IV.E of this ANOPR. 

Table II.15 summarizes the PBP 

results for each of the efficiency levels 

for the VOP.RC.M equipment class. 

Results are summarized for PBP by 

percentile groupings of the distribution 

of results. The chart also shows the 

mean PBP for each efficiency level. 

TABLE II.15.—SUMMARY OF PAYBACK PERIOD RESULTS FOR THE VERTICAL OPEN, REMOTE CONDENSING, MEDIUM

TEMPERATURE (VOP.RC.M) EQUIPMENT CLASS

Efficiency level 

Payback period in years shown by percentiles of the distribution of results Mean 

PBP 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 

Level 2 .............................. 1.4 2.1 2.3 2.8 3.1 3.3 3.5 3.6 3.8 4.1 4.7 3.2 

Level 3 .............................. 1.2 1.8 2.0 2.4 2.7 2.9 3.0 3.1 3.3 3.6 4.1 2.8 

Level 4 .............................. 1.1 1.8 1.9 2.3 2.5 2.7 2.9 3.0 3.2 3.4 3.9 2.6 

Level 5 .............................. 1.2 1.8 1.9 2.3 2.6 2.8 2.9 3.0 3.2 3.5 4.0 2.7 

Level 6 .............................. 1.2 1.8 2.0 2.4 2.7 2.9 3.0 3.1 3.3 3.6 4.1 2.8 

Level 7 .............................. 1.3 1.9 2.1 2.5 2.8 3.0 3.2 3.3 3.5 3.8 4.3 2.9 

Level 8 .............................. 1.4 2.1 2.2 2.7 3.0 3.2 3.4 3.5 3.8 4.0 4.6 3.1 

Table II.16 provides the national 

average payback calculated for each 

efficiency level when compared to the 

baseline efficiency level (Level 1) for all 

equipment classes. Table II.16 also 

shows the percentage of units reporting 

PBPs of less than three years. The 

results of the analysis shows that 

purchases of higher efficiency levels 

resulted in PBPs (with respect to 

purchase of baseline efficiency units) of 

less than four years for any of the 

efficiency levels considered for any 

equipment class. 

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TABLE II.16.—NATIONAL AVERAGE PAYBACK PERIODS BY EFFICIENCY LEVEL AND EQUIPMENT CLASS

Equipment class Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

National Average Payback Period (Years) 

VOP.RC.M ....................................................................... NA 3.2 2.8 2.6 2.7 2.8 2.9 3.1 

VOP.RC.L ........................................................................ NA 0.5 0.8 1.1 1.2 2.0 NA NA 

VOP.SC.M ........................................................................ NA 0.7 0.7 0.8 1.1 1.4 2.0 3.1 

VCT.RC.M ........................................................................ NA 0.3 0.4 0.7 0.9 2.7 3.9 NA 

VCT.RC.L ......................................................................... NA 1.4 1.6 1.8 2.1 2.2 2.3 2.7 

VCT.SC.I .......................................................................... NA 0.3 0.4 0.5 0.6 1.3 1.5 2.1 

VCS.SC.I .......................................................................... NA 0.3 0.6 0.6 0.7 0.7 0.8 1.2 

SVO.RC.M ....................................................................... NA 3.2 2.8 2.7 2.8 2.9 3.0 NA 

SVO.SC.M ........................................................................ NA 0.8 0.8 0.9 1.1 1.3 1.8 2.4 

SOC.RC.M ....................................................................... NA 0.6 1.0 1.2 1.4 3.1 3.9 NA 

HZO.RC.M ....................................................................... NA 0.8 1.2 1.5 NA NA NA NA 

HZO.RC.L ........................................................................ NA 1.2 1.6 1.7 1.8 1.9 NA NA 

HZO.SC.M ........................................................................ NA 0.7 1.0 1.1 1.1 1.2 1.4 1.8 

HZO.SC.L ......................................................................... NA 0.6 0.6 0.8 0.8 0.9 1.3 1.3 

HCT.SC.I .......................................................................... NA 0.7 0.7 1.3 1.4 1.4 NA NA 

Percent of Units With Payback Period of Less Than 3 Years 

VOP.RC.M ....................................................................... 0 38 58 74 64 58 50 40 

VOP.RC.L ........................................................................ 0 100 100 100 100 100 NA NA 

VOP.SC.M ........................................................................ 0 100 100 100 100 100 98 41 

VCT.RC.M ........................................................................ 0 100 100 100 100 60 24 NA 

VCT.RC.L ......................................................................... 0 100 100 100 98 94 88 64 

VCT.SC.I .......................................................................... 0 100 100 100 100 100 100 98 

VCS.SC.I .......................................................................... 0 100 100 100 100 100 100 100 

SVO.RC.M ....................................................................... 0 38 57 60 58 50 42 NA 

SVO.SC.M ........................................................................ 0 100 100 100 100 100 100 87 

SOC.RC.M ....................................................................... 0 100 100 100 100 40 25 NA 

HZO.RC.M ....................................................................... 0 100 100 100 NA NA NA NA 

HZO.RC.L ........................................................................ 0 100 100 100 100 100 NA NA 

HZO.SC.M ........................................................................ 0 100 100 100 100 100 100 100 

HZO.SC.L ......................................................................... 0 100 100 100 100 100 100 100 

HCT.SC.I .......................................................................... 0 100 100 100 100 100 NA NA 

DOE emphasizes that the PBPs shown 

in Table II.16 as well as the rebuttable 

PBPs shown in Table II.11 take into 

account the cumulative impact of all 

technologies used in a design option to 

reach a specific energy efficiency level 

when compared to the baseline 

equipment. Shorter PBP resulting from 

the most cost-effective technologies can 

offset longer PBP from less cost-effective 

technologies to yield a low overall PBP 

for the design option. For this reason, 

the choice of baseline efficiency level 

affects the PBP for higher efficiency 

levels. The LCC spreadsheet allows the 

user to select alternate baseline 

efficiency levels for each equipment 

class and calculate the LCC savings and 

PBP for all higher levels compared to 

the selected baseline. 

Table II.17 illustrates the impact of 

the selection of baseline level on the 

VCT.RC.M equipment class for the 

supermarket business type and using 

national average energy prices. Note that 

the values shown in Table II.17 differ 

from the values shown in Table II.14 

since the values in Table II.17 do not 

represent a national average developed 

through the weighting of all business 

types and fuel costs. Nevertheless, they 

serve to illustrate the impact of the 

selected baseline efficiency level on 

LCC savings and PBP. The LCC savings 

and PBP are shown for four alternate 

baseline efficiency levels: Level 1, Level 

2, Level 3 and Level 4. As the baseline 

efficiency is moved from Level 1 to 

Level 4, the life-cycle-cost savings are 

correspondingly reduced for each of the 

higher efficiency levels. The efficiency 

level with the maximum life-cycle-cost 

savings (level 6) is, however, the same 

regardless of choice of baseline level. 

Selection of the baseline level at level 6 

would show no life-cycle-cost savings 

for higher levels. 

The calculated PBP also changes with 

selection of alternate baseline efficiency 

levels. As the baseline efficiency is 

moved from Level 1 to Level 4, the PBP 

for each of the higher efficiency levels, 

relative to the selected baseline, 

increases, with the Level 7 PBP moving 

from 3.9 years—using Level 1 as the 

baseline efficiency level—to 6.2 years 

using Level 4 as the baseline efficiency 

level. 

TABLE II.17.—SENSITIVITY OF AVERAGE LIFE-CYCLE COST SAVINGS AND PAYBACK PERIOD TO SELECTION OF BASELINE

EFFICIENCY LEVEL FOR THE VERTICAL TRANSPARENT DOOR, REMOTE CONDENSING, MEDIUM TEMPERATURE

(VCT.RC.M) EQUIPMENT CLASS

Baseline level Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

Average LCC Savings (2006$) 

Level 1 ............................................................................. 0 983 1232 1503 1646 2175 1709 NA 

Level 2 ............................................................................. NA 0 249 520 664 1193 726 NA 

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TABLE II.17.—SENSITIVITY OF AVERAGE LIFE-CYCLE COST SAVINGS AND PAYBACK PERIOD TO SELECTION OF BASELINE

EFFICIENCY LEVEL FOR THE VERTICAL TRANSPARENT DOOR, REMOTE CONDENSING, MEDIUM TEMPERATURE

(VCT.RC.M) EQUIPMENT CLASS—Continued 

Baseline level Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 

Level 3 ............................................................................. NA NA 0 271 414 944 477 NA 

Level 4 ............................................................................. NA NA NA 0 144 673 206 NA 

Average Payback Period (Years) 

Level 1 ............................................................................. NA 0.3 0.4 0.7 0.9 2.7 3.9 NA 

Level 2 ............................................................................. NA NA 0.8 1.2 1.5 3.7 5.2 NA 

Level 3 ............................................................................. NA NA NA 1.6 1.9 4.0 5.6 NA 

Level 4 ............................................................................. NA NA NA NA 2.4 4.5 6.2 NA 

DOE provided a sensitivity analysis of 

the life-cycle-cost savings as well as the 

PBP to the choice of baseline efficiency 

level in Chapter 8 of the TSD. DOE 

presents these findings to facilitate 

stakeholder review of the LCC and PBP 

analyses. DOE seeks information and 

comments relevant to the assumptions, 

methodology, and results of this 

analysis. See chapter 8 of the TSD for 

additional detail on the LCC and PBP 

analyses. 

H. Shipments Analysis 

This section presents DOE’s 

shipments analysis, which is an input to 

the NIA (section II.I) and MIA (section 

II.K). DOE will undertake the MIA after 

the ANOPR is published, and will 

report the results of the MIA in the 

NOPR. 

The results of the shipments analysis 

are driven primarily by historical 

shipments data for the 15 equipment 

classes of commercial refrigeration 

equipment under consideration. The 

model estimates that, in each year, the 

existing stock of commercial 

refrigeration equipment either ages by 

one year or is worn out and replaced. In 

addition, new equipment can be 

shipped into new commercial floor 

space, and old equipment can be 

removed through demolitions. DOE 

chose to analyze all efficiency levels 

analyzed in the LCC in the NIA. Because 

DOE is assessing impacts presuming 

each level analyzed represents a 

possible standard level, DOE refers to 

the efficiency levels analyzed in the NIA 

as ‘‘candidate standard levels’’ (CSLs). 

Shipments forecasts were determined 

for all of the CSLs analyzed in the NIA 

and NPV analysis. 

The shipments analysis is a 

description of commercial refrigeration 

equipment stock flows as a function of 

year and age. While there are 15 

equipment classes, the shipment 

analysis treats each category of 

equipment independently and without 

coupling between them. DOE 

formulated the equations used in the 

analysis as updates of the distribution of 

stock in any given year, as a function of 

age, to the following year using the 

following steps: (1) DOE first converted 

the equipment units to linear feet of 

display space cooled by those units by 

taking the national statistics on sales of 

equipment and calculating equipment 

capacity per linear foot of retail grocery 

building display space; (2) DOE used 

this calculation of existing stock, and 

the average age of the equipment, as a 

basis for calculating replacement sales; 

(3) DOE subtracted replacement sales 

from historical total sales statistics to 

calculate new sales of commercial 

refrigeration equipment; (4) DOE 

forecast new sales as a function of new 

construction of retail food sales space; 

(5) DOE recorded sales of new and 

replacement equipment by the year 

sold, and depreciated each annual 

vintage over the estimated life of the 

equipment; and (6) DOE allocated sales 

in each year to the 15 equipment classes 

in proportion to their relative historical 

sales. 

Table II.18 shows the results of the 

shipments analysis for the 15 

commercial refrigeration equipment 

classes for the base case (baseline 

efficiency level or Level 1). As 

equipment purchase price increases 

with higher efficiency levels, a drop in 

shipments could be expected relative to 

the base case. However, as annual 

energy consumption is reduced, there is 

potentially a countering effect of 

increased equipment sales due to more 

frequent installations and use of 

commercial refrigeration equipment by 

retailers (a potential rebound effect). 

Although there is a provision in the 

spreadsheet for a change in projected 

shipments in response to efficiency 

level increases (or energy consumption 

level decreases), DOE has no 

information with which to calibrate 

such a relationship. Therefore, for the 

ANOPR analysis, DOE presumed that 

the shipments do not change in 

response to the changing CSLs. 

TABLE II.18.—FORECASTED SHIPMENTS FOR COMMERCIAL REFRIGERATION EQUIPMENT, 2012–2042, LEVEL 1 (BASE

CASE) 

Equipment class 

Thousands of linear feet shipped by year and equipment class 

2012 2015 2020 2025 2030 2035 2040 2042 Cumulative 

VOP.RC.M ................................................ 423 446 490 538 591 649 714 742 17574 

VOP.RC.L* ............................................... 0 0 0 0 0 0 0 0 0 

VOP.SC.M ................................................ 28 30 33 36 40 44 48 50 1182 

VCT.RC.M ................................................ 30 32 35 38 42 46 51 53 1255 

VCT.RC.L ................................................. 420 443 487 535 587 645 709 737 17456 

VCT.SC.I .................................................. 10 11 12 13 14 16 17 18 430 

VCS.SC.I .................................................. 3 3 3 3 4 4 4 5 107 

SVO.RC.M ................................................ 323 340 374 411 451 495 545 566 13405 

SVO.SC.M ................................................ 43 45 49 54 59 65 72 75 1769 

SOC.RC.M ............................................... 81 86 94 104 114 125 137 143 3379 

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TABLE II.18.—FORECASTED SHIPMENTS FOR COMMERCIAL REFRIGERATION EQUIPMENT, 2012–2042, LEVEL 1 (BASE

CASE)—Continued 

Equipment class 

Thousands of linear feet shipped by year and equipment class 

2012 2015 2020 2025 2030 2035 2040 2042 Cumulative 

HZO.RC.M ................................................ 50 52 57 63 69 76 84 87 2060 

HZO.RC.L ................................................. 156 164 181 198 218 239 263 273 6476 

HZO.SC.M ................................................ 4 4 4 5 5 6 6 6 152 

HZO.SC.L ................................................. 8 8 9 10 11 12 13 13 315 

HCT.SC.I .................................................. 34 35 39 43 47 52 57 59 1397 

* Estimated shipments of this equipment class were zero. The industry requested that this equipment class be included in the rulemaking. 

Additional details on the shipments 

analysis can be found in chapter 9 of the 

TSD. 

I. National Impact Analysis 

The NIA assesses future NES and the 

national economic impacts of CSLs. The 

analysis measures economic impacts 

using the NPV metric (i.e., future 

amounts discounted to the present) of 

total commercial customer costs and 

savings expected to result from new 

standards at specific efficiency levels. 

For a given CSL, DOE calculated the 

NPV, as well as the NES, as the 

difference between a base case forecast 

and the standards case. Additional 

details on the national impacts analysis 

for commercial refrigeration equipment 

are found in chapter 10 of the TSD. 

DOE determined national annual 

energy consumption as the product of 

the annual energy consumption per 

commercial refrigeration equipment 

unit and the number of commercial 

refrigeration equipment units of each 

vintage. This approach accounts for 

differences in unit energy consumption 

from year to year. Cumulative energy 

savings are the sum of the annual NES 

determined over the period of analysis. 

DOE calculated net economic savings 

each year as the difference between total 

operating cost savings and increases in 

total installed costs. Cumulative savings 

are the sum of the annual NPV. 

1. Approach 

Over time, in the standards case, more 

efficient equipment gradually replaces 

less efficient equipment. This affects the 

calculation of both the NES and NPV, 

both of which are a function of the total 

number of units in use and their 

efficiencies, and thus are dependent 

upon annual shipments and the lifetime 

of equipment. Both calculations start by 

using the estimate of shipments and the 

quantity of units in service, which are 

derived from the shipments model. 

With regard to the estimation of NES, 

because more efficient commercial 

refrigeration equipment units gradually 

replace less efficient ones, the energy 

per unit of capacity used by the 

commercial refrigeration equipment in 

service gradually decreases in the 

standards case relative to the base case. 

To estimate the total energy savings for 

each candidate efficiency level, DOE 

first calculated the national site energy 

consumption (site energy is the energy 

directly consumed by the units in 

operation) for commercial refrigeration 

equipment each year, beginning with 

the expected effective date of the 

standards (2012). This calculation was 

done for the base case forecast and the 

standards case forecast. Second, DOE 

determined the annual site energy 

savings, which is the difference between 

site energy consumption in the base 

case and in the standards case. Third, 

DOE converted the annual site energy 

savings into the annual amount of 

energy saved at the source of electricity 

generation (the source energy). Finally, 

DOE summed the annual source energy 

savings from 2012 to 2042 to calculate 

the total NES for that period. DOE 

performed these calculations for each 

CSL. 

2. Base Case and Standards Case 

Forecasted Efficiencies 

A key component of DOE’s estimates 

of NES and NPV are the energy 

efficiencies for shipped equipment that 

it forecasts over time for the base case 

(without new standards) and for each of 

the standards cases. The forecasted 

efficiencies represent the distribution of 

energy efficiency of the equipment 

under consideration that is shipped over 

the forecast period (i.e., from the 

assumed effective date of a new 

standard to 30 years after the standard 

becomes effective). Because key inputs 

to the calculation of the NES and NPV 

are dependent on the estimated 

efficiencies, they are of great importance 

to the analysis. In the case of the NES, 

the per-unit annual energy consumption 

is a direct function of efficiency. With 

regard to the NPV, two inputs, the perunit total installed cost and the per-unit 

annual operating cost, both depend on 

efficiency. The per-unit total installed 

cost is a direct function of efficiency 

while the per-unit annual operating 

cost, because it is a direct function of 

the per-unit energy consumption, is 

indirectly dependent on equipment 

efficiency. 

The annual per-unit energy 

consumption is the site energy 

consumed by a commercial refrigeration 

equipment unit per year. The annual 

energy consumption is directly tied to 

the efficiency of the unit. Thus, 

knowing the efficiency of a commercial 

refrigeration equipment unit determines 

the corresponding annual energy 

consumption. DOE determined annual 

forecasted market shares by efficiency 

level that, in turn, enabled a 

determination of shipment-weighted 

annual energy consumption values. 

Because no data were available on 

market shares broken down by 

efficiency level, DOE determined market 

shares by efficiency level for 

commercial refrigeration equipment 

based on its own analysis. First, DOE 

converted 2005 shipment information 

by equipment class into market shares 

by equipment class, and then adapted a 

cost-based method similar to that used 

in the NEMS to estimate market shares 

for each equipment class by efficiency 

level. This cost-based method relied on 

cost data developed in the engineering 

and life-cycle cost analyses as well as 

economic purchase criteria data taken 

directly from NEMS. Then, from those 

market shares and projections of 

shipments by equipment class, DOE 

developed the future efficiency 

scenarios for a base case (i.e., without 

new standards) and for various 

standards cases (i.e., with new 

standards). DOE did not have data to 

calibrate this approach to actual market 

shipments by efficiency level. 

Therefore, DOE specifically seeks 

feedback on this economic-based 

approach to estimating market shares. 

This is identified as Issue 10 under 

‘‘Issues on Which DOE Seeks Comment’’

in section IV.E of this ANOPR. 

DOE developed base case efficiency 

forecasts based on the estimated market 

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shares by equipment class and 

efficiency level. Because there are no 

historical data to indicate how 

equipment efficiencies or relative 

equipment class preferences have 

changed over time, DOE predicted that 

forecasted market shares would remain 

frozen at the 2012 efficiency level until 

the end of the forecast period (30 years 

after the effective date—the year 2042). 

Realizing that this prediction very likely 

has the effect of causing the estimates of 

savings associated with these efficiency 

standards to be overstated, DOE seeks 

comment on this prediction and the 

potential significance of the overestimate of savings. In particular, DOE 

requests data that would enable it to 

better characterize the likely increases 

in efficiency that would occur over the 

30-year modeling period in absence of 

this rule. 

For its determination of standards 

case forecasted efficiencies, DOE used a 

‘‘roll-up’’ scenario to establish the 

market shares by efficiency level for the 

year that standards become effective 

(i.e., 2012). Information available to 

DOE suggests that equipment shipments 

with efficiencies in the base case that 

did not meet the standard level under 

consideration would ‘‘roll-up’’ to meet 

the new standard level. Also, available 

information suggests that all equipment 

efficiencies in the base case that were 

above the standard level under 

consideration would not be affected. 

DOE specifically seeks feedback on its 

basis for the forecasted base case and 

standards case efficiencies and its 

prediction on how standards impact 

efficiency distributions in the year that 

standards take effect. This is identified 

as Issue 11 under ‘‘Issues on Which 

DOE Seeks Comment’’ in section IV.E of 

this ANOPR. In addition, DOE 

specifically seeks feedback on whether 

higher standard levels in specific 

equipment classes are likely to cause 

commercial refrigeration equipment 

customers to shift to using other, lessefficient equipment classes for 

displaying merchandise. This is 

identified as Issue 12 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

IV.E of this ANOPR. 

3. National Impact Analysis Inputs 

The difference in shipments by 

equipment efficiency level between the 

base and standards cases was the basis 

for determining the reduction in perunit annual energy consumption that 

could result from new standards. The 

commercial refrigeration equipment 

stock in a given year is the total linear 

footage of commercial refrigeration 

equipment shipped from earlier years 

that survive in the given year. The NES 

spreadsheet model keeps track of the 

total linear footage of commercial 

refrigeration equipment units shipped 

each year. For purposes of the ANOPR 

NES and NPV analyses, DOE estimated 

that approximately 10 percent of the 

existing commercial refrigeration 

equipment units are retired each year 

(based on a 10-year average lifetime) 

and that for units shipped in 2042, any 

units still remaining at the end of 2052 

are replaced. 

The site-to-source conversion factor is 

the multiplicative factor used for 

converting site energy consumption, 

expressed in kWh, into primary or 

source energy consumption, expressed 

in quads (quadrillion Btu). DOE used 

annual site-to-source conversion factors 

based on U.S. average values for the 

commercial sector, calculated from 

AEO2006, Table A5. The average 

conversion factors vary over time, due 

to projected changes in electricity 

generation sources (i.e., the power plant 

types projected to provide electricity to 

the country). 

To estimate NPV, DOE calculated the 

net impact each year as the difference 

between total operating cost savings 

(including electricity, repair, and 

maintenance cost savings) and increases 

in total installed costs (which consists 

of MSP, sales taxes, distribution channel 

markups, and installation cost). DOE 

calculated the NPV of each CSL over the 

life of the equipment, using three steps. 

First, DOE determined the difference 

between the equipment costs under the 

CSL case and the base case, to get the 

net equipment cost increase resulting 

from the CSL. Second, DOE determined 

the difference between the base case 

operating costs and the CSL operating 

costs, to get the net operating cost 

savings from the CSL. Third, DOE 

determined the difference between the 

net operating cost savings and the net 

equipment cost increase to get the net 

savings (or expense) for each year. DOE 

then discounted the annual net savings 

(or expenses) for commercial 

refrigeration equipment purchased on or 

after 2012 to the year 2007, and summed 

the discounted values to provide the 

NPV of a CSL. An NPV greater than zero 

shows net savings (i.e., the CSL would 

reduce overall customer expenditures 

relative to the base case in present value 

terms). An NPV that is less than zero 

indicates that the candidate energy 

standard level would result in a net 

increase in customer expenditures in 

present value terms. 

Table II.19 summarizes the NES and 

NPV inputs to the NES spreadsheet 

model. For each input a brief 

description of the data source is given. 

TABLE II.19.—NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE INPUTS

Input data Description 

Shipments ....................................... Annual shipments from shipments model (see chapter 9 Shipments Analysis). 

Effective Date of Standard .............. 2012. 

Base-Case Efficiencies ................... Distribution of base-case shipments by efficiency level. 

Standards-Case Efficiencies ........... Distribution of shipments by efficiency level for each standards case. Standards case annual market 

shares by efficiency level remain constant over time for the base-case and each standards case. 

Annual Energy Consumption per 

Linear Foot.

Annual weighted-average values are a function of energy consumption level, which are established in the 

Engineering Analysis (see chapter 5 of the TSD). Converted to a per linear foot basis. 

Total Installed Cost per Linear Foot Annual weighted-average values are a function of energy consumption level (see chapter 8 of the TSD). 

Converted to a per linear foot basis. 

Repair Cost per Linear Foot ........... Annual weighted-average values are constant with energy consumption level (see chapter 8 of the TSD). 

Converted to a per linear foot basis. 

Maintenance Cost per Linear Foot Annual weighted-average value equals $156 (see chapter 8 of the TSD), plus lighting maintenance cost. 

Converted to a per linear foot basis. 

Escalation of Electricity Prices ........ EIA AEO2006 forecasts (to 2030) and extrapolation for beyond 2030 (see chapter 8 of the TSD). 

Electricity Site-to-Source Conversion.Conversion varies yearly and is generated by DOE/EIA’s NEMS* program (a time series conversion factor; 

includes electric generation, transmission, and distribution losses). 

Discount Rate ................................. 3 and 7 percent real. 

Present Year ................................... Future costs are discounted to year 2007. 

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TABLE II.19.—NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE INPUTS—Continued 

Input data Description 

Rebound Effect ............................... A rebound effect (due to changes in shipments resulting from standards) was not considered in the National Impact Analysis. 

* Chapter 13 (utility impact analysis) and chapter 14 (environmental assessment) provide more detail on NEMS. 

4. National Impact Analysis Results 

Below are the NES results for each 

efficiency level considered for the 15 

equipment classes of commercial 

refrigeration equipment analyzed. 

Results are cumulative to 2042 and are 

shown as primary energy savings in 

quads. Inputs to the NES spreadsheet 

model are based on weighted-average 

values, yielding results that are discrete 

point values, rather than a distribution 

of values as in the LCC analysis. 

Table II.20 shows the NES results for 

the CSLs analyzed for each equipment 

class of commercial refrigeration 

equipment. DOE based all the results on 

electricity price forecasts from the 

AEO2006 reference case. The range of 

overall cumulative energy impacts for 

establishing standards above the 

baseline level (Level 1) for all 

equipment classes is from 0.12 quad for 

a standard at Level 2 to 1.73 quads with 

all equipment at the highest efficiency 

level. 

TABLE II.20.—CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL REFRIGERATION EQUIPMENT (2012–2042) 

(QUADS) 

Equipment class 

National energy savings (quads*,**) by standard level 

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

VOP.RC.M ......................................................................................... 0.04 0.07 0.13 0.26 0.33 0.41 0.52 

VOP.RC.L† ........................................................................................ 0.00 0.00 0.00 0.00 0.00 0.00 NA 

VOP.SC.M .......................................................................................... 0.00 0.01 0.01 0.02 0.02 0.04 0.06 

VCT.RC.M .......................................................................................... 0.00 0.00 0.01 0.01 0.03 0.03 NA 

VCT.RC.L ........................................................................................... 0.04 0.08 0.13 0.27 0.36 0.45 0.66 

VCT.SC.I ............................................................................................ 0.00 0.00 0.01 0.01 0.02 0.02 0.03 

VCS.SC.I ............................................................................................ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

SVO.RC.M ......................................................................................... 0.01 0.03 0.06 0.10 0.14 0.20 NA 

SVO.SC.M .......................................................................................... 0.00 0.01 0.01 0.01 0.02 0.04 0.05 

SOC.RC.M ......................................................................................... 0.01 0.02 0.02 0.03 0.06 0.06 NA 

HZO.RC.M ......................................................................................... 0.00 0.00 0.01 NA NA NA NA 

HZO.RC.L .......................................................................................... 0.00 0.01 0.03 0.05 0.07 NA NA 

HZO.SC.M .......................................................................................... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

HZO.SC.L ........................................................................................... 0.00 0.00 0.00 0.00 0.00 0.01 0.01 

HCT.SC.I ............................................................................................ 0.00 0.00 0.02 0.02 0.02 NA NA 

* A value of NA means that no energy savings were calculated for this level of efficiency. For example, a vertical open, remote condensing, low 

temperature unit (VOP.RC.L) had only six possible energy consumption levels and, therefore, only six possible standards. Level 1 = Baseline, so 

there would be no savings at Level 1 and it has been omitted from the table. 

** 0.00 indicates savings are less than 0.005 quadrillion Btu. 

† The VOP.RC.L equipment class had no projected shipments. It was included in the analysis at the request of the industry. 

Below are the NPV results for the 

CSLs considered for the 15 equipment 

classes of commercial refrigeration 

equipment. Results are cumulative and 

are shown as the discounted value of 

these savings in dollar terms. The 

present value of increased total installed 

costs is the total installed cost increase 

(i.e., the difference between the 

standards case and base case), 

discounted to 2007, and summed over 

the time period in which DOE evaluates 

the impact of standards (i.e., from the 

effective date of standards, 2012, to the 

year 2052 when the last commercial 

refrigeration equipment unit is retired). 

Savings are decreases in operating 

costs (including electricity, repair, and 

maintenance) associated with the higher 

energy efficiency of commercial 

refrigeration equipment units purchased 

in the standards case compared to the 

base case. Total operating cost savings 

are the savings per unit multiplied by 

the number of units of each vintage (i.e., 

the year of manufacture) surviving in a 

particular year. Commercial 

refrigeration equipment consumes 

energy and must be maintained over its 

entire lifetime. For units purchased in 

2042, the operating cost includes energy 

consumed and maintenance and repair 

costs incurred until the last unit is 

retired from service in 2052. 

Table II.21 shows the NPV results for 

the standard levels considered for 

commercial refrigeration equipment 

based upon a seven percent discount 

rate. DOE based all results on electricity 

price forecasts from the AEO2006 

reference case. Detailed results showing 

the breakdown of the NPV into national 

equipment costs and national operating 

costs are provided in appendix I of the 

TSD. At a seven percent discount rate, 

the range of overall national NPV 

benefits calculated for different CSL 

scenarios above the baseline was from 

$120 million to $1.4 billion. The present 

value of the installed cost increase 

varied from a low of $70 million to a 

high of $1.82 billion. The present value 

of the operating cost savings for higher 

standards varied from a low of $210 

million to a high of $3.14 billion. 

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TABLE II.21.—CUMULATIVE NET PRESENT VALUE RESULTS BASED ON A SEVEN PERCENT DISCOUNT RATE (BILLION

2006$) 

Equipment class 

Standard level (billion 2006$) * **

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

VOP.RC.M ......................................................................................... 0.03 0.07 0.12 0.25 0.31 0.36 0.40 

VOP.RC.L† ........................................................................................ 0.00 0.00 0.00 0.00 0.00 NA NA 

VOP.SC.M .......................................................................................... 0.01 0.01 0.01 0.02 0.02 0.03 0.02 

VCT.RC.M .......................................................................................... 0.00 0.01 0.01 0.01 0.02 0.00 NA 

VCT.RC.L ........................................................................................... 0.06 0.10 0.16 0.30 0.37 0.44 0.55 

VCT.SC.I ............................................................................................ 0.00 0.01 0.01 0.01 0.02 0.03 0.02 

VCS.SC.I ............................................................................................ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

SVO.RC.M ......................................................................................... 0.01 0.03 0.06 0.09 0.13 0.17 NA 

SVO.SC.M .......................................................................................... 0.01 0.01 0.01 0.02 0.02 0.04 0.04 

SOC.RC.M ......................................................................................... 0.01 0.03 0.02 0.03 0.02 ¥0.01 NA 

HZO.RC.M ......................................................................................... 0.00 0.01 0.01 NA NA NA NA 

HZO.RC.L .......................................................................................... 0.00 0.02 0.04 0.06 0.08 NA NA 

HZO.SC.M .......................................................................................... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

HZO.SC.L ........................................................................................... 0.00 0.00 0.01 0.01 0.01 0.01 0.01 

HCT.SC.I ............................................................................................ 0.00 0.01 0.02 0.03 0.03 NA NA 

* A value of NA means that no energy savings were calculated for this level of efficiency. For example, a vertical open, remote condensing, low 

temperature unit (VOP.RC.L) had only six possible energy consumption levels and, therefore, only six possible standards. Level 1 = Baseline, so 

there would be no savings at Level 1 and it has been omitted from the table. 

** 0.00 indicates savings are less than 0.005 quadrillion Btu. 

† The VOP.RC.L equipment class had no projected shipments. It was included in the analysis at the request of the industry. 

Table II.22 provides the NPV results 

based on the three percent discount rate 

and electricity price forecasts from the 

AEO2006 reference case. As with the 

NPV results based upon a seven percent 

discount rate, detailed results showing 

the breakdown of the NPV into national 

equipment costs and national operating 

costs based upon a three percent 

discount rate are provided in appendix 

I of the TSD. At a three percent discount 

rate, the range of overall NPV benefits 

calculated for different CSL scenarios 

above the assumed baseline was from 

$360 million to $4.03 billion. The 

present value of the installed cost varied 

from a low of $150 million to a high of 

$3.57 billion. The present value of the 

operating cost savings for higher 

standards varied from a low of $510 

million to a high of $7.51 billion. 

TABLE II.22.—CUMULATIVE NET PRESENT VALUE RESULTS BASED ON A THREE PERCENT DISCOUNT RATE (BILLION

2006$) 

Equipment class 

Standard level (billion 2006$) * ** 

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

VOP.RC.M ......................................................................................... 0.09 0.20 0.35 0.69 0.86 1.03 1.20 

VOP.RC.L † ........................................................................................ 0.00 0.00 0.00 0.00 0.00 NA NA 

VOP.SC.M .......................................................................................... 0.02 0.02 0.03 0.06 0.06 0.08 0.08 

VCT.RC.M .......................................................................................... 0.01 0.01 0.02 0.03 0.05 0.03 NA 

VCT.RC.L ........................................................................................... 0.15 0.27 0.42 0.80 1.00 1.21 1.59 

VCT.SC.I ............................................................................................ 0.01 0.01 0.02 0.02 0.07 0.07 0.07 

VCS.SC.I ............................................................................................ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

SVO.RC.M ......................................................................................... 0.03 0.09 0.17 0.26 0.36 0.49 NA 

SVO.SC.M .......................................................................................... 0.02 0.02 0.03 0.05 0.05 0.12 0.12 

SOC.RC.M ......................................................................................... 0.02 0.07 0.06 0.08 0.07 0.03 NA 

HZO.RC.M ......................................................................................... 0.00 0.02 0.02 NA NA NA NA 

HZO.RC.L .......................................................................................... 0.01 0.05 0.10 0.17 0.21 NA NA 

HZO.SC.M .......................................................................................... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

HZO.SC.L ........................................................................................... 0.00 0.01 0.01 0.01 0.02 0.02 0.02 

HCT.SC.I ............................................................................................ 0.01 0.01 0.06 0.07 0.08 NA NA 

* A value of NA means that no energy savings were calculated for this level of efficiency. For example, a vertical open, remote condensing, low 

temperature unit (VOP.RC.L) had only six possible energy consumption levels and, therefore, only six possible standards. Level 1 = Baseline, so 

there would be no savings at Level 1 and it has been omitted from the table. 

** 0.00 indicates savings are less than 0.005 quadrillion Btu. 

† The VOP.RC.L equipment class had no projected shipments. It was included in the analysis at the request of the industry. 

J. Life-Cycle Cost Sub-Group Analysis 

The LCC sub-group analysis evaluates 

impacts of standards on identifiable 

groups of customers, such as customers 

of different business types, which may 

be disproportionately affected by 

standards. In the NOPR phase of this 

rulemaking, DOE will analyze the LCCs 

and PBPs for customers that fall into 

those groups. The analysis will 

determine whether any particular group 

of commercial consumers would be 

adversely affected by any of the CSLs. 

Also, DOE plans to examine 

variations in energy prices and energy 

use that might affect the NPV of a 

standard to customer sub-populations. 

To the extent possible, DOE will obtain 

estimates of the variability of each input 

parameter and consider this variability 

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41200 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

in the calculation of customer impacts. 

Variations in energy use for a particular 

equipment type may depend on factors 

such as climate and type of business. 

DOE will determine the effect on 

customer sub-groups using the LCC 

spreadsheet model. The spreadsheet 

model used for the LCC analysis can be 

used with different data inputs. The 

standard LCC analysis includes various 

customer types that use commercial 

refrigeration equipment. DOE can 

analyze the LCC for any sub-group, such 

as a convenience store, by using the LCC 

spreadsheet model and sampling only 

that sub-group. Details of this model are 

explained in section II.G, which 

describes the LCC and PBP analyses. 

DOE will be especially sensitive to 

purchase price increases (‘‘first-cost’’

increases) to avoid negative impacts on 

identifiable population groups such as 

small businesses (i.e., those with low 

annual revenues), which may not be 

able to afford a significant increase in 

the price of commercial refrigeration 

equipment. For such customers that are 

sensitive to price increases, increases in 

first costs of equipment can preclude 

the purchase of a new model. As a 

result, some customers may retain 

equipment past its useful life. This older 

equipment is generally less efficient to 

begin with, and its efficiency may 

deteriorate further if it is retained 

beyond its useful life. Large increases in 

first cost also can possibly preclude the 

purchase and use of equipment 

altogether, resulting in a potentially 

large loss of utility to the customer. 

Although business income and annual 

revenues are not known for the types of 

businesses analyzed in the LCC 

analysis, the floor space occupied by a 

business may be an indicator of its 

annual income. If this is generally true, 

then DOE will be able to perform subgroup analyses on smaller businesses. 

As stated earlier, DOE can also use SBA 

data for businesses with 750 or fewer 

employees as a proxy for ‘‘smaller 

businesses.’’

K. Manufacturer Impact Analysis 

The purpose of the manufacturer 

impact analysis is to identify the likely 

impacts of energy conservation 

standards on manufacturers. DOE will 

conduct this analysis with input from 

manufacturers and other interested 

parties and will apply this methodology 

to its evaluation of standards. DOE will 

also consider financial impacts and a 

wide range of quantitative and 

qualitative industry impacts that might 

occur following the adoption of a 

standard. For example, a particular 

standard level, if adopted by DOE, could 

require changes to commercial 

refrigeration equipment manufacturing 

practices. DOE will identify and 

understand these impacts through 

interviews with manufacturers and 

other stakeholders during the NOPR 

stage of its analysis. 

Recently, DOE announced changes to 

the format of the manufacturer impact 

analysis through a report submitted to 

Congress on January 31, 2006 (as 

required by section 141 of EPACT 2005), 

entitled ‘‘Energy Conservation 

Standards Activities.’’ Previously, DOE 

did not report any manufacturer impact 

analysis results during the ANOPR 

phase; however, under this new format, 

DOE has collected, evaluated, and 

reported preliminary information and 

data in the ANOPR (see section II.K.6 of 

this ANOPR). Such preliminary 

information includes the anticipated 

conversion capital expenditures by 

efficiency level and the corresponding 

anticipated impacts on jobs. DOE 

solicited this information during the 

ANOPR engineering analysis 

manufacturer interviews and reported 

the results in the preliminary 

manufacturer impact analysis (see 

chapter 12 of the TSD). 

DOE conducts the manufacturer 

impact analysis in three phases, and 

further tailors the analytical framework 

based on stakeholder comments. In 

Phase I, an industry profile is created to 

characterize the industry, and a 

preliminary manufacturer impact 

analysis is conducted to identify 

important issues that require 

consideration. Results of the Phase I 

analysis are presented in the ANOPR 

TSD. In Phase II, an industry cash flow 

model and an interview questionnaire 

are prepared to guide subsequent 

discussions. In Phase III, manufacturers 

are interviewed, and the impacts of 

standards are assessed both 

quantitatively and qualitatively. 

Industry and sub-group cash flow and 

net present value are assessed through 

use of the Government Regulatory 

Impact Model (GRIM). Then impacts on 

competition, manufacturing capacity, 

employment, and regulatory burden are 

assessed based on manufacturer 

interview feedback and discussions. 

Results of the Phase II and Phase III 

analyses are presented in the NOPR 

TSD. For more detail on the 

manufacturer impact analysis, refer to 

chapter 12 of the TSD. 

1. Sources of Information for the 

Manufacturer Impact Analysis 

Many of the analyses described above 

provide important information 

applicable to the MIA. Such information 

includes manufacturing costs and prices 

from the engineering analysis, retail 

price forecasts, and shipments forecasts. 

DOE will supplement this information 

with company financial data and other 

information gathered during interviews 

its contractor conducts with 

manufacturers. This interview process 

plays a key role in the manufacturer 

impact analysis because it allows 

interested parties to privately express 

their views on important issues. To 

preserve confidentiality, DOE aggregates 

these perspectives across manufacturers, 

creating a combined opinion or estimate 

for DOE. This process enables DOE to 

incorporate sensitive information from 

manufacturers in the rulemaking 

process without specifying precisely 

which manufacturer provided a certain 

set of data. 

DOE conducts detailed interviews 

with manufacturers to gain insight into 

the range of potential impacts of 

standards. During the interviews, DOE 

typically solicits both quantitative and 

qualitative information on the potential 

impacts of efficiency levels on sales, 

direct employment, capital assets, and 

industrial competitiveness. DOE prefers 

an interactive interview process, rather 

than a written response to a 

questionnaire, because it helps clarify 

responses and identify additional 

issues. Before the interviews, DOE will 

circulate a draft document showing the 

estimates of the financial parameters 

based on publicly available information. 

DOE will solicit comments and 

suggestions on these estimates during 

the interviews. 

DOE will ask interview participants to 

identify any confidential information 

that they have provided, either orally or 

in writing. DOE will consider all 

information collected, as appropriate, in 

its decision-making process. However, 

DOE will not make confidential 

information available in the public 

record. DOE also will ask participants to 

identify all information that they wish 

to have included in the public record, 

but that they do not want to have 

associated with their interview. DOE 

will incorporate this information into 

the public record, but will report it 

without attribution. 

DOE will collate the completed 

interview questionnaires and prepare a 

summary of the major issues. For more 

detail on the methodology used in the 

manufacturer impact analysis, refer to 

chapter 12 of the TSD. 

2. Industry Cash Flow Analysis 

The industry cash flow analysis relies 

primarily on the GRIM. DOE uses the 

GRIM to analyze the financial impacts 

of more stringent energy conservation 

standards on the industry. 

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The GRIM analysis uses several 

factors to determine annual cash flows 

from a new standard: Annual expected 

revenues; manufacturer costs (including 

COGS, depreciation, research and 

development, selling, general and 

administrative expenses); taxes; and 

conversion capital expenditures. DOE 

compares the results against base case 

projections that involve no new 

standards. The financial impact of new 

standards is the difference between the 

two sets of discounted annual cash 

flows. For more information on the 

industry cash flow analysis, refer to 

chapter 12 of the TSD. 

3. Manufacturer Sub-Group Analysis 

Industry cost estimates are not 

adequate to assess differential impacts 

among sub-groups of manufacturers. For 

example, small and niche 

manufacturers, or manufacturers whose 

cost structure differs significantly from 

the industry average, could experience a 

more negative impact. Ideally, DOE 

would consider the impact on every 

firm individually; however, it typically 

uses the results of the industry 

characterization to group manufacturers 

exhibiting similar characteristics. 

During the interview process, DOE 

will discuss the potential sub-groups 

and sub-group members it has identified 

for the analysis. DOE will encourage the 

manufacturers to recommend subgroups or characteristics that are 

appropriate for the sub-group analysis. 

For more detail on the manufacturer 

sub-group analysis, refer to chapter 12 

of the TSD. 

4. Competitive Impacts Assessment 

DOE must also consider whether a 

new standard is likely to reduce 

industry competition, and the Attorney 

General must determine the impacts, if 

any, of any reduced competition. DOE 

will make a determined effort to gather 

and report firm-specific financial 

information and impacts. The 

competitive analysis will focus on 

assessing the impacts on smaller 

manufacturers. DOE will base this 

assessment on manufacturing cost data 

and on information collected from 

interviews with manufacturers. The 

manufacturer interviews will focus on 

gathering information to help assess 

asymmetrical cost increases to some 

manufacturers, increased proportions of 

fixed costs that could increase business 

risks, and potential barriers to market 

entry (e.g., proprietary technologies). 

5. Cumulative Regulatory Burden 

DOE recognizes and seeks to mitigate 

the overlapping effects on 

manufacturers of new or revised DOE 

standards and other regulatory actions 

affecting the same equipment. DOE will 

analyze and consider the impact on 

manufacturers of multiple, equipmentspecific regulatory actions. 

Based on its own research and 

discussions with manufacturers, DOE 

identified several regulations relevant to 

commercial refrigeration equipment, 

including: existing or new standards for 

commercial refrigeration equipment, 

phaseout of hydrochlorofluorocarbons 

and foam insulation blowing agents, 

standards for other equipment made by 

commercial refrigeration equipment 

manufacturers, State energy 

conservation standards, and 

international energy conservation 

standards. DOE will study the potential 

impacts of these cumulative burdens in 

greater detail during the MIA conducted 

during the NOPR phase. 

6. Preliminary Results for the 

Manufacturer Impact Analysis 

DOE received views from 

manufacturers about what they 

perceived to be the possible impact of 

potential new standards on their future 

profitability. As stated by 

manufacturers, a new energy 

conservation standard has the potential 

to impact financial performance in 

several different ways. The capital 

investment needed to upgrade or 

redesign equipment and equipment 

platforms before they have reached the 

end of their useful life can require 

conversion costs that otherwise would 

not be expended, resulting in stranded 

investments. In addition, more stringent 

standards can result in higher per-unit 

costs that may deter some customers 

from buying higher-margin units with 

more features, thereby decreasing 

manufacturer profitability. 

DOE estimates that a commercial 

refrigeration equipment production line 

would have a life cycle of 

approximately 15 to 20 years in the 

absence of standards. During that 

period, manufacturers would not make 

major changes that altered the 

underlying platforms. Thus, a standard 

that took effect and resulted in a major 

equipment platform redesign before the 

end of the platform’s life would strand 

a portion of the earlier capital 

investments. 

DOE asked manufacturers what level 

of conversion costs they anticipated if 

energy conservation standards were to 

take effect. In general, manufacturers 

expected only conversion costs 

associated with redesigning of 

insulation foaming fixtures. One 

manufacturer estimated this to be 

approximately $10 million in new 

fixtures, research, and testing. 

Manufacturers indicated there would 

not be a significant amount of stranded 

assets because of standards, but any 

stranded assets that did exist would be 

primarily in the insulation foaming 

fixtures. The manufacturers also 

indicated that standards would have 

little effect on capacity and utilization. 

The impact of new energy 

conservation standards on employment 

is an important consideration in the 

rulemaking process. To assess how 

domestic employment patterns might be 

affected by new energy conservation 

standards for commercial refrigeration 

equipment, DOE posed several 

questions related to this topic to 

manufacturers. 

Over the past several years, some 

commercial refrigeration equipment 

manufacturers have moved a portion of 

their production out of the United 

States, primarily driven by concerns 

about profitability and the opportunity 

for lower labor costs. Mexico is the most 

common location for U.S. manufacturers 

to establish new production capacity, 

since it offers low labor rates relative to 

the United States and proximity to the 

U.S. market. Manufacturers indicated 

that they anticipate new standards will 

accelerate the trend to manufacture 

commercial refrigeration equipment 

outside of the United States. Further, 

new standards may accelerate the rate at 

which commercial refrigeration 

equipment production is moved to 

Mexico because if manufacturers need 

to make large capital investments to 

produce redesigned equipment 

platforms, they have strong financial 

incentives to invest in a location with 

lower labor costs. 

Manufacturers indicated that new 

standards could cause them to exit one 

or more portions of the markets affected 

by the standards. Thus, standards could 

affect the degree of industry 

consolidation, that is, the degree to 

which a limited number of companies 

dominate a market. At present, four 

companies account for a large majority 

of commercial refrigeration equipment 

sales. 

DOE asked manufacturers to what 

degree they expected industry 

consolidation to occur in the absence of 

standards. In general, manufacturers felt 

that there would be little industry 

consolidation in the future. Historically, 

the commercial refrigeration equipment 

industry has not seen extensive 

consolidation, although several 

manufacturers have been bought and 

sold by parent companies in the past. 

For more preliminary results for the 

manufacturer impact analysis such as 

other impacts on financial performance, 

impacts on utility and performance, and 

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41202 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

24For more information on NEMS, please refer to 

the U.S. Department of Energy, Energy Information 

Administration documentation. A useful summary 

is National Energy Modeling System: An Overview 

2000, DOE/EIA–0581(2000), March 2000. DOE/EIA 

approves use of the name NEMS to describe only 

an official version of the model without any 

modification to code or data. Because this analysis 

entails some minor code modifications and the 

model is run under various policy scenarios that are 

variations on DOE/EIA assumptions, in this 

analysis, DOE refers to it by the name NEMS–BT. 

25Roop, J. M., M. J. Scott, and R. W. Schultz. 

2005. ImSET: Impact of Sector Energy 

Technologies. PNNL–15273. Pacific Northwest 

National Laboratory, Richland, WA. 

additional details on the impacts of 

cumulative regulatory burden, refer to 

chapter 12 of the TSD. 

L. Utility Impact Analysis 

The utility impact analysis estimates 

the effects on the utility industry of 

reduced energy consumption due to 

improved appliance efficiency. The 

analysis compares modeling results for 

the base case with results for each 

candidate standards case. It consists of 

forecasted differences between the base 

and standards cases for electricity 

generation, installed capacity, sales, and 

prices. 

To estimate these effects of proposed 

commercial refrigeration equipment 

standard levels on the electric utility 

industry, DOE intends to use a variant 

of the EIA’s NEMS.24 EIA uses NEMS to 

produce the 2007 Annual Energy 

Outlook (AEO). DOE will use a variant 

known as NEMS–Building Technologies 

(BT) to provide key inputs to the 

analysis. NEMS–BT produces a widely 

recognized reference case forecast for 

the United States and is available in the 

public domain. 

The use of NEMS–BT for the utility 

impact analysis offers several 

advantages. As the official DOE energy 

forecasting model, it relies on a set of 

assumptions that are transparent and 

have received wide exposure and 

commentary. NEMS–BT allows an 

estimate of the interactions between the 

various energy supply and demand 

sectors and the economy as a whole. 

The utility impact analysis will 

determine the changes in installed 

capacity and generation by fuel type 

produced by each CSL, as well as 

changes in electricity sales to the 

commercial sector. 

DOE conducts the utility analysis as 

a policy deviation from the AEO2007, 

applying the same basic set of premises. 

For example, the operating 

characteristics (e.g., energy conversion 

efficiency, emissions rates) of future 

electricity generating plants are as 

specified in the AEO2007 reference 

case, as are the prospects for natural gas 

supply. DOE also will explore 

deviations from some of the reference 

case premises, to represent alternative 

futures. Two alternative scenarios use 

the high and low economic growth cases 

of AEO2007. (The reference case 

corresponds to medium growth.) The 

high economic growth case projects 

higher growth rates for population, labor 

force, and labor productivity, resulting 

in lower predicted inflation and interest 

rates relative to the reference case and 

higher overall aggregate economic 

growth. The opposite is true for the low 

growth case. Starting in 2012, the high 

growth case predicts growth in per 

capita gross domestic product of 3.5 

percent per year, compared with 3.0 

percent per year in the reference case 

and 2.5 percent per year in the low 

growth case. While supply-side growth 

determinants are varied in these cases, 

AEO2007 uses the same reference case 

energy prices for all three economic 

growth cases. Different economic 

growth scenarios will affect the rate of 

growth of electricity demand. 

The electric utility industry analysis 

will consist of NEMS–BT forecasts for 

generation, installed capacity, sales, and 

prices. The NEMS–BT provides 

reference case load shapes for several 

end uses, including commercial 

refrigeration. The model uses predicted 

growth in demand for each end use to 

build up a projection of the total electric 

system load growth for each region, 

which it uses in turn to predict the 

necessary additions to capacity. The 

NEMS–BT accounts for the 

implementation of energy conservation 

standards by decrementing the 

appropriate reference case load shape. 

DOE determines the size of the 

decrement using data for the per-unit 

energy savings developed in the LCC 

and PBP analyses (see chapter 8 of the 

TSD) and the forecast of shipments 

developed for the NIA (see chapter 9 of 

the TSD). 

The predicted reduction in capacity 

additions is sensitive to the peak load 

impacts of the standard. DOE will 

investigate the need to adjust the hourly 

load profiles that include this end use 

in NEMS–BT. Since the AEO2007 

version of NEMS–BT forecasts only to 

the year 2030, DOE must extrapolate the 

results to 2042. DOE will use the 

approach developed by EIA to forecast 

fuel prices for the FEMP. FEMP uses 

these prices to estimate LCCs of Federal 

equipment procurements. For petroleum 

products, EIA uses the average growth 

rate for the world oil price over the 

years 2010 to 2025, in combination with 

the refinery and distribution markups 

from the year 2025, to determine the 

regional price forecasts. Similarly, EIA 

derives natural gas prices from an 

average growth rate figure in 

combination with regional price 

margins from the year 2025. Results of 

the analysis will include changes in 

commercial electricity sales, and 

installed capacity and generation by fuel 

type, for each trial standard level, in 

five-year, forecasted increments 

extrapolated to the year 2040. 

M. Employment Impact Analysis 

DOE estimates the impacts of 

standards on employment for 

equipment manufacturers, relevant 

service industries, energy suppliers, and 

the economy in general. Both indirect 

and direct employment impacts are 

covered. Direct employment impacts 

would result if standards led to a change 

in the number of employees at 

manufacturing plants and related 

supply and service firms. Direct impact 

estimates are covered in the MIA. 

Indirect employment impacts are 

impacts on the national economy other 

than in the manufacturing sector being 

regulated. Indirect impacts may result 

both from expenditures shifting among 

goods (substitution effect) and changes 

in income which lead to a change in 

overall expenditure levels (income 

effect). DOE defines indirect 

employment impacts from standards as 

net jobs eliminated or created in the 

general economy as a result of increased 

spending driven by the increased 

equipment prices and reduced spending 

on energy. 

DOE expects new standards to 

increase the total installed cost of 

equipment (includes MSP, sales taxes, 

distribution channel markups, and 

installation cost). DOE also expects the 

new standards to decrease energy 

consumption, and thus expenditures on 

energy. Over time, increased total 

installed cost is paid back through 

energy savings. The savings in energy 

expenditures may be spent on new 

commercial investment and other items. 

Using an input/output model of the 

U.S. economy, this analysis seeks to 

estimate the effects on different sectors 

and the net impact on jobs. DOE will 

estimate national employment impacts 

for major sectors of the U.S. economy in 

the NOPR, using public and 

commercially available data sources and 

software. DOE will make all methods 

and documentation available for review. 

DOE developed Impact of Sector 

Energy Technologies (ImSET), a 

spreadsheet model of the U.S. economy 

that focuses on 188 sectors most 

relevant to industrial, commercial, and 

residential building energy use.25

ImSET is a special-purpose version of 

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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 41203 

26Lawson, Ann M., Kurt S. Bersani, Mahnaz 

Fahim-Nader, and Jiemin Guo. 2002. ‘‘Benchmark 

Input-Output Accounts of the U.S. Economy, 1997,’’

Survey of Current Business, December, pp. 19–117. 27See http://www.epa.gov/cleanairinterstaterule/. 

the U.S. Benchmark National InputOutput (I–O) model, which has been 

designed to estimate the national 

employment and income effects of 

energy saving technologies that are 

deployed by the DOE Office of Energy 

Efficiency and Renewable Energy. In 

comparison with previous versions of 

the model used in earlier rulemakings, 

the current version allows for more 

complete and automated analysis of the 

essential features of energy efficiency 

investments in buildings, industry, 

transportation, and the electric power 

sectors. 

The ImSET software includes a 

personal computer-based I–O model 

with structural coefficients to 

characterize economic flows among the 

188 sectors. ImSET’s national economic 

I–O structure is based on the 1997 

Benchmark U.S. table (Lawson, et al. 

2002),26 specially aggregated to 188 

sectors. The time scale of the model is 

50 years. 

The model is a static I–O model, 

which allows a great deal of flexibility 

concerning the types of energy 

efficiency effects that can be 

accommodated. For example, certain 

economic effects of energy efficiency 

improvements require an assessment of 

inter-industry purchases, which is 

handled in the model. Some energy 

efficiency investments will not only 

reduce the costs of energy in the 

economy but the costs of labor and other 

goods and services as well, which is 

accommodated through a recalculation 

of the I–O structure in the model. 

Output from the ImSET model can be 

used to estimate changes in 

employment, industry output, and wage 

income in the overall U.S. economy 

resulting from changes in expenditures 

in the various sectors of the economy. 

Although DOE intends to use ImSET 

for its analysis of employment impacts, 

it welcomes input on other tools and 

factors it might consider. For more 

information on the employment impacts 

analysis, refer to chapter 14 of the TSD. 

N. Environmental Assessment 

DOE will assess the impacts of 

proposed commercial refrigeration 

equipment standard levels on certain 

environmental indicators, using NEMS–

BT to provide key inputs to the analysis. 

The environmental assessment produces 

results in a manner similar to those 

provided in the AEO. 

The intent of the environmental 

assessment is to provide estimates of 

reduced powerplant emissions and to 

fulfill requirements to properly quantify 

and consider the environmental effects 

of all new Federal rules. The 

environmental assessment that will be 

produced by NEMS–BT considers two 

pollutants (sulfur dioxide (SO2) and 

nitrogen oxides (NOX)) and one other 

emission (carbon). The only form of 

carbon the NEMS–BT model tracks is 

carbon dioxide (CO2). Therefore, the 

only carbon discussed in this analysis is 

in the form of CO2. For each of the CSLs, 

DOE will calculate total undiscounted 

and discounted emissions using NEMS–

BT and will use external analysis as 

needed. 

DOE will conduct the environmental 

assessment as an incremental policy 

impact (i.e., a commercial refrigeration 

equipment standard) of the AEO2007 

forecast, applying the same basic set of 

assumptions used in AEO2007. For 

example, the emissions characteristics 

of an electricity generating plant will be 

exactly those used in AEO2007. Also, 

forecasts conducted with NEMS–BT 

consider the supply-side and demandside effects on the electric utility 

industry. Thus, DOE’s analysis will 

account for any factors affecting the type 

of electricity generation and, in turn, the 

type and amount of airborne emissions 

generated by the utility industry. The 

NEMS–BT model tracks carbon 

emissions with a specialized carbon 

emissions estimation subroutine, 

producing reasonably accurate results 

due to the broad coverage of all sectors 

and inclusion of interactive effects. Past 

experience with carbon results from 

NEMS–BT suggests that emissions 

estimates are somewhat lower than 

emissions based on simple average 

factors. One of the reasons for this 

divergence is that NEMS–BT tends to 

predict that conservation displaces 

generating capacity in future years. On 

the whole, NEMS–BT provides carbon 

emissions results of reasonable 

accuracy, at a level consistent with 

other Federal published results. 

NEMS–BT also reports SO2 and NOX, 

which DOE has reported in past 

analyses. The Clean Air Act 

Amendments of 1990 set an SO2

emissions cap on all power generation. 

The attainment of this target, however, 

is flexible among generators through the 

use of emissions allowances and 

tradable permits. Although NEMS–BT 

includes a module for SO2 allowance 

trading and delivers a forecast of SO2

allowance prices, accurate simulation of 

SO2 trading implies that the effect of 

energy conservation standards on 

physical emissions will be zero because 

emissions will always be at or near the 

ceiling. This fact has caused 

considerable confusion in the past. 

However, there may be an SO2 benefit 

from energy conservation, in the form of 

a lower SO2 allowance price. Since the 

impact of any one standard on the 

allowance price is likely small and 

highly uncertain, DOE does not plan to 

monetize any potential SO2 benefit. 

NEMS also has an algorithm for 

estimating NOX emissions from power 

generation. The impact of these 

emissions, however, will be affected by 

the Clean Air Interstate Rule (CAIR), 

which the U.S. Environmental 

Protection Agency issued on March 10, 

2005.27 CAIR will permanently cap 

emissions of NOX in 28 eastern States 

and the District of Columbia. 70 FR 

25162 (May 12, 2005). As with SO2

emissions, a cap on NOX emissions 

means that equipment energy 

conservation standards may have no 

physical effect on these emissions. 

When NOX emissions are subject to 

emissions caps, DOE’s emissions 

reduction estimate corresponds to 

incremental changes in the prices of 

emissions allowances in cap-and-trade 

emissions markets rather than physical 

emissions reductions. Therefore, while 

the emissions cap may mean that 

physical emissions reductions will not 

result from standards, standards could 

produce an environmental-related 

economic benefit in the form of lower 

prices for emissions allowances. 

However, as with SO2 allowance prices, 

DOE does not plan to monetize this 

benefit because the impact on the NOX

allowance price from any single energy 

conservation standard is likely small 

and highly uncertain. 

The results for the environmental 

assessment are similar to a complete 

NEMS run as published in the 

AEO2007. These results include power 

sector emissions for SO2, NOX, and 

carbon in five-year forecasted 

increments extrapolated to 2042. The 

outcome of the analysis for each CSL is 

reported as a deviation from the 

AEO2007 reference (base) case. 

For more detail on the environmental 

assessment, refer to the environmental 

assessment report of the TSD. 

O. Regulatory Impact Analysis 

DOE will prepare a draft regulatory 

impact analysis in compliance with 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ which will be 

subject to review by the Office of 

Management and Budget’s Office of 

Information and Regulatory Affairs 

(OIRA). 58 FR 51735 (September 30, 

1993). 

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As part of the regulatory impact 

analysis (and as discussed in section 

II.K of this ANOPR), DOE will identify 

and seek to mitigate the overlapping 

effects on manufacturers of new or 

revised DOE standards and other 

regulatory actions affecting the same 

equipment. Through manufacturer 

interviews and literature searches, DOE 

will compile information on burdens 

from existing and impending 

regulations affecting commercial 

refrigeration equipment. DOE also seeks 

input from stakeholders about 

regulations it should consider. 

The regulatory impact analysis also 

will address the potential for nonregulatory approaches to supplant or 

augment energy conservation standards 

to improve the efficiency of commercial 

refrigeration equipment. The following 

list includes non-regulatory means of 

achieving energy savings that DOE can 

consider. 

• No new regulatory action 

• Consumer tax credits 

• Manufacturer tax credits 

• Performance standards 

• Rebates 

• Voluntary energy efficiency targets 

• Early replacement 

• Bulk government purchases 

The TSD, in support of DOE’s NOPR, 

will include an analysis of each 

alternative, the methodology for which 

is discussed briefly below. 

DOE will use the NES spreadsheet 

model (as discussed in sections I.B.5 

and II.I of this ANOPR) to calculate the 

NES and the NPV corresponding to each 

alternative to the proposed standards. 

The details of NES spreadsheet model 

are discussed in chapter 10 of the TSD. 

To compare each alternative 

quantitatively to the proposed 

conservation standards, it will be 

necessary to quantify the effect of each 

alternative on the purchase and use of 

energy efficient commercial equipment. 

Once each alternative is properly 

quantified, DOE will make the 

appropriate revisions to the inputs in 

the NES spreadsheet model. The 

following are key inputs that DOE may 

revise in the NES spreadsheet model. 

• Energy prices and escalation factors 

• Implicit market discount rates for 

trading off purchase price against 

operating expense when choosing 

equipment efficiency 

• Customer purchase price, operating 

cost, and income elasticities 

• Customer price versus efficiency 

relationships 

• Equipment stock data (purchase of 

new equipment or turnover rates for 

inventories) 

The following are the key measures of 

the impact of each alternative. 

• Commercial energy use (EJ = 1018

joule) is the cumulative energy use of 

the equipment from the effective date of 

the new standard to the year 2035. DOE 

will report electricity consumption as 

primary energy. 

• NES is the cumulative national 

energy use from the base case projection 

less the alternative policy case 

projection. 

• NPV is the value of future operating 

cost savings from commercial 

refrigeration equipment bought in the 

period from the effective date of the new 

standard to the year 2035. DOE 

calculates the NPV as the difference 

between the present value of equipment 

and operating expenditures (including 

energy) in the base case, and the present 

value of expenditures in each 

alternative policy case. DOE discounts 

future operating and equipment 

expenditures to 2006 using a seven 

percent real discount rate. It calculates 

operating expenses (including energy) 

for the life of the equipment. 

For more information on the 

regulatory impact analysis, refer to the 

regulatory impact analysis report in the 

TSD. 

III. Candidate Energy Conservation 

Standards Levels 

DOE will specify CSLs in the ANOPR, 

but will not propose a particular 

standard. DOE selected between four 

and eight energy consumption levels for 

each commercial refrigeration 

equipment class for use in the LCC and 

NIA. Based on the results of the ANOPR 

analysis, DOE selects from the CSLs 

analyzed in the ANOPR a subset for a 

more detailed analysis for the NOPR 

stage of the rulemaking. The range of 

CSLs selected includes: the most energy 

efficient level or most energy efficient 

combination of design options, the 

combination of design options or 

efficiency level with the minimum LCC, 

and a combination of design options or 

efficiency level with a PBP of not more 

than three years. Additionally, CSLs 

that incorporate noteworthy 

technologies or fill in large gaps 

between efficiency levels of other CSLs 

may be selected. 

DOE will include the most energy 

efficient level analyzed as a CSL. The 

level with the maximum LCC savings 

was identified for each equipment 

category. In some instances this was 

identical to the most efficient level 

analyzed. In other cases it was the next 

most efficient level analyzed. The 

calculated national average PBPs from 

the LCC analysis suggested that many of 

the energy efficiency levels analyzed 

provided a national average payback of 

less than three years when compared 

with the baseline equipment. DOE opted 

to designate as a CSL the maximum 

energy efficiency level that provided for 

a payback of less than three years. These 

three selection criteria provided only 

one or two CSLs selections per 

equipment class. Therefore, DOE 

selected two or three lower energy 

consumption levels for each equipment 

class in order to provide greater 

variation in CSLs for its future analysis. 

The selection of these additional levels 

reflects DOE review of the relative cost 

effectiveness of the levels when 

compared with the baseline equipment 

and when compared with other 

efficiency levels. Four CSLs were 

selected for each equipment class. Table 

III.1 shows the selected CSLs based on 

the energy consumption for the specific 

equipment analyzed in the engineering 

analysis. DOE specifically seeks 

feedback on its selection of specific 

candidate standard levels for the post 

ANOPR analysis phase. This is 

identified as Issue 13 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

IV.E of this ANOPR. 

DOE will refine its final selection of 

CSLs for further analysis after receiving 

input from stakeholders on the ANOPR 

and after any revision of the ANOPR 

analyses. At that point, the CSLs will be 

recast as Trial Standard Levels (TSLs). 

DOE will analyze specific TSLs during 

the post-ANOPR analysis and will 

report the results of that analysis in the 

NOPR. 

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TABLE III.1.—CANDIDATE STANDARD LEVELS AND FACTORS CONSIDERED IN THEIR SELECTION FOR FUTURE ANALYSIS

Candidate standard level selection considerations 

Equipment class Maximum 

efficiency 

level 

Maximum 

efficiency 

level with 

positive 

LCC 

savings 

Efficiency 

level with 

minimum 

LCC 

Highest 

efficiency 

level with 

PBP <3 

years 

Additional candidate standard level 

selected for future analysis 

VOP.RC.M ............................................................. Level 8 ..... Level 8 ..... Level 8 ..... Level 7 ..... Level 6 ..... Level 4.

VOP.RC.L .............................................................. Level 6 ..... Level 6 ..... Level 4 ..... Level 6 ..... Level 5 ..... Level 3.

VOP.SC.M .............................................................. Level 8 ..... Level 8 ..... Level 7 ..... Level 7 ..... Level 5 ..... Level 3.

VCT.RC.M .............................................................. Level 7 ..... Level 7 ..... Level 6 ..... Level 6 ..... Level 5 ..... Level 3.

VCT.RC.L ............................................................... Level 8 ..... Level 8 ..... Level 8 ..... Level 8 ..... Level 7 ..... Level 5 ..... Level 3. 

VCT.SC.I ................................................................ Level 8 ..... Level 8 ..... Level 7 ..... Level 8 ..... Level 6 ..... Level 3.

VCS.SC.I ................................................................ Level 8 ..... Level 8 ..... Level 7 ..... Level 8 ..... Level 6 ..... Level 5.

SVO.RC.M ............................................................. Level 7 ..... Level 7 ..... Level 7 ..... Level 6 ..... Level 4 ..... Level 2.

SVO.SC.M .............................................................. Level 8 ..... Level 8 ..... Level 7 ..... Level 8 ..... Level 5 ..... Level 3.

SOC.RC.M ............................................................. Level 7 ..... Level 7 ..... Level 5 ..... Level 5 ..... Level 4 ..... Level 3.

HZO.RC.M ............................................................. Level 4 ..... Level 4 ..... Level 4 ..... Level 4 ..... Level 3 ..... Level 2.

HZO.RC.L .............................................................. Level 6 ..... Level 6 ..... Level 6 ..... Level 6 ..... Level 5 ..... Level 4 ..... Level 3. 

HZO.SC.M .............................................................. Level 8 ..... Level 8 ..... Level 8 ..... Level 8 ..... Level 7 ..... Level 6 ..... Level 4. 

HZO.SC.L ............................................................... Level 8 ..... Level 8 ..... Level 8 ..... Level 8 ..... Level 7 ..... Level 6 ..... Level 3. 

HCT.SC.I ................................................................ Level 6 ..... Level 6 ..... Level 6 ..... Level 6 ..... Level 5 ..... Level 4 ..... Level 3. 

Because the equipment classes cover 

a variety of equipment sizes, DOE has 

suggested defining the standard in terms 

of upper limits on daily energy 

consumption (CDEC or TDEC as 

provided for remote condensing and 

self-contained equipment, respectively) 

normalized by TDA for remote 

condensing commercial equipment with 

transparent doors or without doors, 

commercial ice-cream freezers with 

transparent doors, and self-contained 

commercial equipment without doors. 

DOE has suggested defining the 

standard levels in terms of maximum 

rated daily energy consumption (CDEC 

or TDEC as provided for remote 

condensing and self-contained 

equipment, respectively) normalized by 

refrigerated volume (V, as measured by 

ANSI/AHAM Standard HRF–1–2004) 

for remote condensing commercial 

refrigerators, commercial freezers, and 

commercial refrigerators-freezers with 

solid doors and for commercial icecream freezers with solid doors. The 

industry supplied cost-efficiency curves 

are in the form of CDEC normalized by 

TDA (kWh/day/ft2). In the engineering 

analysis, DOE normalized the CDEC for 

each efficiency level by TDA or 

refrigerated volume. Table III.2 presents 

the CSLs for the analyzed equipment 

classes in terms of these normalized 

metrics. 

TABLE III.2.—CANDIDATE STANDARD LEVELS FOR ANALYZED EQUIPMENT CLASSES EXPRESSED IN TERMS OF THE

NORMALIZED TEST METRICS

Equipment class Test metric 

Candidate standard level 

in order of efficiency 

Candidate standard levels for equipment analyzed 

expressed in terms of the test metric 

Baseline CSL1 CSL2 CSL3 CSL4 Baseline CSL1 CSL2 CSL3 CSL4 

VOP.RC.M ....................... CDEC/TDA kWh/day/ft2 .. Level 1 Level 4 Level 6 Level 7 Level 8 1.08 0.90 0.75 0.70 0.64 

VOP.RC.L ........................ CDEC/TDA kWh/day/ft2 .. Level 1 Level 3 Level 4 Level 5 Level 6 2.93 2.61 2.47 2.46 2.39 

VOP.SC.M ....................... TDEC/TDA kWh/day/ft2 ... Level 1 Level 3 Level 5 Level 7 Level 8 2.55 2.23 2.07 1.84 1.65 

VCT.RC.M ....................... CDEC/TDA kWh/day/ft2 .. Level 1 Level 3 Level 5 Level 6 Level 7 0.54 0.42 0.38 0.24 0.19 

VCT.RC.L ........................ CDEC/TDA kWh/day/ft2 .. Level 1 Level 3 Level 5 Level 7 Level 8 1.06 0.90 0.75 0.65 0.55 

VCT.SC.I ......................... TDEC/TDA kWh/day/ft2 ... Level 1 Level 3 Level 6 Level 7 Level 8 1.58 1.24 0.77 0.69 0.63 

VCS.SC.I ......................... TDEC/V kWh/day/ft3 ....... Level 1 Level 5 Level 6 Level 7 Level 8 0.27 0.19 0.18 0.17 0.17 

SVO.RC.M ....................... CDEC/TDA kWh/day/ft2 .. Level 1 Level 2 Level 4 Level 6 Level 7 1.05 1.00 0.90 0.80 0.74 

SVO.SC.M ....................... TDEC/TDA kWh/day/ft2 ... Level 1 Level 3 Level 5 Level 7 Level 8 2.24 1.99 1.87 1.62 1.54 

SOC.RC.M ...................... CDEC/TDA kWh/day/ft2 .. Level 1 Level 3 Level 4 Level 5 Level 7 0.95 0.76 0.74 0.71 0.60 

HZO.RC.M ....................... CDEC/TDA kWh/day/ft2 .. Level 1 Level 1 Level 2 Level 3 Level 4 0.16 0.16 0.14 0.11 0.10 

HZO.RC.L ........................ CDEC/TDA kWh/day/ft2 .. Level 1 Level 3 Level 4 Level 5 Level 6 0.83 0.75 0.70 0.65 0.62 

HZO.SC.M ....................... TDEC/TDA kWh/day/ft2 ... Level 1 Level 4 Level 6 Level 7 Level 8 0.78 0.61 0.56 0.54 0.48 

HZO.SC.L ........................ TDEC/TDA kWh/day/ft2 ... Level 1 Level 3 Level 6 Level 7 Level 8 2.05 1.80 1.52 1.33 1.32 

HCT.SC.I ......................... TDEC/TDA kWh/day/ft2 ... Level 1 Level 3 Level 4 Level 5 Level 6 1.63 1.28 0.73 0.61 0.57 

When an energy conservation 

standard is defined for an equipment 

class, DOE must consider how to 

express the level in a manner suitable 

for all equipment within that class. This 

is of particular concern when the rating 

is in terms of energy consumption and 

there is variation of energy consumption 

within a class due to variation in 

equipment size or capacity. DOE 

believes that TDA captures the most 

significant driver behind capacityrelated energy consumption differences 

between like equipment designs within 

an equipment class (see section II.A.2 of 

the ANOPR). For this reason, DOE has 

suggested that the maximum energy 

consumption standards for this 

equipment be expressed as: 

MECSC = ASC × TDA (self-contained 

equipment) 

MECRC = ARC × TDA (remote 

condensing equipment) 

Where: 

MECSC = maximum TDEC (kWh/day) from 

ANSI/ARI Standard 1200–2006, 

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MECRC = maximum CDEC (kWh/day) from 

ANSI/ARI Standard 1200–2006, 

ARC = a minimum normalized energy 

consumption factor (expressed in kWh/ 

day/ft2 TDA), 

ASC = a minimum normalized TDEC factor 

(expressed in kWh/day/ft2 TDA), and 

TDA = Total Display Area (ft2). 

Commercial refrigerators, commercial 

freezers and commercial refrigeratorfreezers with a self-contained 

condensing unit designed for holding 

temperature applications manufactured 

on or after January 1, 2010, will have 

energy conservation standards in terms 

of: 

Maximum energy consumption M 

(kWh/yr) = B × V + K 

Where: 

B is expressed in terms of kWh/yr/ft3 of rated 

volume, 

V is the adjusted volume (ft3) calculated for 

the equipment class, and 

K is an offset factor expressed in kWh/yr. 

In similar fashion, DOE has suggested 

that the energy conservation standards 

for remote condensing refrigerators, 

commercial freezers, and commercial 

refrigerators-freezers with solid doors 

and for commercial ice-cream freezers 

with solid doors, respectively, be 

expressed as: 

MECRC= BRC × V + KRC (remote 

condensing equipment) 

MECSC= BSC × V + KSC (self-contained 

equipment) 

Where: 

MECRC = maximum CDEC (kWh/day) from 

ANSI/ARI Standard 1200–2006, 

MECSC = maximum TDEC (kWh/day) from 

ANSI/ARI Standard 1200–2006, 

BRC = a minimum normalized energy 

consumption factor (expressed in kWh/ 

day/ft3 gross refrigerated volume) 

calculated using the CDEC rating from 

the DOE adopted test procedure (ANSI/ 

ARI Standard 1200–2006), 

BSC = a minimum normalized TDEC factor 

(expressed in kWh/day/ft3 gross 

refrigerated volume) and calculated 

using the TDEC rating from the DOE 

adopted test procedure (ANSI/ARI 

Standard 1200), 

V = Gross Refrigerated Volume (ft3), 

KRC = an offset factor in kWh/day for remote 

condensing equipment, and 

KSC = an offset factor in kWh/day for selfcontained equipment. 

DOE is concerned that V may not 

completely capture the most significant 

driver behind capacity- or size-related 

energy consumption differences 

between equipment designs within 

these equipment classes. In particular, 

for these equipment classes, the surface 

area for heat gain may not vary linearly 

with volume. The VCS.SC.I equipment 

class falls under this category. 

DOE specifically seeks feedback on its 

approach for characterizing energy 

conservation standards for commercial 

refrigeration equipment. If the approach 

to characterizing standards for remote 

condensing commercial refrigerators, 

commercials freezers, and commercial 

refrigerators-freezers with solid doors 

and for commercial ice-cream freezers 

with solid doors is acceptable, DOE 

seeks comments on how it could 

develop appropriate offset factors (KSC

and KRC) for these classes of equipment. 

This is identified as Issue 14 under 

‘‘Issues on Which DOE Seeks Comment’’

in section IV.E of this ANOPR. 

Commercial refrigerator-freezers (also 

called dual temperature units) are 

equipment that have two or more 

compartments that operate at different 

temperatures. During the Framework 

public meeting, Hill Phoenix stated that 

shipments of this equipment are very 

low. (Public Meeting Transcript, No. 3.4 

at p. 52) In the engineering analysis 

(section II.C of this ANOPR), DOE only 

analyzed those equipment classes with 

the highest shipment volumes, and 

therefore did not include an analysis of 

commercial refrigerator-freezers. 

However, DOE explained in the market 

and technology assessment (section II.A 

of this ANOPR) that it intended to adapt 

the analytical results for commercial 

refrigerators and commercial freezers to 

commercial refrigerator-freezers. 

DOE understands that remote 

condensing commercial refrigeratorfreezers (with and without doors) and 

self-contained commercial refrigeratorfreezers without doors may operate in 

one of two ways. First, they may operate 

as separate chilled and frozen 

compartments with evaporators fed by 

two sets of refrigerant lines or two 

compressors. Second, they may operate 

as separate chilled and frozen 

compartments fed by one set of low 

temperature refrigerant lines (with 

evaporator pressure regulator (EPR) 

valves or similar devices used to raise 

the evaporator pressure, and thus the 

temperature of one or more 

compartments) or one compressor. 

Accordingly, for the purposes of 

implementing standards, DOE is 

considering the following method for 

implementing standards for commercial 

refrigerator-freezers. 

• For remote condensing commercial 

refrigerator-freezers where two or more 

chilled and frozen compartments are 

cooled by independent remote 

condensing units, each compartment 

should have its total refrigeration load 

measured separately according to the 

ANSI/ASHRAE Standard 72–2005 test 

procedure. Compressor energy 

consumption (CEC) for each 

compartment shall be calculated using 

Table 1 in ANSI/ARI Standard 1200–

2006 using the evaporator temperature 

for that compartment. The CDEC for the 

entire case shall be the sum of the CEC 

for each compartment, fan energy 

consumption (FEC), lighting energy 

consumption (LEC), anti-condensate 

energy consumption (AEC), defrost 

energy consumption (DEC), and 

condensate evaporator pan energy 

consumption (PEC) (as measured in 

ANSI/ARI Standard 1200–2006). 

Determine the maximum limit on CDEC 

for each compartment, based on that 

compartment’s respective equipment 

class and TDA or volume. The 

maximum limit on CDEC for the entire 

case is the sum of all the maximum 

limits on CDEC of all compartments. 

• For remote condensing commercial 

refrigerator-freezers where two or more 

chilled and frozen compartments are 

cooled by one condensing unit (with 

EPR valves or similar devices used to 

raise the evaporator pressure, and thus 

the temperature of one or more 

compartments), the total case shall have 

its total refrigeration load measured 

according to the ANSI/ASHRAE 

Standard 72–2005 test procedure. CEC 

for the entire case shall be calculated 

using Table 1 in ANSI/ARI Standard 

1200–2006 using the lowest evaporator 

temperature of all compartments. The 

CDEC for the entire case shall be the 

sum of the CEC, FEC, LEC, AEC, DEC, 

and PEC. Determine the maximum limit 

on CDEC for the compartment with the 

lowest integrated average temperature 

(IAT), based on that compartment’s 

respective equipment class and the total 

TDA or volume of all compartments. 

This value is the maximum limit on 

CDEC for the entire case. 

• For self-contained commercial 

refrigerator-freezers without doors 

where two or more chilled and frozen 

compartments are cooled by 

independent self-contained condensing 

units, the CDEC for the entire case shall 

be measured according to the ANSI/ 

ASHRAE Standard 72–2005 test 

procedure. Determine the maximum 

limit on CDEC for each compartment, 

based on that compartment’s respective 

equipment class and TDA. The 

maximum limit on CDEC for the entire 

case is the sum of all the maximum 

limits on CDEC of all compartments. 

• For self-contained commercial 

refrigerator-freezers without doors 

where two or more chilled and frozen 

compartments are cooled by one 

condensing unit (with EPR valves or 

similar devices used to raise the 

evaporator pressure, and thus the 

temperature of one or more 

compartments), the daily energy 

consumption for the entire case shall be 

measured according to the ANSI/ 

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Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 41207 

ASHRAE Standard 72–2005 test 

procedure. Determine the maximum 

limit on CDEC for the compartment with 

the lowest IAT, based on that 

compartment’s respective equipment 

class and the total TDA of all 

compartments. This value is the 

maximum limit on CDEC for the entire 

case. 

DOE specifically seeks feedback on its 

approach for setting standards for 

remote condensing commercial 

refrigerator-freezers. Additionally, DOE 

seeks feedback on how to implement 

standards for self-contained commercial 

refrigerator-freezers without doors. 

These are identified as Issue 15 under 

‘‘Issues on Which DOE Seeks Comment’’

in section IV.E of this ANOPR. 

IV. Public Participation 

A. Attendance at Public Meeting 

The time, date and location of the 

public meeting are set forth in the 

DATES and ADDRESSES sections at the 

beginning of this document. Anyone 

who wants to attend the public meeting 

must notify Ms. Brenda Edwards-Jones 

at (202) 586–2945. As explained in the 

ADDRESSES section, foreign nationals 

visiting DOE Headquarters are subject to 

advance security screening procedures. 

B. Procedure for Submitting Requests to 

Speak 

Any person who has an interest in 

today’s notice, or who is a 

representative of a group or class of 

persons that has an interest in these 

issues, may request an opportunity to 

make an oral presentation. Please handdeliver requests to speak to the address 

shown under the heading ‘‘Hand 

Delivery/Courier’’ in the ADDRESSES

section of this ANOPR, between 9 a.m. 

and 4 p.m., Monday through Friday, 

except Federal holidays. Also, requests 

may be sent by mail to the address 

shown under the heading ‘‘Postal Mail’’

in the ADDRESSES section of this 

ANOPR, or by e-mail to 

Brenda.Edwards-Jones@ee.doe.gov. 

Persons requesting to speak should 

briefly describe the nature of their 

interest in this rulemaking and provide 

a telephone number for contact. DOE 

asks persons selected to be heard to 

submit a copy of their statements at 

least two weeks before the public 

meeting, either in person, by postal 

mail, or by e-mail as described in the 

preceding paragraph. Please include an 

electronic copy of your statement on a 

computer diskette or compact disk 

when delivery is by postal mail or in 

person. Electronic copies must be in 

WordPerfect, Microsoft Word, Portable 

Document Format (PDF), or text 

(American Standard Code for 

Information Interchange (ASCII)) file 

format. At its discretion, DOE may 

permit any person who cannot supply 

an advance copy of his or her statement 

to participate, if that person has made 

alternative arrangements with the 

Building Technologies Program. In such 

situations, the request to give an oral 

presentation should ask for alternative 

arrangements. 

C. Conduct of Public Meeting 

DOE will designate a DOE official to 

preside at the public meeting and may 

also use a professional facilitator to aid 

discussion. The meeting will not be a 

judicial or evidentiary-type public 

hearing, but DOE will conduct it in 

accordance with 5 U.S.C. 553 and 

section 336 of EPCA. (42 U.S.C. 6306) A 

court reporter will be present to record 

and transcribe the proceedings. DOE 

reserves the right to schedule the order 

of presentations and to establish the 

procedures governing the conduct of the 

public meeting. After the public 

meeting, interested parties may submit 

further comments about the 

proceedings, and any other aspect of the 

rulemaking, until the end of the 

comment period. 

The public meeting will be conducted 

in an informal, conference style. DOE 

will present summaries of comments 

received before the public meeting, 

allow time for presentations by 

participants, and encourage all 

interested parties to share their views on 

issues affecting this rulemaking. Each 

participant will be allowed to make a 

prepared general statement (within time 

limits determined by DOE) before 

discussion of a particular topic. DOE 

will permit other participants to 

comment briefly on any general 

statements. 

At the end of all prepared statements 

on a topic, DOE will permit participants 

to clarify their statements briefly and 

comment on statements made by others. 

Participants should be prepared to 

answer questions by DOE and by other 

participants concerning these issues. 

DOE representatives may also ask 

questions of participants concerning 

other matters relevant to the public 

meeting. The official conducting the 

public meeting will accept additional 

comments or questions from those 

attending, as time permits. The 

presiding official will announce any 

further procedural rules or modification 

of the above procedures that may be 

needed for proper conduct of the public 

meeting. 

DOE will make the entire record of 

this proposed rulemaking, including the 

transcript from the public meeting, 

available for inspection at the U.S. 

Department of Energy, Forrestal 

Building, Room 1J–018 (Resource Room 

of the Building Technologies Program), 

1000 Independence Avenue, SW., 

Washington, DC, (202) 586–2945, 

between 9 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

Any person may purchase a copy of the 

transcript from the transcribing reporter. 

D. Submission of Comments 

DOE will accept comments, data, and 

information regarding all aspects of this 

ANOPR before or after the public 

meeting, but no later than October 9, 

2007. Please submit comments, data, 

and information electronically to the 

following e-mail address: 

commercialrefrigeration.

rulemaking@ee.doe.gov. Submit 

electronic comments in WordPerfect, 

Microsoft Word, PDF, or ASCII file 

format and avoid the use of special 

characters or any form of encryption. 

Comments in electronic format should 

be identified by the docket number EE–

2006-STD–0126 and/or RIN 1904–AB59, 

and whenever possible carry the 

electronic signature of the author. 

Absent an electronic signature, 

comments submitted electronically 

must be followed and authenticated by 

submitting a signed original paper 

document. No telefacsimiles (faxes) will 

be accepted. 

Under 10 CFR Part 1004.11, any 

person submitting information that he 

or she believes to be confidential and 

exempt by law from public disclosure 

should submit two copies: One copy of 

the document including all the 

information believed to be confidential, 

and one copy of the document with the 

information believed to be confidential 

deleted. DOE will make its own 

determination about the confidential 

status of the information and treat it 

according to its determination. 

Factors of interest to DOE when 

evaluating requests to treat submitted 

information as confidential include: (1) 

A description of the items; (2) whether 

and why such items are customarily 

treated as confidential within the 

industry; (3) whether the information is 

generally known by, or available from, 

other sources; (4) whether the 

information has previously been made 

available to others without obligation 

concerning its confidentiality; (5) an 

explanation of the competitive injury to 

the submitting person which would 

result from public disclosure; (6) when 

such information might lose its 

confidential character due to the 

passage of time; and (7) why disclosure 

of the information would be contrary to 

the public interest. 

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41208 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

E. Issues on Which DOE Seeks Comment 

DOE is interested in receiving 

comments on all aspects of this ANOPR. 

DOE particularly invites comments or 

data to improve DOE’s analysis, 

including data or information that will 

respond to the following questions or 

concerns that were addressed in this 

ANOPR: 

1. Equipment Class Prioritization and 

Extending Analyses 

Because of the large number of 

equipment classes included in this 

rulemaking, DOE focused on conducting 

a thorough examination of the 

equipment classes with the greatest 

energy-savings potential. To address 

low-shipment equipment classes, DOE 

could either conduct a full technical 

analysis of these equipment classes or 

develop correlations to extend analyses 

or standard levels in the NOPR phase of 

the rulemaking. DOE requests feedback 

on the approach to equipment type 

prioritization and its approach to 

address low-shipment volume 

equipment classes, and of extending 

EPCA standards to equipment classes in 

this rulemaking. (See section I.D.3.c and 

II.A.2 of this ANOPR and chapter 5 of 

the TSD for further details.) 

2. Air-Curtain Angle 

For equipment without doors, DOE 

believes that the orientation of the air 

curtain affects the energy consumption 

(both remote condensing and selfcontained equipment) and that 

equipment without doors can be broadly 

categorized by the angle of the air 

curtain that divides the refrigerated 

compartment from the ambient space. 

DOE is considering defining air-curtain 

angle as ‘‘the angle between a vertical 

line and the line formed by the points 

at the center of the discharge air grille 

and the center of the return air grille, 

when viewed in cross-section.’’ DOE 

requests feedback on this definition of 

air-curtain angle. (See section II.A.2 of 

this ANOPR for further details.) 

3. Door Angle 

For equipment with doors, DOE 

believes that the orientation of doors 

affects the energy consumption and that 

equipment with doors can be broadly 

categorized by the angle of the door. 

DOE is considering defining door angle 

as ‘‘the angle between a vertical line and 

the line formed by the plane of the door, 

when viewed in cross-section.’’ DOE 

requests feedback on this on this 

definition of door angle. (See section 

II.A.2 of this ANOPR for further details.) 

4. Equipment Classes for Equipment 

With Doors 

DOE is proposing to define two 

equipment families each for equipment 

with solid and transparent doors, based 

on door angles of 0° to 45° (vertical) and 

45° to 90° (horizontal). DOE requests 

comments on these ranges of door 

angles in defining equipment classes 

with doors. (See section II.A.2 of this 

ANOPR for further details.) 

5. Equipment Classes 

In accordance with EPCA section 

325(p)(1)(A), DOE identified the 

equipment classes covered under this 

rulemaking in Table II.6. (42 U.S.C. 

6295(p)(1)(A)) Pursuant to EPCA section 

325(p)(1)(B), DOE requests comments on 

these equipment classes and invites 

interested persons to submit written 

presentations of data, views, and 

arguments. (42 U.S.C. 6295(p)(1)(B)) 

(See section II.A.2 of this ANOPR for 

further details.) 

6. Case Lighting Operating Hours 

DOE’s analysis suggests that typical 

lighting operating hours for most classes 

of commercial refrigeration equipment 

would fall in the range of 16 to 24 hours 

per day, depending on store operating 

hours, use of lighting during after-hours 

case stocking, and typical lighting 

operation or controls used for 

unoccupied periods. Display case 

lighting hours may also depend on 

business type as convenience stores 

have distinctly different operating hours 

than other segments of the food retail 

industry. DOE requests comments on 

whether the 24-hour basis for case 

lighting operating hours is valid for 

DOE’s continued analysis, and if not, 

what changes should be made to better 

characterize the case lighting operating 

hours? (See section II.E of this ANOPR 

for further details.) 

7. Operation and Maintenance Practices 

DOE requests comments on operation 

and maintenance practices for 

commercial refrigeration equipment that 

may be prevalent in the field which may 

differ from standardized conditions, 

such as those represented in a test 

procedure. These field conditions could 

potentially affect the energy 

consumption savings experienced in the 

field as a result of increased energy 

efficiency as compared to those savings 

estimated in the TSD’s energy 

consumption analysis under idealized 

conditions. DOE requests comment on 

the frequency to which such factors 

come in to play in energy use in the 

field, and whether and how DOE could 

account for these factors in assessing the 

overall impacts of the candidate 

standards levels for commercial 

refrigeration equipment. (See section 

II.E of this ANOPR for further details.) 

8. Equipment Lifetime 

DOE requests comments on the 

lifetime of commercial refrigeration 

equipment and whether, in fact, this is 

a significant issue and whether DOE 

should perform a sensitivity analysis of 

this variable in the LCC and NES 

analyses. In particular, DOE seeks 

comment on how long these units are 

typically maintained in service by 

equipment class and store type. Also, 

DOE seeks comment on the existence 

and importance of a used-equipment 

market for commercial refrigeration 

equipment, and the importance of 

considering such a market in its 

analysis. (See section II.E of this ANOPR 

for further details.) 

9. Life-Cycle Cost Baseline Level 

DOE did not receive data from 

industry concerning the average energy 

efficiency of commercial refrigeration 

equipment currently being shipped, nor 

was data provided in further discussion 

with manufacturers. An analysis of the 

literature suggests little data on the 

energy characteristics of display cases in 

the general market is available. Based on 

this, DOE used the Level 1 (minimum 

energy efficiency level) established in 

the engineering analysis as the baseline 

for the LCC analysis. 

The selection of baseline level has 

two impacts in the LCC and PBP 

analyses. It can affect the PBP calculated 

since payback is calculated from the 

baseline level, and it can affect the 

maximum level showing LCC savings. It 

can also affect the fraction of users on 

the market who experience LCC savings 

at any level. The selection of the 

baseline level does not generally affect 

the level identified as having the 

maximum LCC savings. DOE requests 

feedback on whether the Level 1 

baseline selected by DOE is valid for the 

LCC analysis, and if not, what changes 

should be made to provide a more 

realistic baseline level. Since higher 

efficiency equipment is known to be 

sold into the market, DOE also seeks 

input on whether a distribution of 

efficiencies should be used for the LCC 

analysis baseline, and if so, what data 

could be used to populate this 

distribution. If more detailed data to 

develop a distribution of efficiencies in 

the baseline cannot be provided, DOE 

seeks input on how a sensitivity 

analysis to alternative baselines could 

best be used to inform the LCC and NES 

analyses supporting the rulemaking. 

(See section II.G.15 of this ANOPR for 

further details.) 

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10. Characterizing the National Impact 

Analysis Base Case 

No data have been found on the 

market shares of various commercial 

refrigeration equipment classes by 

energy consumption level. Therefore, 

for the National Impact Analysis base 

case, DOE adapted a cost-based method 

used in the NEMS to estimate market 

shares for each equipment class by 

efficiency level. DOE did not have data 

to calibrate this approach to actual 

market shipments. Does the economicbased approach DOE used to establish 

base case shipments by efficiency level 

provide a valid base case assumption for 

the NIA and future analyses? If not, 

what should DOE do to improve the 

base case efficiency forecast? (See 

section II.I.2 of this ANOPR for further 

details.) 

11. Base Case and Standards Case 

Forecasts 

Because key inputs to the calculation 

of the NES and NPV are dependent on 

the estimated efficiencies under the base 

case (without standards) and the 

standards case (with standards), 

forecasted efficiencies are of great 

importance to the analysis. Information 

available to DOE suggests that 

forecasted market shares would remain 

frozen throughout the analysis period 

(i.e., 2012–2042). For its determination 

of standards case forecasted efficiencies, 

DOE used a ‘‘roll-up’’ scenario to 

establish the market shares by efficiency 

level for the year that standards become 

effective (i.e., 2012). Available 

information suggests that equipment 

shipments with efficiencies in the base 

case that did not meet the standard level 

under consideration would ‘‘roll-up’’ to 

meet the new standard level. Also, 

available information suggests that all 

equipment efficiencies in the base case 

that were above the standard level 

under consideration would not be 

affected. DOE requests feedback on its 

development of standards case 

efficiency forecasts from the base case 

efficiency forecast and its basis for how 

standards would impact efficiency 

distributions in the year that standards 

are to take effect. (See section II.I.2 of 

this ANOPR for further details.) 

12. Differential Impact of New 

Standards on Future Shipments by 

Equipment Classes 

The shipment models used in the NES 

and NIA presume that the relative 

market share of the different classes of 

commercial refrigeration equipment 

remains constant over the time period 

analyzed. While DOE is aware that 

market preferences for certain types of 

products may change in the future, DOE 

has no data with which to predict or 

characterize those changes. DOE is 

however particularly concerned 

whether higher standards for certain 

classes of commercial refrigeration 

equipment are likely to generate 

significant market shifts to other 

equipment that may have higher energy 

consumption. By developing standards 

for all classes of commercial 

refrigeration equipment within the 

scope of this rulemaking using the same 

economic criteria, DOE hopes to 

mitigate this concern. However, DOE 

specifically requests stakeholder input 

on the potential for standards-driven 

market shifts between equipment 

classes that could reduce national 

energy savings as well as stakeholder 

input on how the standards setting 

process can reduce or eliminate these 

shifts. (See section II.I.2 of this ANOPR 

for further details. 

13. Selection of Candidate Standard 

Levels for Post-Advance Notice of 

Proposed Rulemaking Analysis 

DOE is required to examine specific 

criteria for the selection of CSLs for 

further analysis. Some of these criteria 

are economic based and the resulting 

CSLs selected may be impacted by 

updates to the ANOPR analysis after 

input from stakeholders. DOE has 

discretion in the selection of additional 

standard levels it may choose to 

analyze. DOE seeks input on the 

candidate standard levels selected for 

future analysis shown in Table III.1 (See 

section III of this ANOPR for further 

details.) 

14. Approach to Characterizing Energy 

Conservation Standards 

When an efficiency or energy 

consumption standard is defined for a 

class of equipment, DOE must consider 

how to express the level in a manner 

suitable for all equipment within that 

class. DOE seeks input on its approach 

for characterizing energy conservation 

standards for commercial refrigeration 

equipment as discussed in section III. If 

the approach to characterizing standards 

for remote condensing commercial 

refrigerators, commercial freezers, and 

commercial refrigerators-freezers with 

solid doors and for commercial icecream freezers with solid doors is 

acceptable, DOE seeks comments on 

how it could develop appropriate offset 

factors (KSC and KRC) for these classes of 

equipment. (See section III of this 

ANOPR for further details.) 

15. Standards for Commercial 

Refrigerator-Freezers 

DOE is addressing standards for 

commercial refrigerator-freezers (both 

remote condensing and self-contained). 

For equipment served by independent 

condensing units, the maximum limit 

on CDEC for the entire case is the sum 

of the maximum limits on CDEC of all 

compartments, based on each 

compartment’s respective equipment 

class and TDA or volume. For 

equipment served by one condensing 

unit, the maximum limit on CDEC for 

the entire case is the maximum limit on 

CDEC for the compartment with the 

lowest IAT, based on the equipment 

class of that compartment and the total 

TDA or volume of all compartments. 

DOE requests feedback on this approach 

to implementing standards for 

commercial refrigerator-freezers. (See 

section III of this ANOPR for further 

details.) 

V. Regulatory Review and Procedural 

Requirements: Executive Order 12866 

DOE submitted this ANOPR for 

review to the Office of Management and 

Budget, under Executive Order 12866, 

‘‘Regulatory Planning and Review.’’ 58 

FR 51735 (October 4, 1993). If DOE later 

proposes energy conservation standards 

for certain commercial refrigeration 

equipment, and if the proposed rule 

constitutes a significant regulatory 

action, DOE would prepare and submit 

to OMB for review the assessment of 

costs and benefits required under 

section 6(a)(3) of the Executive Order. 

The Executive Order requires agencies 

to identify the specific market failure or 

other specific problem that it intends to 

address that warrant new agency action, 

as well as assess the significance of that 

problem, to enable assessment of 

whether any new regulation is 

warranted. (Executive Order 12866, 

§ 1(b)(1)). Without a market failure, a 

regulation cannot result in net benefits. 

DOE’s preliminary analysis suggests 

that accounting for the market value of 

energy savings alone (i.e., excluding any 

possible ‘‘externality’’ benefits such as 

those noted below) would produce 

enough benefits to yield net benefits 

across a wide array of equipment and 

circumstances. These results, if correct, 

imply the existence of a market failure 

in the commercial refrigeration 

equipment market. DOE requests data 

on, and suggestions for testing the 

existence and extent of, these potential 

market failures to complete an 

assessment in the proposed rule of the 

significance of these failures and thus 

the net benefits of regulation. 

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41210 Federal Register / Vol. 72, No. 143 / Thursday, July 26, 2007 / Proposed Rules 

First, DOE believes that there is a lack 

of consumer information and/or 

information processing capability about 

energy efficiency opportunities in the 

commercial refrigeration equipment 

market. If this is in fact the case, DOE 

would expect the energy efficiency for 

commercial refrigeration equipment to 

be randomly distributed across key 

variables such as energy prices and 

usage levels. DOE seeks data on the 

efficiency levels of existing commercial 

refrigeration equipment in use by store 

type (e.g., large grocery, multi-line 

retailer, small grocery/convenience 

store) and electricity price (and/or 

geographic region of the country). DOE 

plans to use these data to test the extent 

to which purchasers of this equipment 

behave as if they are unaware of the 

costs associated with their energy 

consumption. Also, DOE seeks comment 

on knowledge of the Federal 

ENERGYSTAR program, and it’s 

penetration into the commercial 

refrigeration equipment consumer 

market as a resource for knowledge of 

the availability and benefits of energy 

efficient refrigeration units. 

Second, for small businesses in 

particular, DOE believes there may be 

‘‘split incentives’’ for more energy 

efficient equipment. The commercial 

space owner may not invest in efficient 

equipment because the owner of the 

space does not pay the energy bill, and 

the retail establishment owner (building 

tenant) does not want to invest so as not 

to risk losing the capital investment at 

the end of the lease. If this is in fact the 

case, DOE would expect that, other 

things equal, establishments that own 

the equipment purchase higher 

efficiency commercial refrigeration 

equipment on average than those who 

rent the equipment through building 

lease arrangements. DOE seeks data on 

owner-occupied buildings versus 

leased/non-owner occupied buildings 

for given store types (e.g., large grocery) 

and their associated use of highefficiency units. With these data, DOE 

plans to assess the significance of this 

market failure by comparing the energy 

efficiencies of the units in place by 

building occupancy status. 

Of course, there are likely to be 

certain ‘‘external’’ benefits resulting 

from the improved efficiency of units 

that are not captured by the users of 

such equipment. These include both 

environmental and energy securityrelated externalities that are not already 

reflected in energy prices such as 

reduced emissions of greenhouse gases 

and reduced use of natural gas (and oil) 

for electricity generation. DOE invites 

comments on the weight that should be 

given to these factors in DOE’s 

determination of the maximum 

efficiency level at which the total 

benefits are likely to exceed the total 

burdens resulting from a DOE standard. 

In addition, various other analyses 

and procedures may apply to such 

future rulemaking action, including 

those required by the National 

Environmental Policy Act, Pub. L. 91–

190, 42 U.S.C. 4321 et seq.; the 

Unfunded Mandates Act of 1995, Pub. 

L. 104–4; the Paperwork Reduction Act, 

44 U.S.C. 3501 et seq.; the Regulatory 

Flexibility Act, 5 U.S.C. 601 et seq.; and 

certain Executive Orders. 

The draft of today’s action and any 

other documents submitted to OIRA for 

review are part of the rulemaking record 

and are available for public review at 

the U.S. Department of Energy, Forrestal 

Building, Room 1J–018, (Resource Room 

of the Building Technologies Program), 

1000 Independence Avenue, SW., 

Washington, DC, (202) 586–2945, 

between 9 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

VI. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s ANOPR. 

Issued in Washington, DC, on July 19, 

2007. 

John Mizroch, 

Principal Deputy Assistant Secretary, Energy 

Efficiency and Renewable Energy. 

[FR Doc. 07–3640 Filed 7–25–07; 8:45 am] 

BILLING CODE 6450–01–P 

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