WELCOMEto theDOE Webcast PresentationforCommercial Unitary Air Conditioners and Heat PumpsThursday, August 12, 2004, from 1:00 p.m. to 4:00 p.m. EDT• This webcast has been arranged through Microsoft Office Live Meeting2003. If you need help, there is aweb site that you can access in advanceto test your system. The linkis http://www.livemeeting.com/ then usecustomer support/browser check.• For technical support withLiveMeeting, please call 1-866-493-2825.• Audio for this webcast isaccessible by dialing 1-202-287-5323(Reservation #104883). If you have any questions about the audio, pleasecontact the DOE Headquarters Operator at (301) 903-3000.DOE WEBCAST PRESENTATION:Analyses and Advance Noticeof Proposed Rulemaking Processfor Commercial Unitary Air Conditionersand Heat PumpsBuilding Technologies ProgramOffice of Energy Efficiency and Renewable EnergyU.S. Department of EnergyAugust 12, 20043PurposePreparing for the Public MeetingThe DOE wants to assist stakeholders with understanding andinterpreting the material developed for the Advance Notice ofProposed Rulemaking (ANOPR)ANOPR Federal Register notice published July 29 at 69 FR 45460Technical Support Document (TSD) appears on the DOE website athttp://www.eere.energy.gov/buildings/appliance_standards/commercial/ac_hp.htmlHow to use and apply the spreadsheet tools:Life-cycle cost and payback periods analysesNational impact analysis (nationalenergy savings and net present value)4Webcast ProtocolWebcast ProtocolToday's webcast is not part of theformal process, and there is noprovision to capture comments for the recordPurpose: Familiarize you with the ANOPR spreadsheet tools(education and clarification)Opportunity to ask clarification questions after each sectionThis is not a forum tocritique the ANOPR analysisThe Department requests your comments:Public meeting - September 30, 2004Written comments not later than November 12, 20045Agenda1Rulemaking Overview2Engineering Analysis3Building Energy Use and End-Use Load Characterization4Life-Cycle Cost and Payback Period Analysis5National Impact Analysis6• Public Meeting,October 1, 2001• ANOPR, July 29, 2004• ANOPR PublicMeeting, September30, 2004• NOPR Analysis – to becompleted• NOPR Public Meeting– to be held• Final Rule• Public Meetings onTest Procedures: April14, 1998 and October18, 1998• Test ProcedureProposed Rule,August 9, 2000• Public Meeting,September 21, 2000• Test Procedure FinalRule, Pending• Notice of PreliminaryScreening Analysis,March 1, 2000• Standards Final Rulefor Water-Source AirConditioners, January12, 2001Test ProcedureRulemakingCurrentStandardsRulemakingPrincipal Procedural Steps for Commercial Unitary AirConditioners and Heat PumpsStakeholder ParticipationRulemaking OverviewPreviousStandardsRulemaking7• Public Meeting,October 1, 2001• ANOPR, July 29, 2004• ANOPR PublicMeeting, September30, 2004• NOPR Analysis – to becompleted• NOPR Public Meeting– to be held• Final Rule• Public Meetings onTest Procedures: April14, 1998 and October18, 1998• Test ProcedureProposed Rule,August 9, 2000• Public Meeting,September 21, 2000• Test Procedure FinalRule, Pending• Notice of PreliminaryScreening Analysis,March 1, 2000• Standards Final Rulefor Water-Source AirConditioners, January12, 2001Test ProcedureRulemakingPreviousStandardsRulemakingCurrentStandardsRulemakingPrincipal Procedural Steps for Commercial Unitary AirConditioners and Heat PumpsStakeholder ParticipationRulemaking Overview8• Public Meeting,October 1, 2001• ANOPR, July 29, 2004• ANOPR PublicMeeting, September30, 2004• NOPR Analysis – to becompleted• NOPR Public Meeting– to be held• Final Rule• Public Meetings onTest Procedures: April14, 1998 and October18, 1998• Test ProcedureProposed Rule,August 9, 2000• Public Meeting,September 21, 2000• Test Procedure FinalRule, Pending• Notice of PreliminaryScreening Analysis,March 1, 2000• Standards Final Rulefor Water-Source AirConditioners, January12, 2001Test ProcedureRulemakingPreviousStandardsRulemakingCurrentStandardsRulemakingPrincipal Procedural Steps for Commercial Unitary AirConditioners and Heat PumpsStakeholder ParticipationRulemaking Overview9• Public Meeting,October 1, 2001• ANOPR, July 29, 2004• ANOPR PublicMeeting, September30, 2004• NOPR Analysis – to becompleted• NOPR Public Meeting– to be held• Final Rule• Public Meetings onTest Procedures: April14, 1998 and October18, 1998• Test ProcedureProposed Rule,August 9, 2000• Public Meeting,September 21, 2000• Test Procedure FinalRule, Pending• Notice of PreliminaryScreening Analysis,March 1, 2000• Standards Final Rulefor Water-Source AirConditioners, January12, 2001Test ProcedureRulemakingPreviousStandardsRulemakingCurrentStandardsRulemakingPrincipal Procedural Steps for Commercial Unitary AirConditioners and Heat PumpsStakeholder ParticipationRulemaking Overview10Rulemaking OverviewStandards RulemakingFrameworkDocument 

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A na l y si sFinalRuleTodayStages of the Rulemaking ProcessStakeholder Participation9Federal Register Notices9Written Comments9Meetings and Oral Comments9Web-posting Draft Analysis9Consultative Meetings9Webcasts11Rulemaking OverviewANOPR Documents and Material PublishedFederal Register NoticeTechnical Support Document (ANOPR version)Engineering AnalysisBuilding Simulation AnalysisLife-Cycle Cost and Payback Period AnalysisNational Impact Analysis12Rulemaking OverviewANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisBuilding EnergyUse & End-UseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses13Rulemaking OverviewANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisBuilding EnergyUse & End-UseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses14Rulemaking OverviewANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisBuilding EnergyUse & End-UseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses15Rulemaking OverviewANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisBuilding EnergyUse & End-UseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses16Rulemaking OverviewANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisBuilding EnergyUse & End-UseLoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses17Rulemaking Overview SummaryNext StepsWebcast today to focus on explainingthe spreadsheets posted on the webANOPR public meeting on Thursday,September 30, 2004ANOPR - submit comments by Friday,November 12, 2004Please reserve your comments on theanalysis for either the public meetingorsubmit written comments for the recordFederal Register Notice, Technical SupportDocument and Spreadsheets published tothe DOE websitehttp://www.eere.energy.gov/buildings/appliance_standards/commercial/ac_hp.html18CommentsHow to Submit Comments...Public Meeting– oral comments will be captured in the transcript andbecome part of the public record.Written comments– comment period open until November 12, 20003Reference docket #: EE-RM/STD-01-375 and/or RIN #: 1904-AB09Email: commercialairconditioner.anopr@ee.doe.govMail: Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding Technologies Program, Mail stop EE-2JANOPR for Commercial Unitary AirConditioners and Heat Pumps,EE-RM/STD-01-3751000 Independence Avenue, SWWashington DC, 20585-0121Courier: Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding TechnologiesProgram, 1J-0181000 Independence Avenue, SWWashington DC, 20585-012119Agenda1Rulemaking Overview2Engineering Analysis3Building Energy Use and End-Use Load Characterization4Life-Cycle Cost and Payback Period Analysis5National Impact Analysis20Engineering AnalysisEngineering –Flow DiagramANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy Use &End-Use LoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses21Engineering AnalysisCost-Efficiency CurvesEngineering –OverviewRulemaking Analyses•Life-Cycle Cost•Manufacturer Impact•Employment ImpactCost - Efficiency Relationship

Product Cost DeltaProduct Efficiency (EER)22Engineering AnalysisEarly Consultation and RefinementEngineering – EarlyConsultation andRefinementFramework document posted online on June13, 2001.Informal public workshop held to discussissues and data collection on October 1, 2001.Meeting with ARI and member companies heldin November, 2002.Engineering Analysis summary presentationposted on the BT website in January, 2003.23Engineering AnalysisEngineering –ProcessEngineering Analysis ProcessDefine Equipment Classes and Baseline UnitsSelect Teardown Units, Perform Teardowns, Develop Bill ofMaterials, Develop Cost Model, Validate Cost ModelDevelop Manufacturers’ Cost-Efficiency Curves, NormalizeCurves, Aggregate Curves to an Industry CurveIdentify Design Options, Develop Performance Model, Apply CostModel to Design Options, Validate Cost-Efficiency RelationshipConduct R-410a Analysis, Incorporate Stakeholder FeedbackProductSelectionDesign OptionAnalysisCost ModelDevelopmentCost-EfficiencyCurveDevelopmentAdditionalAnalyses24Engineering Analysis8910111289101112ASHRAE90.1-1999 Level1EPCA 1992Level17.5-ton Products15-ton ProductsEEREERProduct SelectionEngineering – ProductSelection1Based on ASHRAE 90.1-1999 Mandatory Minimum EER, including a reductionof 0.2 for units having a heating section other than electric resistance heat.25Engineering AnalysisFixed CostsEquipment and Plant DepreciationTooling AmortizationEquipment MaintenanceUtilitiesIndirect LaborCost of CapitalOverhead LaborVariable CostsManufactured MaterialsPurchased MaterialsFabrication LaborAssembly LaborShippingIndirect MaterialsDirectLaborDirectMaterialsFactoryExpenseGeneralExpenseSalesExpenseProfitManufacturingCostCorporate ExpensesResearch and DevelopmentProfitGeneral & AdministrationWarrantyTaxesSales and MarketingTotalProduct CostShippingTotal ProductCost +DistributionMarkups =Consumer PriceManufacturing Cost ComponentsEngineering –ManufacturingCost Components26Engineering AnalysisCost Model ValidationEngineering – CostModel ValidationFactory Cost Breakdown by AssemblyModel A Model B Model C

Factory Cost ($)PackagingOutbound FreightControlsHeater AssemblyEvaporator CoilEvaporator UnitCondenser CoilCondenser UnitCabinet AssemblyCompressorFactory Cost BreakdownLaborMaterialOverhead & ShipDepreciationTOTALfactory costModel A$$$$$Model B$$$$$Model C$$$$$ILLUSTRATIVEEXAMPLE27Engineering AnalysisCost-Efficiency Curve DevelopmentAn exponential curvewas fit to eachmanufacturer’s costefficiency pointsindividually.1The data pointswere thennormalized so thateach manufacturercurve intersected atthe ASHRAE 90.1-1999 EER level.2Next, anexponential curvewas fit to thenormalized datapoints (allmanufacturers),extrapolating thecurve slightly to 12EER.3Engineering –Cost-EfficiencyCurveDevelopmentEER

Normalized Product CostEER

Normalized Product CostEER

Absolute Product Cost28Engineering AnalysisEngineering – 7.5-tonCost-EfficiencyResults7.5 Ton Cost-Efficiency Results-$250$0$250$500$750$1,0008.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5EER

Product Cost Delta ($)ASHRAE 90.1-1999Standard1Upper 95% Confidence Interval2Industry Average Cost-Efficiency CurveLower 95% Confidence Interval1Based on ASHRAE 90.1-1999 Mandatory Minimum EER, including a reductionof 0.2 for units having a heating section other than electric resistance heat.2Confidence Interval represents the accuracy of the mean regression curve-fit (i.e., There is a 95% probability that the mean cost of a sample ofproducts at a given EER level would fall within the confidence interval).29Engineering AnalysisThere were nocommerciallyavailable productsabove 11.5 EER duringthe development of thecost-efficiency analysisso the design optionanalysis verified that theexponential curve-fit canbe extrapolated.9.5 10 10.5 11 11.5 12EER

Normalized Product CostILLUSTRATIVEIllustrative Cost-Efficiency CurveDesign Option AnalysisManufacturer AManufacturer BManufacturer CDesign OptionsEngineering – DesignOption Analysis30Engineering AnalysisValidation of Cost-Efficiency Curves-$250$0$250$500$750$1,0008.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5EER

Product Cost Delta ($)ASHRAE 90.1-1999Standard1Manufacturer “A”Design OptionsManufacturer “B”Design OptionsUpper 95% Prediction Interval2Upper 95% Confidence Interval3Industry Average Cost-Efficiency CurveLower 95% Confidence IntervalLower 95% Prediction Interval1Based on ASHRAE 90.1-1999 Mandatory Minimum EER, including a reduction of 0.2 for units having a heating section other than electric resistance heat.2Prediction Interval represents the accuracy of predicting the cost of any single unit given its EER.3Confidence Interval represents the accuracy of the mean regression curve-fit (i.e., There is a 95% probability that the mean cost of a sample ofproducts at a given EER level would fall within the confidence interval).Engineering –Validation ofCost-EfficiencyCurves31Engineering AnalysisR-410a AnalysisEngineering – R-410aAnalysisBecause of the phase-out ofCFC refrigerants, the engineering analysis considers howthe cost-efficiency relationship ofR-410a systems differ from R-22.The properties of R-410a are different from those of R-22.The critical parameters in the analysis are the cost differential between baseline andhigh efficiency units (rather than absolute cost) and whether this cost delta differs for R410a vs. R-22 products.R-410aR-22$ of R-410a

Product Cost Delta$ of R-22EERThe 7.5-ton R-410a design option points based on a representative design appear tofollow a trend that is similar tothe R-22 cost-efficiency curve.This trend will be validatedin the post ANOPR phase.32Engineering Analysis7.5 Ton R-410a Analysis ResultsThe R-410a points fall within the prediction interval of the R-22 curve.Engineering – 7.5-ton R-410a AnalysisResults-$250$0$250$500$750$1,0008.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5EER

Product Cost Delta ($)ASHRAE 90.1-1999Standard1R-410A Design OptionsUpper 95% Prediction Interval (R-22)Upper 95% Confidence Interval (R-22)Industry Average Cost-Efficiency Curve (R-22)Lower 95% Confidence Interval (R-22)Lower 95% Prediction Interval (R-22)1Based on ASHRAE 90.1-1999 Mandatory Minimum EER, including a reductionof 0.2 for units having a heating section other than electric resistance heat.33Agenda1Rulemaking Overview2Engineering Analysis3Building Energy Use and End-Use Load Characterization4Life-Cycle Cost and Payback Period Analysis5National Impact Analysis34Building Energy Use and End-Use Load CharacterizationANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy Use &End-Use LoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses35Building Energy Use and End-Use Load CharacterizationPurposeThe purpose of the Energy Use and End-Use LoadCharacterization Analysis is to develop electrical energy use andpeak electricity demand characteristics for buildings that usecommercial unitary air-conditioning equipment.These characteristics are developed for selected equipmentefficiency levels, and for a diverse set of commercial buildingsand climatesThe results of this analysis provide the basis for the energy costcalculations used in the Life-Cycle Cost Analysis.36Simulation OverviewSimulation OverviewBuilding Energy Use and End-Use Load CharacterizationCharacterizationof Building StockUsing CBECS1DataDevelopment andSimulation ofBuilding PrototypesUsing BLAST2 EnergyTimeHourlyWhole-BuildingEnergy End UseProfiles1CBECS:Commercial Building Energy Consumption Surveyconducted by DOE’sEnergy InformationAdministration (EIA)2 BLAST:Building Loads and System Thermodynamicsenergy simulation tool37Building Energy Use and End-Use Load CharacterizationDeveloping a Representative Set of BuildingsCBECS95 Buildings Using PackagedEquipment - Number of Buildings2,5962,1011,03301,0002,0003,000BldgsBldgs W/Pkgd Eq6 Bldg Types>=70%Based on 1995*CBECS DataSix BuildingCategoriesMinimum of 70%Floor Space In EachBuilding Cooled byPackaged Equipment1033 BuildingsSelected*1995 was the last CBECS survey withnew information on small buildingsCBECS95 Floorspace Using PackagedEquipment - Represented Square Footage14.29.412.10.05.010.015.0Billion Sq FtSq Ft Cooled ByPkgd Eq6 Bldg Types>=70%38Building Energy Use and End-Use Load CharacterizationKey Simulation InputsBuilding schedulesLighting loadsPlug loadsOccupancyOther Building characteristics such as:•Roof construction•Wall construction•Windows•Aspect Ratio (ratio of building length to building width)•Window-to-Wall Ratio (WWR)39Building Energy Use and End-Use Load CharacterizationDeveloping Parameters for Mechanical SystemsSizing of the equipment – based on ASHRAE 1% design dayconditionOver-sizing Factor: 0% - 25% over design day sizingEconomizer (based on reported CBECS usage for each building,enthalpy control assumed)Thermostat set points and setbackTotal Fan Pressure = Internal fanstatic pressure + External fanstatic pressure (by building type)Ventilation rates – based on ASHRAE Standard 62.1-2001(prescriptive ventilation rate tables)40Building Energy Use and End-Use Load CharacterizationAssigning Climate StationsNine census divisions overlaidwith 5 Climate Zones results in26 GeoClimate ZonesWithin each GeoClimate zonebuildings were assigned to aTMY2 station using populationweights. 154 of the 239 TMY2stations were used in thesimulations+41Building Energy Use and End-Use Load CharacterizationEER Levels Used in Building SimulationsEER Levels Used in Building SimulationsCaseEERLevelSource18.5Existing EPCA Level for 135-240 kBtu/h28.9Existing EPCA Level for 65-135 kBtu/h39.5ASHRAE 90.1-1999 Level 135-240 kBtu/h410.00.5 EER increment510.1ASHRAE 90.1-1999 Level 65-135 kBtu/h610.50.5 EER increment711.00.5 EER increment811.5Highest reported EER for 135-240 kBtu/h*911.8Highest reported EER for 65-135 kBtu/h*1012.00.5 EER incrementStatutoryBaselineLevels*As of Dec, 200142Building Energy Use and End-Use Load CharacterizationSimulation Methodology15-zone, 3-storyPrototype(48,000 sf)Size equipmentwith BLASTdesign-day runScale results tomatch actualbuilding geometryCBECS –inferredsize andgeometrySimulate annualenergy usewith BLASTAdjust coolingand fan energyuse for less than100% packagedcooling43Building Energy Use and End-Use Load CharacterizationSimulation OutputSimulation OutputEach of the 1033 buildings was simulated for each of the 10efficiency levels. The resultsprovided from this analysis are:•A stream of hourly electrical consumption for each building end use(including cooling)•The number of 7.5 ton or 15 ton air conditioning units that would beinstalled in the building to meet the peak loads44Agenda1Rulemaking Overview2Engineering Analysis3Building Energy Use and End-Use Load Characterization4Life-Cycle Cost and Payback Period Analysis5National Impact Analysis45Life-Cycle Cost and Payback Period AnalysisANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy Use &End-Use LoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses46Life-Cycle Cost and Payback Period AnalysisBasic LCC Process DiagramEconomic evaluation from the customer perspectiveChange in First CostChange in Operating CostsCombine Changesin CostsLCC Results47Life-Cycle Cost and Payback Period AnalysisBasic LCC ProcessLCC equals first cost plus thesum of operating costs discountedto a particular base yearImplemented in an Excel®spreadsheetKey sensitivities can be testedResults are expressed as LCC difference (baseline minuscandidate standard)One LCC spreadsheet for both equipment classes48Life-Cycle Cost and Payback Period AnalysisFromEngineeringAnalysis(Price is afunction ofEER)LCC FlowchartBaselineManufacturerPriceStd-LevelManufacturerPriceWholesalerMarkupGeneralContractorMarkupSales TaxMechanicalContractorMarkupInstallationCostTotal InstalledCostEquipmentPriceFrom Markupsfor EquipmentPriceDeterminationAnalysisEnergyConsumptionPowerDemandElectricityPricesAnnual EnergyExpenseRepair CostMaintenanceCostAnnualOperatingExpenseLifetimeDiscount RateElectricityPrice TrendLifetimeOperatingExpenseLife-CycleCostFrom EnergyUse & End UseLoadCharacterizationAnalysis(Energy Use &Load are afunction of EER)PaybackPeriod49Life-Cycle Cost and Payback Period AnalysisMarkups: Distribution ChannelsDistribution Channels 1 & 2represents 82.5% of distributionDistribution Channel 3 (Nat’l Acct)represents 17.5% of distributionManufacturerWholesalerLarge Mech.Contractor32.5% of distributionGeneral Contractornot present for replacement marketSmall Mech. Contractor50% of distributionCustomerCustomerManufacturerCustomerGeneral Contractornot present for replacement marketyTwo construction types:Replacement (70%) andNew Construction (30%)50Life-Cycle Cost and Payback Period AnalysisTwo Types of Markups: Baseline and IncrementalMarkups relate customer price to cost of goods sold (CGS)Baseline markups relate price tocost prior to a change inefficiency•Baseline markups indicate a customer price that covers allof a Wholesaler’sor Contractor’s expenses plus profit•Direct labor costs (salaries, payroll, rental and occupancy) are includedBut some costs remain constant when CGS increasesIncremental markups relate the incremental change in customerprice to the incremental change in CGS•Incremental markups cover only expensesthat vary with CGS – in this case,expenses that increase due to anincrease in equipment efficiency•For example, direct labor costs (salaries, payroll, rental and occupancy) donot vary with efficiency induced changes in CGS51Life-Cycle Cost and Payback Period AnalysisExample: Using Baseline and Incremental Markups to CalculateCustomer Prices from Manufacturer PricesBaseline Manufacturer Price $2000Overall Baseline Markupx2.31Baseline Customer Price $4620BASELINE CUSTOMER PRICEBaseline Manufacturer Price $2000Overall Baseline Markupx2.31Baseline Customer Price $4620CUSTOMER PRICE – MORE EFFICIENT UNIT+Incremental Manufacturer Price $325Overall Incremental Markupx1.56Incremental Customer Price $507Total Customer Price$5127Total Manufacturer Price $2325Overall MarkupOverall Markup2.21=divide by52Life-Cycle Cost and Payback Period AnalysisElectricity Prices Based on Two Approaches:Tariff-Based and Hourly-BasedTariff-based•Primary approach•Based upon non-residential electricutility tariffs collected in 2001Hourly-based•Secondary approach•Prices that might exist assuming all electricity markets are deregulated•Based upon the premise thatan electricity provider charges customers•for what it costs to supply energy for air conditioningMarginal prices developed from both approaches•Tariffs or Hourly Costs applied tobuilding energy use and demand data•Electricity bill savings and marginalprices calculated from an efficiencyimprovement to air-conditioning equipmentElectricity price forecasts are used to estimate future marginal prices•Based on trends from the2003 Annual Energy Outlook53Life-Cycle Cost and Payback Period AnalysisLCC Input: Electricity Price ChartsNational average marginal price is high in the year 2001 butprice trends decrease future prices0.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%16.00%1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35Marginal Electricity Rate (Cents/kWh)

Percent of Comm AC UnitsTariff-Based Marginal PricesAverage = 10.0 cents/kWhAEO 2003 Price Trends0.800.850.900.951.001.051.101995 2000 2005 2010 2015 2020 2025 2030 2035 2040Year

Electricity Price Trend (2001 = 1.0)High GrowthAEO 2003 Ref CaseLow Growth54Life-Cycle Cost and Payback Period AnalysisSummary of other LCC and PBP inputsInstallation Costs•Based on RS Means data: $1585 for baseline 7.5 ton unit, $2142 for 15 ton unit•Costs vary in direct proportion to equipment weightDiscount Rates•Derived from estimates of the cost of capital of companies thatpurchase unitary a/c•Cost of capital is calculatedfrom the weighted-average costto the firm (WACC) to obtainequity and debt financing•Weighted-average value equals 6.1% realEquipment Lifetime•Median age of 15 years based upon1999 ASHRAE HVAC Applications Handbook•Survival function based upon Weibull probability distributionRepair Costs•Baseline annual repair cost: $158 for 7.5 ton unit, $291 for 15 ton unit•Increases in direct proportion toequipment manufacturing priceMaintenance Costs•Based upon RS Means datafor 3 to 24 ton rooftop air conditioners•Annual maintenance costequals $200 and does not vary with capacity or efficiency55Life-Cycle Cost and Payback Period AnalysisLCC Flowchart – LCC ResultsBaselineManufacturerPriceStd-LevelManufacturerPriceWholesalerMarkupGeneralContractorMarkupSales TaxMechanicalContractorMarkupInstallationCostTotal InstalledCostEquipmentPriceFromEngineeringAnalysis(Price is afunction ofEER)From Markupsfor EquipmentPriceDeterminationAnalysisEnergyConsumptionPowerDemandElectricityPricesAnnual EnergyExpenseRepair CostMaintenanceCostAnnualOperatingExpenseLifetimeDiscount RateElectricityPrice TrendLifetimeOperatingExpenseLife-CycleCostPaybackPeriodFrom EnergyUse & End UseLoadCharacterizationAnalysis(Energy Use &Load are afunction of EER)56Life-Cycle Cost and Payback Period AnalysisCustomer VariationA customer sample is developedwhere every customer is uniqueWe represent the variabilityamong customers using inputvariables defined with probability distributionsMonte Carlo simulation is a statistical technique that samplesfrom input variable distributionsLCC results produced as 10,000-iterations•Implemented with Crystal Ball ®, supplement to Excel57Summary Sheet from LCC SpreadsheetCOMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostLife-Cycle Cost and Payback Period Analysis58User Options: CalculationsCOMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostLife-Cycle Cost and Payback Period Analysis59User Options: Energy Price ProjectionCOMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostLife-Cycle Cost and Payback Period Analysis60User Options: Start YearLife-Cycle Cost and Payback Period AnalysisCOMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair Cost61User Options: Product ClassCOMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostLife-Cycle Cost and Payback Period Analysis62User Options: Installation & Repair CostsCOMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostLife-Cycle Cost and Payback Period Analysis63COMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostAssumptionsLife-Cycle Cost and Payback Period Analysis64COMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostBuilding InformationLife-Cycle Cost and Payback Period Analysis65LCC Results (highlighted)COMMERCIAL UNITARY AIR CONDITIONERSLIFE CYCLE COST CALCULATION: TARIFF-BASED ELECTRICITYUSER OPTIONS:LIFE CYCLE COSTS RESULTS:Year of Purchase2008Year Equipment Retires 2022Baseline Efficiency Level2Energy Price ProjectionTotal Annual Annual Cumul. LifeInstalled Repair & Elec. Bill Cash Cycle LCCStart YearPrice Maint. Cost2008Flow Cost Savings Payback($) ($/yr) ($/yr) ($)($) ($) (year)Product Class0 EER=9.5 $7,251 $381 $612 $20,989 $15,5101 EER=10.0 $7,290 $381 $581 $20,622 $15,306$0 0.0Baseline >>2 EER=10.1 $7,298 $381 $575 $20,552 $15,267$0 0.03 EER=10.5 $7,408 $385 $553 $20,434 $15,241 $27 6.14 EER=11.0 $7,603 $393 $528 $20,419 $15,310 -$43 8.75 EER=11.5 $7,898 $407 $504 $20,608 $15,543 -$275 13.36 EER=11.8 $8,149 $418 $492 $20,869 $15,801 -$533 18.57 EER=12.0 $8,359 $428 $483 $21,121 $16,036 -$769 23.9ASSUMPTIONS:Lifetime(years)15.4Discount Rate7.1%BUILDING INFORMATION:Building ID11Utility ID733StateDESub-Division5.1Census Region3Average Electricity Price5.2cents/kWhMarginal Electricity Price5.8cents/kWhMaximum Annual Demand163.5kWSquare Footage25,000sq.ft.% Cooling Package100.0%Installation Cost Multiplier1.08Number of A/C Units10.48Building TypeSmRetOwner-occupiedYes* All costs in 2001 dollarsAEO 2003 - Reference Case2008Sample CalculationCrystal Ball Simulation7.5 tonsFlatIncreasingInstallation CostFlatIncreasingRepair CostLife-Cycle Cost and Payback Period Analysis66Life-Cycle Cost and Payback Period Analysis7.5 Ton (≥65,000 Btu/h and <135,000 Btu/h)Sample Results67Life-Cycle Cost and Payback Period AnalysisCrystal Ball Results for 10,000 iterations:7.5 ton, 11.0 EERFrequency ChartCertainty is 92.60% from $0 to +InfinityMean = $533.000.011.022.032.0430108216324432($1,200)$200$1,600$3,000$4,40010,000 Trials8 OutliersForecast: 11.0 EER Delta LCC68Agenda1Rulemaking Overview2Engineering Analysis3Building Energy Use and End-Use Load Characterization4Life-Cycle Cost and Payback Period Analysis5National Impact Analysis69National Impact AnalysisANOPR Analyses Flow DiagramFrameworkDocumentANOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy Use &End-Use LoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod Analyses70National Impact AnalysisThe Need for National Impact AnalysisQ. Why isn’t the LCC the end of the economic analysis for the nation?• Briefly, the LCC is performed from the perspective of commercialunitary air conditioner customers and is not the sole expression ofnational impacts.• Total National Energy Savings is not estimated by LCC• Manufacturers impacts are not estimated by LCC71National Impact AnalysisThe Need for National Impact Analysis (cont.)Q. How does the national impact analysis extend the LCC results?A. Specifically the National Impact analysis ...• Utilizes a shipments model to estimate the total stock of airconditioning units in service in any year.• Utilizes the LCC to estimate the cost and energy use per unit in anygiven year.• Aggregates the costs and energy use, by vintage, for all years thatthe proposed standard is in effect.• Accounts for energy at the source of production not the site ofconsumption.• Accounts for the time value of money though discount rate.72National Impact AnalysisPurposeEstimate national energy savings (NES) (Quads source)Estimate national economic impacts (national NPV)MethodSpreadsheet-based toolAnnual time seriesNational summations with projections to the future•Purchases to 2035•Energy Impact to 2035 (source)•Economic impact to 206573National Impact AnalysisShipments ModelPurpose•Project the rate of new equipmentshipments under aproposed standard•Track the CUAC stock of equipment, by vintage, over the time frame of the standardThe life cycle of equipment is modeled as a “birth–death” process inwhich equipment moves from one state to another•New equipment is purchased and shipped to a building•Equipment operates for some number of years in a building•The equipment is retiredThe model is probabilistic•The change from one state to anotheris determined by a probability functionA new purchase is influenced by several factors•Economics (e.g. equipment price and operating costs)•Equipment failures•New building construction ratesThe model is calibrated to historical shipments and market saturationdata74National Impact AnalysisShipments Model: Fit to Historical DataModel Fit To Historical Shipments: 65-134.9 kBtu/h-50,000100,000150,000200,000250,000300,000350,0001960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035Year

ShipmentsHistorical ShipmentsModel Shipments - Base Case75National Impact AnalysisBase Case AnnualEnergy Use2035Base Case AnnualEnergy Use2010Base Case AnnualEnergy Use2009Standards CaseAnnual Energy Use2035Standards CaseAnnual Energy Use2010Standards CaseAnnual Energy Use2009Standards CaseAnnual Energy Use2008Base Case AnnualEnergy Use2008HistoricalShipmentsBase CaseProjected ShipmentsStandards CaseProjected ShipmentsBase CaseCumulativeEnergy ConsumptionStandards CaseCumulativeEnergy ConsumptionCumulative Site Energy Savings(Base Case – Standards Case)NationalNationalEnergySavingsSite-to-SourceEnergyConversionNES Flowchart76National Impact AnalysisSite-to-Source ConversionEnergy consumed at the site does not equal energy at the power plant•Conversion losses•Transmission and distribution losses•Generation fuel mix•Generation plant mix change over timeConversion factors provided by DOE’s National Energy Modeling System(NEMS)77National Impact AnalysisBase CaseCumulativeEnergy Cost2008 -2035Base CaseCumulativeRepair & Maint Cost2008 -2035HistoricalShipmentsBase CaseProjected ShipmentsStandards CaseProjected ShipmentsBase CaseCumulativeTotal Equip Cost2008 -2035Standards CaseCumulativeEnergy Cost2008 -2035Standards CaseCumulativeRepair & Maint Cost2008 -2035Standards CaseCumulativeTotal Equip Cost2008 -2035Base CaseCumulativeOperating CostStandards CaseCumulativeOperating CostBase CaseCumulativeTotal Equip CostStandards CaseCumulativeTotal Equip CostCumulative OperatingCost Savings(Base Case – Standards Case)Cumulative Total EquipmentCost Increase(Standards Case – Base Case)NetPresentPresentValueNational NPVFlowchart78National Impact AnalysisBase Case AnnualEnergy Cost2035Base Case AnnualEnergy Cost2010Base Case AnnualEnergy Cost2009Base Case AnnualEnergy Cost2008Base Case AnnualEnergy Use2008xElectricityPrice2008xDiscountFactor2008DiscountRateBase Case AnnualEnergy Cost2008=HistoricalShipmentsBase CaseProjected ShipmentsStandards CaseProjected ShipmentsNational NPVFlowchart:Energy Cost79National Impact AnalysisBase CaseCumulativeEnergy Cost2008 -2035Base CaseCumulativeRepair & Maint Cost2008 -2035HistoricalShipmentsBase CaseProjected ShipmentsStandards CaseProjected ShipmentsBase CaseCumulativeTotal Equip Cost2008 -2035Standards CaseCumulativeEnergy Cost2008 -2035Standards CaseCumulativeRepair & Maint Cost2008 -2035Standards CaseCumulativeTotal Equip Cost2008 -2035Base CaseCumulativeOperating CostStandards CaseCumulativeOperating CostBase CaseCumulativeTotal Equip CostStandards CaseCumulativeTotal Equip CostCumulative OperatingCost Savings(Base Case – Standards Case)Cumulative Total EquipmentCost Increase(Standards Case – Base Case)NetPresentPresentValueNational NPVFlowchart80National Impact Analysis"''.\,""I"."«l".•,II•-,,-,-----,,-,,---.-,,-,----")),t,'fRA<____'f(",."",,.,.O<R___.,;("0'-'"I"."Ii!".,.,,,d'M".,,,,,,,,,."CO(DO<,---J"H,--Ii"u.."HI,P""".'"..i'"".!'"'"".'"S","cfSf;lndi>rtIleV.'fc,.'of.!lnnu..'"",",,.,.;(£"""""" "",,-I....81UpdateValuesTo Re-Run the modelwith user selectedinputs, press the greenbuttonNational Impact Analysis82National Impact Analysis.,".,""::1'"j,"I".,,,•,"•-.,,-,--,,-,-,-,--.-,,-,---,-""•EquipmentClass10plot"llet5,yillll'","";no"",,,."""""n,...,<C"".,83National Impact Analysis.,".,""::1'"j,"I".,,,•,"••-.,,-,--,,-,-,-,--.-,,-,---,-"",...,EquipmentClass,1<C"".,10plotllet5,yillll'""";no"",,,."""""n"'''··0"'''·,.'''....'··,..._..........._,,,''''84National Impact Analysis•-.,,-,--,,-,,-,,-•,,-"-•--.,,,-,---,-"",...,<C"EquipmentClass1".,T,-,10plotllet5,yillll'""";no"",,,."""""n"'''··0"'''·,.'''....'··,..._..........._,,,''''85National Impact Analysis.,".,""::1'"j,"I".,,,•,"••-.,,-,--",-,-,-,--.-"-,---,-"",...,EquipmentClass,1<C"".,10plotllet5,yillll'""";no"" ,,,."""""n"'''··0"'''·,.'''....'··,..._..........._,,,''''86Base ASHRAE 10.010.511.011.512.0Cumulative Shipments (2008-2035)7,798,2877,783,771-7,774,4477,735,2647,672,6297,632,366Shipments % Change99.81%0.00% 99.69% 99.19% 98.39% 97.87%Equipment Cost Difference ($billions)(0.23)$-$(0.27)$(0.57)$(0.99)$(1.26)$Operating Cost Savings ($billions)0.75$-$0.84$1.50$2.06$2.28$NPV Value ($billions)0.52$-$0.57$0.93$1.08$1.02$Cumulative Energy Savings (Quads)0.310.000.390.700.981.08Standard LevelNational Impact Analysis87Shipments Forecasts60000800001000001200001400001600001800002000002200002400002600002800003000003200003400003600002000 2005 2010 2015 2020 2025 2030 2035Year

Shipments (units)Base CaseASHRAE10.5 EER11.0 EER11.5 EER12.0 EERNational Impact Analysis88Cumulative Source Energy Savings and NPV0.00.20.40.60.81.01.2 ASH R AE 1 0. 0 10.5 1 1. 0 11 . 5 12.0Standard Level

Cumulative Energy Savings (Quads)0.00.20.40.60.81.01.2 NPV (Billion 2001$)Energy SavingsNPV89Std Level11Net Savings-$1.0-$0.8-$0.6-$0.4-$0.2$0.0$0.2$0.4$0.6$0.8$1.02004 2008 2012 2016 2020 2024 2028 2032Year

Billion 2001$Annual Equipment Price ChangeAnnual Operating SavingsNet Annual ImpactSelect Standard level to plot AnnualNon-Discounted Net Impacts trend.National Impact Analysis90National Impact Analysis'""...""'.SeledSl;>nd;:)""/eYe/toplotAn"".1I'"rl--".,,""',,',"" "".,,-,,'...=1_"""","".0;",0.,..._""""''0.......",0-.-...,-91Contact InformationThank you, and for more information ...Website -http://www.eere.energy.gov/buildings/appliance_standards/commercial/ac_hp.htmlPublic Meeting -Thursday, September 30, 2004, from 9 a.m. to 5 p.m. EDT, in Washington,DC.•If you would like to participate in the public meeting, please contact Ms.Brenda.Edwards-Jones@ee.doe.gov by e-mail or by telephone at (202) 586-2945.Comment Submission:•E-mail: commercialairconditioner.anopr@ee.doe.gov•Mail: Ms. Brenda Edwards-Jones, U.S. Department of Energy, Building TechnologiesProgram, Mail Stop EE-2J,1000 Independence Avenue, SW,Washington, DC, 20585-0121.•Courier: Ms. Brenda Edwards-Jones, U.S. Department of Energy, Building TechnologiesProgram, Room 1J-018,1000 Independence Avenue, SW,Washington, DC, 20585-0121. Telephone: (202) 586-2945.•All comments (electronic and hardcopy) should clearly identify the Docket number,which is EE-RM/STD-01-375.The deadline for submitting comments is November 12,2004.Contact -Mr. James Raba, telephone: (202) 586-8654, or e-mail: jim.raba@ee.doe.gov