i

Energy Conservation Standards

Rulemaking Framework Document for

Furnace Fans

RIN: 1904-AC22

U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy

Building Technologies Program

June 1, 2010
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TABLE OF CONTENTS

1 INTRODUCTION .................................................................................................................. 1

1.1 The Appliances and Commercial Equipment Standards Program................................... 2

1.2 Overview of the Scope of Coverage for Furnace Fans .................................................... 3

1.2.1 Preliminary Discussion of Scope of Coverage for the Test Procedures and Energy 

Conservation Standards Rulemaking...................................................................................... 3

1.3 Overview of the Rulemaking Process.............................................................................. 4

1.3.1 Rulemaking Process and Participation of Interested Parties..................................... 4

1.3.2 Test Procedures......................................................................................................... 6

1.3.2.1 Furnace Fan Modes of Operation and Electrical Energy Consumption............ 7

1.3.2.2 DOE’s Preliminary Review of CSA C823 ........................................................ 9

1.3.2.2.1 Performance Curves ..................................................................................... 10

1.3.2.2.2 Reference System Load Curve ..................................................................... 12

1.3.2.2.3 Operating Points........................................................................................... 13

1.3.2.2.4 Annual Electrical Energy Consumption of Furnace Fans ............................ 14

1.3.2.3 DOE’s Preliminary Review of the Blower Electricity Consumption in the DOE 

Furnace Test Procedure..................................................................................................... 17

1.4 Notice of Proposed Rulemaking .................................................................................... 19

1.5 Final Rule ....................................................................................................................... 20

2 OVERVIEW OF ANALYSES FOR RULEMAKING......................................................... 20

3 MARKET AND TECHNOLOGY ASSESSMENT............................................................. 23

3.1 Market Assessment ........................................................................................................ 23

3.1.1 Product Classes....................................................................................................... 25

3.2 Technology Assessment................................................................................................. 26

3.2.1 High-Efficiency Furnace Fan Motors..................................................................... 27

3.2.2 High-Efficiency Impellers ...................................................................................... 28

4 SCREENING ANALYSIS ................................................................................................... 28

5 ENGINEERING ANALYSIS............................................................................................... 29

5.1 Engineering Analysis Overview..................................................................................... 30

5.2 Baseline Models............................................................................................................. 30

5.3 Cost-Efficiency Relationship and Analysis.................................................................... 31

5.4 Proprietary Designs........................................................................................................ 32

5.5 Outside Regulatory Changes Affecting the Engineering Analysis................................ 33

6 MARKUPS FOR PRODUCT PRICE DETERMINATION ................................................ 33

6.1 Description of Market Participants and Distribution Channels ..................................... 34

6.2 Markup Estimation Using Financial Statements and Regression Analysis ................... 34

7 ENERGY USE CHARACTERIZATION ............................................................................ 37

7.1 Overview of Energy Use Analysis................................................................................. 37

7.2 Estimating Annual Energy Consumption of Furnace Fans............................................ 37

8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES ......................................... 39

8.1 Overview ........................................................................................................................ 39

8.2 Energy Prices.................................................................................................................. 41

8.3 Consumer Discount Rates.............................................................................................. 41

8.4 Installation, Maintenance, and Repair Costs.................................................................. 42

8.5 Product Lifetime............................................................................................................. 42
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8.6 Energy Efficiency in the Base Case ............................................................................... 42

8.7 Rebuttable Presumption Analysis .................................................................................. 43

9 SHIPMENTS ANALYSIS ................................................................................................... 43

9.1 Base-Case Forecast ........................................................................................................ 44

9.2 Accounting Methodology............................................................................................... 44

9.3 Impacts of Standards on Furnace Fan Shipments .......................................................... 45

10 NATIONAL IMPACT ANALYSIS..................................................................................... 45

10.1 Inputs to the NIA ........................................................................................................ 46

10.2 Calculation of National Energy Savings .................................................................... 47

10.3 Net Present Value of Consumer Savings.................................................................... 47

11 LIFE-CYCLE COST CONSUMER SUBGROUP ANALYSIS .......................................... 48

12 MANUFACTURER IMPACT ANALYSIS......................................................................... 48

12.1 Sources of Information for the Manufacturer Impact Analysis.................................. 49

12.2 Industry Cash-Flow Analysis ..................................................................................... 49

12.3 Manufacturer Subgroup Analysis............................................................................... 50

12.4 Competitive Impacts Analysis.................................................................................... 50

12.5 Cumulative Regulatory Burden .................................................................................. 51

13 UTILITY IMPACT ANALYSIS.......................................................................................... 51

14 EMPLOYMENT IMPACT ANALYSIS.............................................................................. 52

15 ENVIRONMENTAL ASSESSMENT ................................................................................. 53

15.1 Carbon Dioxide........................................................................................................... 53

15.2 Sulfur Dioxide ............................................................................................................ 53

15.3 Nitrogen Oxides.......................................................................................................... 54

15.4 Mercury ...................................................................................................................... 54

15.5 Particulate Matter ....................................................................................................... 55

16 MONETIZATION OF EMISSIONS REDUCTIONS.......................................................... 55

17 REGULATORY IMPACT ANALYSIS .............................................................................. 57

APPENDIX A – LIST OF ITEMS FOR COMMENT................................................................. 58

LIST OF TABLES

Table 1.1. Standardized Annual Operating Hours for Canada as Specified in CSA C823 16

LIST OF FIGURES

Figure 2.1. Flow Diagram of Analyses Conducted for an Energy Conservation Standard 

Rulemaking 22
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LIST OF ACRONYMS

ACEEE American Council for an Energy Efficient Economy

AECR annual energy consumption rating

AEO Annual Energy Outlook

AHRI Air-conditioning, Heating, and Refrigeration Institute

AMCA The Air Movement and Control Association International, Inc.

ANSI American National Standards Institute

ASHRAE American Society of Heating, Refrigerating and Air-Conditioning Engineers

BOH burner operating hours 

BOM bill of materials

BT Building Technologies Program

Btu British Thermal Unit 

CAC central air conditioner

CAIR Clean Air Interstate Rule

CAMR Clean Air Mercury Rule

cfm cubic feet per minute

CDD cooling degree day

CFR Code of Federal Regulations

CGS cost of goods sold

CO2

CSA Canadian Standards Association

carbon dioxide

DC District of Columbia

DOE U.S. Department of Energy

DOJ U.S. Department of Justice

EA Environmental Assessment

ECM electronically commutated motor

EGU electricity generating unit

EIA Energy Information Administration

EISA 2007 Energy Independence and Security Act of 2007

EPA U.S. Environmental Protection Agency

EPACT 2005 Energy Policy Act of 2005

EPCA Energy Policy and Conservation Act

FR Federal Register

GDP Gross Domestic Product

GHG greenhouse gas emissions

GRIM Government Regulatory Impact Model 

HARDI Heating, Air-Conditioning and Refrigeration International

HCL house cooling load

HDD heating degree-days

Hg mercury

HHL house heating load

hp horsepower

HVAC heating, ventilation, and air conditioning

Hz Hertz

IEC International Electrotechnical Commission
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ImSET Impact of Sector Energy Technologies

INPV industry net present value

in.w.c. inches water column

kWh kilowatt hour

LCC life-cycle cost

LPG liquid petroleum gas

LSC labor-scaling costs

MIA manufacturer impact analysis

MPC manufacturer production cost

MSP manufacturer selling price

NCI Navigant Consulting, Inc.

NEMS National Energy Modeling System

NEMS-BT National Energy Modeling System – Building Technologies

NES national energy savings

NIA national impact analysis

NLSC non-labor scaling costs

NOPR notice of proposed rulemaking

NOX

NPV net present value

oxides of nitrogen

OEM original equipment manufacturer 

OIRA Office of Information and Regulatory Affairs 

OMB U.S. Office of Management and Budget

PBP payback period

PM particulate matter

PSC permanent split capacitor 

R&D research and development 

RECS Residential Energy Consumption Survey 

SCC social cost of carbon

SEER Seasonal Energy Efficiency Ratio 

SG&A selling, general, and administration costs 

SO2

TSD technical support document

sulfur dioxide

TSL trial standard level

U.S.C. United States Code

W watt
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Rulemaking Framework Document for Furnace Fans

1 INTRODUCTION

The U.S. Department of Energy (DOE) Appliances and Commercial Equipment 

Standards Program, within the Office of Energy Efficiency and Renewable Energy’s Building 

Technologies Program (BT), develops and promulgates test procedures and energy conservation 

standards for certain consumer appliances and commercial equipment. The process for 

developing standards involves analysis, public notice and comment, and consultation with 

interested parties. “Interested parties” include manufacturers, consumers, energy conservation 

and environmental advocates, State and Federal agencies, and any other groups or individuals 

with an interest in these standards and test procedures. A DOE Report to Congress,

a initially 

submitted on January 31, 2006 and updated twice a year since first publication, identifies the 

numerous rulemakings for a variety of products that DOE has scheduled for completion by 

January 2015 and explains many of the techniques DOE will be applying during the rulemaking 

process to meet this schedule. 

The purpose of this document is to describe the procedural and analytical approaches 

DOE anticipates using to evaluate potential new energy conservation standards or energy use 

standards for the use of electricity for purposes of circulating air through duct work in residential 

heating and cooling systems, hereinafter referred to as “furnace fans” (see section 1.1 below for a 

discussion of the statutory authority for this rulemaking). This framework document is intended 

to inform interested parties of the process DOE will follow for the standards rulemaking for 

these furnace fans and to encourage and facilitate the input of interested parties during the 

rulemaking. This document is merely the starting point for developing energy conservation 

standards or energy use standards and is not a definitive statement on any issue to be determined 

in the rulemaking.

Section 1.3 of this report provides an overview of DOE’s rulemaking process. Sections 2

through 17 discuss analyses DOE intends to conduct to fulfill the statutory requirements and 

guidance for this particular energy conservation standards rulemaking. DOE will analyze furnace 

fans to determine whether new energy conservation standards or energy use standards are 

technologically feasible, economically justified, and would result in significant energy savings. 

DOE will maintain information about this rulemaking on its website at:

www.eere.energy.gov/buildings/appliance_standards/residential/furnace_fans.html.

. 

 a Energy Conservation Standards Activities; Submitted pursuant to Section 141 of the Energy Policy Act of 

2005(EPACT 2005), Pub. L. 109-58, and in response to section 305 of the Energy Independence and Security Act of 

2007 (EISA 2007), Pub. L. 110-140; U.S. Department of Energy (Feb. 2010). Available at: 

http://www.eere.energy.gov/buildings/appliance_standards/pdfs/2010_feb_report_to_congress.pdf.
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While DOE invites comment on all aspects of the material presented in this document, 

several specific issues on which DOE seeks comment are set out in comment boxes like this 

one. DOE uses these comment boxes to highlight issues and ask specific questions on the 

approaches DOE plans to follow to conduct the analyses required for the energy 

conservation standards rulemaking. Such requests for feedback are numbered sequentially 

throughout the document and are repeated in Appendix A.

1.1 The Appliances and Commercial Equipment Standards Program 

Title III of the Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94-163, (42 

United States Code (U.S.C.) 6291 et seq.) established an energy conservation program for major 

household appliances and certain industrial and commercial equipment. More specifically, Part 

A of Title III (42 U.S.C. 6291-6309) establishes the “Energy Conservation Program for 

Consumer Products Other Than Automobiles.” Subsequent amendments to EPCA have given 

DOE the authority to regulate the energy efficiency of several additional kinds of products and 

equipment, including certain furnace fans, which are the focus of this document.

The discussion below sets the stage for the issues raised in the balance of this framework 

document. Through the framework document, DOE is initiating its first rulemaking to consider 

new energy conservation standards or energy use standards for furnace fans, as required under 42 

U.S.C. 6295(f)(4)(D), which provides as follows:

Notwithstanding any other provision of this chapter, if the requirements of subsection (o) 

of this section are met, not later than December 31, 2013, the Secretary shall consider 

and prescribe energy conservation standards or energy use standards for electricity used 

for purposes of circulating air through duct work.

The following statutory provisions (and associated rulemakings) are directly related to

the furnace fan standards rulemaking. A test procedure that accounts for active, standby, and off 

mode energy consumption is required to develop standards. (42 U.S.C. 6295(r) and (gg)) Also, 

furnace fans are an integral component of the products covered in the ongoing residential furnace 

and boiler rulemaking and the residential central air conditioner and heat pump (CAC)

rulemaking. Consequently, the technologies and analyses are linked.

• DOE published a final rule in the Federal Register (FR) in November 2007 amending the 

minimum energy conservation standards for furnaces. 72 FR 65136 (Nov. 19, 2007). 

However, this rule was the subject of litigation and was remanded by the court to DOE 

under the mandate that DOE publish a new final rule by May 1, 2011. Voluntary remand 

in the case of New York v. Department of Energy (Case Nos. 08-0311-ag(L); 08-0312-

ag(con)).

• DOE is also determining whether to amend existing energy conservation standards for 

residential central air conditioners and heat pumps. DOE is required by a court-ordered 
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consent decree to publish a final rule addressing the energy conservation standards for 

residential central air conditioners and heat pumps by June 30, 2011.

• Additionally, as discussed in section 1.3.2, DOE will complete a separate, concurrent test 

procedure rulemaking for furnace fans, as required by EPCA. (U.S.C 6295(r) and (gg))

DOE will publish a final rule for its test procedure in the Federal Register prior to the 

publication of the energy conservation standards final rule for furnace fans.

1.2 Overview of the Scope of Coverage for Furnace Fans

1.2.1 Preliminary Discussion of Scope of Coverage for the Test Procedures and Energy 

Conservation Standards Rulemaking

EPCA provides DOE authority to consider and prescribe new energy conservation 

standards or energy use standards for electricity used for purposes of circulating air through duct 

work. (42 U.S.C. 6295(f)(4)(D)) DOE is tentatively interpreting the preceding language as 

referring to the electricity used by any electrically-powered device used in residential central 

heating, ventilation, and air conditioning (HVAC) systems for the purposes of circulating air 

through duct work. A furnace fan consists of a fan motor and its controls, a centrifugal impeller, 

and sheet metal housing.

Furnace fans that fall within the intended scope of coverage of this rule are found in a 

variety of residential central HVAC products including, but not limited to, gas-fired and oil-fired 

furnaces, electric furnaces, air handlers, and modular fan coils. DOE seeks comment on any 

other residential central HVAC products that may also use furnace fans that should be included 

in the scope of coverage of this rule, such as small-duct, high-velocity systems or through-thewall systems. DOE understands that through-the-wall systems have specialized condensing units 

that operate in conjunction with air handler units that are similar to conventional split-system air 

handler units. As for small-duct, high-velocity systems, DOE understand these units operate at

higher external static pressures as compared to other central air conditioning equipment, which 

may pose additional challenges in the context of the furnace fan rulemaking. DOE plans to 

collectively refer to products covered by the rule as “furnace fans,” because they meet the 

outlined criteria. However, DOE is interpreting the EPCA language as excluding the electricity 

used by draft inducer fans, exhaust fans, or heat/energy recovery ventilators; while they are also 

integral components in some of the same residential central HVAC products as furnace fans, 

these components do not circulate air through duct work. DOE seeks comment on its approach 

outlined above and the intended scope of coverage.

DOE notes that EPCA’s standard-setting provision for furnace fans does not include a 

specific range of rated airflow capacities or rated motor horsepower, which would aid interested 

parties in defining the scope of coverage under DOE’s regulations. (42 U.S.C. 6295(f)(4)(D)) 

DOE’s initial market research indicates that furnace fans are used in products ranging from small 

CAC products with low cooling capacities to large oil-fired residential furnaces with high rated 

input capacities. These products have nominal airflow capacities ranging from 400 and 2,200 

cubic feet per minute (cfm) and use motors with rated horsepower between 1/5 and 1 horsepower 
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(hp). In addition, and as described in greater detail later in this document, DOE initially reviewed 

a draft of an industry standard being developed relating to furnace fans (i.e., the Canadian 

Standard Association C823 Performance Standard for Air Handlers in Residential Space 

Conditioning Systems), which does not specify a range of coverage for furnace fan testing. DOE 

seeks comment on whether DOE should consider including a rated airflow capacity range or a 

range of motor horsepower to limit the test procedure applicability.

Item 1 DOE welcomes comments on its approach interpreting the relevant language 

in EPCA as referring to electricity used by any electrically-powered device used in 

residential central HVAC systems for the purposes of circulating air through duct work. 

Residential HVAC systems include, but are not limited to, furnaces, split-system and 

packaged central air conditioner and heat pump air handlers, and modular fan coils.

Item 2 DOE seeks comment on any other residential central HVAC products that 

may also use furnace fans that should be included in the scope of coverage of this rule.

Item 3 DOE welcomes comments on its interpretation of the relevant language in 

EPCA as excluding electricity used by draft inducer fans, exhaust fans, and heat/energy 

recovery ventilators.

Item 4 DOE seeks comment on whether DOE should include a rated airflow capacity 

range or a rated horsepower range to help define test procedure applicability. 

1.3 Overview of the Rulemaking Process

1.3.1 Rulemaking Process and Participation of Interested Parties

EPCA specifies that any standard DOE prescribes for consumer products shall be 

designed to “achieve the maximum improvement in energy efficiency . . . which the Secretary 

[of Energy] determines is technologically feasible and economically justified.” (42 U.S.C. 

6295(o)(2)(A)) Moreover, EPCA states that the Secretary may not establish an amended standard 

if such standard would not result in “significant conservation of energy,” or “is not 

technologically feasible or economically justified.” (42 U.S.C. 6295(o)(3)(B)) When DOE 

evaluates any new or amended energy conservation standard for covered products under EPCA, 

DOE considers to the greatest extent practicable the following seven factors to determine 

whether a standard is economically justified: 

(1) The economic impact of the standard on the manufacturers and on the consumers of the 

products subject to such standard;
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(2) The savings in operating costs throughout the estimated average life of the covered 

products in the type (or class) compared to any increase in the price, or in the initial 

charges for, or maintenance expenses of the covered products which are likely to result 

from the imposition of the standard; 

(3) The total projected amount of energy (or as applicable, water) 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 result from the imposition of the standard;

(6) The need for national energy and water conservation; and 

(7) Other factors the Secretary considers relevant.

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

Additional statutory requirements of general applicability for prescribing new or amended 

standards are set forth in 42 U.S.C. 6295(o)(1)–(2)(A), (2)(B)(ii)-(iii), and (3)–(5).

The processes for developing energy conservation standards and test procedures involve

analysis, public notice and comment, and consultation with interested parties. Interested parties 

generally include manufacturers, consumers, environmental advocates, State and Federal 

agencies, and other groups and individuals with an interest in energy conservation standards and 

test procedures. DOE considers the participation of interested parties to be a very important part 

of the rulemaking processes for setting energy conservation standards and establishing test 

procedures. Accordingly, DOE encourages the participation of all interested parties during the

comment periods provided at each stage of both rulemakings. The broad array of interested 

parties who routinely provide comments promotes a balanced discussion of critical information 

required to conduct the standards and test procedure rulemakings, beginning with public 

comments on the framework document.

In conducting the test procedure rulemakings and the energy conservation standards 

rulemakings, DOE involves interested parties through a variety of means. As discussed in further 

detail below, the standards rulemaking process for furnace fans involves two public notices, 

which are published in the Federal Register. Specifically, after publication of this framework 

document and the notice of proposed rulemaking (NOPR), DOE will hold public meetings to 

solicit comment from interested parties in order to enhance the rulemaking process. The 

following outlines next steps for the furnace fan energy conservation standards rulemaking:

 • Notice of Proposed Rulemaking (section 1.4). For this rulemaking, the NOPR will

present: (1) a discussion of comments received in response to this framework document; 

(2) DOE’s analysis of the impacts of potential standards on consumers, manufacturers, 

and the Nation; (3) DOE’s weighting of these impacts; and (4) the proposed standard 

levels for public comment.

 • Final Rule (section 1.5). The final rule will present: (1) a discussion of comments 

received in response to the NOPR; (2) the revised analysis of the impacts of standards; 
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(3) DOE’s weighting of the impacts; and (4) the standard levels DOE is adopting. The 

final rule also establishes the compliance date for the adopted standards.

DOE is considering a compliance date five years after the date of publication of a final 

rule establishing any new energy conservation standards or energy use standards for furnace 

fans. The current round of EPCA rulemaking for furnaces provides that amended standards for 

those products provide a minimum of five years between publication of the final rule and the 

standards compliance date. (42 U.S.C. 6295(f)(4)(C)) In addition, when considering amended 

standards for furnaces under 42 U.S.C. 6295(m)(4)(A)(ii), DOE must provide a five-year lead 

time. DOE believes that five years would provide furnace fan manufacturers with adequate lead 

time and that it is also appropriate because these products are an integral part of the furnace 

itself. Maintaining a consistent timeline for these related products is appropriate from both a 

manufacturing and implementation perspective.

1.3.2 Test Procedures

EPCA directs DOE to establish test procedures in conjunction with new or amended 

energy conservation standards, including furnace fans. (42 U.S.C. 6295(r)) To fulfill this 

requirement, DOE is simultaneously initiating a test procedure rulemaking for furnace fans in 

addition to the conservation standards rulemaking. DOE intends for the test procedure to include

an efficiency descriptor and the methods necessary to adequately measure the performance of the 

covered products for the purposes of developing energy conservation standards.

Also relevant to the development of a furnace fan test procedure, section 310(3) of the 

Energy Independence and Security Act of 2001 (EISA 2007) amended EPCA to require that any 

new or amended energy conservation standard adopted after July 1, 2010, address standby mode 

and off mode energy use pursuant to 42 U.S.C. 6295(o). (42 U.S.C. 6295(gg)(3)) Specifically, 

when DOE adopts new or amended standards for certain covered products after July 1, 2010, the 

final rule must, if justified by the criteria for adoption of standards in section 325(o) of EPCA, 

incorporate standby mode and off mode energy use into a single standard if feasible, or otherwise 

adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)) Section 

310(2) of EISA 2007 also directs DOE to update its test procedures to account for standby mode 

and off mode energy consumption, with such energy consumption integrated into the overall 

energy efficiency, energy consumption, or other energy descriptor, unless the current test 

procedure already accounts for standby mode and off mode energy use; furthermore, if an 

integrated test procedure is technically infeasible, DOE must prescribe a separate standby mode 

and off mode test procedure for the covered product, if technically feasible. (42 U.S.C. 

6295(gg)(2)(A)) Because the final rule for furnace fans is scheduled for issuance after July 1, 

2010, DOE plans to address the standby mode and off mode energy use in both the test 

procedure and standards rulemaking.

When establishing or amending test procedures, DOE begins by reviewing existing 

industry test procedures or testing methods currently used to measure the energy use or energy 

efficiency of the covered product. DOE is aware that the Canadian Standard Association (CSA) 

is currently working on developing a test procedure for furnace fans titled CSA C823 
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Performance Standard for Air Handlers in Residential Space Conditioning Systems. b In 

addition, DOE understands the current DOE test procedure for residential furnaces, as detailed in 

the Code of Federal Regulations (CFR) at 10 CFR part 430, subpart B, appendix N, provides a 

method of test for estimating the blower electricity consumption when the furnace burner is on. 

DOE discusses its preliminary review of both approaches in the following subsections along with 

the issues for public comment.

1.3.2.1 Furnace Fan Modes of Operation and Electrical Energy Consumption

Pursuant to EPCA, the performance characteristic DOE intends to measure and regulate 

for this rulemaking is the electrical energy consumption of furnace fans. (42 U.S.C. 

6295(f)(4)(D))

Furnace fans have distinct modes of operation, and each mode has a corresponding rate 

or rates of electrical energy consumption. DOE plans to label these modes as active mode, 

standby mode, and off mode. DOE tentatively plans to consider the following definitions as they 

relate to furnace fan modes of operation: 

• “Active mode” is the mode of operation during which the residential central HVAC 

system in which the furnace fan is used, hereinafter referred to as the “furnace fan 

product,” is powered and the impeller is in motion.

• “Standby mode” is the mode of operation during which the furnace fan product is 

powered and the impeller is not in motion. 

• “Off mode” is the mode of operation during which the furnace fan product is not 

powered.

Some furnace fans are manufactured with multiple control speed settings that govern 

impeller speed and airflow to meet varying climate control demands during active mode 

operation. Consequently, DOE expects some furnace fans to have multiple rates of electrical 

energy consumption during active mode operation. DOE expects furnace fans will have a 

different electrical energy consumption rate for each of its factory-set control speeds. As defined 

above, the active mode consumption would account for the electrical consumption under 

different control speeds by the furnace fan while performing the heating, cooling, or circulation

function.

As part of this rulemaking, EPCA, as amended by EISA 2007, requires that test 

procedures established for furnace fans must include standby mode and off mode energy 

consumption, taking into consideration the most current versions of Standards 62301 and 62087 

of the International Electrotechnical Commission (IEC), with such energy consumption 

 b A copy of the December 22, 2009 draft version of CSA C823, Performance Standard for Air Handlers in 

Residential Space Conditioning Systems is available at: 

http://www.eere.energy.gov/buildings/appliance_standards/residential/pdfs/draft_csa_c823.pdf.
8

integrated into the overall energy efficiency, energy consumption, or other energy descriptor for 

each covered product. (42 U.S.C. 6295(gg)(2)(A)) The most current versions of these test 

procedures are IEC Standard 62301, Household electrical appliances—Measurement of standby 

power (First Edition 2005–06), and IEC Standard 62087, Methods of measurement for the power 

consumption of audio, video, and related equipment (Second Edition, 2008–09). DOE reviewed 

both of the IEC standards referenced in EISA 2007 in consideration for this rulemaking. DOE 

found that IEC 62087 specifies methods of measurement for the power consumption of 

television receivers, video cassette recorders, set top boxes, audio equipment, and multi-function 

equipment for consumer use. IEC Standard 62087 does not, however, include measurement for 

the power consumption of appliances such as furnace fans. Accordingly, DOE has tentatively 

concluded that IEC Standard 62087 is not suitable for application to furnace fans and does not 

plan to consider it further in this rulemaking. DOE found that IEC 62301 specifies methods of 

measurement for electrical energy consumption in low-power modes for household appliances 

and equipment, including furnace fan products. Therefore, DOE believes IEC 62301 is 

applicable to this rulemaking.

Using DOE’s definitions above for “active mode,” “standby mode,” and “off mode” for 

furnace fans, DOE anticipates that furnace fans will not have any standby mode electricity 

consumption that needs to be accounted for in this rulemaking. The furnace fan is an integral part 

of a larger system and is usually paired with a heating and/or cooling device in the field. Because 

the furnace fan controls are connected to the furnace product control boards, DOE believes that 

any electrical consumption by the furnace fan when the impeller is not in motion will be 

attributable to the furnace product. DOE further believes that this standby mode consumption for 

the furnace fans is already being addressed in separate energy conservation standards 

rulemakings that cover furnace products (i.e., residential furnaces and central air conditioners 

and heat pumps). For example, in residential furnaces, the furnace fan controls are typically 

integrated into the main control board that governs many, if not all, of the furnace components. 

As a result, any energy consumption attributable to the furnace fan in standby mode, as defined 

above, is measured by the DOE test procedure for residential furnaces (10 CFR part 430, subpart 

B, appendix N), which references IEC 62301. Similarly, any standby mode energy consumption 

attributable to the furnace fans used in residential CAC products is measured by the DOE test 

procedure for residential CAC (10 CFR part 430, subpart B, appendix M) and is either already 

accounted for in the either the seasonal energy efficiency ratio (SEER) metric or heating season 

performance factor (HSPF) or will be addressed in a separate test procedure rulemaking for 

CACs. 

DOE also anticipates that furnace fans will not have any off mode electrical energy 

consumption, as defined above. DOE believes that most consumers are unlikely to set their 

residential central HVAC systems to off mode. Therefore, furnace fans will never operate in the 

off mode, as defined above, because the furnace fan product will always be powered. 

Since the furnace fan will spend time operating in active mode to perform heating, 

cooling, and circulation functions, DOE intends to use an efficiency metric that accounts for each 

electrical energy consumption rate for each operation and speed control setting. This annualized 

approach will consider the number of hours annually a furnace fan spends in each

function/setting. 
9

Item 5 DOE requests comment on its assumptions for the electrical energy 

consumption expected in each mode of operation (i.e., active mode, standby mode, and 

off mode).

Item 6 DOE seeks input on the use of the annual electrical energy consumption 

rating for rating and regulating furnace fans, along with any other relevant efficiency 

descriptors. 

1.3.2.2 DOE’s Preliminary Review of CSA C823 

DOE has completed a preliminary review of the definitions, measurement accuracy 

requirements, test set-up, and testing methods detailed in CSA C823 (review draft). CSA C823 

incorporates specific testing and set-up provisions from other industry standards such as the

American National Standards Institute (ANSI)/Air Movement and Control Association AMCA

210-07 | ANSI/ American Society of Heating, Refrigerating and Air-Conditioning Engineers 

(ASHRAE) 51-07 Laboratory Methods of Testing Fans for Certified Aerodynamic Performance 

Rating and ANSI/ASHRAE Std 37-2005 Methods of Testing for Rating Electrically Driven 

Unitary Air-Conditioning and Heat Pump Equipment. CSA uses these two industry procedures 

along with the additional provisions it specifies to provide the definition, test set-up provisions, 

testing procedures, instrumentation requirements, and additional calculations to estimate the 

annual energy use of the furnace fan. DOE presents its initial review of CSA C823 in the 

subsections below along with various issues to which DOE seeks comments from interested 

parties. DOE believes that the draft CSA standard provides a useful frame of reference for the 

development of DOE’s own furnace fan test procedure.

All of the standards that are referenced in CSA C823 are widely used in the HVAC 

industry to determine the performance of various fans and blowers. Consistent with its normal 

practice, where possible, DOE plans to develop its test procedure to measure the electrical

energy consumption of furnace fans by adopting and modifying applicable portions of 

commonly-used industry test procedures, thereby minimizing the testing burden on 

manufacturers. DOE seeks comment as to what types of testing manufacturers currently conduct 

on furnace fans and what test set-ups and testing methods are used.
10

Item 7 DOE welcomes comments on the use of Canadian Standard CSA C823 

Performance Standard for Air Handlers in Residential Space Conditioning Systems, 

ANSI/AMCA 210-07 | ANSI/ASHRAE 51-07 Laboratory Methods of Testing Fans for 

Certified Aerodynamic Performance Rating, and ANSI/ASHRAE Std 37-2005 Methods 

of Testing for Rating Electrically Driven Unitary Air-Conditioning and Heat Pump 

Equipment as reference test procedures.

Item 8 DOE seeks comment on the existence and applicability of any other industry 

test procedure that DOE could consider for use in measuring the airflow and electrical 

energy consumption of furnace fans. In addition, DOE seeks comment as to what types 

of testing manufacturers currently conduct on furnaces fans and what test set-ups and 

methods are used.

1.3.2.2.1 Performance Curves

To circulate air through duct work, a furnace fan motor rotates the impeller, which 

increases the velocity of an airstream. As a result, the airstream gains kinetic energy. This kinetic 

energy is converted to a static pressure increase as the air slows at the entrance to the ducting. In 

order to supply enough conditioned air to adequately control the climate of a residence, this static 

pressure created by the motor must be enough to overcome the pressure losses the airstream will 

encounter throughout the duct work. To characterize how furnace fans perform under these 

physical demands, the CSA C823 test procedure begins with development of performance 

curves. According to CSA C823, performance curves are developed by measuring and plotting 

the furnace fan’s airflow in cfm and fan power in watts (W) at each of its active mode speed 

control settings over a range of operating conditions (e.g., static pressures). This range of static 

pressures is intended to model the operating conditions the furnace fan encounters while in use. 

Performance curves illustrate static pressure and fan energy consumption as a function of the fan 

airflow. In general, furnace fan performance curves arc downward because, as the backpressure 

on the fan decreases, airflow increases. For furnace fans that have multi-stage capacity for 

heating and/or cooling, performance curves are required for each stage of air flow. For furnace 

fans that have variable capacity for heating and/or cooling, performance curves are required at 

the minimum and maximum stage of air flow.

CSA C823 states that, for the purpose of developing energy conservation standards for 

furnace fans, full performance curves that characterize performance from free airflow to shutoff 

are unnecessary. Typical furnace fan operation in the field results in a narrower range of 

operating points. For this reason, CSA C823 suggests using a narrower range of static pressures 

based on expected furnace fan operating conditions. DOE is aware that furnace fan product 

manufacturers provide performance data in their specification sheets that includes rated airflow 

measurements at static pressures ranging from 0.1 inches water column (in.w.c.) to 2 in.w.c. in 

roughly 0.1 to 0.25 in. w.c. increments per speed control setting. It is DOE’s understanding that 
11

CSA expects manufacturers to use all of the airflow measurements in the development of the 

performance curves. For example, a furnace fan that has 3 speed control settings and operates 

from 0.1 to 1.0 in. w.c. will be required to take 30 airflow measurements to develop the 

performance curves. Since these airflow measurements are currently included in furnace fan 

product specification sheets, DOE seeks comment about whether manufacturers currently test the 

furnace fan to produce the airflow measurement table or whether manufacturers use simulations 

to predict the performance of the furnace fan. DOE seeks comment on the approach CSA uses 

for developing the performance curves, which are generated through testing at various static

pressures and speed controls. In an effort to minimize the testing burden on furnace fan product 

manufacturers, DOE seeks comment on the appropriate total number and range of test static 

pressures necessary to adequately represent a range of furnace fan operating conditions. DOE 

also seeks data, which will show that testing at a reduced number of static pressures will provide 

similar results as testing over the entire range of static pressures. In its test procedures, DOE will 

need to specify the static pressure range and increments for which measurements should be taken 

in order to ensure all manufacturers are using the same test data for developing the performance 

curves.

Section 6.1 of CSA C823 specifies the methods by which speed control settings should 

be selected during testing. According to CSA C823, the wiring of the furnace fan speed controls 

or speed taps are to be adjusted, as specified by the manufacturer, to obtain the desired speed 

operating setting. DOE is aware that furnace fan product manufacturers specify certain speed 

taps for cooling, heating, and circulation functions. However, DOE is also aware that these 

operations can be altered by installers depending on the climate and the location of the 

installation. As a result, manufacturer-specified pairings of speed setting and operation (heating, 

cooling, or circulation) may not provide a good representation of actual furnace fan operation. 

DOE seeks comment on CSA C823’s specified method of selecting furnace fan speed control 

settings for testing. DOE also seeks comment on the relationship between speed control setting 

or speed tap and use in heating, cooling, or circulation functions of active mode furnace fan 

operation. 

Item 9 DOE welcomes comment on the CSA CS823 methodology used to develop 

performance curves.

Item 10 DOE seeks comment on the appropriate total number and range of static 

pressures necessary to encompass the expected operating conditions for furnace fans 

for the purposes of developing performance curves without being unduly burdensome.

DOE also seeks data, which would show that testing at a reduced number of static 

pressures would provide similar results as testing over the entire range of static 

pressures.
12

Item 11 DOE seeks comment on the CSA C823-specified method of selecting furnace 

fan speed control settings for testing. DOE also seeks comment on the relationship 

between speed control setting or speed tap and use in heating, cooling, or circulation 

functions of active mode furnace fan operation.

1.3.2.2.2 Reference System Load Curve

For the purposes of rating furnace fan performance, a reference system must be defined. 

The reference system is used to determine the expected furnace fan performance. It also serves as 

a starting point for comparing furnace fan performance across various manufacturers, models 

and efficiencies. For this rulemaking, DOE reviewed the method of test for determining the 

reference system used in CSA C823, which is a system that can achieve 0.5 in. w.c. in the default 

heating speed control setting. According to CSA C823, for a furnace fan product that does not 

have a designated default space heating control setting or speed tap, the heating setting shall be 

the lowest control setting that provides sufficient airflow at 0.5 in. w.c. that would be needed to 

achieve the midpoint or lower of the specified air temperature rise. The standard airflow required 

to achieve the midpoint of the specified temperature rise shall be calculated based on dry air at 

standard air conditions and the rated heating capacity of the unit. DOE understands that the CSA 

C823 reference system may be based on the Canadian climate and usage, where the majority of 

the time the furnace fan is used to perform the heating function. The heating function usually 

corresponds to the median fan speed settings. DOE seeks comment on whether the reference 

system needs to be modified for application to the U.S. climate and usage and what potential 

modifications should be considered.

Airflow and electrical energy consumption rate measurements for the furnace fan at its 

default heating speed control setting will be taken from the intersection of the performance curve 

for the default heating speed control setting and a static pressure of 0.5 in. w.c.. The purpose of 

defining a reference system is to provide a rating point based on the performance metrics being 

measured that is appropriate for furnace fans and from which system load curves can be 

determined. 
13

Each system load curve will represent the relationship between the test system static 

pressure and airflow. The test system consists of the furnace fan product and the simple 

distribution test duct system. The simple distribution duct system will remain consistent for each 

furnace fan tested. According to DOE’s review of existing test procedures and industry literature,

system static pressure is approximated as being proportional to the square of the airflow rate for 

furnace fans. The governing mathematical equation for the system load curve is as follows:

Where:

PS

K = a constant that characterizes the system, and

= system static pressure (in.w.c.),

Q = airflow in cfm.

For each furnace fan tested, the K and Q values will be different. Therefore, each furnace 

fan will have a different system load curve. The K value for each furnace fan will be derived

using the reference system criteria described above. The CSA test procedure uses each furnace 

fan’s default heating control setting performance curve to determine the airflow (Q) necessary to 

achieve 0.5 in. w.c. (PS). A value for K can be derived by inputting these values into the 

governing equation. Once K has been determined, the system load curve can be plotted for a 

desired range of airflow rates or system static pressures. DOE understands that the reference 

system is not dependent on the HVAC products in which the furnace fan is incorporated since 

the system static pressure is held constant. Instead, the reference system is used to characterize 

the performance of each impeller and motor combination used in these HVAC products. DOE 

seeks comment on CSA’s methodology for developing a reference system curve for each fan and 

motor combination.

Item 12 DOE requests comment on the use of 0.5 in w.c. in the default heating speed 

control setting to define its reference system and resulting rating point. DOE requests

comment on whether changes are necessary to the reference system to more accurately 

reflect furnace fan operation in the U. S.

Item 13 DOE welcomes comment on the methodology outlined in CSA C823 to 

develop system load curves.

1.3.2.2.3 Operating Points

Next, the CSA test procedure specifies that each furnace fan’s system load curve be 

superimposed onto a plot of its performance curves. The points at which the performance curves 

intersect the system load curve are the operating points of the furnace fan for a particular HVAC 
14

system. The performance measurements at these operating points represent the expected airflow 

and electricity consumption rate for each respective speed control setting of active mode 

operation. CSA C823 uses electrical power measurements at the operating points as inputs for 

the annual energy consumption rating (AECR) equation. The CSA C823 equation for AECR is 

defined and explained in the next section, section 1.3.2.2.4.

Item 14 DOE welcomes comment on the methodology CSA C823 currently uses to 

identify furnace fan operating points.

1.3.2.2.4 Annual Electrical Energy Consumption of Furnace Fans

Finally, the CSA C823 test procedure specifies the use of a time-weighted sum of each 

electricity consumption rate measurement taken at each of a furnace fan’s operating points, 

referred to as the annual electricity consumption rating for the furnace fan. Multiplying the 

measured power consumption rate at each operating point by the number of hours in a year that 

the furnace fan operates in that respective speed control setting yields the amount of energy 

consumed annually by the furnace fan in that setting. Repeating this operation for each function

and control setting, then summing the results, yields the total annual electrical energy 

consumption for a furnace fan. The mathematical equation for AECR, according to CSA C823, 

is as follows:

Where:

AECR = annual electricity consumption rating for the air handler in kilowatt hours

(kWh);

AHeatH = annual heating hours,

ECh= electrical energy consumption rating while performing the heating 

function,

AHeatHreduced

ECh

= annual reduced capacity heating hours (air-handler operating),

reduced

ACoolH= annual cooling hours,

= electrical energy consumption rating for operation in performing the 

reduced heating function,

ECc = electrical energy consumption rating while performing the cooling 

function; 

ACircH = annual circulating hours,

ECcirc= electrical energy consumption rating while performing the circulation 

function; 
15

AStdbyH = annual standby hours; and

ECstdby = electrical energy consumption rating for standby mode.

In order to calculate AECR, CSA C823 developed standardized values, referred to as 

annual hourly multipliers, for hours spent in each function and speed control setting. The values 

for the annual hourly multipliers used in CSA C823 are specified in Table 1.1 below. As shown, 

the values for each multiplier are dependent on the system configuration and are specific to 

Canada’s climate. Since the U.S. climate is more diverse, DOE could consider developing annual 

hourly multipliers specific to the U.S. should it adopt a similar methodology. DOE requests 

comment on the annual hourly multiplier methodology specified in CSA C823, as well as how 

this methodology and annual hourly multiplier values could be modified, if necessary, to be 

specific to furnace fan operation in the United States.
16

Table 1.1. Standardized Annual Operating Hours for Canada as Specified in CSA C823

AHeatH 

high

AHeatH 

reduced

ACoolH

high

ACoolH 

reduced ACircH AstbyH

Single-stage 

Heating 

Without 

Constant 

Circulation

SNHHC 0 SNCHC 0 0

8760-

AHeatHhighACoolHhigh

Single-stage 

Heating With 

Constant 

Circulation

SNHHC 0 SNCHC 0

8760-

AHeatHhighACoolHhigh0

Multi-stage 

Heating with 

Single-stage 

Cooling 

Without 

Constant 

Circulation

0.1*SNHHC 0.9*SNHHC/

HCR SNCHC 0 0

8760-

AHeatHhighAHeatHreduced

-ACoolHhigh

Multi-stage 

Heating and 

Single-stage 

Cooling With 

Constant 

Circulation

0.1*SNHHC 0.9*SNHHC/

HCR SNCHC 0

8760-

AHeatHhighAHeatHreduced

0

-ACoolHhigh

Single-stage 

Heating and 

Multi-stage 

Cooling 

Without 

Constant 

Circulation

SNHHC 0 0.1*SNCHC 0.9*SNCHC/

CCR 0

8760-

AHeatHhighACoolHhighACoolHreduced

Single-stage 

Heating and 

Multi-stage 

Cooling With 

Constant 

Circulation

SNHHC 0 0.1*SNCHC 0.9*SNCHC/

CCR

8760-

AHeatHhighACoolHhighACoolH

0

reduced

Multi-stage 

Heating and 

Cooling 

Without 

Constant 

Circulation

0.1*SNHHC 0.9*SNHHC/

HCR 0.1*SNCHC 0.9*SNCHC/

CCR 0

8760-

AHeatHhighAHeatHreduced

-

ACoolHhighACoolHreduced

Multi-stage 

Heating and 

Cooling With 

Constant 

Circulation

0.1*SNHHC 0.9*SNHHC/

HCR 0.1*SNCHC 0.9*SNCHC/

CCR

8760-

AHeatHhighAHeatHreduced

-

ACoolHhighACoolH

0

reduced
17

Where:

HCR = heating capacity ratio (rated heat output in the lowest capacity mode / rated full 

heat output). If HCR is ≤ 0.35, use 0.35,

CCR= cooling capacity ratio (rated cooling output in the lowest capacity mode / rated 

full cooling output) If CCR is ≤ 0.35, use 0.35,

SNHH = Standardized National Cooling Hours for Canada = 400 hours, and

SNCH = Standardized National Heating Hours for Canada = 2000 hours.

Item 15 DOE seeks input on the CSA C823 equation for annual energy consumption 

rating (AECR).

Item 16 DOE requests comment on the annual hourly multiplier methodology 

specified in CSA C823, as well as if and how this methodology and the annual hourly 

multiplier values could be modified to more specifically address furnace fan operation 

in the United States.

1.3.2.3 DOE’s Preliminary Review of the Blower Electricity Consumption in the DOE 

Furnace Test Procedure

DOE also preliminarily explored the merits of developing a furnace fan test procedure 

that is based on the existing DOE test procedure for residential furnaces, as set forth in 10 CFR 

part 430, subpart B, appendix N. DOE’s test procedure for residential furnaces, which 

incorporates by reference ANSI/ASHRAE Standard 103-1993, Method of Testing for Annual 

Fuel Utilization Efficiency of Residential Central Furnaces and Boilers, specifies a measurement 

of blower (furnace fan) power, BE, in watts. This wattage measurement is used in determining 

the annual blower electrical consumption in kilowatt hours (kWh) associated with the heating 

function. DOE would need to make modifications as well as add additional calculations to a

furnace fan test procedure based on BE in order to develop a rating method appropriate for 

furnace fan operation in all modes, in all speed control settings, and for all products covered by 

this rulemaking. The need for such modifications is discussed in further detail below.

Currently, BE is a specified measurement for residential furnaces only. Because the scope 

of coverage of this rulemaking also includes furnace fans used in residential central HVAC 

products other than residential furnaces, DOE would need to develop additional methods for 

rating the blower electricity consumption of furnace fans used in those other products. DOE 

could do this by extending the existing BE measurements for residential furnaces to other 

products, if applicable, or develop separate testing procedures, which would also estimate the 

blower electricity consumption in the other products.
18

As mentioned above, BE is only measured while the furnace is performing the heating 

function (i.e., while the burner is on). A furnace fan is also likely to periodically operate while 

the furnace is not actively heating the home to circulate air for ventilation. DOE would need to 

include calculations, in order to account for the furnace fan power consumption when performing 

these additional functions. 

As an additional issue, BE is measured at a minimum specified external static pressure 

and at either a single airflow rate if the furnace has a single-stage burner or possibly two airflow 

rates if the furnace has a two-stage or modulating burner. However, DOE expects furnace fan 

operation in the field to span multiple external static pressures in multiple speed control settings. 

For this reason, DOE could either determine that the test conditions specified by DOE’s furnace 

test procedure are adequate, or it would need to develop methods for determining BE at multiple 

external static pressures and airflow rates. 

In addition, DOE would need to develop usage multipliers to determine the number of 

hours annually that the furnace fan operates in each speed control setting or function (i.e., 

heating, cooling, and circulation).

DOE seeks comment on the merits of potentially using the BE measurement specified in 

DOE’s existing residential furnaces test procedure as the basis for its furnace fan test procedure

and subsequent energy conservation standards. Furthermore, DOE seeks comment on: (1) the 

need for additional rating methods that would be necessary to cover the power consumption of 

furnace fans used in residential central HVAC products other than furnaces; (2) how BE could 

also be used to rate the power consumption for furnace fans operating in the circulation function 

of residential furnaces; (3) how the measurements of BE and the power consumption for other 

furnace fans not used in residential furnaces could be altered to account for furnace fan operation 

within an appropriate range of static pressures and at an appropriate number of speed control 

settings; and (4) the appropriate annual hourly multipliers to determine the number of hours 

annually that the furnace fan operates in each speed control setting or function.

Item 17 DOE seeks comment on the potential merits of using the BE measurement 

specified in DOE’s existing residential furnaces test procedure (10 CFR part 430, 

subpart B, appendix N) as the basis for its furnace fan test procedure. 
19

Item 18 DOE seeks comment on additional rating methods that would be necessary to 

cover the power consumption of furnace fans used in residential central HVAC 

products other than furnaces. 

Item 19 DOE seeks comment on how these power measurements could estimate the 

power consumption of the furnace fan in the circulation function and account for the 

furnace fan operation within an appropriate range of static pressures and at an

appropriate number of speed control settings. 

Item 20 DOE seeks comment on the appropriate annual hourly multipliers to 

determine the number of hours annually that the furnace fan operates in each speed 

control setting or function.

1.4 Notice of Proposed Rulemaking

In developing the separate NOPRs for the test procedure and energy conservation 

standards for furnace fans, DOE will consider all the comments it receives after publication of 

this framework document. For test procedures, DOE will publish a NOPR proposing test 

procedures for furnace fans, which will be followed by a 75-day public comment period that 

includes one public meeting. For energy conservation standards, DOE will publish a NOPR 

proposing standards for furnace fans, which will be followed by a 60-day public comment period 

that includes one public meeting.

This comment process may result in revisions to the planned methodology for each 

analysis related to the energy conservation standards rulemaking. For furnace fans, DOE is 

planning to conduct in-depth technical analyses for the energy conservation standards NOPR in 

the following areas: (1) engineering, (2) markups to determine product price, (3) energy-use 

characterization, (4) life-cycle cost (LCC) and payback period (PBP), (5) national impacts, (6) 

manufacturer impacts, (7) utility impacts, (8) environmental impacts, (9) employment impacts, 

and (10) regulatory impacts. DOE will describe the methodology used and make the results of all 

the analyses available on its website for review.

This part of the analytical process results in the proposed standard levels (if any) that 

DOE will present in the published NOPR document. DOE selects the proposed standard levels 

from the trial standard levels (TSLs) analyzed prior to publication of the NOPR document. The 

NOPR, published in the Federal Register, will document the evaluation and selection of any 

proposed standards levels, along with a discussion of other TSLs considered but not selected and 

the reasons DOE did not select them. 

For each product class, DOE will identify the maximum efficiency level that is 

technologically feasible, hereinafter referred to as max-tech. If DOE proposes a lower level, it 

will sequentially explain the reasons for eliminating higher levels, beginning with the highest 
20

level considered. DOE will present the analytical results in the NOPR, and provide the details of 

the analysis in an accompanying technical support document (TSD).

DOE considers many factors in selecting proposed standards, as discussed in section 

1.3.1. These factors are contained in EPCA and take into consideration the benefits, costs, and 

other impacts of energy conservation standards. DOE encourages interested parties to develop 

joint recommendations for standard levels. DOE will carefully consider such recommendations 

in its decision process.

When DOE publishes the NOPR proposing energy conservation standards for furnace 

fans, it will provide the U.S. Department of Justice (DOJ) with copies of the NOPR and TSD to 

solicit feedback on the impact of the proposed standard levels on competition in the furnace fan 

product industries. DOJ will review these standard levels in light of any lessening of competition 

likely to result from the imposition of standards (42 U.S.C. 6295(o)(2)(B)(i)(V) and (ii)). As 

noted above, publication of the NOPR for energy conservation standards for furnace fans will be 

followed by a 60-day public comment period that includes one public meeting.

1.5 Final Rule

After the NOPR is published, DOE will consider public comments it receives on the test 

procedures, proposed standards, and accompanying analyses. For the standards rulemaking, 

DOE will review the engineering and economic impact analyses and proposed standards based 

on these comments and consider modifications where necessary. Before the final rule is issued, 

DOE also will consider DOJ comments on the NOPR relating to the impacts of the proposed 

standard levels on competition to determine whether changes to these standard levels are needed.

DOE will publish the DOJ comments and DOE’s response as part of the final rule. The standards 

rulemaking will conclude with publication of the final rule. DOE will select the final standard 

level based on the complete record of the standards rulemaking. The final rule will promulgate 

the final standard level and the compliance date and explain the basis for their selection. The 

final rule will be accompanied by a final TSD. The test procedure rulemaking will conclude with 

the publication of a final rule, which considers all of the comments it receives on its proposed 

test procedures.

2 OVERVIEW OF ANALYSES FOR RULEMAKING 

The purpose of the analyses is to ensure that DOE selects energy conservation standards 

that achieve the maximum improvement in energy efficiency that is technologically feasible and 

economically justified and will result in significant energy savings, as required by EPCA. 

Economic justification includes the consideration of economic impacts on manufacturers and

consumers, national benefits (including environmental impacts), issues of consumer utility, and 

impacts from any lessening of competition. DOE expects the selection of such standards to 

achieve the maximum energy savings that are technologically feasible and economically justified 

without imposing excessive financial burden on any particular party. 
21

Figure 2.1 summarizes the analytical components of the DOE standard-setting process. 

The analyses are presented in the center column. Each analysis has a set of key inputs that are 

required data and information. Approaches are the methods that DOE will use to obtain key 

inputs, which may vary depending on the information in question. For example, some key inputs 

exist in public databases. DOE will collect other information from interested parties or experts 

with special knowledge, and DOE will develop yet other information independently in support of 

this rulemaking. The results of each analysis are key outputs that feed directly into the 

rulemaking. Arrows indicate the flow of information between the various analyses. DOE ensures 

a consistent approach to its analyses throughout the rulemaking by considering each analysis as a 

part of the overall standard-setting framework.
22

Figure 2.1. Flow Diagram of Analyses Conducted for an Energy Conservation Standard 

Rulemaking
23

3 MARKET AND TECHNOLOGY ASSESSMENT

The market and technology assessment will provide information about the manufacturers 

of furnace fans and the performance attributes of these products. Based on analyses done for the 

associated residential CAC and furnaces energy conservation standards rulemakings, DOE 

believes that, in most cases, the manufacturer of the product in which the furnace fan is used, 

hereinafter referred to as a “furnace fan product,” purchases the furnace fan impeller and motor 

and fabricates the furnace fan assembly in house (i.e., the sheet metal assembly). The furnace fan 

impeller, motor, controls and sheet metal housing are produced separately by different 

manufacturers. DOE also believes these components are typically replaced separately, as needed. 

Since the individual manufacturers of residential CAC/HP and furnaces ultimately assemble all 

of the components into one furnace fan assembly, DOE believes that furnace fan product 

manufacturers are ultimately responsible for the design and performance, including efficiency, of 

the furnace fan assembly. Consequently, manufacturers of furnace fan products will experience 

the impacts that result from having to meet energy conservation standards for furnace fans. For 

this reason, the market and technology assessment will focus on providing information about the 

manufacturers of the furnace fan products and furnace fan product performance attributes. This 

market and technology assessment is particularly important at the outset of the rulemaking for 

developing product classes and for identifying technology options that improve furnace fan 

efficiency.

3.1 Market Assessment

DOE will qualitatively and quantitatively characterize the structure of the markets for 

furnace fans. In the market assessment, DOE will identify and characterize the manufacturers of 

furnace fan products, estimate market shares and trends, address regulatory and non-regulatory 

initiatives intended to improve the efficiency or reduce the energy consumption of covered 

furnace fans, and explore the potential for technological improvements in the design and 

manufacturing of such products.

This market assessment will establish the context for this rulemaking, and it will serve as 

a resource to guide the analyses that follow. For example, DOE may use historical shipments and

prices as an indicator of future shipments and prices. Similarly, DOE plans to use market 

structure data for the manufacturer impact analysis, data that will be particularly useful for 

assessing competitive impacts. During this phase, DOE also begins to identify design options by 

reviewing product literature and industry publications.

DOE recognizes that there may be limited public information on national shipments, 

manufacturing costs, channels of distribution, and manufacturer market shares of furnace fans. 

This type of data is an important input for analyses that determine if energy conservation 

standards or energy use standards are economically justified and will result in significant energy 

savings. Therefore, DOE encourages interested parties to submit data that will improve DOE’s 

understanding of the furnace fan markets. These data may be provided under a confidentiality 

agreement with DOE’s contractor responsible for this part of the rulemaking analysis, Navigant 
24

Consulting, Inc. (NCI). In other rulemakings, NCI routinely works with confidential data 

provided by manufacturers and other organizations in preparing aggregated results for DOE’s 

analysis. These aggregated results do not divulge the sensitive, individual raw data, but enable 

other interested parties to comment on the aggregated dataset.

Alternatively, interested parties may submit confidential data to DOE, indicating in 

writing which data should remain confidential. Interested parties must submit confidential 

information to DOE according to the procedures outlined in 10 CFR 1004.11. Under 10 CFR 

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 shall include 

all the information believed to be confidential, and the other copy shall have the information 

believed to be confidential deleted. DOE will make its own determination about the confidential 

status of the information and treat it accordingly.c

DOE is tracking commonly-available products based on recent literature from small and 

large furnace fan and furnace fan product manufacturers. This information will enable DOE to 

understand which furnace fans are used in the residential HVAC market and in order to better

assess which furnace fans fall within the scope of this rulemaking (section 1.2). DOE will use the 

resulting knowledge about product availability to evaluate how the market may respond to 

various standard levels and to gain insight on the performance attributes of various 

commercially-available furnace fan technologies.

Item 21 DOE seeks comment on whether the manufacturers of the products in which 

furnace fans are used, herein referred to as “furnace fan products,” are also the 

manufacturers of the furnace fan.

Item 22 DOE welcomes input on estimates of market shares, products, features, and 

trends related to electricity consumption for the furnace fans covered in this 

rulemaking.

 c Factors that DOE considers 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 public 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) a date 

after which such information might lose its confidential character; and (7) why disclosure of the information would 

be contrary to the public interest.
25

3.1.1 Product Classes

As mentioned previously, DOE tentatively defines the term “furnace fan” to mean an 

electrically-powered device used in residential central HVAC systems for the purposes of 

circulating air through duct work. This would include the air distribution fan used in oil-fired, 

gas-fired, and electric furnaces, split-system and packaged air conditioner and heat pump air 

handlers, and modular fan coils. The scope of this standard does not include draft inducer fans, 

exhaust fans, or heat/energy recovery ventilators. When necessary, DOE divides covered 

products into classes by: (a) the type of energy used; (b) the capacity of the product; or (c) any 

other performance-related feature that justifies different standard levels, such as features 

affecting consumer utility. (42 U.S.C. 6295(q)) DOE then conducts its analysis and considers 

establishing standards so as to provide separate standard levels for each product class.

DOE does not plan to differentiate product classes based on the type of energy used 

because all furnace fans are powered by electricity. DOE will consider differentiating product 

classes based on performance-related features impacting the energy efficiency of the furnace fan. 

Even though motor type affects efficiency, DOE does not believe the overall utility of the 

product is affected. Instead, DOE believes that a more-efficient motor is a technology option to 

improve the efficiency of the furnace fan. DOE has found in its preliminary review of furnace 

fan product specification sheets that the achievable heating or cooling capacity of a furnace fan 

product is independent of motor type. Therefore, at this time, DOE has tentatively decided not to 

use motor type to differentiate furnace fan product classes. Instead, DOE is initially considering 

differentiating product classes for furnace fans based on either rated airflow capacity (cfm) or 

rated motor horsepower. DOE believes each is a performance-related feature that affects product 

efficiency and, therefore, falls under one of the statutory bases for establishing a product class.

An initial review of furnace fan product specification sheets shows that furnace fans are 

available with rated airflow capacities from approximately 400 cfm to 2,200 cfm. The rated 

airflow capacity of the furnace fan will vary depending on the application. Furnace fans intended 

for use in lower-capacity furnace fan products, such as a product with a 1 to1.5 ton (18,000 

British thermal units per hour (Btu/h)) cooling capacity and 40,000 Btu/h heating input rate, 

typically have nominal airflow capacities around 400 cfm. Furnace fans intended for use in 

higher-capacity furnace fan products, such as a product with a 5 ton (60,000 Btu/h) cooling 

capacity and 150,000 Btu/h heating input rate, typically have nominal airflow capacities around 

2,200 cfm. DOE is aware that some oil-fired furnaces with heating input rates around 220,000 

Btu/h achieve nominal airflow rates of around 4,000 cfm by integrating two furnace fans.

Similarly, an initial review of furnace fan product specification sheets shows that furnace 

fans are available with rated motor hp ranging from around 1/5 hp to 1 hp. The rated motor 

horsepower of the furnace fan will vary depending on the application. Furnace fans intended for 

use in lower-capacity furnace fan products, such as a product with a 2 ton (24,000 Btu/h) cooling 

capacity or 40,000 Btu/h heating input rate, typically use a 1/5 hp motor. Furnace fans intended 

for use in higher-capacity furnace fan products, such as a product with a 5 ton (60,000 Btu/h) 

cooling capacity or 126,000 Btu/h heating input rate, typically use 3/4 to 1 hp motors. However, 

DOE also noted models currently available on the market with the same rated airflow capacity 

and different horsepower ratings. 
26

DOE believes rated airflow capacity and rated motor horsepower can impact the amount 

of conditioned air the furnace fan product can provide. Furnace fan product manufacturer 

specification sheets show that, in general, furnace fans with higher rated airflow capacities have 

the potential to consume more energy because a more powerful motor is required. DOE seeks 

comment on whether to use rated airflow capacity, rated motor horsepower, or another 

characteristic of the furnace fan to differentiate product classes. DOE also seeks comment on 

how these specifications are considered in furnace fan product design processes.

If DOE determines that either rated airflow capacity or rated motor horsepower is an 

appropriate product class differentiator, it plans to establish product classes by dividing the 

typical range into bins based on market data and product characteristics. The bin ranges will be 

set so as to include furnace fans that use components with similar specifications to achieve 

similar heating and cooling capacities. An important goal of the market assessment is to 

determine the appropriate number of bins and their respective ranges. DOE seeks comments on 

the approach described above for differentiating between product classes and any other potential 

methods for establishing product classes corresponding to the requirements of 42 U.S.C. 

6295(q).

Item 23 DOE welcomes comments on whether to use rated airflow capacity, rated 

motor horsepower or an alternative approach to defining product classes in 

accordance with the requirements of 42 U.S.C. 6295(q.). DOE also seeks comment on 

how each of these specifications influences furnace fan product design decisions.

Item 24 DOE seeks input on appropriate rated airflow or rated motor horsepower 

bins. Specifically, DOE is interested in information that could be used to determine the 

number of bins or range of each bin.

3.2 Technology Assessment

The technology assessment centers on understanding how furnace fans use energy and 

how potential efficiency measures would be expected to reduce their energy consumption. 

Measures that improve the energy efficiency of the product are called “technology options,” and 

they are based on existing technologies, as well as prototype designs and concepts. In 

consultation with interested parties, DOE will develop a list of technology options for 

consideration in this rulemaking. Following research into this list of technology options, DOE 

will consider each one against four screening criteria: (1) technological feasibility; (2) 

practicability to manufacture, install, and service; (3) adverse impacts on product utility or 

availability; and (4) adverse impacts on health or safety (see section 4). Those technology 

options that pass the four screening criteria are called “design options” and will be considered as 

appropriate ways of improving the efficiency of the product in the engineering analysis, and will 

assist DOE in determining the max-tech design.
27

DOE is studying technology options by reviewing furnace fan product manufacturer 

specification sheets, recent trade publications, technical journals, and patent filings. DOE also 

intends to consult with technical experts who have worked on furnace fan designs and to conduct 

manufacturer interviews about these technology options. At this time, DOE is aware of a limited 

set of technology options (discussed in further detail below) that could improve furnace fan

efficiency: (1) high-efficiency furnace fan motors; and (2) improved impellers. DOE intends to 

study both as possible technology options.

3.2.1 High-Efficiency Furnace Fan Motors

Furnace fan manufacturers typically use either a permanent split capacitor (PSC) motor 

or a more-efficient, electronically-commutated motor (ECM). (DOE is aware that "ECM" may 

be a trade name specific to a certain motor manufacturer. DOE is using "ECM" to refer to any 

brushless permanent magnet furnace fan motor.) Both are types of electric motors which operate 

based on the interaction of the magnetic fields produced by the stator (the stationary portion of 

the motor) and the rotor (the rotating portion of the motor). These magnetic fields can be

produced by electromagnets or permanent magnets.

PSC motors are a type of induction motor. In induction motors, the stator is an 

electromagnet that consists of electrical wire windings. Current is driven through the windings to 

produce a magnetic field. Through electromagnetic induction, this magnetic field induces current 

in the conductor bars of the rotor. The conductor bars of the rotor, often made of copper or 

aluminum, are arranged in such a manner that they produce another magnetic field once current 

is induced. The interaction of the magnetic field of the electromagnet and the magnetic field of 

the rotor results in rotation of the rotor. In a PSC motor, a smaller, start-up winding is present in 

addition to the main winding in the stator. The start-up winding is electrically connected in 

parallel with the main winding and in series with a capacitor. At startup, the interactions between 

the magnetic field generated by the start-up winding and that generated by the main winding 

induce rotation. Because of the capacitor, however, the current to the start-up winding is cut off 

as the motor reaches steady state.

ECM motors are brushless permanent magnet motors. Like a PSC motor, the stator of an 

ECM motor is an electromagnet used to produce a magnetic field. Unlike the PSC motor, the 

rotor of an ECM motor consists of a permanent magnet. The interaction of the magnetic field of 

the electromagnet and the magnetic field of the permanent magnet rotor result in rotation of the 

rotor. ECM motors generally operate more efficiently than PSC motors. While PSC motors 

operate most efficiently at a single speed with significantly diminishing operating efficiency at 

others, ECM motors are capable of maintaining a high operating efficiency at multiple speeds.

Typical furnace fan motor sizes range from 1/5 hp to 1 hp, depending on the required

airflow capacity of the furnace fan. The furnace fan motor accounts for the majority of electricity 

consumption in furnace fan products, approximately 80 percent in residential furnaces. 

Consequently, increased fan motor efficiency could yield significant electricity savings. PSC fan 

motors are used in a large majority of furnace fan products. Currently 95 percent of furnace fans 

used in residential furnaces use a PSC motor. In contrast, only 2.5 percent of furnace fans used in 
28

residential furnaces incorporate an ECM motor. A 1/2 hp ECM running at typical speed for the 

heating function in residential furnaces operates at over 70-percent motor efficiency, compared 

to a similarly-sized multi-speed PSC, which achieves an efficiency level of only 34 percent to 39

percent.

d

3.2.2 High-Efficiency Impellers

High-efficiency fan blades (impellers) move air more efficiently, yielding energy 

consumption savings by reducing the required fan motor shaft power. The impellers typically 

used in furnace fan products are centrifugal impellers with thin, stamped, forward-curved sheet 

metal blades. These impellers are compact, inexpensive, and easy to manufacture. Required fan 

shaft power could be reduced if the impeller blades were optimized for each specific application.

Item 25 DOE welcomes comments on the preliminary technology options identified in 

this section (i.e., high-efficiency furnace fan motors and high-efficiency impellers) and 

whether there are other technology options it should consider. In commenting on 

technology options, please discuss their impacts, if any, on safety, performance, and 

consumer utility.

4 SCREENING ANALYSIS

The purpose of the screening analysis is to eliminate, or screen out, technology options

from further consideration in the engineering analysis that do not meet four key criteria. DOE 

will follow the process set forth below to screen out technology options.

DOE will develop a list of technology options (through its own research and in 

consultation with interested parties) for consideration in the engineering analysis (section 5).

This initial list of identified candidate technology options will encompass all those technologies 

that may be technologically feasible. Thereafter, DOE will review each technology option or best 

available technology in light of the following four criteria, as provided in sections 4(a)(4) and 

5(b) of the Process Rulee and tailored to the current rulemaking:

1. Technological feasibility. DOE will screen out technologies that are not incorporated in 

commercially-available products or working prototypes.

 d Sachs, H.M. and Smith, S. Saving Energy with Efficient Residential Furnace Air Handlers: A Status Report and 

Program Recommendations (2003), American Council for an Energy-Efficient Economy (ACEEE): Washington, 

D.C. Report No. A033.

e The Process Rule establishes procedures, interpretations, and policies to guide DOE in the consideration and 

promulgation of new or amended energy conservation standards under EPCA and is found at 10 CFR part 430, 

subpart C, appendix A.
29

2. Practicability to manufacture, install, and service. If DOE determines that mass 

production of a technology in commercial products and reliable installation and servicing 

of the technology could not be achieved on the scale necessary to serve the relevant 

market by the time of the compliance date of the standard, it will not consider that 

technology further.

3. Adverse impacts on product or equipment utility or availability. If DOE determines a 

technology has a significant adverse impact on the utility of the product for significant 

consumer subgroups, or results in the unavailability of any covered product type with 

performance characteristics (including reliability), features, size, capacities, and volumes 

that are substantially the same as products generally available in the United States at the 

time, it will not consider that technology further.

4. Adverse impacts on health or safety. If DOE determines that a technology will have 

significant adverse impacts on health or safety, it will not consider that technology 

further.

DOE will fully document its reasons for eliminating any technology options during the 

screening analysis and will publish this documentation for interested parties to review as part of 

the NOPR. Technology options that are not screened out by the above four criteria will be 

considered design options in the development of cost-efficiency curves in the engineering 

analysis.

Item 26 DOE welcomes comments on how the above four screening criteria might 

apply to any additional technology option(s) that an interested party recommends to 

DOE.

5 ENGINEERING ANALYSIS

After conducting the screening analysis described above, DOE will perform an

engineering analysis based on the remaining design options that are available to improve product

efficiency. The engineering analysis consists of estimating the energy consumption and cost of 

products at various levels of increased efficiency. Section 5.1 provides an overview of the 

engineering analysis. Section 5.2 discusses baseline models. Section 5.3 describes DOE’s 

planned approach. Section 5.4 addresses proprietary designs. Section 5.5 discusses cumulative 

regulatory burdens that might affect the engineering analysis.
30

5.1 Engineering Analysis Overview

The purpose of the engineering analysis is to determine the relationship between furnace 

fan efficiency and the portion of the manufacturer selling price (MSP) of the furnace fan product 

that is attributable to the furnace fan. This relationship between price and efficiency serves as the 

basis for cost/benefit calculations to individual consumers in the LCC analysis and to the Nation 

in the national impact analysis (NIA). 

The engineering analysis will focus on identifying and evaluating commercially-available 

furnace fans that incorporate design options that improve efficiency. The engineering analysis 

will also identify the highest efficiency that is technologically feasible within each product class 

(i.e., the max-tech model). DOE may determine the max-tech model by investigating the 

existence of any furnace fan prototypes with higher efficiency than those commercially

available.

5.2 Baseline Models

For each product class, DOE will identify a baseline model furnace fan that will serve as 

a reference point against which DOE can measure changes resulting from potential energy 

conservation standards. DOE will develop a separate engineering analysis for each product class 

and a separate efficiency curve for each baseline model directly analyzed. Should DOE develop 

a scaling method, as described in more detail in section 5.3, a separate curve for each baseline 

model and product class may not be necessary.

Selection of the baseline model is a critical aspect of DOE’s analytical approach. The 

baseline model should represent the characteristics of a typical furnace fan in a given product 

class used in common residential HVAC products. Normally, the baseline model would be a 

model that just meets current energy conservation standards. However, energy conservation 

standards for furnace fans do not currently exist. As a result, DOE will select baseline models 

typical of the furnace fans used in the least-efficient residential HVAC models offered for sale in 

the market. For furnace fans, selection of the baseline model for each product class will 

encompass consideration of furnace fan features and performance characteristics, such as motor 

type, rated fan motor horsepower, number of fan motor control speeds, and fan motor efficiency.

Item 27 DOE welcomes comments on the selection and appropriate features and 

performance characteristics of baseline models for each product class.
31

5.3 Cost-Efficiency Relationship and Analysis

The engineering analysis primarily involves estimating the energy consumption and cost 

of products at various levels of increased efficiency. These estimates are then used to identify the 

cost-efficiency relationship for the products. DOE typically structures its estimation of the costefficiency relationship around one of three methodologies: (1) the design-option approach, which 

calculates the incremental cost of adding specific design options to the baseline model; (2) the 

efficiency-level approach, which calculates the incremental costs of achieving increases in 

energy efficiency, without regard to the particular design options used to achieve such increases;

and (3) the reverse engineering cost-assessment approach, which involves a “bottom-up” 

manufacturing cost assessment based on a detailed bill of materials (BOM) derived from 

teardowns of products being analyzed. Deciding which methodology to use for the engineering 

analysis depends on the product, the technologies under study, and any historical data DOE can 

draw upon. Due to the limited availability of public information on the cost and efficiency of 

furnace fans, DOE has tentatively decided to use both the efficiency-level approach to identify 

incremental improvements in efficiency for each product and the cost-assessment approach to 

develop a cost for each efficiency level. If a relationship between airflow capacity and electricity 

consumption can be quantified, DOE may select a representative product class to analyze and 

develop a scaling method to derive results for the remaining product classes. If not, DOE could

conduct a separate analysis for each product class.

Prior to the engineering analysis, DOE plans to test a number of furnace fans according to 

the DOE test procedure being developed in order to gather measured data on furnace fan 

efficiency. In the engineering analysis, DOE will use the test results to select a series of furnace 

fans with incrementally increasing efficiency from the baseline model to max-tech for either 

each product class or a representative product class, depending on whether electricity 

consumption is scalable. After selecting both the baseline furnace fan and incrementally moreefficient substitutes, DOE will generate BOMs by disassembling multiple manufacturers’ 

furnace fans spanning a range of efficiency levels. The BOMs describe the products in detail, 

including all manufacturing steps required to make and/or assemble each part. DOE will then 

develop a cost model to convert the BOMs and efficiency levels into manufacturer production 

costs (MPCs). By applying derived manufacturer markups to the MPCs, DOE will calculate the 

manufacturer selling prices and construct industry cost-efficiency curves. For each furnace fan 

for which DOE is not able to generate a BOM, DOE will evaluate retail prices and estimate an 

MSP.

DOE will select furnace fans for the analysis such that potential substitutions maintain 

airflow of the residential HVAC system in which it is used within the range specified by the 

product class. In identifying more-efficient substitutes, DOE will use a database of 

commercially-available residential HVAC products. There are limited publicly-available data on 

efficiency and costs of furnace fans. Therefore, DOE encourages interested parties to submit data 

that would improve DOE’s understanding of the furnace fan cost-efficiency relationship. These 

data may be provided under a confidentiality agreement with NCI. As discussed previously, 

DOE presents aggregated results and does not divulge sensitive raw data from interested parties.

After identifying the more-efficient substitutes for each of the baseline furnace fans, DOE 

will develop TSLs. TSLs are a set of efficiency levels considered in the NOPR analysis that span
32

the range of furnace fan efficiencies from baseline products to the maximum technologically 

feasible. Each TSL is analyzed in the LCC and NIA analyses. At the NOPR stage of the 

rulemaking process, DOE will propose energy conservation standard levels for each product 

class by selecting a TSL for each product class and invite public comment. 

Item 28 DOE seeks comments on its approach to calculating the cost-efficiency 

relationship for furnace fans.

Item 29 DOE welcomes comments on the selection of commercially-available furnace 

fans with incrementally increasing efficiency from the baseline model to max-tech for 

characterizing the efficiencies of furnace fans currently offered for sale.

Item 30 DOE welcomes comments on how furnace fan efficiency varies with airflow 

capacity, motor type, motor rated horsepower, number of speed control settings, or any 

other furnace fan parameter.

5.4 Proprietary Designs

DOE will consider in its engineering and economic analyses all design options that are 

commercially available or present in a working prototype, including proprietary designs, that 

meet the screening criteria discussed in section 4. However, DOE will consider a proprietary 

design in the subsequent analyses only if it does not represent a unique path to a given efficiency 

level. If the proprietary design is the only approach available to achieve a given efficiency level, 

then DOE will eliminate the efficiency level from further analysis. DOE will reject a standard 

level that can only be met with a single proprietary technology because it could result in an anticompetitive market, a principle consistently applied in past DOE rulemakings as economically 

unjustifiable. However, if a given energy efficiency level can be achieved by a number of design 

approaches, including a proprietary design, DOE will continue to examine the given efficiency 

level, in spite of the proprietary nature of that one design. 

DOE is sensitive to manufacturer concerns about proprietary designs and will take steps 

to maintain the confidentiality of any proprietary data provided by manufacturers. This 

information will provide input to the competitive impacts assessment and other economic 

analyses.
33

Item 31 DOE seeks information on proprietary designs of which it should be aware for 

the furnace fans under consideration in this rulemaking and, if such proprietary 

designs exist, how DOE can acquire the cost data necessary for evaluating these 

designs.

5.5 Outside Regulatory Changes Affecting the Engineering Analysis

In conducting an engineering analysis, DOE considers the effects of regulatory burdens 

outside DOE’s statutory energy conservation standards rulemaking process that can affect 

manufacturers of the covered products. Some regulatory requirements could potentially affect the 

energy efficiency or energy consumption of the furnace fans covered under this rulemaking. 

DOE will attempt to identify all outside regulatory requirements that could affect the engineering 

analysis. The consideration of these requirements is closely related to the cumulative regulatory 

burden assessment that DOE will conduct as part of the manufacturer impact analysis. Based on 

consideration of the comments received on the engineering analysis, DOE will make any

necessary changes to its analysis. Those changes will be reflected in the NOPR.

Item 32 DOE welcomes comments on regulatory burdens and changes that should be 

considered in the engineering analysis of furnace fans. 

Item 33 DOE welcomes comments on other engineering issues that could affect the 

engineering analysis.

6 MARKUPS FOR PRODUCT PRICE DETERMINATION

DOE uses manufacturer-to-customer markups to convert the manufacturer selling price 

estimates from the engineering analysis to customer prices, which are then used in the LCC and 

PBP analysis, as well as the manufacturer impact analysis. Retail prices are necessary for the 

baseline efficiency level and all other efficiency levels under consideration. DOE will obtain 

these retail prices by applying manufacturer-to-customer markups (consisting of distribution 

channel markups and sales tax) to the manufacturer selling price estimates which will be 

calculated as part of the engineering analysis.
34

6.1 Description of Market Participants and Distribution Channels

Before developing markups, DOE must first define key market participants and identify 

distribution channels. Because a furnace fan is a component of a furnace, DOE plans to use the 

same distribution channels for furnace fans as it intends to use for furnaces.

Generally, the furnace distribution chain includes six market participants: (1) distributors, 

(2) dealers, (3) general contractors, (4) mechanical contractors, (5) installers, and (6) builders. 

Based on DOE’s 2007 furnace and boiler rulemaking, DOE will consider three distinct 

categories of market participants: “distributors,” “mechanical contractors,” and “general 

contractors.” DOE combined mechanical contractors, dealers and installers in a single category 

labeled “mechanical contractors” because these terms are used interchangeably by the industry. 

Since builders serve the same function in the HVAC marketplace as general contractors, DOE 

included the builders in the “general contractors” category. 

Distributors receive shipments from manufacturers and resell the products at a markup to 

contractors. No other participant in the channel carries significant inventory, so distributors 

absorb imbalances between manufacturer supply and consumer demand.

Most contractors compete at the local level, and the majority of them are small businesses. 

Many contractors carry products fabricated by more than one manufacturer. Contractors interface 

with the end user by installing new furnace systems to their specifications, as well as inspecting, 

servicing, or repairing the existing system. In the residential furnace market, contractors sell 

products as part of an installation package and do not list retail product prices separately from 

installation cost. Furthermore, differences in local markets, weather conditions, and many other 

factors can affect the price contractors charge for furnaces. 

Most residential furnaces pass through the following distribution channel: the original 

equipment manufacturer (OEM) assembles the system and sells it to a distributor; the distributor 

sells the unit to a contractor; the contractor sells the unit to the end user and performs the 

installation. After installation, the contractor performs all service on the system, including 

inspection, maintenance, and repair.

6.2 Markup Estimation Using Financial Statements and Regression Analysis

DOE will determine typical markups in the distribution chain using publicly-available 

corporate and industry data. DOE will rely on Economic Census data from the United States 

Census Bureauf and input from industry trade associations such as the Heating, AirConditioning, and Refrigeration Distributors International (HARDI)g to define how furnaces are 

marked up from the manufacturer to the consumer. 

Along the distribution chain, companies mark up the price of products to cover their 

business costs and profit margin. In financial statements, gross margin is the effective markup on 

 f U.S. Census Bureau. Plumbing, Heating, and Air-Conditioning Contractors: 2002. Report EC02-231-238220 g Heating, Air-Conditioning, and Refrigeration Distributors International (HARDI) Regional Analysis, Profit 

Report: 1999, 2002, 2005, 2008, and 2009.
35

a company's cost of goods sold (CGS). It includes: all corporate overhead costs; sales, general 

and administration costs; research and development (R&D); interest expenses; depreciation and 

taxes; and profits. For sales of a product to contribute positively to company cash flow, its 

markup must be greater than the corporate gross margin less the company's operating profit 

margin.

To estimate markups, DOE categorizes expenses into two categories: (1) labor-scaling 

costs (LSC), which are fixed labor and occupancy expenses that increase in proportion to the 

amount of labor required to produce or sell the product; and (2) non-labor-scaling costs (NLSC), 

which are variable operating costs that do not scale with labor and vary in proportion to CGS. 

Together, LSC and NLSC represent the gross margin. 

DOE develops baseline and incremental markups to transform the manufacturer selling 

price into a consumer product price. DOE uses the baseline markups, which cover all of a 

distributor’s or contractor’s costs, to determine the sales price of baseline models. DOE 

considers baseline models to be products sold in the absence of new energy conservation 

standards. DOE calculates the baseline markup (MUBASE) using the following equation:

Where: 

MUBASE 

CGS = Cost of goods sold, 

= Baseline markup, 

GM = Gross margin, 

LSC = Labor-scaling costs, and 

NLSC = Non-labor-scaling costs.

Incremental markups are coefficients that relate the change in the manufacturer sales 

price of higher-efficiency models to the change in the final sales price. Incremental markups 

cover only those costs that scale with a change in the manufacturer’s sales price (i.e., NLSC). 

DOE considers higher-efficiency models to be products sold under market conditions with new 

or amended energy conservation standards. It calculates the incremental markup (MUINCR) using 

the following equation:

Where:

MUINCR 

CGS = Cost of goods sold, and 

= Incremental markup, 

NLSC = Non-labor-scaling costs.
36

Because detailed financial data are not available for general and mechanical contractors, 

DOE relies on an alternative method of markup estimation. Using U.S. Economic Census data on 

the value of construction, cost of materials, payroll costs, and cost of subcontracted work, DOE 

calculates the baseline markup for contractors using the following equation: 

Where:

MUBASE 

V

= Baseline contractor markup, 

CONSTRUCT 

Pay = Payroll,

= Value of construction, 

MatCost = Cost of materials, and

SubCost = Cost of subcontracted work.

DOE estimates the incremental contractor markup using regression analysis of per-firm 

revenue on per-firm cost of goods sold and payroll, estimating the coefficients for the equation:

Where:

α = An estimate of the incremental builder markup,

Ri

CGS

= Revenue of firm i, 

i

Pay

= Cost of goods sold of firm i, and

i = Payroll of firm i. 

The overall markups will include an average multiplier to account for any sales tax 

applied at the last stage of the distribution channel. The State Tax Clearinghouseh is an Internet 

source that DOE intends to use to calculate applicable sales taxes.

Item 34 DOE requests comments on the planned distribution path for the furnace fans 

covered under this rulemaking and whether DOE should consider any additional paths. 

DOE also requests information on the relative fraction of shipments expected for each 

path.

Item 35 DOE requests feedback on the overall markups for the furnace fans covered 

under this rulemaking for each path in the distribution chain.

 h Sales Tax Clearinghouse, Inc., State sales tax rates along with combined average city and county rates. Available 

at: http://thestc.com/STrates.stm.
37

7 ENERGY USE CHARACTERIZATION

7.1 Overview of Energy Use Analysis

The purpose of the energy use analysis is to determine the annual energy consumption of 

furnace fans in representative U.S. homes and to assess the energy savings potential of increased 

fan efficiency. DOE will estimate the annual energy consumption of furnace fans at specified 

energy efficiency levels across a range of climate zones. The annual energy consumption will 

include the electricity use by the fan and the change in natural gas, liquid petroleum gas (LPG), 

electricity, or oil use for heat production as result of change in the amount of useful heat 

provided to the conditioned space as a result of the furnace fan. It will also include the impact of 

the heat delivery by the fan on the house cooling system operation. The annual energy 

consumption of furnace fans will be used in subsequent analyses, including the LCC and PBP 

analysis and the national impact analysis.

To determine the energy consumption of furnace fans, DOE plans to use DOE’s furnace 

fan test procedure established in conjunction with this rulemaking. DOE also intends to use the 

Energy Information Administration’s (EIA) Residential Energy Consumption Survey (RECS)i

8

to 

establish a sample of households with furnace fans for each furnace fan product class. 

Specifically, DOE plans to use the 2005 version of the RECS (RECS 2005), which is the most 

current survey available at this time. RECS survey data provide information on the age of 

furnaces with furnace fans, as well as heating and cooling energy use in each household. The 

survey also includes household characteristics such as the physical characteristics of housing 

units, household demographics, information about other heating and cooling products, fuels 

used, energy consumption and expenditures, and other relevant data. DOE plans to use the 

household samples not only to determine furnace fan annual energy consumption, but also as the 

basis for conducting the LCC and PBP analysis (see section ).

Details on how DOE will determine the annual energy consumption of furnace fans are 

provided below.

7.2 Estimating Annual Energy Consumption of Furnace Fans

The furnace fan moves heated air through the house whenever the furnace burner is on 

(adjusted for delay times between burner and fan operation) and also operates in the cooling 

season (summer) if the house is air-conditioned. Using RECS household data, DOE will 

determine for each sample household whether it has a central furnace and central air conditioning 

system. DOE intends to estimate the annual energy consumption of furnace fans used during the 

active mode (heating, cooling, continuous ventilation). For these calculations, DOE plans to use 

DOE’s furnace fan test procedure established in conjunction with this rulemaking, along with 

 i

Energy Information Administration (EIA), 2005 Residential Energy Consumption Survey. Available at: 

http://www.eia.doe.gov/emeu/recs. 
38

relevant heating and cooling characteristics for each RECS household. DOE’s test procedure will 

specify the annual energy consumption rating, which is a time-weighted sum of the electricity

consumed in each mode of operation. In addition, DOE plans to take into account the furnace fan 

heat contribution, which affects the house heating and cooling load.

The power consumption (and overall efficiency) of a furnace fan depends on the speed at 

which the motor operates, the external static pressure difference across the fan, and the airflow 

through the fan. To calculate furnace fan electricity consumption, DOE intends to determine the 

operating conditions (the pressure and airflow) at which a particular furnace fan will operate in 

each RECS housing unit when performing heating, cooling, and continuous ventilation functions. 

These operating conditions can be described as the intersection of a system curve of the ducts in 

the housing unit (which represents the airflow across the supply and return air ducts as a function 

of static pressure) with the fan curve of the furnace fan (which represents the airflow through the 

furnace as a function of static pressure). The intersection of these two curves is the airflow and 

the static pressure at which the furnace fan operates in that housing unit, which determines the 

furnace fan power consumption. DOE plans to take into account field data on static pressures of 

duct systems, as well as airflow curves for furnace fans from manufacturer literature. 

DOE intends to determine furnace fan operating hours in each operating mode by first 

determining heating and cooling operating hours and then assigning the remaining hours to 

continuous ventilation. To determine the furnace fan heating operating hours, DOE will calculate 

the furnace burner operating hours and adjust them for delay times between burner and fan 

operation. Burner operating hours (BOH) are a function of annual house heating load (HHL), 

furnace efficiency, and furnace input capacity. To determine the furnace fan cooling function 

operating hours, DOE will calculate the cooling operating hours and adjust them for delay times 

between compressor and fan operation. Cooling operating hours are a function of annual house 

cooling load (HCL), cooling system efficiency, and the capacity of the cooling system. 

To calculate burner and compressor operating hours, DOE will determine the house 

heating and cooling loads based on the RECS estimates of the annual energy consumption of the 

furnace and air conditioner for each household. RECS estimates the furnace and air conditioner 

annual energy consumption from the household’s utility bills. DOE will determine the house 

heating and cooling load by reference to the existing furnace’s and cooling system’s 

characteristics, specifically its efficiency and capacity, and will also consider the heat generated 

from the furnace fan and other electrical components. Calculation of furnace and cooling system

efficiency in each home will be based on product vintage data from RECS 2005j

and data on the 

average efficiency by year published by the Air-conditioning, Heating, and Refrigeration 

Institute (AHRI).

k

.

 RECS house characteristics, such as house size and location, will be used to 

determine the product capacity. The ratio of furnace fan on-time to burner on-time and the ratio 

of furnace fan on-time to compressor on-time will be determined from the test procedures. The 

required delay time values will be determined from manufacturer product literature.

 j

The term “vintage” refers to the year of installation of the equipment in question.

k Air Conditioning, Heating & Refrigeration Institute Industry Statistics is the reference source for the shipped 

efficiency data by vintage year. Available at: http://www.ahrinet.org/Content/EquipmentStatistics_118.aspx.
39

DOE will make adjustments to the house heating and cooling loads based on information 

indicating that housing units in the year in which compliance with the standards is expected to be 

required will have a somewhat different heating or cooling load than the housing units in the 

RECS 2005. The adjustment will consider projected improvements in building thermal efficiency 

(due to improvement in home insulation and other thermal efficiency practices) and changes in 

house floor area between 2005 and the compliance date of the standards. DOE will also consider 

market trends that would cause some housing units in the year of compliance to have a different 

furnace or air conditioner than the housing units in the RECS 2005. DOE will apply these 

adjustments to both the replacement and new construction markets using data from EIA’s Annual 

Energy Outlook 2010 (AEO 2010) residential sector forecast, as well as data from RECS 2005 

and American Housing Survey.

To account for the effect of annual weather variations, the RECS 2005 household heating 

and cooling consumption values will be adjusted based on 30-year average heating degree-day 

(HDD) and cooling degree-day (CDD) data for the nine Census Divisions and four large States 

(California, Florida, New York, and Texas).

l

Item 36 DOE seeks comments on the planned approach for determining the energy 

consumption of furnace fans in residential buildings.

8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSES 

8.1 Overview

Energy conservation standards usually decrease products’ operating expenses and usually 

increase consumer prices for the products. DOE analyzes the effect of amended standards on 

consumers by evaluating changes in the LCC of owning and operating the product, as well as the 

PBP of higher-efficiency products. The LCC of a product is the cost a product incurs over its 

lifetime, taking into account both purchase price and operating expenses. The PBP represents the 

time it takes to recover the additional installed cost of the more-efficient device through annual 

operating cost savings. 

DOE analyzes the net effect on consumers by calculating the LCC and PBP using the 

engineering performance data (section 8), the energy-use and end-use load characterization data 

(section 7), and the markups for product price determination (section 6). Inputs to the LCC 

calculation include the installed cost to the consumer (purchase price plus installation cost), 

operating expenses (energy expenses, and, if applicable, repair costs and maintenance costs), the 

 l

National Oceanic and Atmospheric Administration (NOAA), 30 year Cooling and Heating Degree Data. Available 

at: http://www.noaa.gov/. 
40

lifetime of the product or other defined period of analysis, and a discount rate. Inputs to the 

payback period calculation include the installed cost to the consumer and first-year operating 

costs.

DOE considers both LCC and PBP to determine the impacts of potential energy 

conservation standards on consumers of the covered products. However, because calculation of 

LCC uses a discount rate (that depends on consumers’ cost of financing) and takes into account 

changing energy prices over time, it is considered by DOE to be a better indicator of the 

economic impacts of standards on consumers. 

DOE will perform the LCC and PBP analyses using a spreadsheet model combined with 

Crystal Ball (a commercially-available software add-on program to Microsoft Excel used to 

conduct stochastic analysis using Monte Carlo simulation and probability distributions) to 

account for uncertainty and variability among the input variables. Each Monte Carlo simulation 

will consist of 10,000 LCC and PBP calculations. The models will perform each calculation 

using input values that are either sampled from probability distributions and household samples 

or characterized with single point values. The analytical results will be a distribution of 10,000 

data points showing the range of LCC savings and PBPs for a given efficiency level relative to 

the base-case efficiency forecast. For any sensitivity analyses it conducts, DOE will account for 

correlations that may exist between inputs. 

DOE does not intend to take into account the rebound effect associated with moreefficient furnace fans because this effect will be accounted for in the rulemakings for residential 

furnaces and central air conditioners and heat pumps. In the latter rulemakings, the energy 

consumption considered will include the electricity used by the fan.

The following sections discuss the methodologies DOE plans to use to develop several of 

the inputs to the LCC and PBP analysis, including: (1) energy prices; (2) discount rates; (3) 

maintenance, repair, and installation costs; and (4) product lifetime. The other inputs to the LCC 

and PBP analysis—namely, manufacturer costs, annual energy consumption, and markups for 

the determination of consumer retail prices—have been discussed previously.

Item 37 DOE welcomes comments from interested parties as to whether a moreefficient furnace fan would be expected to be used more and whether such a rebound 

effect should be considered separately for this product.
41

8.2 Energy Prices

Energy prices are used to calculate the annual energy cost savings at different efficiency 

levels. DOE will derive average monthly energy prices using recent EIA datam for each of the 

nine Census Divisions and four large States to establish appropriate energy prices for each 

sample household.

In contrast to the situation with residential air conditioners and heat pumps, for which the 

appliance’s load primarily occurs during utility "on peak" periods during the summer, electricity 

consumption of furnaces is not concentrated during peak periods. Therefore, DOE does not see a 

compelling reason to use marginal electricity prices.

DOE will use projections of national average electricity prices to residential consumers to 

estimate future energy prices (from the assumed compliance date of a new standard to 30 years 

after compliance is required). DOE will use the most recent available edition of EIA’s AEO as 

the source of projections for future energy prices. 

8.3 Consumer Discount Rates

The calculation of LCC requires use of an appropriate discount rate to determine the 

present value of operating expenses during the product lifetime. The discount rate used in the 

LCC analysis represents the rate from an individual consumer’s perspective. 

For consumers of furnace fans, DOE plans to use the same approach that it relied on to 

develop discount rates for the November 2007 residential furnaces and boilers standards 

rulemaking (i.e., deriving the discount rates from estimates of the “finance cost” to purchase 

residential products).

n The finance cost can be interpreted as: (1) the financial cost of any debt 

incurred to purchase products (principally interest charges on debt), or (2) the opportunity cost of 

any equity used to purchase products (principally interest earnings on household equity). Much 

of the data DOE uses to determine the cost of debt and equity comes from the Federal Reserve 

Board’s triennial Survey of Consumer Finances.o

Item 38 DOE welcomes input on the planned approaches for estimating discount rates 

for consumers of the furnace fans covered under this rulemaking.

 m EIA’s 2008 Form 861 data and EIA’s Form 826. Available at: 

http://www.eia.doe.gov/cneaf/electricity/epm/table5_3.html. n See http://www.eere.energy.gov/buildings/appliance_standards/residential/furnace_boiler_fr.html. o See http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html. 
42

8.4 Installation, Maintenance, and Repair Costs

DOE does not currently plan to consider installation costs for furnace fans because: (1) 

the installation of a fan in a new furnace is included in the manufacturing cost of a furnace; and 

(2) installation of a replacement fan in an existing furnace is considered part of the 

repair/replacement cost.

DOE will evaluate how any maintenance and repair costs change with increased 

efficiency for the furnace fans. Often, small incremental changes in product efficiency would 

incur little or no change in maintenance and repair costs over baseline products. For products 

with significant energy-efficiency improvements over the baseline, there may be increased 

maintenance and repair costs, because such products are more likely to incorporate technologies 

that are not widely available or used. 

DOE will estimate maintenance and repair costs at each considered efficiency level using 

a variety of sources, including RS Means,

p manufacturer literature, and information from expert 

consultants. DOE will account for regional differences in labor costs by using RS Means data.

Item 39 DOE welcomes comments on appropriate maintenance and repair costs for 

furnace fans.

8.5 Product Lifetime

Product lifetime is the age at which a product is retired from service. DOE plans to use 

information from various literature sources and industry experts and input from manufacturers 

and other interested parties to determine a range for the lifetime of furnace fans.

Item 40 DOE welcomes comments on appropriate lifetimes for the furnace fans 

covered in this rulemaking.

8.6 Energy Efficiency in the Base Case 

To estimate the share of consumers that would be affected by a standard at a particular 

efficiency level, DOE’s LCC and PBP analysis will consider the projected distribution (i.e., 

market shares) of product efficiencies that consumers will purchase in the first compliance year 

 p See http://rsmeans.reedconstructiondata.com/. 
43

under the base case (i.e., the case without amended energy conservation standards). The 

projection will use available data on recent market trends in furnace efficiency and will take into 

account the potential impacts of the ENERGY STAR program and other programs or policies 

that may affect the demand for more-efficient furnaces (such as consumer rebate programs or 

State tax credits to consumers that encourage the purchase of more-efficient products, and 

manufacturer tax credits that encourage the production of more-efficient products). DOE will 

consider how the trends in furnace and central air conditioner efficiency are likely to influence 

the distribution of furnace fan efficiency.

Item 41 DOE seeks comments on the appropriate distribution of energy efficiencies for 

furnace fans in the absence of amended energy conservation standards. 

8.7 Rebuttable Presumption Analysis

In addition to the LCC and PBP calculations discussed above, DOE also conducts a 

rebuttable presumption analysis for covered products. Under 42 U.S.C. 6295(o)(2)(B)(iii), the 

statute establishes a rebuttable presumption that a standard is economically justified “[i]f 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....” While the rebuttable presumption calculation 

is helpful in understanding that certain standard levels have short payback periods, DOE 

routinely conducts a full economic analysis that considers the full range of impacts, including 

those to the consumer, manufacturer, Nation, and environment, as required under 42 U.S.C. 

6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE to definitively evaluate 

the economic justification for a potential standard level (thereby supporting or rebutting the 

results of any preliminary determination of economic justification). Economic justification is 

based on a weighing of the seven EPCA factors described in section 1.3.1. The LCC and PBP 

analyses described in the following section reflect field conditions and are, therefore, a more 

accurate depiction of consumer impacts.

9 SHIPMENTS ANALYSIS

DOE develops shipment forecasts of products to calculate the national impacts of 

potential energy conservation standards on energy consumption, net present value (NPV), and 

future manufacturer cash flows. DOE plans to develop shipments forecasts (from the assumed 

compliance date of a new standard to 30 years after compliance is required) based on an analysis 

of key market drivers for furnace fans.
44

9.1 Base-Case Forecast

To evaluate the impacts of potential energy conservation standards, DOE will develop a 

base-case shipments forecast against which to compare forecasts for higher efficiency levels. 

(The latter are also referred to as standards-case forecasts). DOE designs the base-case forecast 

to depict what it anticipates would happen to energy consumption and costs over time if DOE 

does not adopt new energy conservation standards for the products covered under this 

rulemaking. When it develops base-case shipments forecasts, DOE plans to calibrate its 

shipments model against historical shipments. DOE will also consider the distribution of 

efficiencies in the absence of new standards and how that mix might change over time.

Item 42 DOE seeks input on historical shipments data for furnace fans, including the 

distribution of shipments by efficiency.

9.2 Accounting Methodology 

DOE intends to use an accounting model to prepare shipment scenarios for the base case 

and the standards cases. DOE plans to determine annual shipments in the base case by 

accounting for: (1) furnace and cooling product replacements due to failure; (2) furnaces and 

cooling products installed in new homes; (3) furnaces and cooling products installed in homes 

that convert to central heating and cooling; and (4) fan retrofits into existing furnaces and 

cooling products if the fan fails. 

To forecast furnace fan replacement shipments, DOE will develop retirement functions 

for furnace and cooling products from the lifetime estimates and apply them to the existing 

products in the housing stock. The existing stock of products will be tracked by vintage and will 

be developed from historical shipments data. To establish historical shipments by product class, 

DOE plans to rely on public sources including Appliance Magazineq and data from AHRI. 

To forecast shipments to the new construction market, DOE plans to utilize estimates of 

forecasted new housing construction and saturation rates of various furnace and cooling product

types in new housing. DOE plans to rely on the latest available edition of EIA’s AEO for 

forecasts of new residential construction. New housing saturation rates are provided by the U.S. 

Census Bureau’s Characteristics of New Housing.

r In projecting future new housing saturation 

rates of residential furnaces and cooling products, DOE will consider expected trends in builder 

and consumer preferences, including competition among space heating and cooling products. 

 q Available at: http://www.appliancemagazine.com/. r Available at: http://www.census.gov/const/www/charindex.html.
45

DOE also plans to consider the market segment consisting of existing households that do 

not already own a product with a furnace fan. In the case of furnaces, this would primarily refer 

to homes built without central heating in which a furnace is later installed. DOE plans to derive a 

historical rate of product adoption for the non-centrally-heated market. DOE plans to project 

future adoption rates by considering the historical trend, as well as market saturation effects

based on American Housing Survey data.

s

Lastly, DOE will analyze shipments of fans for retrofit into existing furnaces and cooling 

products (i.e., replacement of failed fans). DOE will estimate these shipments by taking into 

account the fan lifetime distribution developed for the LCC analysis.

Item 43 DOE welcomes comments on the methodology described to forecast shipments 

of furnace fans.

9.3 Impacts of Standards on Furnace Fan Shipments

DOE intends to evaluate whether standards that require more-efficient furnace fans 

would have an impact on the number of fans shipped. DOE will consider application of elasticity 

parameters that relate changes in shipment quantities to changes in the installed cost of products 

with furnace fans.

Item 44 DOE welcomes comments on whether energy conservation standards might 

affect shipments of furnace fans, as well as the anticipated extent of such impacts, if 

any. 

10 NATIONAL IMPACT ANALYSIS

The national impact analysis assesses the aggregate impacts at the national level of 

potential energy conservation standards for each of the considered products, as measured by the 

NPV of total consumer economic impacts and the national energy savings (NES). DOE 

determines the NPV and NES for the standard levels considered for each of the product classes 

analyzed. To make the analysis more accessible and transparent to all interested parties, DOE 

prepares a spreadsheet model to forecast NES and the national consumer economic costs and 

 s Available at: http://www.census.gov/hhes/www/housing/ahs/ahs.html. 
46

savings resulting from new standards. The spreadsheet model uses typical values as inputs (as 

opposed to probability distributions). To assess the effect of input uncertainty on NES and NPV 

results, DOE may conduct sensitivity analyses by running scenarios on specific input variables.

10.1 Inputs to the NIA

Analyzing impacts of potential energy conservation standards for residential furnace fans 

requires comparing projections of U.S. energy consumption with new or amended energy 

conservation standards against projections of energy consumption without the standards. The 

forecasts include projections of annual appliance shipments, the annual energy consumption of 

new appliances, and the purchase price of new appliances.

A key component of DOE’s NIA analysis is the energy efficiencies forecasted over time 

for the base case (without new standards) and each of the standards cases. The forecasted 

efficiencies represent the annual shipment-weighted energy efficiency of the products under 

consideration during the forecast period (i.e., from the assumed compliance date of a new 

standard to 30 years after compliance is required). 

Section 9 described how DOE plans to develop a base-case energy efficiency distribution 

(which yields a shipment-weighted average efficiency) for each of the furnace fan product 

classes for the first year of the forecast period. To forecast base-case efficiencies over the entire 

forecast period, DOE intends to extrapolate from the historical trends to the extent that is 

reasonable. 

To develop shipment-weighted efficiencies for the various standards cases, DOE will 

utilize the efficiency market share data for each product class. Once DOE establishes the 

shipment-weighted efficiencies for the assumed compliance date of the standard, it plans to 

estimate future shipment-weighted efficiencies using the same rate of forecasted efficiency 

growth as in the base-case efficiency trend. 

To estimate the impact that standards may have in the year compliance becomes required, 

DOE has used “roll-up” and/or “shift” scenarios in its standards rulemakings. Under the “rollup” scenario, DOE assumes: (1) product efficiencies in the base case that do not meet the 

standard level under consideration would “roll-up” to meet the new standard level; and (2) 

product efficiencies above the standard level under consideration would not be affected. Under 

the “shift” scenario, DOE retains the pattern of the base-case efficiency distribution but reorients the distribution at and above the new minimum energy conservation standard. DOE will 

evaluate whether one of these approaches is more reasonable for furnace fans, or whether it 

would be preferable to use both scenarios in its calculation of national impacts. 
47

Item 45 DOE seeks comments on the appropriate assumptions to use regarding longrun changes in furnace fan energy efficiency independent of amended energy 

conservation standards.

Item 46 DOE seeks comments on the use of the “roll-up” and “shift” efficiency 

scenarios to characterize the impact that potential standards would have on the 

product efficiency distributions.

10.2 Calculation of National Energy Savings

DOE will calculate national energy consumption for each year in the forecast period. 

DOE will calculate national energy consumption by fuel type for the base case and each 

standards case analyzed. DOE plans to perform this calculation through the use of a spreadsheet 

model that multiplies the stock of products (which is determined by the shipments forecasts) by 

unit energy savings, accounting for the stock of products affected by the energy conservation 

standards. In response to comments by stakeholders in prior rulemakings who asked for a simple, 

transparent model, DOE has developed NIA spreadsheet models to forecast energy savings from 

standards at different efficiency levels. 

To estimate the primary energy savings resulting from fuel and/or electricity savings at 

building sites, DOE will develop annual site-to-source conversion factors based on the version of 

the National Energy Modeling System (NEMS) that corresponds to the AEO 2010. The factors 

that DOE develops are marginal values, which represent the response of the system to an

incremental decrease in consumption. Natural gas losses include pipeline leakage, pumping 

energy, and transportation fuel. For electricity, the conversion factors change over time in 

response to projected changes in generation sources (i.e., the types of power plant projected to 

provide electricity). 

10.3 Net Present Value of Consumer Savings

The inputs for determining NPV of the total costs and benefits experienced by consumers 

of the considered appliances are: (1) total annual installed cost; (2) total annual savings in 

operating costs; (3) a discount factor; (4) present value of costs; and (5) present value of savings. 

DOE calculates net savings each year as the difference between the base case and each standards 

case in terms of the total savings in operating costs and total increases in installed costs. DOE 

calculates savings over the life of each product. DOE calculates NPV as the difference between 

the present value of operating cost savings and the present value of total installed costs. 

DOE calculates increases in total installed costs as the product of the difference in total 

installed cost between the base case and a standards case. DOE expresses savings in operating 
48

costs as decreases associated with the lower energy consumption of products bought in the 

standards case compared to the base case. Total savings in operating costs are the product of 

savings per unit and the number of units of each vintage that survive in a given year. 

According to U.S. Office of Management and Budget (OMB) guidelines for Federal 

agencies, DOE will conduct two NPV calculations, one using a real discount rate of 3 percent 

and another using a real discount rate of 7 percent (OMB, Circular A-4: Regulatory Analysis

(2003)). The discount rates for the determination of NPV are in contrast to the discount rates 

used in the LCC analysis, which are designed to reflect a consumer’s perspective. The 7-percent 

real value is an estimate of the average before-tax rate of return to private capital in the U.S. 

economy. The 3-percent real value represents the “societal rate of time preference,” which is the 

rate at which society discounts future consumption flows to their present value. 

11 LIFE-CYCLE COST CONSUMER SUBGROUP ANALYSIS

At the NOPR stage of this rulemaking, DOE will conduct a LCC subgroup analysis. In 

this analysis, DOE assesses consumer impacts by dividing consumers into subgroups and 

accounting for variations in key inputs to the LCC analysis. A consumer subgroup comprises a 

subset of the population likely to be affected disproportionately by new or revised energy 

conservation standards (e.g., low-income consumers, seniors). The purpose of a subgroup 

analysis is to determine the extent of any such disproportional impact. DOE will work with 

industry and other interested parties early in the rulemaking process to identify any subgroups for 

consideration. 

Item 47 DOE welcomes comments from interested parties on which, if any, consumer 

subgroups should be considered when developing energy conservation standards for 

furnace fans.

12 MANUFACTURER IMPACT ANALYSIS

DOE intends the manufacturer impact analysis (MIA) to provide an assessment of the 

potential impacts of energy conservation standards on manufacturers of furnace fans. A wide 

range of quantitative and qualitative effects may occur following the adoption of a standard that 

may require changes to manufacturing practices. DOE will identify these potential effects 

through interviews with manufacturers and other experts.

For the NOPR, DOE will conduct an industry-wide cash-flow analysis using the 

Government Regulatory Impact Model (GRIM), identify and analyze subgroups of 
49

manufacturers whose businesses vary significantly from the industry as a whole, perform a 

competitive impacts assessment, and review the cumulative regulatory burden for the industry.

12.1 Sources of Information for the Manufacturer Impact Analysis

Many of the analyses described earlier provide important information that DOE will use 

as inputs for the MIA. Such information includes financial parameters developed in the market 

assessment (section 3.1), cost data developed in the engineering analysis (section 5), and 

shipments forecasts (section 9). DOE will supplement this information with information gathered 

during manufacturer interviews, as discussed below. 

DOE will conduct detailed interviews with manufacturers to gain insight into the range of 

possible impacts from potential energy conservation standards. The interview process plays a 

key role in the MIA, because it provides an opportunity for directly-affected parties to express 

their views on important issues. During the interviews, DOE will solicit information on the 

possible impacts of potential standards on manufacturing costs, product prices, sales, direct 

employment, capital assets, and industry competitiveness. Both qualitative and quantitative 

information are valuable in this analysis. DOE will schedule interviews well in advance to 

provide every opportunity for key individuals to participate. In addition, DOE will provide 

manufacturers with questionnaires before the interviews to facilitate information gathering. 

Although a written response to the questionnaire is acceptable, DOE prefers an interactive 

interview process, because it helps to clarify responses and provides the opportunity to identify 

additional issues.

DOE will ask interview participants to identify confidential information, and will 

consider the information gathered in the energy conservation standard decision-making process. 

DOE will also ask participants to identify any information they wish to have included in the 

public record, but do not want to have associated with their interview (thereby identifying that 

particular manufacturer). DOE will incorporate this information into the public record, but will 

report it without attribution.

DOE will collate the interview results and prepare a summary of the major issues and 

outcomes. This summary will become part of the technical support document for this 

rulemaking.

12.2 Industry Cash-Flow Analysis

The industry cash-flow analysis will rely primarily on the GRIM. DOE uses the GRIM to 

analyze the financial impacts of new or more-stringent energy conservation standards on the 

industry that produces the products covered by the standard.

The GRIM uses a number of factors—annual expected revenues; manufacturer costs such 

as costs of goods sold; selling, general, and administrative (SG&A) costs; research and 

development costs; product conversion costs; taxes; capital expenditures (both ordinary capital 

expenditures and those related to standards); and working capital requirements—to determine 
50

annual cash flows associated with a new standard, beginning from the announcement of the 

standard and continuing for several years after its implementation. 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, or the 

differences between the base-case and standards-case industry net present values (INPV). Other 

performance metrics, such as return on invested capital, are also available from the GRIM.

DOE will gather the inputs needed for the GRIM from two primary sources: (1) the 

analyses conducted to this point; and (2) interviews with manufacturers and other interested 

parties. As discussed above, information gathered from previous analyses will include financial 

parameters, manufacturing costs, price forecasts, and shipment forecasts. Interviews with 

manufacturers and other interested parties will be essential in supplementing this information.

12.3 Manufacturer Subgroup Analysis

Average industry cost values may not reveal differential impacts among furnace fan

manufacturer subgroups. Smaller manufacturers, niche players, and manufacturers exhibiting a 

cost structure that differs significantly from the industry average may be affected differently by 

standards. Ideally, DOE would consider the impact on every firm individually. In highlyconcentrated industries, this may be possible. In industries having numerous participants, 

however, DOE uses the results of the market and technology assessment to group manufacturers 

into subgroups, as appropriate. For furnace fans, DOE does not intend to assess the impacts on 

every manufacturer individually, and therefore, is interested in feedback about potential 

subgroups. However, the detailed manufacturer subgroup impact analysis will calculate cash 

flows separately for each class of manufacturer.

Item 48 DOE seeks comments on the subgroups of furnace fan and furnace fan 

product manufacturers that it should consider in a manufacturer subgroup analysis.

12.4 Competitive Impacts Analysis

EPCA directs DOE to consider any lessening of competition likely to result from the 

imposition of standards. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It further directs the Attorney General 

to determine in writing the impacts, if any, of any lessening of competition likely to result from 

standards. (42 U.S.C. 6295(o)(2)(B)(ii)) 

DOE will make a determined effort to gather firm-specific financial information and 

impacts and report the aggregated impact of the amended standard on manufacturers. The 

competitive impacts analysis will focus on assessing the impacts on smaller manufacturers. DOE 

will base the assessment on manufacturing cost data and information collected from interviews 
51

with manufacturers. The manufacturer interviews will focus on gathering information that would 

help in assessing asymmetrical cost increases to some manufacturers, increased proportion of 

fixed costs potentially increasing business risks, and potential barriers to market entry (e.g., 

proprietary technologies). DOE will provide the Attorney General with a copy of the NOPR for 

consideration in his evaluation of the impact of standards on the lessening of competition. DOE 

will publish the Attorney General’s letter and address any related comments in the final rule.

12.5 Cumulative Regulatory Burden

Other regulations (Federal, State, local, or international) may apply to the furnace fan

product manufacturers covered under this rulemaking, and to other products made by furnace fan

and furnace fan product manufacturers. Multiple regulations may result in a significant, 

cumulative regulatory burden on these manufacturers. DOE will consider the impact on these

manufacturers of multiple, product-specific regulatory actions. Regulations that could impact the 

industry affected by this rulemaking include:

• Energy Conservation Standards for Residential Furnaces and Boilers

• Energy Conservation Standards for Residential Central Air Conditioners and 

Heat Pumps

Item 49 DOE welcomes comments on what other existing regulations or pending 

regulations it should consider in its examination of cumulative regulatory burden.

13 UTILITY IMPACT ANALYSIS

To estimate the impacts of potential energy conservation standards for furnace fans on 

the electric utility industry, DOE will use a variant of the EIA’s National Energy Modeling 

System called NEMS-BT.t

NEMS is a large, multi-sectoral, partial-equilibrium model of the 

U.S. energy sector that EIA has developed over several years, primarily for the purpose of 

preparing the AEO. NEMS produces a widely-recognized Reference-Case forecast for the United 

States through 2035 and is available to the public. 

 t

For 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 (March 2000), available at: http://tonto.eia.doe.gov/ftproot/forecasting/05812000.pdf. 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 EIA assumptions, DOE refers to the model by the name NEMS-BT. (“BT” refers to DOE’s 

Building Technologies Program, under whose aegis this work is performed.)
52

The utility impact analysis is a comparison between the NEMS-BT model results for the 

base case and standard cases. Outputs of the utility impact analysis usually parallel results that 

appear in the latest AEO, with some additions. The utility impact analysis reports the changes in 

installed capacity and generation that result from each standard level by plant type. DOE will 

model the anticipated energy savings impacts from potential amended energy conservation 

standards using NEMS-BT to generate forecasts that deviate from the AEO Reference Case.u

Item 50 DOE seeks input on its plans to use NEMS-BT to conduct the utility impact 

analysis for the products covered under this rulemaking.

14 EMPLOYMENT IMPACT ANALYSIS

The adoption of energy conservation standards can affect employment both directly and 

indirectly. Direct employment impacts are changes in the number of employees at the plants that 

produce the covered products, along with affiliated distribution and service companies. DOE will 

evaluate direct employment impacts in the MIA (section 12).

Indirect employment impacts may result from expenditures shifting between goods (the 

substitution effect) and changes in income and overall expenditure levels (the income effect) that 

occur due to standards. 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 

increased product prices and reduced spending on energy.

The combined direct and indirect employment impacts will be investigated in the 

employment impact analysis using the Pacific Northwest National Laboratory’s “Impact of 

Sector Energy Technologies” (ImSET) model.v The ImSET model was developed for DOE’s 

Office of Planning, Budget, and Analysis to estimate the employment and income effects of 

energy-saving technologies in buildings, industry, and transportation. Compared with simple 

economic multiplier approaches, ImSET allows for more complete and automated analysis of the 

economic impacts of energy conservation investments.

 u Several descriptions of NEMS-BT models from previous rulemakings, including residential furnaces and boilers, 

can be found on DOE’s website at: 

www.eere.energy.gov/buildings/appliance_standards/residential/pdfs/fb_fr_tsd/chapter_13.pdf. v Roop, J. M., M. J. Scott, and R. W. Schultz, ‘‘ImSET: Impact of Sector Energy Technologies,’’ PNNL–15273. 

(Pacific Northwest National Laboratory, Richland, WA)(2005).
53

Item 51 DOE requests comments on its approach to assessing employment impacts on 

the products covered under this rulemaking.

15 ENVIRONMENTAL ASSESSMENT

The intent of the environmental assessment (EA) is to quantify and consider the 

environmental effects of potential energy conservation standards for furnace fans. The primary 

environmental effects of these standards would be reduced power plant emissions resulting from 

reduced consumption of electricity. DOE will assess these environmental effects by using 

NEMS-BT to provide key inputs to its analysis. The portion of the environmental assessment 

that will be produced by NEMS-BT considers carbon dioxide (CO2), nitrogen oxides (NOX), and 

mercury (Hg). The environmental assessment also considers impacts on sulfur dioxide (SO2) 

emissions. After a brief discussion of general methodology, this section will address each of the 

relevant emissions. This section then explains how DOE plans to monetize the benefits 

associated with emissions reductions.

15.1 Carbon Dioxide

In the absence of any Federal emissions control regulation of power plant emissions of 

CO2, a DOE standard is likely to result in reductions of these emissions. The CO2 emission 

reductions likely to result from a standard will be estimated using NEMS-BT and national energy 

savings estimates drawn from the NIA spreadsheet model. The net benefit of the standard is the 

difference between emissions estimated by NEMS-BT at each standard level considered and the 

AEO Reference Case. NEMS-BT tracks CO2 emissions using a detailed module that provides 

results with broad coverage of all sectors and inclusion of interactive effects.

15.2 Sulfur Dioxide

DOE has preliminarily determined that SO2 emissions from affected Electric Generating 

Units (EGUs) are subject to nationwide and regional emissions cap-and-trade programs that are 

likely to eliminate the standards’ impact on SO2 emissions. The costs of meeting such emission 

cap requirements are reflected in the electricity prices and forecasts used in DOE’s analysis of 

the standards. Title IV of the Clean Air Act sets an annual emissions cap on SO2 for all affected 

EGUs. SO2 emissions from 28 eastern States and the District of Columbia (DC) are also limited 

under the Clean Air Interstate Rule (CAIR, published in the Federal Register on May 12, 2005. 

70 FR 25162 (May 12, 2005)), which creates an allowance-based trading program that will 

gradually replace the Title IV program in those States and DC. (The recent legal history 

surrounding CAIR is discussed below.) The attainment of the emissions caps is flexible among 

EGUs and is enforced through the use of emissions allowances and tradable permits. Under 

existing EPA regulations, any excess SO2 emission allowances resulting from the lower 
54

electricity demand caused by the imposition of an efficiency standard could be used to permit 

offsetting increases in SO2 emissions by any regulated EGU. However, if the standard resulted in 

a permanent increase in the quantity of unused emission allowances, there would be an overall 

reduction in SO2 emissions from the standards. While there remains some uncertainty about the 

ultimate effects of efficiency standards on SO2 emissions covered by the existing cap-and-trade 

system, the NEMS-BT modeling system that DOE plans to use to forecast emissions reductions 

currently indicates that no physical reductions in power sector emissions would occur for SO2.

15.3 Nitrogen Oxides

NEMS-BT also has an algorithm for estimating NOX emissions from power generation. 

The impact of these emissions, however, will be affected by the CAIR, which the U.S. 

Environmental Protection Agency (EPA) issued on May 12, 2005. CAIR will permanently cap 

emissions of NOX in 28 eastern States and the District of Columbia (DC). 70 FR 25162 (May 12, 

2005).

Much like SO2 emissions, a cap on NOX emissions means that the furnace fan standards 

may have little or no physical effect on these emissions in the 28 eastern States and DC covered 

by CAIR. Although CAIR has been remanded to the EPA by the U. S. Court of Appeals for the 

District of Columbia Circuit, it will remain in effect until it is replaced by a rule consistent with 

the Court’s July 11, 2008, opinion in North Carolina v. EPA. 531 F.3d 896 (DC Cir. 2008); see 

also North Carolina v. EPA, 550 F.3d 1176 (DC Cir. 2008). Because all States covered by CAIR 

opted to reduce NOX emissions by participating in cap-and-trade programs for electric 

generating units, emissions from these sources are capped across the CAIR region.

DOE plans to use NEMS-BT to estimate the emissions reductions from possible 

standards in the 22 States where emissions are not capped.

15.4 Mercury

Similar to emissions of SO2 and NOX, future emissions of Hg would have been subject to 

emissions caps. In May 2005, EPA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 

(May 18, 2005). CAMR would have permanently capped emissions of mercury for new and 

existing coal-fired power plants in all States by 2010. However, on February 8, 2008, the United 

States Court of Appeals for the DC Circuit issued its decision in New Jersey v. Environmental 

Protection Agency, in which the Court, among other actions, vacated the CAMR. 517 F.3d 574 

(DC Cir. 2008). EPA has decided to develop emissions standards for power plants under the

Clean Air Act (Section 112), consistent with the Court’s opinion on the CAMR. See 

http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf. Pending EPA's 

forthcoming revisions to the rule, DOE is excluding the CAMR from its environmental 

assessment. In the absence of CAMR, a DOE standard would likely reduce Hg emissions and 

DOE plans to use NEMS-BT to estimate these emission reductions. However, DOE continues to 

review the impact of rules that reduce energy consumption on Hg emissions, and may revise its 

assessment of Hg emission reductions in future rulemakings.
55

15.5 Particulate Matter

DOE acknowledges that particulate matter (PM) impacts are of concern because exposure 

can impact health. However, the impacts of PM emissions reduction are much more difficult to 

estimate than other emissions reductions due to the complex interactions between PM, other 

power plant emissions, meteorology, and atmospheric chemistry that affect human exposure to 

particulates. Human exposure to PM usually occurs at a significant distance from the power 

plants that emit particulates and particulate precursors. When power plant emissions travel 

significant distances through the atmosphere, they undergo highly complex chemical reactions, 

ultimately producing secondary sulfates. Although the EPA does record inventories of direct PM 

emissions of power plants, in its source attribution reviews, the EPA does not separate direct PM 

emissions from power plants from the sulfate particulates indirectly produced through complex 

atmospheric chemical reactions. The great majority of PM emissions from power plants are of 

these secondary sulfates. Thus, it is not useful to examine how the amended standard impacts 

direct PM emissions independent of indirect PM production and atmospheric dynamics. 

Therefore, DOE is not planning to assess the impact of these standards on particulate emissions. 

Further, even the cumulative impact of PM emissions from power plants and indirect emissions 

of pollutants from other sources is unlikely to be significant.

Item 52 DOE seeks input on its plans to use NEMS-BT to conduct the environmental 

assessment for the products covered by this rulemaking. 

16 MONETIZATION OF EMISSIONS REDUCTIONS 

For those emissions for which real national emission reductions are anticipated (CO2, Hg, 

and NOX for 22 States), only ranges of estimated economic values based on environmental 

damage studies of varying quality and applicability are available. Therefore, DOE intends to

report estimates of monetary benefits derived using these values and consider these benefits in 

weighing the costs and benefits of each of the standard levels considered. 

In order to estimate the monetary value of benefits resulting from reduced emissions of 

CO2 emissions, DOE intends to use in its analysis the most current Social Cost of Carbon (SCC) 

values developed and/or agreed to by interagency reviews. The SCC is intended to be a monetary 

measure of the incremental damage resulting from greenhouse gas (GHG) emissions, including, 

but not limited to, net agricultural productivity loss, human health effects, property damage from 

sea level rise, and changes in ecosystem services. Any effort to quantify and to monetize the 

harms associated with climate change will raise serious questions of science, economics, and 

ethics. But with full regard for the limits of both quantification and monetization, the SCC can be 

used to provide estimates of the social benefits of reductions in GHG emissions. 
56

At the time of this notice, the most recent interagency estimates of the potential global 

benefits resulting from reduced CO2 emissions in 2010 were $4.7, $21.4, $35.1, and $64.9 per 

metric ton in 2007 dollars. These values are then adjusted to 2009$ using the standard gross 

domestic product (GDP) deflator value for 2008 and 2009. For emissions (or emission 

reductions) that occur in later years, these values grow in real terms over time. Additionally, the 

interagency group determined that a range of values from 7 percent to 23 percent should be used 

to adjust the global SCC to calculate domestic effects, although DOE will give preference to 

consideration of the global benefits of reducing CO2 emissions. To calculate a present value of 

the stream of monetary values, DOE will discount the values in each of the four cases using the 

discount rates that had been used to obtain the SCC values in each case.

DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to 

the contribution of CO2 and other GHG to changes in the future global climate and the potential 

resulting damages to the world economy. Thus, these values are subject to change. 

DOE also intends to estimate the potential monetary benefit of reduced NOX emissions 

resulting from the standard levels it considers. For NOX emissions, available estimates suggest a 

very wide range of monetary values for NOX emissions, ranging from $370 per ton to $3,800 per 

ton of NOX from stationary sources, measured in 2001$ (equivalent to a range of $447 to $4,591

per ton in 2009$). Refer to the OMB, Office of Information and Regulatory Affairs (OIRA), 

“2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded 

Mandates on State, Local, and Tribal Entities,” for additional information. In accordance with 

OMB guidance, DOE will conduct two calculations of the monetary benefits derived using each 

of the economic values used for NOX, one using a real discount rate of 3 percent and another 

using a real discount rate of 7 percent.w 

DOE does not plan to monetize estimates of Hg in this rulemaking. DOE is aware of 

multiple agency efforts to determine the appropriate range of values used in evaluating the 

potential economic benefits of reduced Hg emissions. DOE has decided to await further guidance 

regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg 

in its rulemakings.

Item 53 DOE requests comments on the approach it plans to use for estimating 

monetary values associated with emissions reductions, or any widely-accepted values 

that could be used in DOE’s analyses.

 w OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
57

17 REGULATORY IMPACT ANALYSIS

DOE will prepare a regulatory impact analysis at the NOPR and final rule stages of this 

rulemaking. This analysis will address the potential for non-regulatory approaches to supplant or 

augment potential energy conservation standards to improve the efficiency of furnace fans on the 

market. DOE recognizes that voluntary and other non-regulatory efforts by manufacturers, 

utilities, and other interested parties can result in substantial efficiency improvements. DOE 

intends to analyze the likely effects of non-regulatory initiatives on product energy use, 

consumer utility, and LCCs. DOE will try to base its assessment on the actual impacts of any 

such initiatives to date, but also will consider information presented on the impacts that any 

existing initiative might have in the future.

If DOE determines that energy conservation standards for furnace fans would constitute a 

significant regulatory action, DOE will prepare and submit to OMB the assessment of costs and 

benefits required under section 6(a)(3) of Executive Order 12866, “Regulatory Planning and 

Review,” 58 FR 51735 (Oct. 4, 1993).
58

APPENDIX A – LIST OF ITEMS FOR COMMENT

This appendix lists all the items for comment contained in this framework document and the 

page numbers on which those items can be found.

Item 1 DOE welcomes comments on its approach interpreting the relevant language in 

EPCA as referring to electricity used by any electrically-powered device used in 

residential central HVAC systems for the purposes of circulating air through duct 

work. Residential HVAC systems include, but are not limited to, furnaces, splitsystem and packaged central air conditioner and heat pump air handlers, and modular 

fan coils......................................................................................................................... 4

Item 2 DOE seeks comment on any other residential central HVAC products that may also 

use furnace fans that should be included in the scope of coverage of this rule............ 4

Item 3 DOE welcomes comments on its interpretation of the relevant language in EPCA as 

excluding electricity used by draft inducer fans, exhaust fans, and heat/energy 

recovery ventilators. ..................................................................................................... 4

Item 4 DOE seeks comment on whether DOE should include a rated airflow capacity range 

or a rated horsepower range to help define test procedure applicability. ..................... 4

Item 5 DOE requests comment on its assumptions for the electrical energy consumption 

expected in each mode of operation (i.e., active mode, standby mode, and off mode)..

...................................................................................................................................... 9

Item 6 DOE seeks input on the use of the annual electrical energy consumption rating for 

rating and regulating furnace fans, along with any other relevant efficiency 

descriptors..................................................................................................................... 9

Item 7 DOE welcomes comments on the use of Canadian Standard CSA C823 Performance 

Standard for Air Handlers in Residential Space Conditioning Systems, ANSI/AMCA 

210-07 | ANSI/ASHRAE 51-07 Laboratory Methods of Testing Fans for Certified 

Aerodynamic Performance Rating, and ANSI/ASHRAE Std 37-2005 Methods of 

Testing for Rating Electrically Driven Unitary Air-Conditioning and Heat Pump 

Equipment as reference test procedures. .................................................................... 10

Item 8 DOE seeks comment on the existence and applicability of any other industry test 

procedure that DOE could consider for use in measuring the airflow and electrical 

energy consumption of furnace fans. In addition, DOE seeks comment as to what 

types of testing manufacturers currently conduct on furnaces fans and what test setups and methods are used. .......................................................................................... 10

Item 9 DOE welcomes comment on the CSA CS823 methodology used to develop 

performance curves..................................................................................................... 11
59

Item 10 DOE seeks comment on the appropriate total number and range of static pressures 

necessary to encompass the expected operating conditions for furnace fans for the 

purposes of developing performance curves without being unduly burdensome. DOE 

also seeks data, which would show that testing at a reduced number of static 

pressures would provide similar results as testing over the entire range of static 

pressures. .................................................................................................................... 11

Item 11 DOE seeks comment on the CSA C823-specified method of selecting furnace fan 

speed control settings for testing. DOE also seeks comment on the relationship 

between speed control setting or speed tap and use in heating, cooling, or circulation 

functions of active mode furnace fan operation. ........................................................ 12

Item 12 DOE requests comment on the use of 0.5 in w.c. in the default heating speed control 

setting to define its reference system and resulting rating point. DOE requests 

comment on whether changes are necessary to the reference system to more 

accurately reflect furnace fan operation in the U. S. .................................................. 13

Item 13 DOE welcomes comment on the methodology outlined in CSA C823 to develop 

system load curves...................................................................................................... 13

Item 14 DOE welcomes comment on the methodology CSA C823 currently uses to identify 

furnace fan operating points. ...................................................................................... 14

Item 15 DOE seeks input on the CSA C823 equation for annual energy consumption rating 

(AECR)....................................................................................................................... 17

Item 16 DOE requests comment on the annual hourly multiplier methodology specified in 

CSA C823, as well as if and how this methodology and the annual hourly multiplier 

values could be modified to more specifically address furnace fan operation in the 

United States............................................................................................................... 17

Item 17 DOE seeks comment on the potential merits of using the BE measurement specified 

in DOE’s existing residential furnaces test procedure (10 CFR part 430, subpart B, 

appendix N) as the basis for its furnace fan test procedure. ....................................... 18

Item 18 DOE seeks comment on additional rating methods that would be necessary to cover 

the power consumption of furnace fans used in residential central HVAC products 

other than furnaces...................................................................................................... 19

Item 19 DOE seeks comment on how these power measurements could estimate the power 

consumption of the furnace fan in the circulation function and account for the furnace 

fan operation within an appropriate range of static pressures and at an appropriate 

number of speed control settings. ............................................................................... 19
60

Item 20 DOE seeks comment on the appropriate annual hourly multipliers to determine the 

number of hours annually that the furnace fan operates in each speed control setting 

or function................................................................................................................... 19

Item 21 DOE seeks comment on whether the manufacturers of the products in which furnace

fans are used, herein referred to as “furnace fan products,” are also the manufacturers 

of the furnace fan........................................................................................................ 24

Item 22 DOE welcomes input on estimates of market shares, products, features, and trends 

related to electricity consumption for the furnace fans covered in this rulemaking... 24

Item 23 DOE welcomes comments on whether to use rated airflow capacity, rated motor 

horsepower or an alternative approach to defining product classes in accordance with 

the requirements of 42 U.S.C. 6295(q.). DOE also seeks comment on how each of 

these specifications influences furnace fan product design decisions........................ 26

Item 24 DOE seeks input on appropriate rated airflow or rated motor horsepower bins. 

Specifically, DOE is interested in information that could be used to determine the 

number of bins or range of each bin. .......................................................................... 26

Item 25 DOE welcomes comments on the preliminary technology options identified in this 

section (i.e., high-efficiency furnace fan motors and high-efficiency impellers) and 

whether there are other technology options it should consider. In commenting on 

technology options, please discuss their impacts, if any, on safety, performance, and 

consumer utility. ......................................................................................................... 28

Item 26 DOE welcomes comments on how the above four screening criteria might apply to 

any additional technology option(s) that an interested party recommends to DOE... 29

Item 27 DOE welcomes comments on the selection and appropriate features and performance 

characteristics of baseline models for each product class. ......................................... 30

Item 28 DOE seeks comments on its approach to calculating the cost-efficiency relationship 

for furnace fans........................................................................................................... 32

Item 29 DOE welcomes comments on the selection of commercially-available furnace fans 

with incrementally increasing efficiency from the baseline model to max-tech for 

characterizing the efficiencies of furnace fans currently offered for sale. ................. 32

Item 30 DOE welcomes comments on how furnace fan efficiency varies with airflow 

capacity, motor type, motor rated horsepower, number of speed control settings, or 

any other furnace fan parameter. ................................................................................ 32

Item 31 DOE seeks information on proprietary designs of which it should be aware for the 

furnace fans under consideration in this rulemaking and, if such proprietary designs 

exist, how DOE can acquire the cost data necessary for evaluating these designs. ... 33
61

Item 32 DOE welcomes comments on regulatory burdens and changes that should be 

considered in the engineering analysis of furnace fans. ............................................. 33

Item 33 DOE welcomes comments on other engineering issues that could affect the 

engineering analysis.................................................................................................... 33

Item 34 DOE requests comments on the planned distribution path for the furnace fans covered 

under this rulemaking and whether DOE should consider any additional paths. DOE 

also requests information on the relative fraction of shipments expected for each path.

.................................................................................................................................... 36

Item 35 DOE requests feedback on the overall markups for the furnace fans covered under r 

each path in the distribution chain.............................................................................. 36

Item 36 DOE seeks comments on the planned approach for determining the energy 

consumption of furnace fans in residential buildings................................................. 39

Item 37 DOE welcomes comments from interested parties as to whether a more-efficient 

furnace fan would be expected to be used more and whether such a rebound effect 

should be considered separately for this product........................................................ 40

Item 38 DOE welcomes input on the planned approaches for estimating discount rates for 

consumers of the furnace fans covered under this rulemaking................................... 41

Item 39 DOE welcomes comments on appropriate maintenance and repair costs for furnace 

fans.............................................................................................................................. 42

Item 40 DOE welcomes comments on appropriate lifetimes for the furnace fans covered in 

this rulemaking. .......................................................................................................... 42

Item 41 DOE seeks comments on the appropriate distribution of energy efficiencies for 

furnace fans in the absence of amended energy conservation standards.................... 43

Item 42 DOE seeks input on historical shipments data for furnace fans, including the 

distribution of shipments by efficiency. ..................................................................... 44

Item 43 DOE welcomes comments on the methodology described to forecast shipments of 

furnace fans................................................................................................................. 45

Item 44 DOE welcomes comments on whether energy conservation standards might affect 

shipments of furnace fans, as well as the anticipated extent of such impacts, if any. ....

.................................................................................................................................... 45
62

Item 45 DOE seeks comments on the appropriate assumptions to use regarding long-run 

changes in furnace fan energy efficiency independent of amended energy

conservation standards................................................................................................ 47

Item 46 DOE seeks comments on the use of the “roll-up” and “shift” efficiency scenarios to 

characterize the impact that potential standards would have on the product efficiency 

distributions. ............................................................................................................... 47

Item 47 DOE welcomes comments from interested parties on which, if any, consumer 

subgroups should be considered when developing energy conservation standards for 

furnace fans................................................................................................................. 48

Item 48 DOE seeks comments on the subgroups of furnace fan and furnace fan product 

manufacturers that it should consider in a manufacturer subgroup analysis.............. 50

Item 49 DOE welcomes comments on what other existing regulations or pending regulations 

it should consider in its examination of cumulative regulatory burden...................... 51

Item 50 DOE seeks input on its plans to use NEMS-BT to conduct the utility impact analysis 

for the products covered under this rulemaking. ........................................................ 52

Item 51 DOE requests comments on its approach to assessing employment impacts on the 

products covered under this rulemaking..................................................................... 53

Item 52 DOE seeks input on its plans to use NEMS-BT to conduct the environmental 

assessment for the products covered by this rulemaking............................................ 55

Item 53 DOE requests comments on the approach it plans to use for estimating monetary 

values associated with emissions reductions, or any widely-accepted values that could 

be used in DOE’s analyses. ........................................................................................ 56