CHAPTER 10. NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

CHAPTER 10. NATIONAL IMPACT ANALYSIS...............................................................................10­i

10.1 INTRODUCTION............................................................................................................. 10­1

10.2 NATIONAL ENERGY SAVINGS................................................................................... 10­1

10.2.1 National Energy Savings Definition .................................................................. 10­1

10.2.2 National Energy Savings Inputs......................................................................... 10­2

10.2.2.1 Annual Unit Energy Consumption.................................................... 10­3

10.2.2.2 Shipments.......................................................................................... 10­9

10.2.2.3 Equipment Stock............................................................................... 10­9

10.2.2.4 National Annual Energy Consumption............................................. 10­9

10.2.2.5 Site­to­Source Conversion Factor................................................... 10­10

10.3 NET PRESENT VALUE ................................................................................................ 10­11

10.3.1 Net Present Value Definition........................................................................... 10­11

10.3.2 Net Present Value Inputs ................................................................................. 10­12

10.3.2.1 Total Annual Installed Cost ............................................................ 10­12

10.3.2.2 Total Annual Operating Cost Savings ............................................ 10­13

10.3.2.3 Discount Factor............................................................................... 10­15

10.3.2.4 Present Value of Costs.................................................................... 10­16

10.3.2.5 Present Value of Savings................................................................ 10­16

10.4 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS ........... 10­16

10.4.1 National Energy Savings and Net Present Value Input Summary................... 10­17

10.4.2 National Energy Savings Results..................................................................... 10­17

10.4.3 Annual Costs and Savings ............................................................................... 10­18

10.4.4 Net Present Value Results................................................................................ 10­19

REFERENCES ........................................................................................................................ 10­22

LIST OF TABLES

Table 10.2.1

Table 10.2.2

Table 10.2.3

National Energy Saving Inputs.......................................................................... 10­3

Risk Premiums by Risk Class (j) in the NEMS Commercial Model................. 10­4

Forecasted Shipment­Weighted Market Shares by Efficiency Level, BaseCase.................................................................................................................... 10­7

Table 10.2.4 Average Annual Energy Consumption per Linear Foot by Efficiency

Level .................................................................................................................. 10­7

Table 10.2.5

Table 10.2.6

Shipment­Weighted Average Annual Energy Consumption per Linear

Foot by Efficiency Level ................................................................................... 10­8

Site­to­Source Conversion Factors.................................................................. 10­11

Table 10.3.1

Table 10.3.2

Table 10.3.3

Table 10.3.4

Table 10.3.5

Net Present Value Inputs ................................................................................. 10­12

Average Total Installed Cost per Linear Foot by Efficiency Level................. 10­13

Shipment­Weighted Average Total Installed Cost per Linear Foot by

Efficiency Level............................................................................................... 10­13

Average Annual Repair Cost per Linear Foot (2006$).................................... 10­14

Average Annual Maintenance Cost per Linear Foot by Efficiency Level

(2006$)............................................................................................................. 10­15

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 EE-2006-STD-0126 COMMENT 11.2
Table 10.3.6 Shipment­Weighted Average Annual Maintenance Cost per Linear Foot

by Efficiency Level (2006$)............................................................................ 10­15

Table 10.4.1 NES and NPV Inputs....................................................................................... 10­17

Table 10.4.2 Cumulative National Energy Savings for Commercial Refrigeration

Equipment (2012­2042) (quads)...................................................................... 10­18

Table 10.4.3 Cumulative NPV Results Based on a Seven­Percent Discount Rate

(Billion 2006$)................................................................................................. 10­20

Table 10.4.4 Cumulative NPV Results based on a Three­Percent Discount Rate

(Billion 2006$)................................................................................................. 10­21

LIST OF FIGURES

Figure 10.4.1 National Annual Costs and Savings for Efficiency Level 4 ............................ 10­19

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 EE-2006-STD-0126 COMMENT 11.2
CHAPTER 10. NATIONAL IMPACT ANALYSIS

10.1 INTRODUCTION

This chapter describes the method for estimating the magnitude and net present value

(NPV) of future national energy savings (NES) to consumers from possible candidate energy

efficiency standards levels for commercial refrigeration equipment (CRE). Results of the

national impact analysis (NIA) described here include national energy consumption and savings,

monetary value of energy savings to the Nation as a result of standards, increased total installed

costs to the Nation as a result of standards, and the net present value of energy savings (the

difference between the present monetary values of energy savings and increased total installed

costs).

The U.S. Department of Energy (DOE) determined both the NPV and NES for each

candidate standard level it considered for each of the 15 equipment classes of CRE it examined.

DOE considered up to eight candidate standard levels for each equipment class.

DOE performed all calculations using a Microsoft Excelspreadsheet, which is accessible

on the Internet at (http://www.eere.energy.gov/buildings/appliance_standards/

commercial_products.html). Details and instructions for using the spreadsheet are discussed in

Appendix H. A more detailed set of results is available in Appendix I. The important facets of

national energy consumption for each equipment class of commercial refrigeration equipment

include shipments, stock or inventory, national average electricity consumption, and the site­tosource conversion factor that is used to translate the amount of electricity consumed at the site

where it is used into the amount of energy that must be consumed at the source where that

electricity was produced. Chapter 9, Shipments Analysis, provides a detailed description of the

shipments analysis that DOE used to forecast future purchases of commercial refrigeration

equipment.

DOE was not able to obtain information that quantified how voluntary energy efficiency

programs affect equipment efficiencies on a national basis, although voluntary programs may

increase the share of energy efficient equipment prior to the implementation date of any new

standards. Consequently, DOE did not explicitly incorporate the impact of market­based

initiatives into the shipments forecasts detailed in chapter 9.

The NIA results shown in chapter 10 differ from what is provided in the ANOPR as the

chapter 10 results include the impact of corrections that were made subsequent to the

preparation of the ANOPR.

10.2 NATIONAL ENERGY SAVINGS

10.2.1 National Energy Savings Definition

DOE calculates annual national energy savings as the difference between two scenarios:

a base case (without new standards) and a standards case (with new standards). Positive values

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 EE-2006-STD-0126 COMMENT 11.2
of NES correspond to net energy savings, i.e., national annual energy consumption (AEC) with

standards is less than AEC in the base case.

NESt =AEC base ­ AEC standard Eq. 10.1

Cumulative energy savings are the sum over a defined time period from the

implementation of a standard forward (from 2012 to 2042) of the annual national energy savings.

NES cum = ∑t NESt Eq. 10.2

DOE calculated the AEC by multiplying the number or stock of commercial refrigeration

equipment (by vintage) by the unit energy consumption (also by vintage) as shown by the

following equation:

AEC = STOCKV x UECV x src_convt Eq. 10.3

For the above expressions, DOE defined the following quantities:

AEC = Annual national energy consumption each year in quadrillion British thermal units

(quads), summed over vintages of commercial refrigeration equipment stock, STOCKV,

NES = Annual national energy savings (in quads),

STOCKV = Stock of commercial refrigeration equipment (millions of units) of vintage

V surviving in the year for which DOE calculated annual energy consumption.

Vintages range from 1 to approximately 10 years, a function of an assumed 10­year

lifetime of the equipment.

UECV = Annual unit energy consumption in kilowatt hours (kWh),

src_convt = Time­dependent conversion factor to convert from site energy (kWh) to

source energy (quads) (Btu/kWh),

V = Year in which the commercial refrigeration equipment was purchased as a new unit,

t = Year in the forecast (e.g., 2012 to 2042).

The stock of commercial refrigeration equipment is dependent on annual shipments and

the lifetime of the equipment. DOE believes that the shipment projections under the standards

cases could be lower than those in the base case projection, because the higher installed costs

would cause some customers to forego new equipment purchases. However, DOE has no

information that would allow a calculation of this effect. For the Advance Notice of Proposed

Rulemaking (ANOPR), the total shipments projections are the same in both the basecase and

standards cases.

10.2.2 National Energy Savings Inputs

Table 10.2.1 lists the inputs for the determination of NES.

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 EE-2006-STD-0126 COMMENT 11.2
Table 10.2.1 National Energy Saving Inputs

)

V)

)

Input

Annual Unit Energy Consumption (UEC

Shipments

Equipment Stock (STOCK

Site­to­Source Conversion Factor (src_conv

10.2.2.1 Annual Unit Energy Consumption

The annual unit energy consumption (UEC) is the site energy consumed by a commercial

refrigeration unit per year. AEC is directly tied to the efficiency of the unit. Thus, knowing the

efficiency of a commercial refrigeration unit determines the corresponding AEC. Because the

equipment classes analyzed represent equipment sold across a range of sizes, DOE’s “unit” in

the NES is actually expressed as a linear foot of equipment in an equipment class and not an

individual unit of commercial refrigeration equipment of a specific size. As described below,

DOE determined annual forecasted shipment­weighted average equipment efficiencies that, in

turn, enabled a determination of shipment­weighted annual energy consumption values.

DOE did not have data on the market shares within each of the equipment classes by

efficiency level. DOE used the 2005 commercial refrigeration equipment shipments by

equipment class provided by the industry to develop future market shares by equipment class.

DOE used these market shares and the estimates of future shipments for all commercial

refrigeration equipment to develop projections of shipments by equipment class. It then adapted

a cost­based method used in the National Energy Modeling System (NEMS) to estimate market

shares within each equipment class by efficiency level. DOE then extrapolated future scenarios

of the equipment efficiency both for a base­case (i.e., without new standards) and for various

standards­cases (i.e., with new standards) using the same cost­based method. The difference in

equipment efficiency between the base­case and standards­cases was the basis for determining

the reduction in UEC resulting from new standards.

The market share for each equipment class by efficiency level is defined as

EFF_Level_Share(i,y), for each equipment class, y, at each efficiency level, i. Because the

lifetime of each equipment class is presumed to be the same, and because DOE had no

information regarding future changes in market shares between equipment classes, DOE

assumed the market share for a particular equipment class to be constant over time. DOE

calculated the EFF_Level_Share(i,y) for each efficiency level i using the following formula,

based on the relative annualized cost of each efficiency level.

EFF_Level_Share(i,y) = ∑m

j=1bj• [((IC(i,y) x (rj/(1­(1+rj)

­n)+OC(i,y))­v/ (∑k

i=1 (((IC(i,y) x (rj/(1­

(1+rj)

­n)+OC(i,y))­v] Eq. 10.4

where

EFF_Level_Share(i,y) = the market share of energy consumption level i for equipment

class y,

IC(i, y) = installed costs of equipment class y of energy consumption level i. i=1 to k,

OC(i,y) =annual operating cost (maintenance, repair and energy cost) of equipment class y of

energy consumption level I,

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 EE-2006-STD-0126 COMMENT 11.2
rj = private, risk­adjusted discount rate for risk class j. Derived by adding a “time

preference premium” to the risk­free real rate of return in the marketplace (4.39% longterm Treasury bond rate–long­term inflation rate of 2.2% = 2.19%),

bj = market share of equipment users with risk class j, j =1 to m,

v = risk penalty factor (also known as a measure of market heterogeneity),

n = equipment lifetime.

The components for IC and OC came from the same inputs as the life­cycle cost analysis

(see chapter 8, life­cycle cost and payback period analysis). The annualization factor

(rj/(1­(1+rj)

­n) converts installed cost into its annual equivalent, so that market shares are based

on the relative annual costs of each energy consumption level, with (generally) higher annualized

costs of higher energy consumption levels leading to lower relative market shares. This is

consistent with the approaches used in the Energy Information Administration (EIA’s) National

Energy Modeling System1 (NEMS) and in the Canadian Integrated Modeling System (CIMS)2a

.

The calibration constants are the private risk­based discount rates by risk class rj, taken from the

NEMS commercial model as shown in Table 10.2.2, the default value of v = 10, taken from the

CIMS, and the equipment lifetime of 10 years.

Table 10.2.2 Risk Premiums by Risk Class (j) in the NEMS Commercial Model

Percentage of Users in

Class

Time Preference

Premium

Implied Real Discount

Rate

1% 0.0% 2.19%

2% 13.6% 15.79%

10% 19.9% 22.09%

15% 30.9% 33.09%

20% 55.4% 57.59%

25% 152.9% 155.09%

27% 1000.0% 1002.19%

100%

Source: NEMS Commercial Model

Table 10.2.3 provides estimated base case market shipment­weighted shares for each of

the 15 equipment classes analyzed in this rulemaking.

To project changes in weighted­average efficiency as standards above the base­case

efficiency (Level 1) are introduced, DOE assumed that market shares below the minimum

permitted efficiency level would be reassigned to the new Level 1. For example, if a Level 4

standard were imposed in 2012 on the VOP.RC.M equipment class, then the market shares for

Levels 1, 2, and 3 would be assigned to Level 4, which would result in a market share of 66.2%

= (23.2% +15.9% +14.3% +12.8%) from the first four columns of the first row in Table 10.2.3)

for Level 4, beginning in 2012. The market shares for Levels 5­8 would not be affected, since

the market already has a choice of that equipment with Level 4 also available. It was assumed

that the standard (efficiency level 4) would not affect the relative attractiveness of equipment

with efficiencies higher than the standard.

a The CIMS Model was originally known as the Canadian Integrated Modeling System, but as the model is now

being applied to other countries, the acronym is now used as its proper name.

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 EE-2006-STD-0126 COMMENT 11.2
As stated earlier, UEC values are tied directly to the efficiency of the equipment.

For the annual shipment­weighted efficiency levels specified in the base case and

standards case efficiency scenarios, DOE calculated the shipment weighted UEC values shown

in Table 10.2.5. For each equipment class, the value shown for a given efficiency level is the

shipment­weighted average UEC for each standard level, after taking into account the nonavailability of equipment at efficiency levels below the minimum standard efficiency level

shown.

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 EE-2006-STD-0126 COMMENT 11.2
Table 10.2.4 provides the UEC values for specific efficiency levels for all equipment classes.

For the annual shipment­weighted efficiency levels specified in the base case and

standards case efficiency scenarios, DOE calculated the shipment weighted UEC values shown

in Table 10.2.5. For each equipment class, the value shown for a given efficiency level is the

shipment­weighted average UEC for each standard level, after taking into account the nonavailability of equipment at efficiency levels below the minimum standard efficiency level

shown.

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 EE-2006-STD-0126 COMMENT 11.2
Table 10.2.4 presents the UEC values according to annual electricity use per linear foot

per year (kWh/linear foot/year). Electricity use per linear foot is how DOE expressed the annual

energy per unit in the NES spreadsheet model. Because projections of grocery refrigeration and

freezer space (expressed in linear feet) are the primary drivers used to estimate future

commercial refrigeration equipment shipments, DOE calculated the national refrigeration

equipment energy expense by expressing the per unit annual energy use on a linear­footage

basis.

Table 10.2.3 Shipment­Weighted Market Shares by Efficiency Level, Base­Case

Equipment

Class*

Shipment­Weighted Market Shares by Efficiency Level*,§

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

VOP.RC.M 23.2% 15.9% 14.3% 12.8% 10.2% 9.1% 7.9% 6.6%

VOP.RC.L 17.6% 18.4% 18.4% 16.9% 16.5% 12.1% 0.0% 0.0%

VOP.SC.M 14.5% 15.1% 15.1% 14.8% 13.9% 12.5% 9.1% 5.1%

VCT.RC.M 15.7% 17.6% 17.8% 17.6% 17.1% 9.1% 5.1% 0.0%

VCT.RC.L 17.6% 16.0% 14.7% 13.5% 11.3% 10.3% 9.3% 7.3%

VCT.SC.I 12.5% 14.0% 15.1% 15.3% 14.7% 11.5% 10.1% 6.8%

VCS.SC.I 11.2% 11.9% 12.6% 13.4% 13.4% 13.3% 13.0% 11.3%

SVO.RC.M 20.3% 17.0% 15.4% 13.9% 12.5% 11.2% 9.6% 0.0%

SVO.SC.M 13.9% 14.2% 14.2% 14.0% 13.2% 12.6% 10.3% 7.6%

SOC.RC.M 16.5% 17.2% 17.2% 16.4% 15.9% 9.4% 7.3% 0.0%

HZO.RC.M 24.8% 25.4% 25.2% 24.6% 0.0% 0.0% 0.0% 0.0%

HZO.RC.L 18.3% 18.1% 17.1% 16.2% 15.4% 14.9% 0.0% 0.0%

HZO.SC.M 12.7% 12.8% 13.0% 12.9% 12.9% 12.6% 12.3% 10.7%

HZO.SC.L 12.1% 12.2% 12.8% 13.4% 13.3% 13.3% 11.6% 11.3%

HCT.SC.I 17.2% 17.9% 18.2% 16.0% 15.5% 15.2% 0.0% 0.0%

* Equipment class designations consist of a combination (in sequential order separated by periods) of a 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), an operating mode code (RC=remote

condensing or SC=self­contained), and a rating temperature code (M=medium temperature (38°F), L=low temperature (0°F), or I=icecream temperature (­15°F)). For example, "VOP.RC.M refers to the "vertical open, remote condensing, medium temperature" equipment

class. See chapter 3, market and technology assessment, for a more detailed explanation of the equipment class terminology

** A value of 0.0% means that no market share was calculated for this efficiency level. For example, the VOP.RC.L equipment class only

had six possible efficiency levels, so no market share was allotted to efficiency levels 7 and 8.

§ Shares may not add to 100% exactly due to rounding.

For the annual shipment­weighted efficiency levels specified in the base case and

standards case efficiency scenarios, DOE calculated the shipment weighted UEC values shown

in Table 10.2.5. For each equipment class, the value shown for a given efficiency level is the

shipment­weighted average UEC for each standard level, after taking into account the nonavailability of equipment at efficiency levels below the minimum standard efficiency level

shown.

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 EE-2006-STD-0126 COMMENT 11.2
Table 10.2.4 Unit Energy Consumption by Efficiency Level

Equipment

Class

Annual Energy Consumption per linear foot (kWh/linear foot/year)

Level 1

(Base Case) Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8

VOP.RC.M 1,751 1,621 1,540 1,459 1,297 1,216 1,135 1,038

VOP.RC.L 3,980 3,787 3,547 3,362 3,344 3,249 NA NA

VOP.SC.M 3,477 3,103 3,038 2,969 2,815 2,701 2,502 2,250

VCT.RC.M 1,007 827 785 734 701 446 358 NA

VCT.RC.L 1,985 1,779 1,685 1,592 1,404 1,311 1,217 1,026

VCT.SC.I 3,001 2,642 2,342 2,227 2,144 1,464 1,316 1,202

VCS.SC.I 1,145 1,049 904 795 776 744 722 700

SVO.RC.M 1,278 1,217 1,156 1,095 1,034 973 900 NA

SVO.SC.M 2,616 2,339 2,320 2,288 2,180 2,142 1,890 1,796

SOC.RC.M 1,483 1,348 1,179 1,149 1,107 946 932 NA

HZO.RC.M 229 194 151 137 NA NA NA NA

HZO.RC.L 1,161 1,119 1,049 979 909 867 NA NA

HZO.SC.M 850 818 703 666 651 611 595 525

HZO.SC.L 2,244 2,210 1,973 1,709 1,673 1,661 1,461 1,449

HCT.SC.I 837 694 656 374 316 294 NA NA

* A value of NA means that no energy use was calculated for this efficiency level. For example, the VOP.RC.L only had six possible

efficiency levels.

Table 10.2.5 Shipment­Weighted Average Annual Energy Consumption per Linear Foot

by Efficiency Level

Equipment

Class

Shipment­weighted AEC per linear foot (kWh/linear foot/year)

Level 1

(Base Case) Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8

VOP.RC.M 1,477 1,446 1,414 1,370 1,261 1,199 1,129 1,038

VOP.RC.L 3,569 3,535 3,447 3,346 3,333 3,249 NA NA

VOP.SC.M 2,944 2,889 2,869 2,838 2,746 2,661 2,489 2,250

VCT.RC.M 754 725 711 684 662 442 358 NA

VCT.RC.L 1,584 1,547 1,515 1,469 1,352 1,282 1,204 1,026

VCT.SC.I 2,151 2,105 2,024 1,975 1,927 1,432 1,309 1,202

VCS.SC.I 850 839 805 766 757 736 720 700

SVO.RC.M 1,124 1,111 1,088 1,056 1,015 966 900 NA

SVO.SC.M 2,237 2,198 2,193 2,179 2,117 2,091 1,883 1,796

SOC.RC.M 1,204 1,181 1,123 1,108 1,079 945 932 NA

HZO.RC.M 178 169 147 137 NA NA NA NA

HZO.RC.L 1,024 1,016 990 952 903 867 NA NA

HZO.SC.M 682 678 648 633 626 600 588 525

HZO.SC.L 1,803 1,799 1,740 1,641 1,622 1,615 1,460 1,449

HCT.SC.I 545 520 506 353 313 294 NA NA

• A value of NA means that no energy use was calculated for this efficiency level. For example, the VOP.RC.L equipment class only

had six possible efficiency levels.

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 EE-2006-STD-0126 COMMENT 11.2
10.2.2.2 Shipments

DOE forecasted shipments for the base case and all standards cases (see chapter 9,

shipments analysis).

10.2.2.3 Equipment Stock

The commercial refrigeration equipment stock in a given year is the total linear footage

of commercial refrigeration equipment shipped from earlier years which survive in the given

year. The NES spreadsheet model keeps track of the total linear footage of commercial

refrigeration units shipped each year. For purposes of the NES and NPV analyses in the

ANOPR, DOE assumes that approximately 10 percent of the existing commercial refrigeration

units are retired in each year (based on a 10­year average lifetime) and that for units shipped in

2042, any units still remaining at the end of 2052 will be replaced.

10.2.2.4 National Annual Energy Consumption

The national AEC for each equipment class is the product of the annual UEC (expressed as

delivered or “site” energy use per year per linear foot) for each standard level

as shown in

For the annual shipment­weighted efficiency levels specified in the base case and

standards case efficiency scenarios, DOE calculated the shipment weighted UEC values shown

in Table 10.2.5. For each equipment class, the value shown for a given efficiency level is the

shipment­weighted average UEC for each standard level, after taking into account the nonavailability of equipment at efficiency levels below the minimum standard efficiency level

shown.

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 EE-2006-STD-0126 COMMENT 11.2
Table 10.2.4 and the total linear feet of CRE units of each vintage and equipment class.

This approach accounts for differences in UEC from year to year. The calculation for

determining the AEC of commercial refrigeration equipment is shown above in Equation 10.3.

DOE initially calculated the AEC at the site (i.e., electricity in kWh consumed by the

CRE units). DOE then calculated primary energy consumption from site energy consumption by

applying a conversion factor to account for losses associated with the generation, transmission,

and distribution of electricity.

10.2.2.5 Site­to­Source Conversion Factor

The site­to­source conversion factor is the multiplicative factor used for converting site

energy consumption, expressed in kWh, into primary or source energy consumption, expressed

in quads. The site­to­source conversion factor accounts for losses in electricity generation,

transmission, and distribution. DOE used annual site­to­source conversion factors based on

U.S. average values for the commercial sector, calculated from the 2006 Annual Energy Outlook

(AEO), Table A5. As shown in Table 10.2.6, 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). DOE intends to update the EIA average site­to­source

conversion factors to marginal site­to­source conversion factors for the NOPR based on the

results of the utility impacts analysis.

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 EE-2006-STD-0126 COMMENT 11.2
Table 10.2.6 Site­to­Source Conversion Factors

Year

Site­to­Source

Conversion Factor

Btu/kWh Year

Site­to­Source

Conversion Factor

Btu/kWh

2012 10,679 2033 9,981

2013 10,638 2034 9,944

2014 10,597 2035 9,907

2015 10,556 2036 9,870

2016 10,530 2037 9,833

2017 10,503 2038 9,797

2018 10,477 2039 9,760

2019 10,500 2040 9,723

2020 10,423 2041 9,686

2021 10,392 2042 9,649

2022 10,361 2043 9,612

2023 10,329 2044 9,575

2024 10,298 2045 9,539

2025 10,267 2046 9,502

2026 10,224 2047 9,465

2027 10,182 2048 9,428

2029 10,140 2049 9,391

2030 10,097 2050 9,354

2031 10,055 2051 9,317

2032 10,018 2052 9,281

Source: AEO 2006, Table A.5. Linearly extrapolated after 2030.

10.3 NET PRESENT VALUE

10.3.1 Net Present Value Definition

The NPV is the value in the present of a time series of costs and savings. The NPV is

given by the equation:

NPV = PVS – PVC Eq. 10.5

where

PVS = present value of operating cost savings (including electricity, repair, and

maintenance costs),

PVC = present value of increased total installed costs (including equipment and

installation).

The PVS and PVC are determined according to the following expressions:

PVS = ∑ OCS t x DF t Eq. 10.6

PVC =∑TICt x DF t Eq. 10.7

where

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 EE-2006-STD-0126 COMMENT 11.2
OCS = total annual operating cost savings,

TIC = total annual installed cost increases,

DF = discount factor,

t = year (PVS is summed over 2012­2052, and PVC is summed over 2012­2042)

DOE determined the contribution to PVC for each year, from the effective date of the

standard (2012) to the year 2042, discounted for the ANOPR analysis, to the year 2007. The

contribution to PVS was determined for each year, from the effective date of the standard (2012)

to the year when units purchased in 2042 retire (assumed to be 2052). DOE calculated costs and

savings as the difference between a standards case and a base case (i.e., without new standards).

DOE calculated a discount factor from the discount rate and the number of years between the

“present” (i.e., year to which the sum is being discounted) and the year in which the costs and

savings occur. DOE calculated the net present value as the sum over time of the discounted net

savings (which is equivalent to the approach shown in Eqns. 10.5 – 10.7).

10.3.2 Net Present Value Inputs

Table 10.3.1 summarizes the inputs to the NPV calculation.

Table 10.3.1 Net Present Value Inputs

)

)

Input

Total Annual Installed Cost (TICt)

Total Annual Operating Cost Savings (OCSt)

Discount Factor

Present Value of Costs (PVC

Present Value of Savings (PVS

10.3.2.1 Total Annual Installed Cost

The increase in the total annual installed cost is equal to the annual change in the per­unit

total installed cost (difference between base case and standards case) multiplied by the shipments

forecasted in the standards case. The total installed cost includes both the equipment cost and

the installation price. DOE based average equipment costs on average manufacturer prices (see

chapter 8, life­cycle cost and payback period analysis) multiplied by average overall markup

values also shown in chapter 8). DOE based average installation prices on nationally

representative values for each equipment class (see chapter 8). Table 10.3.2 shows the resulting

average total installed costs per linear foot for each of the equipment classes of commercial

refrigeration units by efficiency level.

DOE developed base­case and standards­case energy efficiency scenarios as discussed in

section 10.2.2.1. For both the base­case and standards­case energy efficiency scenarios, DOE

calculated annual shipment­weighted average efficiencies. Associated with each annual

shipment­weighted average efficiency value, DOE assigned a total installed cost, based on

shipment­weighted total installed cost for all efficiency levels. DOE based the relationship

between efficiency and total installed cost for each commercial refrigeration equipment class on

the data in Table 10.3.2. As shown in Table 10.3.3, DOE estimated the shipments­weighted

installed cost. DOE determined forecasted average shipments­weighted total installed costs

based on the annual shipments by efficiency level.

10­12

 EE-2006-STD-0126 COMMENT 11.2
Table 10.3.2 Average Total Installed Cost per Linear Foot by Efficiency Level

Equipment

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

VOP.RC.M $481.03 $513.65 $527.13 $542.10 $577.53 $598.79 $623.04 $657.20

VOP.RC.L $792.51 $800.45 $819.60 $847.93 $851.59 $902.58 NA NA

VOP.SC.M $920.39 $941.38 $946.48 $954.69 $976.92 $999.37 $1,071.92 $1,206.04

VCT.RC.M $739.01 $742.78 $745.46 $751.92 $758.04 $853.35 $930.54 NA

VCT.RC.L $749.77 $773.21 $788.96 $806.04 $845.16 $867.77 $892.91 $954.35

VCT.SC.I $1,006.48 $1,013.28 $1,025.24 $1,033.41 $1,045.62 $1,165.40 $1,209.50 $1,294.37

VCS.SC.I $583.72 $586.37 $594.83 $601.22 $602.99 $607.24 $611.50 $625.36

SVO.RC.M $474.81 $490.19 $501.71 $514.40 $528.49 $544.24 $565.74 NA

SVO.SC.M $761.42 $779.22 $780.92 $785.03 $801.04 $808.79 $861.02 $912.02

SOC.RC.M) $945.72 $952.52 $968.94 $975.02 $983.52 $1,068.51 $1,103.73 NA

HZO.RC.M $478.50 $480.77 $486.24 $489.08 NA NA NA NA

HZO.RC.L $502.99 $507.15 $516.84 $527.50 $539.25 $546.91 NA NA

HZO.SC.M $639.82 $641.53 $651.20 $655.30 $657.00 $663.16 $667.26 $687.36

HZO.SC.L $792.35 $794.05 $806.19 $826.02 $830.12 $831.82 $871.41 $875.52

HCT.SC.I $511.77 $519.44 $521.43 $558.89 $568.92 $573.72 NA NA

* A value of NA means that no installed cost was calculated for this efficiency level. For example, the VOP.RC.L only had six possible

efficiency levels.

Table 10.3.3 Shipment­Weighted Average Total Installed Cost per Linear Foot by

Efficiency Level

Equipment

Class

Level 1

(Base

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

VOP.RC.M $542.91 $550.64 $556.00 $564.11 $587.89 $604.31 $625.18 $657.20

VOP.RC.L $831.05 $832.47 $839.46 $855.04 $857.66 $902.58 NA NA

VOP.SC.M $977.63 $980.72 $982.25 $985.95 $999.28 $1,015.86 $1,078.46 $1,206.04

VCT.RC.M $765.79 $766.39 $767.29 $770.63 $774.86 $857.10 $930.54 NA

VCT.RC.L $816.89 $821.10 $826.49 $834.87 $859.37 $876.07 $897.19 $954.35

VCT.SC.I $1,076.36 $1,077.23 $1,080.48 $1,083.94 $1,091.00 $1,178.04 $1,215.00 $1,294.37

VCS.SC.I $601.67 $601.98 $603.96 $606.26 $607.14 $609.80 $613.04 $625.36

SVO.RC.M $509.96 $513.13 $517.48 $524.24 $533.71 $546.25 $565.74 NA

SVO.SC.M $802.45 $804.96 $805.44 $807.19 $816.28 $821.70 $864.79 $912.02

SOC.RC.M) $984.34 $985.47 $991.07 $994.20 $999.96 $1,071.03 $1,103.73 NA

HZO.RC.M $483.61 $484.17 $486.93 $489.08 NA NA NA NA

HZO.RC.L $522.05 $522.82 $526.38 $532.13 $540.37 $546.91 NA NA

HZO.SC.M $657.04 $657.26 $659.76 $661.35 $662.23 $666.22 $669.39 $687.36

HZO.SC.L $827.28 $827.49 $830.49 $837.98 $840.07 $841.17 $871.87 $875.52

HCT.SC.I $540.26 $541.61 $542.32 $562.61 $569.63 $573.72 NA NA

* A value of NA means that no installed cost was calculated for this efficiency level. For example, the VOP.RC.L only had six possible

efficiency levels.

10.3.2.2 Total Annual Operating Cost Savings

The annual operating cost savings to the Nation are equal to the change in the annual

operating costs (difference between base case and standards case) per unit multiplied by the

shipments forecasted in the standards case.

The annual operating cost includes electricity, repair, and maintenance costs.

10­13

 EE-2006-STD-0126 COMMENT 11.2
Annual Electricity Cost Savings. As described in chapter 8, life­cycle cost and payback

period analysis, DOE calculated annual electricity costs based on average State­level commercial

electricity prices. To calculate annual energy cost savings for a particular equipment class in a

given year, DOE first calculated the annual energy costs in each forecast year at each standard

level by multiplying the weighted­average energy consumption at each efficiency level from

Table 10.2.6 times the linear feet of equipment stock in the equipment class in each year, and

then times the sales­weighted national average electricity prices for the four building types in

chapter 8. To determine energy savings, the national energy costs at each efficiency level

(Levels 2­8) were then subtracted from the national energy costs at the baseline level (Level 1).

Because projections of the stock of commercial refrigeration equipment (expressed in linear feet)

are the primary driver used to estimate future commercial refrigeration equipment shipments,

DOE calculated the national energy cost more readily by expressing the AEC on a linear­footage

basis.

Annual Repair Costs. DOE based average annual repair costs on the value of the

commercial refrigeration equipment (see chapter 8). Table 10.3.4 shows the average repair costs

per linear foot for the equipment classes of commercial refrigeration units. Although the NES

spreadsheet provides the capability to allow repair costs to differ by the price of the commercial

refrigeration equipment, and therefore by energy consumption level, for the purposes of ANOPR

analysis, DOE assumes the repair costs to be constant for each equipment class as shown in

Table 10.3.4.

Table 10.3.4 Average Annual Repair Cost per Linear Foot (2006$)

Equipment

Class Annual Repair Cost per Linear Foot

VOP.RC.M $22.82

VOP.RC.L $38.39

VOP.SC.M $42.31

VCT.RC.M $35.78

VCT.RC.L $36.32

VCT.SC.I $48.40

VCS.SC.I $27.26

SVO.RC.M $22.50

SVO.SC.M $34.36

SOC.RC.M) $46.05

HZO.RC.M $22.69

HZO.RC.L $23.91

HZO.SC.M $28.28

HZO.SC.L $35.91

HCT.SC.I $21.25

Annual Maintenance Costs. DOE determined average annual maintenance costs in two

parts: a preventative maintenance cost of $156/year per unit, regardless of cooling capacity or

efficiency level, and a lighting maintenance cost that varied with efficiency level or when

decreased energy consumption level was due to particular types of lighting measures (see chapter

8). Table 10.3.5 shows the resulting annual maintenance costs per linear foot by efficiency level.

Table 10.3.6 shows the corresponding shipments­weighted annual maintenance cost per linear

foot by efficiency level.

10­14

 EE-2006-STD-0126 COMMENT 11.2
Table 10.3.5 Average Annual Maintenance Cost per Linear Foot by Efficiency Level

(2006$)

Equipment

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

VOP.RC.M $24.13 $24.13 $24.13 $24.13 $24.13 $24.13 $24.13 $24.13

VOP.RC.L $16.71 $16.71 $16.71 $16.71 $17.97 $18.60 NA NA

VOP.SC.M $49.37 $49.37 $49.37 $49.37 $49.37 $52.77 $52.77 $53.95

VCT.RC.M $17.91 $19.96 $19.96 $19.96 $19.96 $19.96 $20.85 NA

VCT.RC.L $19.90 $19.90 $19.90 $19.90 $19.90 $19.90 $19.90 $19.90

VCT.SC.I $26.44 $28.70 $28.70 $28.70 $28.70 $28.70 $28.70 $29.68

VCS.SC.I $20.26 $20.26 $20.26 $20.26 $20.26 $20.26 $20.26 $20.26

SVO.RC.M $20.42 $20.42 $20.42 $20.42 $20.42 $20.42 $20.42 NA

SVO.SC.M $42.71 $42.71 $42.71 $42.71 $42.71 $43.97 $43.97 $44.60

SOC.RC.M $19.18 $19.18 $19.18 $21.28 $21.28 $22.34 $22.34 NA

HZO.RC.M $13.00 $13.00 $13.00 $13.00 NA NA NA NA

HZO.RC.L $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 NA NA

HZO.SC.M $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00

HZO.SC.L $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00

HCT.SC.I $45.61 $45.61 $45.61 $45.61 $45.61 $45.61 NA NA

* A value of NA means that no maintenance cost was calculated for this efficiency level. For example, the VOP.RC.L only had six possible

efficiency levels.

Table 10.3.6 Shipment­Weighted Average Annual Maintenance Cost per Linear Foot by

Efficiency Level (2006$)

Equipment

Class

Level 1

(Base Case) Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8

VOP.RC.M $24.13 $24.13 $24.13 $24.13 $24.13 $24.13 $24.13 $24.13

VOP.RC.L $17.14 $17.14 $17.14 $17.14 $18.05 $18.60 NA NA

VOP.SC.M $50.32 $50.32 $50.32 $50.32 $50.32 $52.83 $52.83 $53.95

VCT.RC.M $19.67 $20.00 $20.00 $20.00 $20.00 $20.00 $20.85 NA

VCT.RC.L $19.90 $19.90 $19.90 $19.90 $19.90 $19.90 $19.90 $19.90

VCT.SC.I $28.47 $28.76 $28.76 $28.76 $28.76 $28.76 $28.76 $29.68

VCS.SC.I $20.26 $20.26 $20.26 $20.26 $20.26 $20.26 $20.26 $20.26

SVO.RC.M $20.42 $20.42 $20.42 $20.42 $20.42 $20.42 $20.42 NA

SVO.SC.M $43.14 $43.14 $43.14 $43.14 $43.14 $44.02 $44.02 $44.60

SOC.RC.M) $20.38 $20.38 $20.38 $21.46 $21.46 $22.34 $22.34 NA

HZO.RC.M $13.00 $13.00 $13.00 $13.00 NA NA NA NA

HZO.RC.L $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 NA NA

HZO.SC.M $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00

HZO.SC.L $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00 $39.00

HCT.SC.I $45.61 $45.61 $45.61 $45.61 $45.61 $45.61 NA NA

* A value of NA means that no maintenance cost was calculated for this efficiency level. For example, the VOP.RC.L equipment class only

had six possible efficiency levels.

10.3.2.3 Discount Factor

DOE multiplied monetary values in future years by the discount factor in order to

determine the present value. The discount factor (DF) is described by the equation:

DF =1/ (1+r)( t ­ tp) Eq. 10.8

where

10­15

 EE-2006-STD-0126 COMMENT 11.2
r = discount rate,

t = year of the monetary value,

tp = year in which the present value is being determined.

DOE estimated national impacts with both a three­percent and a seven­percent real

discount rate as the average real rate of return on private investment in the U.S. economy. These

discount rates are used in accordance with the Office of Management and Budget (OMB)’s

guidance to Federal agencies on the development of regulatory analysis (OMB Circular A­4,

September 17, 2003), and section E., “Identifying and Measuring Benefits and Costs,” therein.

DOE defined the present year as 2007 for the ANOPR analysis.

10.3.2.4 Present Value of Costs

The present value of increased installed costs is the annual installed cost increase in each

year (i.e., the difference between the standards­case and base­case), discounted to the present,

and summed for the time period over which DOE is considering the installation of commercial

refrigeration equipment (i.e., from the effective date of standards, 2012, to the year 2042).

The increase in total installed cost refers to both equipment cost and installation cost

associated with the higher energy efficiency of commercial refrigeration units purchased in the

standards case compared to the base case. DOE calculated annual installed costs as the

difference in total installed cost for new equipment purchased each year, multiplied by the

shipments in the standards­case.

10.3.2.5 Present Value of Savings

The present value of operating cost savings is the annual operating cost savings (i.e., the

difference between the base­case and standards­case) discounted to the year 2007, and summed

over the period from the effective date of the standard, 2012, to the time when the last unit

installed in 2042 is retired from service (assumed to be 2052). Savings are decreases in

operating costs (including electricity, repair, and maintenance) associated with the higher energy

efficiency of commercial refrigeration units purchased in the standards­case compared to the

base­case. Total annual operating cost savings is the savings per unit multiplied by the number

of units of each vintage surviving in a particular year. Equipment consumes energy over its

entire lifetime, and for units purchased in 2042, the PVS includes energy consumed until the unit

is retired from service at the end of 2052.

10.4 NATIONAL ENERGY SAVINGS AND NET PRESENT VALUE RESULTS

The NES spreadsheet model provides estimates of the NES and NPV due to various

efficiency levels. The inputs to the NES spreadsheet have been discussed earlier in

sections 10.2.2 (National Energy Savings Inputs) and 10.3.2 (Net Present Value Inputs). DOE

generated the NES and NPV results using a Microsoft Excelspreadsheet, which is accessible on

the Internet

(http://www.eere.energy.gov/buildings/appliance_standards/commercial/commercial_refrigeratio

n.html). Details and instructions for using the spreadsheet are discussed in Appendix H.

10­16

 EE-2006-STD-0126 COMMENT 11.2
10.4.1 National Energy Savings and Net Present Value Input Summary

Table 10.4.1 summarizes the inputs to the NES spreadsheet model. For each input a brief

description of the data source is given.

10.4.2 National Energy Savings Results

The following section provides NES results for each energy consumption 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 weighted­average values, yielding results which are

discrete point values, rather than a distribution of values as in the life­cycle cost (LCC) analysis.

Table 10.4.2 shows the NES results for the efficiency levels analyzed for each equipment

class of commercial refrigeration equipment.

Table 10.4.1 NES and NPV Inputs

Input Data Description

Shipments Annual shipments from shipments model (see chapter 9, shipments

analysis).

Effective Date of Standard 2012

Base­Case Efficiencies Distribution of base­case shipments by efficiency level.

Standards­Case Efficiencies Distribution of shipments by efficiency level for each standards case.

Standards case annual market shares by efficiency level remain constant

over time for base­case and each standards case.

Annual Energy Consumption per Annual weighted­average values are a function of efficiency level.

Linear Foot  (Established from the engineering analysis, chapter 5). Converted to a per

linear foot basis.

Total Installed Cost per Linear Foot Annual weighted­average values are a function of efficiency level (see

chapter 8, Life­Cycle Cost and Payback Period Analysis). Converted to a

per linear foot basis.

Repair Cost per Linear Foot Annual weighted­average values are constant with efficiency level (see

chapter 8). Converted to a per linear foot basis.

Maintenance Cost per Linear Foot Annual weighted­average value equals $156 (see chapter 8), plus lighting

maintenance cost. Converted to a per linear foot basis.

Escalation of Electricity Prices 2006 EIA Annual Energy Outlook forecasts (to 2030) and extrapolation for

beyond 2030 (see chapter 8).

Electricity Site­to­Source 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.

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

10­17

 EE-2006-STD-0126 COMMENT 11.2
Table 10.4.2 Cumulative National Energy Savings for Commercial Refrigeration

Equipment (2012­2042) (quads)

Equipment National Energy Savings (quads*,**) by Standard Level

Class 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 efficiency level because the VOP.RC.L only had six possible

efficiency levels. Level 1 is the baseline efficiency level, 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.

10.4.3 Annual Costs and Savings

As a prelude to providing the NPVs for each standard level in each equipment class, this

section presents the annual equipment cost (or total installed cost) increases and annual operating

cost savings at the national level.

Figure 10.4.1 shows the changes over time of the non­discounted annual equipment price

increases and the non­discounted operating cost savings at the standard level 4 for the

VOP.RC.M equipment class. The total net annual impact is the discounted value of the

difference between annual equipment purchases and annual operating costs at a seven­percent

discount rate. Appendix I shows comparable figures for other efficiency levels and other

equipment classes. Each figure also shows the net annual impact, which is the difference

between the savings and costs for each year. The annual equipment price change is the increase

in equipment price for equipment purchased each year over the period 2012–2042. The annual

operating savings is the savings in operating costs for equipment purchased, and which have not

been retired, for each year over the time period 2012­2052. DOE determined the annual costs

and savings presented in each figure based on the AEO 2006 Reference Case. The NPV is the

difference between the cumulative annual discounted savings and the cumulative annual

discounted costs.

10­18

 EE-2006-STD-0126 COMMENT 11.2
0

Net Savings 

­0.02

­0.01

0.01

0.02

0.03

0.04

0.05

0.06

2012 2016 2020 2024 2028 2032 2036 2040 2044 2048

Billion 2006$ 

Year 

Undiscounted Total Annual Operating Savings

Undiscounted Annual Equipment Purchase Savings

Discounted Total Net Annual Impact

Figure 10.4.1 National Annual Costs and Savings for Efficiency Level 4

Figure 10.4.1 initially shows smaller annual operating cost savings compared to the

increased equipment price costs (shown on the figure as operating savings). For efficiency levels

up through Level 8, operating cost savings increase with time, as more and more equipment

meeting the efficiency level comprises the commercial refrigeration equipment stock.

10.4.4 Net Present Value Results

The following section provides NPV results for the candidate standards levels considered

for the equipment classes of commercial refrigeration units. Results are cumulative and are

shown as the discounted value of these savings in dollar terms. The inputs to the NES

spreadsheet model are based on weighted­average values yielding results which are discrete

point values, rather than a distribution of values as in the LCC analysis. 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).

Savings are decreases in operating costs (including electricity, repair, and maintenance)

associated with the higher energy efficiency of commercial refrigeration 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.

10­19

 EE-2006-STD-0126 COMMENT 11.2
Table 10.4.3 shows the NPV results for the standard levels considered for commercial

refrigeration equipment based on a seven­percent discount rate. DOE based all results on

electricity price forecasts from the AEO 2006 Reference Case. Detailed results showing the

breakdown of the NPV into national equipment costs and national operating costs are provided in

Appendix I.

Table 10.4.3 Cumulative NPV Results Based on a Seven­Percent Discount Rate

(Billion 2006$)

Equipment Standard Level (Billion 2006$)*,**

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

VOP.RC.M 0.03 0.08 0.13 0.26 0.32 0.37 0.44

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 0.03

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

VCT.RC.L 0.06 0.11 0.17 0.31 0.38 0.45 0.59

VCT.SC.I 0.00 0.01 0.01 0.01 0.03 0.03 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 0.13 0.17 NA

SVO.SC.M 0.01 0.01 0.01 0.02 0.02 0.05 0.05

SOC.RC.M 0.01 0.03 0.03 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 0.07 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 efficiency level because the VOP.RC.L equipment class only had six

possible efficiency levels. Level 1 is the baseline efficiency level, 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 billion.

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

Table 10.4.4 provides the NPV results based on the three­percent discount rate and

electricity price forecasts from the AEO 2006 Reference Case. As with the NPV results based on

a seven­percent discount rate, detailed results showing the breakdown of the NPV into national

equipment costs and national operating costs based upon a three­percent discount rate are

provided in Appendix I.

10­20

 EE-2006-STD-0126 COMMENT 11.2
Table 10.4.4 Cumulative NPV Results based on a Three­Percent Discount Rate

(Billion 2006$)

Equipment Standard Level (Billion 2006$)*,**

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

VOP.RC.M 0.09 0.22 0.37 0.73 0.91 1.08 1.36

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 0.07 0.09 0.10

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

VCT.RC.L 0.16 0.28 0.44 0.83 1.04 1.26 1.76

VCT.SC.I 0.01 0.02 0.02 0.03 0.07 0.08 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 0.27 0.38 0.51 NA

SVO.SC.M 0.02 0.02 0.03 0.05 0.05 0.13 0.14

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

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

HZO.RC.L 0.01 0.05 0.11 0.17 0.22 NA NA

HZO.SC.M 0.00 0.00 0.00 0.00 0.00 0.00 0.01

HZO.SC.L 0.00 0.01 0.01 0.02 0.02 0.03 0.03

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

* A value of NA means that no energy savings were calculated for this efficiency level because the VOP.RC.L only had six possible

efficiency levels. Level 1 is the baseline efficiency level, 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 billion.

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

10­21

 EE-2006-STD-0126 COMMENT 11.2
REFERENCES

1 Energy Information Administration (EIA). National Energy Modeling System Commercial

Model (2004 Version).

2 ERG/MKJ. Energy Research Group & M.K. Jaccard & Associates. 2000. Integration of GHG

Emissions Reduction Options using CIMS. <<http://www.emrg.sfu.ca/reports/Rollup.pdf>>

(05 June 2001).

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 EE-2006-STD-0126 COMMENT 11.2