```

[Federal Register Volume 78, Number 176 (Wednesday, September 11, 2013)]
[Proposed Rules]
[Pages 55781-55888]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21530]

[[Page 55781]]

Vol. 78

Wednesday,

No. 176

September 11, 2013

Part II

Department of Energy

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10 CFR Part 431

Energy Conservation Program: Energy Conservation Standards for Walk-In 
Coolers and Freezers; Proposed Rule

Federal Register / Vol. 78 , No. 176 / Wednesday, September 11, 2013 
/ Proposed Rules

[[Page 55782]]

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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2008-BT-STD-0015]
RIN 1904-AB86

Energy Conservation Program: Energy Conservation Standards for 
Walk-In Coolers and Freezers

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of proposed rulemaking (NOPR) and public meeting.

-----------------------------------------------------------------------

SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
walk-in coolers and walk-in freezers. EPCA also requires the U.S. 
Department of Energy (DOE) to determine whether more-stringent, amended 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this notice, DOE 
proposes amended energy conservation standards for walk-in coolers and 
walk-in freezers. The notice also announces a public meeting to receive 
comment on these proposed standards and associated analyses and 
results.

DATES: DOE will hold a public meeting on Wednesday, October 9, 2013, 
from 9 a.m. to 4 p.m., in Washington, DC. The meeting will also be 
broadcast as a webinar. See section VII, ``Public Participation,'' for 
webinar registration information, participant instructions, and 
information about the capabilities available to webinar participants.
    DOE will accept comments, data, and information regarding this 
notice of proposed rulemaking (NOPR) before and after the public 
meeting, but no later than November 12, 2013. See section VII, ``Public 
Participation,'' for details.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., 
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at 
(202) 586-2945. For more information, refer to section VII, Public 
Participation.
    Any comments submitted must identify the NOPR for Energy 
Conservation Standards for walk-in coolers and freezers, and provide 
docket number EERE-2008-BT-STD-0015 and/or regulatory information 
number (RIN) number 1904-AB86. Comments may be submitted using any of 
the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: WICF-2008-STD-0015@ee.doe.gov. Include the docket number 
and/or RIN in the subject line of the message.
    3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building 
Technologies Office, Mailstop EE-2J, 1000 Independence Avenue SW., 
Washington, DC, 20585-0121. If possible, please submit all items on a 
CD. It is not necessary to include printed copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD, in which case it is not necessary to 
include printed copies.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Office of Energy Efficiency and 
Renewable Energy through the methods listed above and by email to 
Chad_S_Whiteman@omb.eop.gov.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VII of this document 
(Public Participation).
    Docket: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at regulations.gov. All 
documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    A link to the docket Web page can be found at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/30. This Web page contains a link to the docket for this notice 
on the regulations.gov site. The regulations.gov Web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section VII for further information on how to submit 
comments through www.regulations.gov.
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact Ms. Brenda Edwards at (202) 586-2945 or by email: 
Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: 
Mr. Charles Llenza, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 
1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: 
(202) 586-2192. Email: walk-in_coolers_and_walk-in_freezers@EE.Doe.Gov.
Mr. Michael Kido, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-8145. Email: Michael.Kido@hq.doe.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Proposed Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Walk-In Coolers and 
Freezers
III. General Discussion
    A. Component Level Standards
    B. Test Procedures and Metrics
    1. Panels
    2. Doors
    3. Refrigeration
    C. Prescriptive Versus Performance Standards
    D. Certification, Compliance, and Enforcement
    E. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    F. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    G. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need of the Nation to Conserve Energy
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion
    A. Market and Technology Assessment
    1. Definitions Related to Walk-In Coolers and Freezers
    a. Display Doors
    b. Freight Doors
    c. Passage Doors
    2. Equipment Included in this Rulemaking
    a. Panels and Doors
    b. Refrigeration System
    3. Equipment Classes
    a. Panels and Doors
    b. Refrigeration Systems

[[Page 55783]]

    4. Technology Assessment
    B. Screening Analysis
    1. Technologies That Do Not Affect Rated Performance
    2. Screened-Out Technologies
    a. Panels and Doors
    b. Refrigeration
    3. Screened-In Technologies
    C. Engineering Analysis
    1. Representative Equipment
    a. Panels and Doors
    b. Refrigeration
    2. Energy Modeling Methodology
    a. Refrigeration
    3. Cost Assessment Methodology
    a. Teardown Analysis
    b. Cost Model
    c. Manufacturing Production Cost
    d. Manufacturing Markup
    e. Shipping Costs
    4. Baseline Specifications
    a. Panels and Doors
    b. Refrigeration
    5. Design Options
    a. Panels and Doors
    b. Refrigeration
    6. Cost-Efficiency Results
    a. Panels and Doors
    b. Refrigeration
    c. Numerical Results
    D. Markups Analysis
    E. Energy Use Analysis
    1. Sizing Methodology for the Refrigeration System
    2. Oversize Factors
    3. Product Load
    4. Other Issues
    F. Life-Cycle Cost and Payback Period Analyses
    1. Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Energy Price Projections
    6. Maintenance and Repair Costs
    7. Product Lifetime
    8. Discount Rates
    9. Compliance Date of Standards
    10. Base-Case and Standards-Case Efficiency Distributions
    11. Inputs to Payback Period Analysis
    12. Rebuttable-Presumption Payback Period
    G. National Impact Analysis--National Energy Savings and Net 
Present Value
    1. Shipments
    a. Share of Shipments and Stock Across Equipment Classes
    b. Lifetimes and Replacement Rates
    c. Growth Rates
    d. Other Issues
    2. Forecasted Efficiency in the Base Case and Standards Cases
    3. National Energy Savings
    4. Net Present Value of Consumer Benefit
    5. Benefits from Effects of Standards on Energy Prices
    H. Consumer Subgroup Analysis
    I. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model Analysis
    a. Government Regulatory Impact Model Key Inputs
    b. Government Regulatory Impact Model Scenarios
    3. Discussion of Comments
    a. Cumulative Regulatory Burden
    b. Inventory Levels
    c. Manufacturer Subgroup Analysis
    4. Manufacturer Interviews
    a. Cost of testing
    b. Enforcement and Compliance
    c. Profitability Impacts
    d. Excessive Conversion Cost
    e. Disproportionate Impact on Small Businesses
    f. Refrigerant Phase-Out
    J. Employment Impact Analysis
    K. Utility Impact Analysis
    L. Emissions Analysis
    M. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
V. Analytical Results
    A. Trial Standard Levels
    1. Trial Standard Level Selection Process
    2. Trial Standard Level Equations
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Commercial Customers
    a. Life-Cycle Cost and Payback Period
    b. Life-Cycle Cost Subgroup Analysis
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Impacts on Direct Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Small Manufacturer Sub-Group
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Amount and Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Employment Impacts
    4. Impact on Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    7. Other Factors
    C. Proposed Standard
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Summary of the Proposed Rule

    DOE proposes creating new performance-based energy conservation 
standards for walk-in coolers and walk-in freezers (collectively, 
``walk-ins'' or ``WICFs''). The proposed standards, which are expressed 
as an annual walk-in energy factor (AWEF) for refrigeration systems, 
the maximum allowable U-factor expressed as a function of the ratio of 
edge area to core area for panels, and the maximum allowable daily 
energy use expressed as a function of the surface area for non-display 
and display doors, are shown in Table I.1. These proposed standards, if 
adopted, would apply to all products listed in Table I.1 and 
manufactured in, or imported into, the United States on or after 3 
years after the publication date of any final rule establishing energy 
conservation standards for walk-ins. Appendix 10D of the TSD lists the 
technologies that DOE assumes manufacturers will use to meet the 
proposed standards.

[[Page 55784]]

[GRAPHIC] [TIFF OMITTED] TP11SE13.000

[[Page 55785]]

[GRAPHIC] [TIFF OMITTED] TP11SE13.001

A. Benefits and Costs to Consumers

    Table I-2 presents DOE's evaluation of the economic impacts of the 
proposed standards on consumers of walk-in coolers and freezers, as 
measured by the shipment-weighted average life-cycle cost (LCC) savings 
\1\ and the median payback period.\2\ The average LCC savings are 
positive for all equipment classes. At TSL 4, the percentage of 
customers who experience net benefits or no impacts ranges from 55 to 
100 percent, and the percentage of customers experiencing a net cost 
ranges from 0 to 45 percent. Chapter 11 presents the LCC subgroup 
analysis on groups of customers that may be disproportionately affected 
by the proposed standard. The installed cost increase over the 9-year 
analysis period (2017-2025) for the proposed TSL is 1.98 billion 
discounted at 7 percent.
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    \1\ Life-cycle cost (LCC) of commercial refrigeration equipment 
is the cost to customers of owning and operating the equipment over 
the entire life of the equipment. Life-cycle cost savings are the 
reductions in the life-cycle costs due to amended energy 
conservation standards when compared to the life-cycle costs of the 
equipment in the absence of amended energy conservation standards. 
Further discussion of the LCC analysis can be found in Chapter 8 of 
the TSD.
    \2\ Payback period (PBP) refers to the amount of time (in years) 
it takes customers to recover the increased installed cost of 
equipment associated with new or amended standards through savings 
in operating costs. Further discussion of the PBP can be found in 
Chapter 8 of the TSD.

 Table I-2--Shipment-Weighted Average Impacts of Proposed Standards (TSL 4) on Consumers of Walk-In Coolers and
                                                Walk-In Freezers
----------------------------------------------------------------------------------------------------------------
                                                                  Average LCC  savings    Median payback period
                        Equipment class                                 (2012$)                  (years)
----------------------------------------------------------------------------------------------------------------
Refrigeration System Class:*
    DC.M.I....................................................                     $611                      4.4
    DC.M.O....................................................                    3,195                      2.2
    DC.L.I....................................................                    1,117                      2.7
    DC.L.O....................................................                    2,664                      2.3
    MC.M......................................................                    1,724                      0.5
    MC.L......................................................                    2,061                      0.4
Panel Class:
    SP.M**....................................................                        8                      4.5
    SP.L**....................................................                       72                      3.6
    FP.L**....................................................                       30                      4.5
Non-Display Door Class:
    PD.M......................................................                      0.3                      5.5
    PD.L......................................................                       52                      4.7
    FD.M......................................................                        1                      5.4
    FD.L......................................................                      136                      2.9
Display Door Class:
    DD.M......................................................                      228                      2.2
    DD.L......................................................                      200                      N/A
----------------------------------------------------------------------------------------------------------------
* For dedicated condensing (DC) refrigeration systems, results include both capacity ranges.
** Results are per 100 square feet.

B. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2013 to 2046). Using real discount rates of 10.5 
percent for panels, 9.4 percent for doors, and 10.4 percent for 
refrigeration \3\, DOE estimates that the industry net present value 
(INPV) for manufacturers of walk-in cooler and freezer refrigeration 
systems, panels, and doors in the base case (without new standards) is 
$851 million in 2012$. Under the proposed standards, DOE expects the 
impact on INPV to range from no change to a 9 percent decrease.

[[Page 55786]]

Total industry conversion costs estimated to be $51 million are assumed 
to be incurred in the years prior to the start of compliance with the 
standards. Based on DOE's interviews with the manufacturers of walk-in 
coolers and walk-in freezers, DOE does not expect significant loss of 
employment.
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    \3\ These rates were used to discount future cash flows in the 
Manufacturer Impact Analysis. The discount rates were calculated 
from SEC filings and then adjusted based on cost of capital feedback 
collected from walk-in door, panel, and refrigeration manufacturers 
in MIA interviews. For a detailed explanation of how DOE arrived at 
these discount rates, refer to Chapter 12 of the NOPR TSD.
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C. National Benefits \4\
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    \4\ All monetary values in this section are expressed in 2012 
dollars and are discounted to 2013.
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    DOE's analyses indicate that the proposed standards would save a 
significant amount of energy. The lifetime full-fuel-cycle energy 
savings for walk-in coolers and freezers purchased in the 30-year 
period that begins in the year of compliance with new standards (2017-
2046) amount to 5.39 quadrillion British thermal units (quads). The 
average annual energy savings over the life of walk-in coolers and 
freezers purchased in 2017 through 2046 is 0.18 quads, which is 
equivalent to 14.8 percent of the annual U.S commercial refrigeration 
sector energy.\5\
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    \5\ Total U.S. commercial sector energy (source energy) used for 
refrigeration in 2010 was 1.21 quads. Source: U.S. Department of 
Energy--Office of Energy Efficiency and Renewable Energy. Buildings 
Energy Data Book, Table 3.1.4, 2010 Commercial Energy End-Use 
Splits, by Fuel Type (Quadrillion Btu). 2012. (Last accessed April 
23, 2013.) http://buildingsdatabook.eren.doe.gov/TableView.aspx?table=3.1.4
---------------------------------------------------------------------------

    The cumulative net present value (NPV) of total consumer costs and 
savings of the proposed standards ranges from $8.6 billion (at a 7-
percent discount rate) to $24.3 billion (at a 3-percent discount rate) 
for walk-in coolers and freezers. This NPV expresses the estimated 
total value to customers of future operating cost savings minus the 
estimated increased product costs for products purchased in 2017-2046.
    In addition, the proposed standards would have significant 
environmental benefits. The energy savings would result in cumulative 
emission reductions of 298 million metric tons (Mt) \6\ of carbon 
dioxide (CO2), 1,428 thousand tons of methane, 379.5 
thousand tons of sulfur dioxide (SO2), 443.8 thousand tons 
of nitrogen oxides (NOX), and 0.6 tons of mercury 
(Hg).7 8
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    \6\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \7\ DOE calculates emissions reductions relative to the Annual 
Energy Outlook (AEO) 2013 Reference case, which generally represents 
current legislation and environmental regulations for which 
implementing regulations were available as of December 31, 2012.
    \8\ DOE also estimated CO2 and CO2 
equivalent (CO2eq) emissions that occur through 2030 
(CO2eq includes greenhouse gases such as CH4 
and N2O). The estimated emissions reductions through 2030 
are 79 million metric tons CO2, 7,897 thousand tons 
CO2eq for CH4, and 338 thousand tons 
CO2eq for N2O.
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    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon, or SCC) developed by an interagency process. 
The derivation of the SCC values is discussed in section IV.M. DOE 
estimates the net present monetary value of the CO2 
emissions reduction is between $1.9 billion and $27.5 billion, 
depending on the SCC value used, over a 30-year analysis period. DOE 
also estimates the net present monetary value of the NOX 
emissions reduction is $243 million at a 7-percent discount rate and 
$553 million at a 3-percent discount rate over a 30-year analysis 
period. Over a 9-year analysis period, DOE estimates the net present 
monetary value of the CO2 emissions reduction is between 
$0.33 billion and $4.07 billion, depending on the SCC value used, while 
the net present monetary value of the NOX emissions 
reduction is $70.5 million at a 7-percent discount rate and $99.8 
million at a 3-percent discount rate.\9\ DOE notes that the estimated 
total social benefits of the rule outweigh the costs whether a 30-year 
or a 9-year analysis period is used.
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    \9\ DOE has decided to await further guidance regarding 
consistent valuation and reporting of Hg emissions before it 
monetizes Hg in its rulemakings.
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    Table I-3 summarizes the national economic costs and benefits 
expected to result from the proposed standards for walk-in coolers and 
walk-in freezers.

     Table I-3--Summary of National Economic Benefits and Costs of Walk-In Cooler and Walk-In Freezer Energy
                                             Conservation Standards
----------------------------------------------------------------------------------------------------------------
                                                                Present value Billion
                           Category                                     2012$            Discount rate (percent)
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......................................                    12.4                        7
                                                                                 31.6                        3
CO2 Reduction Monetized Value (at $12.9/t case)*.............                     1.9                        5
CO2 Reduction Monetized Value (at $40.8/t case)*.............                     9.0                        3
CO2 Reduction Monetized Value (at $62.2/t case)*.............                    14.4                        2.5
CO2 Reduction Monetized Value (at $117.0/t case)*............                    27.5                        3
NOX Reduction Monetized Value (at $2,639/Ton)**..............                     0.24                       7
                                                                                  0.55                       3
                                                              --------------------------------------------------
    Total Benefits[dagger]...................................                    21.6                        7
                                                                                 41.1                        3
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Installed Costs..................................                     3.8                        7
                                                                                  7.2                        3
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
Including CO2 and NOX Reduction Monetized Value..............                    17.8                        7
                                                                                 33.9                        3
----------------------------------------------------------------------------------------------------------------
* The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values
  are based on the average SCC from the integrated assessment models, at discount rates of 2.5, 3, and 5
  percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-
  percent discount rate, is included to represent higher-than-expected impacts from temperature change further
  out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time
  series incorporate an escalation factor.

[[Page 55787]]

 
** The value represents the average of the low and high NOX values used in DOE's analysis.
[dagger] Total Benefits for both the 3 percent and 7 percent cases are derived using the CO2 reduction monetized
  value series corresponding to average SCC with 3-percent discount rate.

    The benefits and costs of today's proposed standards, for equipment 
sold in 2017-2046, can also be expressed in terms of annualized values. 
The annualized monetary values are the sum of (1) the annualized 
national economic value of the benefits from consumer operation of 
equipment that meets the proposed standards (consisting primarily of 
operating cost savings from using less energy, minus increases in 
equipment purchase and installation costs, and (2) the annualized 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\10\
---------------------------------------------------------------------------

    \10\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2013, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2014 through 2043) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the values of operating savings and 
CO2 emission reductions provides a useful perspective, two 
issues should be considered. First, the national operating savings are 
domestic U.S. consumer monetary savings that occur as a result of 
market transactions while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use different time frames for analysis. The national operating 
cost savings is measured for the lifetime of walk-ins shipped from 
2017-2046. The SCC values, on the other hand, reflect the present value 
of some future climate-related impacts resulting from the emission of 
one ton of carbon dioxide in each year. These impacts continue well 
beyond 2100.
    Table I-4 shows the estimates of annualized benefits and costs of 
the proposed standards. (All monetary values below are expressed in 
2012$.) The results under the primary estimate are as follows. Using a 
7-percent discount rate for benefits and costs other than 
CO2 reduction, for which DOE used a 3-percent discount rate 
along with the average SCC series that uses a 3-percent discount rate, 
the cost of the standards proposed in today's rule is $367 million per 
year in increased equipment costs, while the annualized benefits are 
$1.225 billion per year in reduced equipment operating costs, $499 
million in CO2 reductions, and $24 million in reduced 
NOX emissions. In this case, the net benefit amounts to 
$1.382 billion per year. Using a 3-percent discount rate for all 
benefits and costs and the average SCC series, the cost of the 
standards proposed in today's rule is $399 million per year in 
increased equipment costs, while the benefits are $1.606 billion per 
year in reduced operating costs, $499 million in CO2 
reductions, and $31 million in reduced NOX emissions. In 
this case, the net benefit amounts to $1.737 billion per year.

                         Table I-4--Annualized Benefits and Costs of Proposed Standards for Walk-In Coolers and Walk-In Freezers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Primary  estimate*
                                                       Discount rate          -------------------------    Low net  benefits        High net  benefits
                                                                                 (million 2012$/year)          estimate*                estimate*
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings......................  7%.............................                    1,225                    1,188                    1,279
                                              3%.............................                    1,606                    1,544                    1,687
CO2 Reduction Monetized Value (at $12.9t      5%.............................                      142                      142                      142
 case)**.
CO2 Reduction Monetized Value (at $40.8/t     3%.............................                      499                      499                      499
 case)**.
CO2 Reduction Monetized Value (at $62.2/t     2.50%..........................                      739                      739                      739
 case)**.
CO2 Reduction Monetized Value (at $117.0/t    3%.............................                    1,534                    1,534                    1,534
 case)**.
NOX Reduction Monetized Value (at $2,639/     7%.............................                       24                       24                       24
 Ton)**.
                                              3%.............................                       31                       31                       31
    Total Benefits[dagger]..................  7% plus CO2 range..............                    1,748                    1,712                    1,803
                                              7%.............................                    1,249                    1,212                    1,303
                                              3%.............................                    1,637                    1,574                    1,718
                                              3% plus CO2 range..............                    2,136                    2,074                    2,217
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Incremental Installed Costs...........  7%.............................                      367                      377                      357
                                              3%.............................                      399                      414                      385
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total[dagger]...............................  7% plus CO2 range..............                    1,382                    1,335                    1,446
                                              7%.............................                      883                      835                      946
                                              3%.............................                    1,238                    1,160                    1,333

[[Page 55788]]

 
                                              3% plus CO2 range..............                    1,737                    1,660                    1,832
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with walk-in coolers and freezers shipped in 2017-2046. These results include
  benefits to consumers which accrue after 2046 from the walk-in coolers and freezers purchased in 2017-2046. Costs incurred by manufacturers, some of
  which may be incurred in preparation for the rule, are not directly included, but are indirectly included as part of incremental equipment costs. The
  Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices from the AEO2013 Reference case, Low Estimate, and High
  Estimate, respectively. In addition, incremental product costs reflect a medium decline rate for projected product price trends in the Primary
  Estimate, a low decline rate for projected product price trends using a Low Benefits Estimate, and a high decline rate for projected product price
  trends using a High Benefits Estimate.
** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC from the
  three integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile SCC estimate
  across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change further out in the
  tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time series incorporate an escalation factor. The value
  for NOX is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount
  rate. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are calculated using the labeled
  discount rate, and those values are added to the full range of CO2 values.

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified. DOE further notes that 
manufacturers already produce commercially available equipment that 
achieve these levels for most, if not all, equipment classes covered by 
today's proposal. Based on the analyses described above, DOE has 
tentatively concluded that the benefits of the proposed standards to 
the Nation (energy savings, positive NPV of consumer benefits, consumer 
LCC savings, and emission reductions) would outweigh the burdens (loss 
of INPV for manufacturers).
    DOE also considered more-stringent and less-stringent efficiency 
levels as trial standard levels (TSLs), and is still considering them 
in this rulemaking. However, DOE has tentatively concluded that the 
potential burdens of the more-stringent efficiency levels would 
outweigh the projected benefits. Based on consideration of the public 
comments DOE receives in response to this notice and related 
information collected and analyzed during the course of this rulemaking 
effort, DOE may adopt efficiency levels presented in this notice that 
are either higher or lower than the proposed standards, or some 
combination of level(s) that incorporate the proposed standards in 
part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's proposal, as well as some of the relevant historical 
background related to walk-ins.

A. Authority

    Title III, Part C of EPCA, Public Law 94-163 (42 U.S.C. 6311-6317, 
as codified), added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, a program covering certain industrial equipment, which 
includes the walk-in coolers and walk-in freezers that are the focus of 
this notice.11 12 (42 U.S.C. 6311(1), (20), 6313(f) and 
6314(a)(9)) Walk-ins consist of two major pieces--the structural 
``envelope'' within which items are stored and a refrigeration system 
that cools the air in the envelope's interior.
---------------------------------------------------------------------------

    \11\ All references to EPCA in this document refer to the 
statute as amended through the American Energy Manufacturing 
Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 
2012).
    \12\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
---------------------------------------------------------------------------

    DOE's energy conservation program for covered equipment generally 
consists of four parts: (1) Testing; (2) labeling; (3) the 
establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. For walk-ins, DOE is 
responsible for the entirety of this program. The DOE test procedures 
for walk-ins, including those prescribed by Congress in EISA 2007 and 
those established by DOE in the test procedure final rule, currently 
appear at title 10 of the Code of Federal Regulations (CFR) part 431, 
section 304.
    Any new or amended performance standards that DOE prescribes for 
walk-ins must achieve the maximum improvement in energy efficiency that 
is technologically feasible and economically justified. (42 U.S.C. 
6313(f)(4)(A)) For purposes of this rulemaking, DOE also plans to adopt 
those standards that are likely to result in a significant conservation 
of energy that satisfies both of these requirements. See 42 U.S.C. 
6295(o)(3)(B).
    Technological feasibility is determined by examining technologies 
or designs that could be used to improve the efficiency of the covered 
equipment. DOE considers a design to be technologically feasible if it 
is in use by the relevant industry or if research has progressed to the 
development of a working prototype.
    In ascertaining whether a particular standard is economically 
justified, DOE considers, to the greatest extent practicable, the 
following factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the equipment subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment that 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 
equipment 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

[[Page 55789]]

    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i) (I)-(VII))
    DOE does not plan to prescribe an amended or new standard if 
interested persons have established by a preponderance of the evidence 
that the standard is likely to result in the unavailability in the 
United States of any covered product type (or class) of performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as those generally 
available in the United States. Further, under EPCA's provisions for 
consumer products, there is a rebuttable presumption that a standard is 
economically justified if the Secretary finds that the additional cost 
to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) For purposes of its walk-in 
analysis, DOE plans to account for these factors.
    Additionally, when a type or class of covered equipment such as 
walk-ins has two or more subcategories, in promulgating standards for 
such equipment, DOE often specifies more than one standard level. DOE 
generally will adopt a different standard level than that which applies 
generally to such type or class of products for any group of covered 
products that have the same function or intended use if DOE determines 
that products within such group (A) consume a different kind of energy 
than that consumed by other covered products within such type (or 
class) or (B) have a capacity or other performance-related feature that 
other products within such type (or class) do not have, and which 
justifies a higher or lower standard. Generally, in determining whether 
a performance-related feature justifies a different standard for a 
group of products, DOE considers such factors as the utility to the 
consumer of the feature and other factors DOE deems appropriate. In a 
rule prescribing such a standard, DOE typically includes an explanation 
of the basis on which such higher or lower level was established. DOE 
plans to follow a similar process in the context of today's rulemaking.
    DOE notes that since the inception of the statutory requirements 
setting standards for walk-ins, Congress has since made one additional 
amendment to those provisions. That amendment provides that the wall, 
ceiling, and door insulation requirements detailed in 42 U.S.C. 
6313(f)(1)(C) do not apply to the given component if the component's 
manufacturer has demonstrated to the Secretary's satisfaction that 
``the component reduces energy consumption at least as much'' if those 
specified requirements were to apply to that manufacturer's component. 
American Energy Manufacturing Technology Corrections Act, Public Law 
112-210, Section 2 (Dec. 18, 2012) (codified at 42 U.S.C. 6313(f)(6)) 
(AEMTCA). Manufacturers seeking to avail themselves of this provision 
must ``provide to the Secretary all data and technical information 
necessary to fully evaluate its application.'' Id. DOE is proposing to 
codify this amendment into its regulations.
    Since its codification, one company, HH Technologies, submitted 
data on May 24, 2013, demonstrating that its RollSeal doors satisfied 
this new AEMTCA provision. DOE reviewed these data and all other 
submitted information and concluded that the RollSeal doors at issue 
satisfied 42 U.S.C. 6313(f)(6). Accordingly, DOE issued a determination 
letter on June 14, 2013, indicating that these doors met Section 
6313(f)(6) and that the applicable insulation requirements did not 
apply to the RollSeal doors HH Technologies identified. Nothing in this 
proposed rule affects the previous determination regarding HH 
Technologies.
    Federal energy conservation requirements generally pre-empt state 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a); 42 U.S.C. 6316(b)) However, EPCA 
provides that for walk-ins in particular, any state standard issued 
before publication of the final rule shall not be pre-empted until the 
standards established in the final rule take effect. (42 U.S.C 
6316(h)(2)(B))
    Where applicable, DOE generally considers standby and off mode 
energy use for certain covered products or equipment when developing 
energy conservation standards. See 42 U.S.C. 6295(gg)(3). Because the 
vast majority of walk-in coolers and walk-in freezers operate 
continuously to keep their contents cold at all times, DOE is not 
proposing standards for standby and off mode energy use.

B. Background

1. Current Standards
    EPCA defines a walk-in cooler and a walk-in freezer as an enclosed 
storage space refrigerated to temperatures above, and at or below, 
respectively, 32[emsp14][deg]F that can be walked into. The statute 
also defines walk-in coolers and freezers as having a total chilled 
storage area of less than 3,000 square feet, excluding products 
designed and marketed exclusively for medical, scientific, or research 
purposes. (42 U.S.C 6311(20)) EPCA also provides prescriptive standards 
for walk-in coolers and freezers manufactured on or after January 1, 
2009, which are described below.
    First, EPCA sets forth general prescriptive standards for walk-ins. 
Walk-ins must have automatic door closers that firmly close all walk-in 
doors that have been closed to within 1 inch of full closure, for all 
doors narrower than 3 feet 9 inches and shorter than 7 feet; walk-ins 
must also have strip doors, spring hinged doors, or other methods of 
minimizing infiltration when doors are open. Walk-ins must also contain 
wall, ceiling, and door insulation of at least R-25 for coolers and R-
32 for freezers, excluding glazed portions of doors and structural 
members, and floor insulation of at least R-28 for freezers. Walk-in 
evaporator fan motors of under 1 horsepower and less than 460 volts 
must be electronically commutated motors (brushless direct current 
motors) or three-phase motors, and walk-in condenser fan motors of 
under 1 horsepower must use permanent split capacitor motors, 
electronically commutated motors, or three-phase motors. Interior light 
sources must have an efficacy of 40 lumens per watt or more, including 
any ballast losses; less-efficacious lights may only be used in 
conjunction with a timer or device that turns off the lights within 15 
minutes of when the walk-in is unoccupied. See 42 U.S.C. 6313(f)(1).
    Second, EPCA sets forth new requirements related to electronically 
commutated motors for use in walk-ins. See 42 U.S.C. 6313(f)(2)). 
Specifically, in those walk-ins that use an evaporator fan motor with a 
rating of under 1 horsepower and less than 460 volts, that motor must 
be either a three-phase motor or an electronically commutated motor 
unless DOE determined prior to January 1, 2009 that electronically 
commutated motors are available from only one manufacturer. (42 U.S.C. 
6313(f)(2)(A)) DOE determined by January 1, 2009 that these motors were 
available from more than one manufacturer; thus, according to EPCA, 
walk-in evaporator fan motors with a rating of under 1 horsepower and 
less than 460 volts must be either three-phase motors or electronically 
commutated motors. DOE documented this determination in the rulemaking 
docket as docket ID EERE-2008-BT-STD-0015-0072. This document can be

[[Page 55790]]

found at http://www.regulations.gov/#!documentDetail;D=EERE-2008-BT-
STD-0015-0072. Additionally, EISA provided DOE with the authority to 
permit the use of other types of motors as evaporative fan motors--if 
DOE determines that, on average, those other motor types use no more 
energy in evaporative fan applications than electronically commutated 
motors. (42 U.S.C. 6313(f)(2)(B)) DOE is unaware of any other motors 
that would offer performance levels comparable to the electronically 
commutated motors required by Congress. Accordingly, all evaporator 
motors rated at under 1 horsepower and under 460 volts must be 
electronically commutated motors or three-phase motors.
    Third, EPCA sets forth additional requirements for walk-ins with 
transparent reach-in doors. Freezer doors must have triple-pane glass 
with either heat-reflective treated glass or gas fill for doors and 
windows for freezers. Cooler doors must have either double-pane glass 
with treated glass and gas fill or triple-pane glass with treated glass 
or gas fill. (42 U.S.C. 6313(f)(3)(A)-(B)) For walk-ins with 
transparent reach-in doors, EISA also prescribed specific anti-sweat 
heater-related requirements: Walk-ins without anti-sweat heater 
controls must have a heater power draw of no more than 7.1 or 3.0 watts 
per square foot of door opening for freezers and coolers, respectively. 
Walk-ins with anti-sweat heater controls must either have a heater 
power draw of no more than 7.1 or 3.0 watts per square foot of door 
opening for freezers and coolers, respectively, or the anti-sweat 
heater controls must reduce the energy use of the heater in a quantity 
corresponding to the relative humidity of the air outside the door or 
to the condensation on the inner glass pane. See 42 U.S.C. 
6313(f)(3)(C)-(D).
2. History of Standards Rulemaking for Walk-In Coolers and Freezers
    EPCA directs the Secretary to issue performance-based standards for 
walk-ins that would apply to equipment manufactured 3 years after the 
final rule is published, or 5 years if the Secretary determines by rule 
that a 3-year period is inadequate. (42 U.S.C. 6313(f)(4))
    DOE initiated the current rulemaking by publishing a notice 
announcing the availability of its ``Walk-In Coolers and Walk-In 
Freezers Energy Conservation Standard Framework Document'' and a 
meeting to discuss the document. The notice also solicited comment on 
the matters raised in the document. 74 FR 411 (Jan 6, 2009). More 
information on the framework document is available at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/30. The framework document described the procedural and 
analytical approaches that DOE anticipated using to evaluate energy 
conservation standards for walk-ins and identified various issues to be 
resolved in conducting this rulemaking.
    DOE held the framework public meeting on February 4, 2009, in which 
it: (1) Presented the contents of the framework document; (2) described 
the analyses it planned to conduct during the rulemaking; (3) sought 
comments from interested parties on these subjects; and (4) in general, 
sought to inform interested parties about, and facilitate their 
involvement in, the rulemaking. Major issues discussed at the public 
meeting included: (1) The scope of coverage for the rulemaking; (2) 
development of a test procedure and appropriate test metrics; (3) 
manufacturer and market information, including distribution channels; 
(4) equipment classes, baseline units, and design options to improve 
efficiency; and (5) life-cycle costs to consumers, including 
installation, maintenance, and repair costs, and any consumer subgroups 
DOE should consider. At the meeting and during the comment period on 
the framework document, DOE received many comments that helped it 
identify and resolve issues pertaining to walk-ins relevant to this 
rulemaking.
    DOE then gathered additional information and performed preliminary 
analyses to help develop potential energy conservation standards for 
this equipment. This process culminated in DOE's announcement of 
another public meeting to discuss and receive comments on the following 
matters: (1) The equipment classes DOE planned to analyze; (2) the 
analytical framework, models, and tools that DOE used to evaluate 
standards; (3) the results of the preliminary analyses performed by 
DOE; and (4) potential standard levels that DOE could consider. 75 FR 
17080 (April 5, 2010) (the April 2010 Notice). DOE also invited written 
comments on these subjects and announced the availability on its Web 
site of a preliminary technical support document (preliminary TSD) it 
had prepared to inform interested parties and enable them to provide 
comments. Id. (More information about the preliminary TSD is available 
at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/30.)Finally, DOE sought views on other relevant 
issues that participants believed either would impact walk-in standards 
or that the proposal should address. Id. at 17083.
    The preliminary TSD provided an overview of the activities DOE 
undertook to develop standards for walk-ins and discussed the comments 
DOE received in response to the framework document. The preliminary TSD 
also addressed separate standards for the walk-in envelope and the 
refrigeration system, as well as compliance and enforcement 
responsibilities and food safety regulatory concerns. The document also 
described the analytical framework that DOE used (and continues to use) 
in considering standards for walk-in coolers and freezers, including a 
description of the methodology, the analytical tools, and the 
relationships between the various analyses that are part of this 
rulemaking. Additionally, the preliminary TSD presented in detail each 
analysis that DOE had performed for these products up to that point, 
including descriptions of inputs, sources, methodologies, and results. 
These analyses were as follows:
     A market and technology assessment addressed the scope of 
this rulemaking, identified the potential classes for walk-in coolers 
and freezers, characterized the markets for these products, and 
reviewed techniques and approaches for improving their efficiency;
     A screening analysis reviewed technology options to 
improve the efficiency of walk-in coolers and freezers, and weighed 
these options against DOE's four prescribed screening criteria;
     An engineering analysis estimated the manufacturer selling 
prices (MSPs) associated with more energy-efficient walk-in coolers and 
freezers;
     An energy use analysis estimated the annual energy use of 
walk-in coolers and freezers;
     A markups analysis converted estimated MSPs derived from 
the engineering analysis to consumer prices;
     A life-cycle cost analysis calculated, for individual 
consumers, the discounted savings in operating costs throughout the 
estimated average life of walk-in coolers and freezers, compared to any 
increase in installed costs likely to result directly from the 
imposition of a given standard;
     A payback period analysis estimated the amount of time it 
takes individual consumers to recover the higher purchase price expense 
of more energy-efficient products through lower operating costs;
     A shipments analysis estimated shipments of walk-in 
coolers and freezers over the time period examined in the analysis, and 
was used in performing the national impact analysis;

[[Page 55791]]

     A national impact analysis assessed the national energy 
savings and the national net present value of total consumer costs and 
savings that are expected to result from specific potential energy 
conservation standards for walk-in coolers and freezers; and
     A preliminary manufacturer impact analysis (MIA) took the 
initial steps in evaluating the effects on manufacturers of new 
efficiency standards.
    The public meeting announced in the April 2010 Notice took place on 
May 19, 2010. At this meeting, DOE presented the methodologies and 
results of the analyses set forth in the preliminary TSD. Interested 
parties that participated in the public meeting discussed a variety of 
topics, but the comments centered on the following issues: (1) Separate 
standards for the refrigeration system and the walk-in envelope; (2) 
responsibility for compliance; (3) equipment classes; (4) technology 
options; (5) energy modeling; (6) installation, maintenance, and repair 
costs; (7) markups and distributions chains; (8) walk-in cooler and 
freezer shipments; and (9) test procedures. The comments received since 
publication of the April 2010 Notice, including those received at the 
May 2010 public meeting, have contributed to DOE's proposed resolution 
of the issues in this rulemaking as they pertain to walk-ins. This NOPR 
responds to the issues raised by the commenters. (A parenthetical 
reference at the end of a quotation or paraphrase provides the location 
of the item in the public record.)

III. General Discussion

    In preparing today's notice, DOE considered input from the various 
interested parties who commented on the framework document and 
preliminary analysis, information obtained from manufacturer 
interviews, and additional research that DOE conducted. The interested 
parties who provided comments to DOE during the framework document and 
preliminary analysis phases included the following:

                           Table III-1--Framework and Preliminary Analysis Commenters
----------------------------------------------------------------------------------------------------------------
                                                                                           Comment number(s) in
             Commenter(s)              Abbreviated designation        Affiliation                 docket
----------------------------------------------------------------------------------------------------------------
AFM Corporation......................  AFM....................  Manufacturer...........                   0012.1
Air-Conditioning, Heating, and         AHRI...................  Trade Association......           0036.1, 0055.1
 Refrigeration Institute.
American Chemistry Council...........  ACC....................  Material Supplier......                   0062.1
American Chemistry Council Center for  CPI....................  Material Supplier......                   0052.1
 the Polyurethanes Industry.
American Council for an Energy         Joint Advocates........  Energy Efficiency                         0070.1
 Efficient Economy, Appliance                                    Advocates.
 Standards Awareness Project,
 Alliance to Save Energy, Natural
 Resources Defense Council, Northwest
 Energy Efficiency Alliance.
American Panel Corporation...........  American Panel.........  Manufacturer...........           0039.1, 0048.1
AmeriKooler, Inc.....................  AmeriKooler............  Manufacturer...........                   0065.1
Appliance Standards Awareness Project  ASAP...................  Energy Efficiency                         0024.1
                                                                 Advocate.
Bally Refrigerated Boxes, Inc........  Bally..................  Manufacturer...........                   0023.1
Carpenter Co. Chemical Systems         Carpenter..............  Material Supplier......                   0068.1
 Division.
Craig Industries, Inc. and U.S.        Craig Industries.......  Manufacturer...........                   0064.1
 Cooler Company.
Craig Industries, Inc. and US Cooler   Craig Industries.......  Manufacturer...........  0011.1, 0025.1, 0038.1,
 Company.                                                                                         0064.1, 0071.1
CrownTonka Walk-Ins..................  CrownTonka.............  Manufacturer...........           0026.1, 0057.1
Earthjustice.........................  Earthjustice...........  Energy Efficiency                 0027.1, 0047.1
                                                                 Advocate.
Edison Electric Institute............  EEI....................  Energy Efficiency                         0028.1
                                                                 Advocate.
Eliason Corporation..................  Eliason................  Manufacturer...........           0013.1, 0022.1
Foam Supplies, Inc...................  FSI....................  Material Supplier......                   0029.1
Heatcraft Refrigeration Products LLC.  Heatcraft..............  Manufacturer...........           0058.1, 0069.1
Heating, Air-conditioning &            HARDI..................  Trade Association......                   0031.1
 Refrigeration Distributors
 International.
Hill Phoenix Walk-Ins................  Hill Phoenix...........  Manufacturer...........                   0066.1
Hired Hand Technologies..............  Hired Hand.............  Manufacturer...........           0030.1, 0050.1
Hussmann and Ingersoll Rand..........  Ingersoll Rand.........  Manufacturer...........                   0053.1
Kason Industries, Inc................  Kason..................  Component Supplier.....           0009.1, 0019.1
Kysor Panel Systems..................  Kysor..................  Manufacturer...........           0032.1, 0054.1
Manitowoc Ice........................  Manitowoc..............  Manufacturer...........                   0056.1
Master-Bilt Products, Inc............  Master-Bilt............  Manufacturer...........           0033.1, 0046.1
NanoPore Insulation, LLC.............  NanoPore...............  Material Supplier......                   0067.1
Nor-Lake, Incorporated...............  Nor-Lake...............  Manufacturer...........                   0049.1
Owens Corning Foam Insulation, LLC...  Owens Corning..........  Material Supplier......                   0034.1
Southern California Edison and         SCE....................  Utility................                   0035.1
 Technology Test Centers.
Southern California Edison, San Diego  Joint Utilities........  Utility Group..........                   0061.1
 Gas & Electric, Pacific Gas &
 Electric Company, Sacramento
 Municipal Utility District.
The Northwest Energy Efficiency        NEEA and NPCC..........  Utility Representative.           0021.1, 0059.1
 Alliance and the Northeast Power
 Coordinating Council.
Zero-Zone, Inc.......................  Zero-Zone..............  Manufacturer...........                   0051.1
----------------------------------------------------------------------------------------------------------------

A. Component Level Standards

    In the framework document, DOE considered setting standards that 
would apply to the entire walk-in. See the framework document at http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/wicf_framework_doc.pdf. Several interested parties expressed concern 
about this approach because of the variety among assembled walk-ins, 
which would make compliance with

[[Page 55792]]

such a walk-in standard difficult and burdensome. Stakeholders also 
stated that different components of each walk-in would likely be 
manufactured by different entities, which would make it difficult to 
enforce any standard that applied to an entire walk-in.
    After considering the comments submitted on the framework document, 
DOE modified its approach in the preliminary analysis. During that 
phase, it had tentatively identified two primary components of a walk-
in: the envelope (the insulated box that separates the exterior from 
the interior) and the refrigeration system (the mechanical equipment 
that cools the envelope's interior). DOE also indicated that it was 
tentatively considering developing separate standards for refrigeration 
systems and envelopes.
    Several interested parties agreed with this general approach. 
Manitowoc supported separate standards for the envelope and 
refrigeration system, stating that the envelope is typically supplied 
by one manufacturer and the refrigeration system is typically supplied 
by one or more manufacturers. (Manitowoc, Public Meeting Transcript, 
No. 0045 at p. 38 and No. 0056.1 at p. 1) Manitowoc further stated that 
it would not be practical to regulate the energy used by the entire 
walk-in assembly because walk-ins are highly customized. Manitowoc 
estimated that fewer than 20 percent of its walk-ins use a standard 
envelope and refrigeration system combination. (Manitowoc, No. 0056.1 
at p. 1) Pacific Gas and Electric Company, Southern California Edison, 
Sempra Energy Utility, and the Sacramento Municipal Utility District 
(hereafter referred to as the ``Joint Utilities'') also agreed with 
DOE's proposal to separate the refrigeration system standards from the 
envelope standards because the components are separately produced and 
often separately sold. (Joint Utilities, No. 0061.1 at pp. 2-3) 
American Panel stated that the envelope and refrigeration systems must 
be considered separately because the majority of WICFs are custom-made. 
(American Panel, No. 0048.1 at p. 4) Kysor, Master-Bilt, AHRI, and 
CrownTonka all supported separate standards for the envelope and 
refrigeration systems. (Kysor, Public Meeting Transcript, No. 0045 at 
p. 39; Master-Bilt, No. 0046.1 at p. 1; AHRI, No. 0055.1 at p. 2; 
CrownTonka, No. 0057.1 at p. 1) One interested party did not agree with 
this approach. Craig Industries, also doing business as U.S. Cooler, 
commented that DOE should establish a combination standard for the 
envelope and refrigeration system to permit manufacturers greater 
flexibility when designing walk-ins. Under this combination approach, a 
more efficient envelope could be paired with a less efficient 
refrigeration system, or vice versa, to achieve the same overall 
efficiency at a lower cost. (Craig Industries, No. 0064.1 at p. 1)
    Additionally, interested parties suggested that DOE extend the idea 
of separate standards to subcomponents of envelopes and refrigeration 
systems. The Joint Utilities stated that a component performance 
approach would accurately capture efficiency measurements associated 
with the components, and that energy savings associated with targeted 
components would apply to different configurations of whole walk-ins 
and possibly even to repairs and retrofits. (Joint Utilities, No. 
0061.1 at p. 4) The Joint Utilities further added that DOE should 
consider component performance standards for major walk-in components 
that could be enforced at the level of the manufacturer's catalog and 
could be labeled for easy inspection. (Joint Utilities, No. 0061.1 at 
p. 12) Hill Phoenix also recommended that large construction-based 
envelopes (i.e., those constructed in a manner similar to a building) 
be regulated at the component level, asserting that these envelopes may 
need many different options and design flexibility, without which a 
whole-envelope calculation would likely limit the accuracy of any 
estimate of a walk-in's total energy use. (Hill Phoenix, No. 0066.1 at 
p. 1) As stated previously, Manitowoc agreed that it would not be 
practical to regulate the energy used by the entire walk-in assembly 
because walk-ins are highly customized. (Manitowoc, No. 0056.1 at p. 1) 
Manitowoc also remarked that performance metrics could be developed for 
sub-classes of the components of an envelope, and the component 
manufacturers should be responsible for their own components. 
(Manitowoc, Public Meeting Transcript, No. 0045 at p. 46)
    Other stakeholders discussed specific sub-components of the 
envelope or the refrigeration system that could be regulated. Kysor 
mentioned panels and doors as envelope components that should be 
considered separately and stated that because these components are 
often manufactured by separate parties, the manufacturer of each 
component should be responsible for the performance of that component. 
(Kysor, Public Meeting Transcript, No. 0045 at p. 41) The Northwest 
Energy Efficiency Alliance (NEEA) and Northwest Power Conservation 
Council (NPCC) recommended that DOE develop efficiency performance 
standards for display and solid doors separately so that an envelope 
manufacturer could certify that the envelope meets specified standards. 
(NEEA and NPCC, No. 0059.1 at p. 2)
    Likewise, with regard to the refrigeration system, NEAA and NPCC 
recommended that DOE regulate the efficiency of the cooling system 
components separately, an example of which would be setting a 
performance requirement for the specific efficiency of unit coolers 
based on control algorithms. (NEAA and NPCC, No. 0059.1 at pp. 2 and 7) 
The Joint Utilities also stated that a refrigeration system requirement 
should not be based on a single metric and added that the indoor unit 
(i.e., unit cooler) could have a minimum efficiency requirement 
regardless of other components of the refrigeration system. (Joint 
Utilities, No. 0061.1 at p. 4 and Public Meeting Transcript, No. 0045 
at p. 64) Manitowoc, on the other hand, recommended that manufacturers 
have the option of rating the entire refrigeration system and that 
considering the condensing unit separately would not allow 
manufacturers to implement options that would improve the efficiency of 
a matched system. (Manitowoc, Public Meeting Transcript, No. 0045 at p. 
38) Manitowoc further remarked that testing the refrigeration system as 
an integrated, single component and calculating the overall annual 
efficiency has the greatest potential for optimizing energy efficiency, 
but added that DOE should permit the individual components to be tested 
and the performance stated for the individual parts. (Manitowoc, Public 
Meeting Transcript, No. 0045 at p. 59)
    After carefully considering the comments described above, DOE 
proposes an approach for the envelope that would set separate standards 
for panels, display doors, and non-display doors for the reasons set 
forth below.
    Different manufacturers typically produce panels and doors (both 
display and non-display types) for use in walk-in applications. In 
particular, display doors are commonly manufactured separately because 
their unique construction and materials require specialized 
manufacturing methods. Additionally, the modular nature of a walk-in 
envelope means that it is constructed of relatively standardized 
components that can be assembled in a virtually infinite number of 
configurations that may affect the overall consumption of a given walk-
in unit. By regulating the performance of those standardized 
components, manufacturers will be able to choose

[[Page 55793]]

compliant components that should help ensure that whatever walk-in 
configuration is built satisfies the minimal level of energy 
consumption and efficiency that DOE may prescribe. Because of the large 
number of possible combinations of panels and doors that could make up 
an envelope, the burdens presented by a system-based approach for the 
entire walk-in unit would also likely be significantly greater than the 
burdens of the proposed approach because each walk-in envelope 
configuration would need to be separately certified as compliant. 
Alternatively, if DOE were to establish a set envelope of specified 
dimensions for a manufacturer to build and then to certify as 
compliant, the efficiency or energy usage measurement from that 
envelope would not only be more costly to obtain, but it would also not 
necessarily reflect the actual energy usage or efficiency of a given 
walk-in that is installed in the field.
    DOE also notes that requiring an overall envelope performance 
standard would be likely to present significant enforcement burdens, as 
it would likely require DOE to test several fully constructed envelopes 
in order to ascertain the energy efficiency performance of a given 
envelope. DOE tentatively believes that such an approach, at this time, 
would be unduly burdensome.
    DOE is not, however, proposing to set standards for the constituent 
components of refrigeration systems separately. To ensure that 
manufacturers have sufficient flexibility to improve the energy 
efficiency performance of their systems, DOE proposes to set a 
performance standard for the overall refrigeration system and to 
regulate that system as a single component. This approach would help 
ensure that the final refrigeration system assembled by the 
manufacturer would meet a given level of efficiency and would account 
for the interactive effects of the numerous components comprising the 
overall system. For example, some refrigeration systems implement 
complex control strategies, the benefits of which could not be 
adequately demonstrated if the condensing unit and unit cooler were 
considered separately for purposes of setting standards.
    In summary, DOE proposes to set specific component standards for 
the panels, display doors, and non-display doors of a walk-in, and a 
single standard to assess the overall performance of the refrigeration 
system. DOE acknowledges that, by not establishing a standard for the 
energy use of the entire walk-in, manufacturers cannot meet the 
standard by pairing a more-efficient envelope with a less-efficient 
refrigeration system, and vice versa. Also, DOE would not account for 
the energy use of some components, such as the electricity use of 
overhead lighting or heat load due to the infiltration of warm air into 
the walk-in, and would not consider design options whose efficacy 
depends on the interaction between the different covered components. 
Including these factors as part of the current rulemaking would likely 
introduce significant complications with respect to compliance and 
enforcement while yielding a comparatively small benefit in energy 
savings. DOE believes, however, that the proposed approach would help 
ensure that the walk-in components used by manufacturers satisfy some 
minimal level of energy efficiency and reduce the overall certification 
and enforcement burden on manufacturers. DOE may reconsider this issue 
in the future, particularly if accurate computer modeling, such as 
through an alternative efficiency determination method, becomes 
possible with respect to predicting the energy usage and efficiency of 
fully constructed walk-in units. DOE continues to invite comments on 
the approach presented in this NOPR.

B. Test Procedures and Metrics

    While Congress had initially prescribed certain performance 
standards and test procedures concerning walk-ins as part of the EISA 
2007 amendments, Congress also instructed DOE to develop specific test 
procedures to cover walk-in equipment. DOE subsequently established a 
test procedure for walk-ins. See 76 FR 21580 (April 15, 2011). See also 
76 FR 33631 (June 9, 2011) (final technical corrections). The test 
procedure lays out an approach that bases compliance on the ability of 
component manufacturers to produce components that meet the required 
standards. This approach is also consistent with the framework 
established by Congress, which set specific energy efficiency 
performance requirements on a component-level basis. (42 U.S.C. 
6313(f)) The approach is discussed more fully below.
1. Panels
    In the final test procedure rule for walk-ins, DOE defines 
``panel'' as a construction component, excluding doors, used to 
construct the envelope of the walk-in (i.e., elements that separate the 
interior refrigerated environment of the walk-in from the exterior). 76 
FR 33631 (June 9, 2011). The rule explains that panel manufacturers 
would test their panels to obtain a thermal transmittance metric--known 
as U-factor, measured in Btu/h-ft\2\-[deg]F--and identifies three types 
of panels: display panels, floor panels, and non-floor panels. A 
display panel is defined as a panel that is entirely or partially 
comprised of glass, a transparent material, or both, and is used for 
display purposes. Id. It is considered equivalent to a window and the 
U-factor is determined by NFRC 100-2010-E0A1, ``Procedure for 
Determining Fenestration Product U-factors.'' 76 FR at 33639. Floor 
panels are used for walk-in floors, whereas non-floor panels are used 
for walls and ceilings.
    The U-factor for floor and non-floor panels accounts for any 
structural members internal to the panel and the long-term thermal 
aging of foam. This value is determined by a three-step process. First, 
both floor and non-floor panels must be tested using ASTM C1363-10, 
``Standard Test Method for Thermal Performance of Building Materials 
and Envelope Assemblies by Means of a Hot Box Apparatus.'' The panel's 
core and edge regions must be used during testing. Second, the panel's 
core U-factor must be adjusted with a degradation factor to account for 
foam aging. The degradation factor is determined by EN 13165:2009-02, 
``Thermal Insulation Products for Buildings--Factory Made Rigid 
Polyurethane Foam (PUR) Products--Specification,'' or EN 13164:2009-02, 
``Thermal Insulation Products for Buildings--Factory Made Products of 
Extruded Polystyrene Foam (XPS)--Specification,'' as applicable. Third, 
the edge and modified core U-factors are then combined to produce the 
panel's overall U-factor. All industry protocols were incorporated by 
reference most recently in the test procedure final rule correction. 76 
FR 33631.
2. Doors
    The walk-in test procedure final rule addressed two door types: 
display and non-display doors. Within the general context of walk-ins, 
a door consists of the door panel, glass, framing materials, door plug, 
mullion, and any other elements that form the door or part of its 
connection to the wall. DOE defines display doors as doors designed for 
product movement, display, or both, rather than the passage of persons; 
a non-display door is interpreted to mean any type of door that is not 
captured by the definition of a display door. 76 FR at 33631.
    The test metric for doors is in terms of energy use, measured in 
kilowatt-hours per day (kWh/day). The energy use accounts for thermal 
transmittance through the door and the electricity use

[[Page 55794]]

of any electrical components associated with the door. The thermal 
transmittance is measured by NFRC 100-2010-E0A1, and is converted to 
energy consumption via conduction losses using an assumed efficiency of 
the refrigeration system in accordance with the test procedure. See 76 
FR at 33636-33637. The electrical energy consumption of the door is 
calculated by summing each electrical device's individual consumption 
and accounts for all device controls by applying a ``percent time off'' 
value to the appropriate device's energy consumption. For any device 
that is located on the internal face of the door or inside the door, 75 
percent of its power is assumed to contribute to an additional heat 
load on the compressor. Finally, the total energy consumption of the 
door is found by combining the conduction load, electrical load, and 
additional compressor load.
3. Refrigeration
    The test procedure incorporates an industry test procedure applied 
to walk-in refrigeration systems: AHRI 1250 (I-P)-2009, ``2009 Standard 
for Performance Rating of Walk-In Coolers and Freezers'' (``AHRI 1250-
2009''). 76 FR at 33631. This procedure applies to unit coolers and 
condensing units sold together as a matched system, unit coolers and 
condensing units sold separately, and unit coolers connected to 
compressor racks or multiplex condensing systems. It also describes 
methods for measuring the refrigeration capacity, on-cycle electrical 
energy consumption, off-cycle fan energy, and defrost energy. Standard 
test conditions, which are different for indoor and outdoor locations 
and for coolers and freezers, are also specified.
    The test procedure includes a calculation methodology to compute an 
annual walk-in energy factor (AWEF), which is the ratio of heat removed 
from the envelope to the total energy input of the refrigeration system 
over a year. AWEF is measured in Btu/W-h and measures the efficiency of 
a refrigeration system. DOE established a metric based on efficiency, 
rather than energy use, for describing refrigeration system 
performance, because a refrigeration system's energy use would be 
expected to increase based on the size of the walk-in and on the heat 
load that the walk-in produces. An efficiency-based metric would 
account for this relationship and would simplify the comparison of 
refrigeration systems to each other. Therefore, DOE proposes to use an 
energy conservation standard for refrigeration systems that would be 
presented in terms of AWEF.

C. Prescriptive Versus Performance Standards

    EPCA established standards for certain WICF components, while also 
directing the Secretary to establish ``performance-based standards,'' 
which are the subject of this rulemaking. (42 U.S.C. 6313(f)(4)(A)) 
Some interested parties suggested that DOE establish prescriptive 
standards for certain components in addition to the performance-based 
standards that DOE is proposing. NEEA and NPCC stated that DOE should 
establish a prescriptive (i.e., design) standard for electronically 
commutated motors. (NEEA and NPCC, No. 0059.1 at p. 7) The Joint 
Utilities recommended that DOE consider the precedent set by EPCA, as 
the EPCA provisions include both prescriptive and performance 
standards, and further recommended that DOE include additional 
prescriptive requirements for various components of a walk-in as 
necessary to maximize energy savings, and performance standards for the 
unit cooler. (Joint Utilities, No. 0061.1 at p. 11) The Joint Utilities 
also recommended that DOE base new standards using those design 
requirements already prescribed by Title 20 of California's Code as the 
baseline when developing a performance standard. (Joint Utilities, No. 
0061.1 at p. 13) SCE also referred to the prescriptive standards in 
Title 20, and suggested that because EPCA already established 
prescriptive measures, there will be limited additional benefit from 
performance measures. SCE further recommended that a standard for 
infiltration should be implemented through ASHRAE 90.1 (SCE, Public 
Meeting Transcript, No. 0045 at p. 63) The Joint Utilities recommended 
other specific prescriptive requirements that DOE should implement, 
including a minimum solar reflective index for the roof of a walk-in 
located outdoors, adjustable variable speed fan control for unit 
coolers, and floating head pressure control (a control that allows the 
pressure of the refrigerant at the compressor exit point to reach an 
optimal level). (Joint Utilities, No. 0061.1 at pp. 5 and 12; Public 
Meeting Transcript, No. 0045 at p. 29) The Joint Utilities also asked 
DOE to examine how controls could be specified in a performance 
standard. (Joint Utilities, No. 0061.1 at p. 13)
    DOE notes that EPCA requires the promulgation of ``performance-
based standards'' for walk-ins. That phrase indicates that DOE must set 
standards based on energy-related performance. See 42 U.S.C. 
6313(f)(4). Accordingly, the design requirements suggested by 
commenters would be inconsistent with this requirement.

D. Certification, Compliance, and Enforcement

    Walk-ins consist primarily of panels, display and non-display 
doors, and a refrigeration system, as described in section III.A. A 
number of arrangements exist for manufacturing walk-ins. One company 
may manufacture the panels, purchase the display and/or non-display 
doors and refrigeration system, assemble the walk-in at the factory, 
and ship the walk-in to a consumer. Alternatively, the same company may 
ship the walk-in without a refrigeration system, which is then 
purchased separately by the consumer and installed on the walk-in. A 
contractor may purchase all the components from the component 
manufacturers and assemble the walk-in on-site. Other scenarios may 
also exist. Given the wide variety of scenarios under which a walk-in 
is manufactured, it is important to identify an entity or entities 
responsible for complying with standards and certifying compliance to 
DOE, and against whom a possible enforcement action could be taken.
    During the preliminary analysis public meeting, many interested 
parties expressed concern about compliance responsibilities and whether 
those burdens would fall on the envelope and refrigeration 
manufacturers individually, the installer, or another party. 
Additionally, the Joint Advocates submitted a comment urging DOE to 
ensure that the separate system components would be compliant with the 
energy conservation standards, and stating that each manufacturer 
should be held accountable for their products (e.g., door manufacturers 
are responsible for compliance with door standards). (Joint Advocates, 
No. 0070.1 at pp. 2-3) Craig Industries recommended that the definition 
of a manufacturer be expanded to include the installer of the unit, 
because the installer has the ability to ensure that the installed unit 
meets the energy conservation standards. (Craig Industries, No. 0071.1 
at p. 1). Comments on this issue were summarized in the 2011 
Certification, Compliance, and Enforcement for Consumer Products and 
Commercial and Industrial Equipment (referred to hereafter as the CCE 
final rule), and are not repeated here. 76 FR 12422, 12442-12446 (March 
7, 2011).
    DOE notes that within the context of today's proposal, the agency 
is contemplating an approach that would place the primary certification 
and compliance burden on those entities that manufacture particular key 
components of a walk-in--that is, the

[[Page 55795]]

panels, doors, and refrigeration system. This approach dovetails with 
that outlined in the recent test procedure final rule. The various 
requirements that manufacturers would need to follow are detailed in 
the 2011 final rule noted above regarding manufacturer certification, 
compliance, and enforcement-related responsibilities. 76 FR 12422. For 
further details, see 76 FR at 12491.

E. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis, 
which it bases on information gathered on all current technology 
options and prototype designs that could improve the efficiency of the 
products or equipment that are the subject of the rulemaking. As the 
first step in such analysis, DOE develops a list of design options for 
consideration in consultation with manufacturers, design engineers, and 
other interested parties. DOE then determines which of these means for 
improving efficiency are technologically feasible. DOE considers 
technologies incorporated in commercial products or in working 
prototypes to be technologically feasible. 10 CFR 430, subpart C, 
appendix A, section 4(a)(4)(i) Although DOE considers technologies that 
are proprietary, it will not consider efficiency levels that can only 
be reached through the use of proprietary technologies (i.e., a unique 
pathway), as it could allow a single manufacturer to monopolize the 
market.
    Once DOE has determined that particular design options are 
technologically feasible, it generally evaluates each of these design 
options in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-
(iv) Section IV.B of this notice discusses the results of the screening 
analyses for walk-in coolers and freezers. Specifically, it presents 
the designs DOE considered, those it screened out, and those that are 
the basis for the TSLs in this rulemaking. For further details on the 
screening analysis for this rulemaking, see chapter 4 of the TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a new or amended or new energy 
conservation standard for a type or class of covered equipment such as 
walk-ins, it determines the maximum improvement in energy efficiency 
that is technologically feasible for such equipment. Accordingly, DOE 
determined the maximum technologically feasible (max-tech) improvements 
in energy efficiency for walk-ins by applying those design parameters 
that passed the screening analysis to the engineering analysis that DOE 
prepared as part of the preliminary analysis.
    In a comment on the max-tech levels in the preliminary analysis, 
AHRI commented that max-tech efficiency levels would be achieved only 
by a few units, and it requested that DOE demonstrate that max-tech 
levels can be achieved by commonly used products. (AHRI, No. 0055.1 at 
p. 3)
    As indicated previously, whether efficiency levels exist or can be 
achieved in commonly used products does not determine whether they are 
max-tech levels. DOE considers technologies to be technologically 
feasible if they are incorporated in any commercially available 
equipment or working prototypes. A maximum technologically feasible 
level results from the combination of design options that result in the 
highest efficiency level for an equipment class, with such design 
options consisting of technologies already incorporated in commercial 
products or working prototypes. DOE notes that it re-evaluated the 
efficiency levels, including the max-tech levels, when it updated its 
results for this NOPR. See chapter 5 of the NOPR TSD for the results of 
the analysis.
    For panels, non-display doors, display doors, and refrigeration 
systems, the max-tech efficiency levels DOE has identified represent 
products with the most efficient design options available on the 
market, or previously offered for sale, in the given equipment class. 
No products at higher efficiencies are available or have been in the 
past, and DOE is not aware of any working prototype designs that would 
allow manufacturers to achieve higher efficiencies. Table III-2, Table 
III-3, Table III-4, and Table III-5 list the max-tech levels for 
panels, display doors, non-display doors, and refrigeration systems, 
respectively. (See section IV.A.3 for a description of the equipment 
classes.)
    For structural cooler and freezer panels, the max-tech level is 
represented by a single value for U-factor. For all other TSLs (and for 
all floor panel levels including the max-tech level), the level is 
represented by a polynomial equation expressing the U-factor in terms 
of certain panel dimensions, but the max tech level does not result in 
a polynomial equation because the U-factor does not vary with the size 
of the panel. (See section V.A.2 for a list of equations for all TSLs.) 
At max-tech, panels are designed without structural members, making the 
panel uniformly comprised of hybrid insulation. See section IV.C.5 and 
chapter 5 of the TSD for the list of technologies included in max-tech 
equipment.
[GRAPHIC] [TIFF OMITTED] TP11SE13.002

[[Page 55796]]

             Table III-3--Max-Tech Levels for Display Doors
------------------------------------------------------------------------
                                         Equations for maximum energy
          Equipment class                  consumption (kWh/day) *
------------------------------------------------------------------------
Display Door, Medium Temperature...  0.0080 x Add + 0.29
Display Door, Low Temperature......  0.11 x Add + 0.32
------------------------------------------------------------------------
* Add represents the surface area of the display door.

           Table III-4--Max-Tech Levels for Non-Display Doors
------------------------------------------------------------------------
                                         Equations for maximum energy
          Equipment class                  consumption (kWh/day) *
------------------------------------------------------------------------
Passage Door, Medium Temperature...  0.00093 x And + 0.0083
Passage Door, Low Temperature......  0.13 x And + 3.9
Freight Door, Medium Temperature...  0.00092 x And + 0.13
Freight Door, Low Temperature......  0.094 x And + 5.2
------------------------------------------------------------------------
* And represents the surface area of the non-display door.

         Table III-5--Max-Tech Levels for Refrigeration Systems
------------------------------------------------------------------------
                                      Equations for minimum AWEF (Btu/W-
          Equipment class                            h) *
------------------------------------------------------------------------
Dedicated Condensing, Medium         2.63 x 10-4 x Q + 4.53
 Temperature, Indoor System, h Capacity.
Dedicated Condensing, Medium         6.90
 Temperature, Indoor System, >=
 9,000 Btu/h Capacity.
Dedicated Condensing, Medium         9.23 x 10-4 x Q + 3.90
 Temperature, Outdoor System, h Capacity.
Dedicated Condensing, Medium         12.21
 Temperature, Outdoor System, >=
 9,000 Btu/h Capacity.
Dedicated Condensing, Low            1.93 x 10-4 x Q + 1.93
 Temperature, Indoor System, h Capacity.
Dedicated Condensing, Low            3.67
 Temperature, Indoor System, >=
 9,000 Btu/h Capacity.
Dedicated Condensing, Low            4.53 x 10-4 x Q + 2.17
 Temperature, Outdoor System, h Capacity.
Dedicated Condensing, Low            6.25
 Temperature, Outdoor System, >=
 9,000 Btu/h Capacity.
Multiplex Condensing, Medium         10.82
 Temperature.
Multiplex Condensing, Low            5.91
 Temperature.
------------------------------------------------------------------------
* Q represents the system gross capacity as calculated in AHRI 1250.

F. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from the products that 
are the subject of this rulemaking purchased in the 30-year period that 
begins in the year of compliance with new standards (2017-2046). The 
savings are measured over the entire lifetime of products purchased in 
the 30-year period.\13\ DOE quantified the energy savings attributable 
to each TSL as the difference in energy consumption between each 
standards case and the base case. The base case represents a projection 
of energy consumption in the absence of amended mandatory efficiency 
standards and considers market forces and policies that affect demand 
for more efficient products.
---------------------------------------------------------------------------

    \13\ In the past DOE presented energy savings results for only 
the 30-year period that begins in the year of compliance. In the 
calculation of economic impacts, however, DOE considered operating 
cost savings measured over the entire lifetime of products purchased 
in the 30-year period. DOE has chosen to modify its presentation of 
national energy savings to be consistent with the approach used for 
its national economic analysis.
---------------------------------------------------------------------------

    DOE used its national impact analysis (NIA) spreadsheet model to 
estimate energy savings from amended standards for the products that 
are the subject of this rulemaking. The NIA spreadsheet model 
(described in section IV.G of this notice and chapter 10 of the TSD) 
calculates energy savings in site energy, which is the energy directly 
consumed by products at the locations where they are used. For 
electricity, DOE reports national energy savings in terms of the 
savings in the energy that is used to generate and transmit the site 
electricity. To calculate this quantity, DOE derives annual conversion 
factors from the model used to prepare the Energy Information 
Administration's (EIA) Annual Energy Outlook (AEO).
    DOE has begun to also estimate full-fuel-cycle (FFC) energy 
savings. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (August 
17, 2012). The FFC metric includes the energy consumed in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and thus presents a more complete picture of the 
impacts of energy efficiency standards. DOE's approach is based on 
calculation of an FFC multiplier for each of the energy types used by 
covered products. For more information on FFC energy savings, see 
sections IV.G.3 and IV.L and appendix 10G of the TSD.
2. Significance of Savings
    DOE may not adopt a standard that would not result in significant 
additional energy savings. While the term ``significant'' is not 
defined in the Act, the U.S. Circuit Court of Appeals for the District 
of Columbia in Natural Resources Defense Council v. Herrington, 768 
F.2d 1355, 1373 (DC Cir. 1985), indicated that Congress intended 
significant energy savings to be savings that were not ``genuinely 
trivial.'' The estimated energy savings in the analysis period for the 
trial standard levels considered in this rulemaking range from 4.28 to 
6.37 quadrillion Btu (quads), an amount DOE considers significant.

[[Page 55797]]

G. Economic Justification

1. Specific Criteria
    As discussed in section II.A, EPCA provides seven factors to be 
evaluated in determining whether a potential energy conservation 
standard is economically justified. The following sections generally 
discuss how DOE addresses each of those seven factors in this 
rulemaking. For further details and the results of DOE's analyses 
pertaining to economic justification, see sections IV and V of today's 
notice.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of an amended standard on manufacturers, 
DOE first uses an annual cash-flow approach to determine the 
quantitative impacts. This step includes both a short-term assessment--
based on the cost and capital requirements during the period between 
when a regulation is issued and when entities must comply with the 
regulation--and a long-term assessment over a 30-year period. The 
industry-wide impacts analyzed include industry net present value 
(INPV), which values the industry on the basis of expected future cash 
flows; cash flows by year; changes in revenue and income; and other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and the PBP associated with new or amended standards. 
The LCC, which is also separately specified as one of the seven factors 
to be considered in determining the economic justification for a new or 
amended standard, is discussed in the following section. For consumers 
in the aggregate, DOE also calculates the net present value from a 
national perspective of the economic impacts on consumers over the 
forecast period used in a particular rulemaking. For the results of 
DOE's analyses related to the economic impact on consumers, see section 
V.B.1 of this notice and chapters 8 and 11 of the TSD. For the results 
of DOE's analyses related to the economic impact on manufacturers, see 
section V.B.2 of this notice and chapter 12 of the TSD.
b. Life-Cycle Costs
    The LCC is the sum of the purchase price of equipment (including 
the cost of its installation) and the operating expense (including 
energy and maintenance and repair expenditures) discounted over the 
lifetime of the equipment. The LCC savings for the considered 
efficiency levels are calculated relative to a base case that reflects 
likely trends in the absence of new standards. The LCC analysis 
requires a variety of inputs, such as equipment prices, equipment 
energy consumption, energy prices, maintenance and repair costs, 
equipment lifetime, and consumer discount rates. DOE assumes in its 
analysis that consumers purchase the equipment in the year in which 
compliance with the new standard is required.
    To account for uncertainty and variability in specific inputs, such 
as equipment lifetime and discount rate, DOE uses a distribution of 
values with probabilities attached to each value. A distinct advantage 
of this approach is that DOE can identify the percentage of consumers 
estimated to receive LCC savings or experience an LCC increase. In 
addition to identifying ranges of impacts, DOE evaluates the LCC 
impacts of potential standards on identifiable subgroups of consumers 
that may be disproportionately affected by a new national standard. For 
the results of DOE's analyses related to the life-cycle costs of 
equipment, see section V.B.1.a of this notice and chapter 8 of the TSD.
c. Energy Savings
    While significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. DOE uses the NIA spreadsheet results in its 
consideration of total projected savings. For the results of DOE's 
analyses related to the potential energy savings, see section V.B.3.a 
of this notice and chapter 10 of the TSD.
d. Lessening of Utility or Performance of Products
    In establishing classes of equipment, and in evaluating design 
options and the impact of potential standard levels, DOE seeks to 
develop standards that would not lessen the utility or performance of 
the equipment under consideration. None of the TSLs presented in 
today's NOPR would reduce the utility or performance of the equipment 
considered in the rulemaking. During the screening analysis, DOE 
eliminated from consideration any technology that would adversely 
impact consumer utility. For the results of DOE's analyses related to 
the potential impact of new standards on equipment utility and 
performance, see section IV.B of this notice and chapter 4 of the TSD.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from the imposition of a standard. It also directs the 
Attorney General to determine the impact, if any, of any lessening of 
competition likely to result from a proposed standard and to transmit 
such determination to the Secretary within 60 days of the publication 
of a proposed rule, together with an analysis of the nature and extent 
of the impact. DOE will transmit a copy of today's proposed rule to the 
Attorney General with a request that the Department of Justice (DOJ) 
provide its determination on this issue. DOE will address the Attorney 
General's determination in the final rule.
f. Need of the Nation To Conserve Energy
    The energy savings from the proposed standards are likely to 
provide improvements to the security and reliability of the nation's 
energy system. Reductions in the demand for electricity also may result 
in reduced costs for maintaining the reliability of the nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the nation's needed power generation capacity. 
The utility impact analysis is contained in chapter 14 of the TSD.
    The proposed standards also are likely to result in environmental 
benefits in the form of reduced emissions of air pollutants and 
greenhouse gases associated with energy production. DOE reports the 
emissions impacts from today's standards, and from each TSL it 
considered, in section V.B.6 of this notice and chapter 15 of the TSD. 
DOE also reports estimates of the economic value of emissions 
reductions resulting from the considered TSLs.
g. Other Factors
    EPCA allows the Secretary, in determining whether a standard is 
economically justified, to consider any other factors that the 
Secretary deems to be relevant. For the results of DOE's

[[Page 55798]]

analyses related to other factors, see section V.B.7 of this notice.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA provides for a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of 
equipment that meets the standard level is less than three times the 
value of the first-year energy (and, as applicable, water) savings 
resulting from the standard, as calculated under the applicable DOE 
test procedure. DOE's LCC and PBP analyses generate values which can be 
used to calculate the payback period for consumers of products or 
equipment that meet the proposed standards. These analyses include, but 
are not limited to, the three-year payback period contemplated under 
the rebuttable presumption test. However, DOE routinely conducts a full 
economic analysis that considers the full range of impacts 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 evaluate the economic justification for a potential 
standard level (thereby supporting or rebutting the results of any 
preliminary determination of economic justification). The rebuttable 
presumption payback calculation is discussed in section IV.F.12 of this 
NOPR and chapter 8 of the TSD.

IV. Methodology and Discussion

A. Market and Technology Assessment

    When beginning an energy conservation standards rulemaking, DOE 
develops information that provides an overall picture of the market for 
the products concerned, including the purpose of the products, the 
industry structure, and market characteristics. This activity includes 
both quantitative and qualitative assessments based primarily on 
publicly-available information (e.g., manufacturer specification sheets 
and industry publications) and data submitted by manufacturers, trade 
associations, and other stakeholders. The subjects addressed in the 
market and technology assessment for this rulemaking include: (1) 
Quantities and types of products sold and offered for sale; (2) retail 
market trends; (3) products covered by the rulemaking; (4) equipment 
classes; (5) manufacturers; (6) regulatory requirements and non-
regulatory programs (such as rebate programs and tax credits); and (7) 
technologies that could improve the energy efficiency of the products 
under examination. DOE researched manufacturers of panels, display 
doors, non-display doors, and refrigeration equipment. DOE also 
identified and characterized small business manufacturers of these 
components. See chapter 3 of the TSD for further discussion of the 
market and technology assessment.
    In the preliminary TSD, DOE presented market performance data. 
Typically, DOE's analysis of market data uses catalog and performance 
data to determine the number of products on the market at varying 
efficiency levels. However, WICF systems and equipment have not 
previously been rated for efficiency by manufacturers, nor has an 
efficiency metric been established for this equipment. Based on the 
available data, DOE presented a sample of equipment at various sizes in 
the preliminary TSD and estimated the energy consumption of the 
equipment using the preliminary engineering spreadsheet. For 
refrigeration equipment in particular, DOE found that, as expected, the 
relationship between capacity and energy consumption was roughly 
linear.
    In a comment on the market performance data DOE presented, 
Manitowoc expressed concern that DOE's use of linear trends to 
establish the relationship between energy consumption and net capacity 
will lead to an overestimation of the potential benefits of 
refrigeration system standards. (Manitowoc, No. 0056.1 at p. 2)
    DOE presented the market performance data to illustrate its 
understanding of the market. In response to Manitowoc's concern, DOE 
notes that the benefits of the rule are not derived from the estimates 
of market performance data but are determined from the LCC analysis and 
NIA. DOE seeks market performance data to help inform DOE's analysis.
1. Definitions Related to Walk-In Coolers and Freezers
    DOE proposes to amend the definition of display door and to adopt 
definitions for passage and freight door in order to clarify the 
boundaries separating these equipment classes. The display door 
definition was modified to permit transparent doors used for the 
passage of people to be categorized as display doors rather than as 
non-display passage doors. DOE is proposing to define transparent 
passage doors as a type of display door because transparent passage 
doors are generally constructed in the same manner and with the same 
materials as transparent reach-in doors. DOE proposes to include 
definitions for non-display passage and freight doors in order to 
clarify the distinction between the two types of doors. Non-display 
passage doors are typically smaller than freight doors and are designed 
for passage of people and small machines, whereas non-display freight 
doors are larger than passage doors and designed for the passage of 
large machines like forklifts.
a. Display Doors
    As described in section III.B of this notice, DOE established a 
definition for display door in the test procedure. 76 FR 33631 (June 9, 
2011). DOE is now proposing to amend this definition to include all 
doors that are comprised of 75 percent or more glass or other 
transparent material. This amendment is intended to classify passage 
doors that are mostly comprised of glass as display doors because the 
utility and construction of glass passage doors more closely resembles 
that of a display door. DOE proposes to define a display door as one 
that ``(1) is designed for product display; or (2) has 75 percent or 
more of its surface area comprised of glass or another transparent 
material.'' DOE requests comment on this proposed definition.
b. Freight Doors
    DOE is proposing to separate non-display doors into two equipment 
classes, passage doors and freight doors. DOE proposes to define 
freight doors in order to clarify the distinction between these two 
equipment classes and remove any ambiguity about which energy standards 
apply to a given door. The two types of doors are constructed 
differently--for example, freight doors tend to have more structural 
support because they are bulkier--and warrant different standards for 
each type. DOE is proposing a definition of freight doors that would 
account for the fact that these doors are typically larger than passage 
doors and are used to allow large machines, like forklifts, into walk-
ins. Specifically, DOE proposes to define a freight door to mean ``a 
door that is not a display door and is equal to or larger than 4 feet 
wide and 8 feet tall.'' DOE based these proposed dimensions on the 
standard size of a walk-in panel, which is 4 feet wide by 8 feet tall. 
In DOE's estimation doors used for the passage of people small machines 
would be less than the standard size of a walk-in panel and therefore 
all other doors would be freight doors. DOE requests comment on its 
proposed definition.
c. Passage Doors
    DOE proposes a definition of passage doors to differentiate passage 
doors from

[[Page 55799]]

freight doors and display doors. Passage doors are mostly intended for 
the passage of people and small machines like hand carts and not for 
product display. DOE proposes to define this term to mean ``a door that 
is not a freight or display door.'' DOE requests comment on this 
proposed definition.
2. Equipment Included in This Rulemaking
a. Panels and Doors
    As mentioned in section III.B.1, DOE identified three types of 
panels used in the walk-in industry: Display panels, floor panels, and 
non-floor panels. Based on its research, DOE determined that display 
panels, typically found in beer caves (walk-ins used for the display 
and storage of beer or other alcoholic beverages often found in a 
supermarket) make up a small percentage of all panels currently present 
in the market. Therefore, because of the extremely limited energy 
savings potential currently projected to result from amending the 
requirements that these panels must meet, DOE is not proposing 
standards for walk-in display panels in this NOPR. Display panels, 
however, must still follow all applicable design standards already 
prescribed by EPCA, as discussed in section II.B.1 of this notice.
    DOE is also not proposing to require the installation of walk-in 
cooler floor panels. DOE did not consider including walk-in cooler 
floor panels in its analysis because of their complex nature. Through 
manufacturer interviews and market research, DOE determined that, 
unlike walk-in freezers, the majority of walk-in coolers are made with 
concrete floors and do not use insulated floor panels. The entity that 
installs the cooler floor is considered the floor's manufacturer and is 
responsible for testing and complying with a walk-in cooler floor 
standard. If DOE were to require that all walk-in coolers to be 
equipped with floor panels, the onus of complying with this requirement 
would likely fall on entities that do not specialize in constructing 
walk-in coolers, and the accompanying burden in using these components 
and certifying compliance with the appropriate standards would likely 
be costly and difficult for that entity to fulfill. Therefore, at this 
time, it is DOE's view that requiring the use of floor panels--along 
with the accompanying compliance costs--would present an undue burden 
to those entities that would be responsible for meeting these 
requirements. For these reasons, DOE is not proposing to require walk-
in coolers to have floor panels, nor is DOE proposing energy efficiency 
standards for cooler floor panels. (DOE is, however, proposing energy 
efficiency standards for walk-in freezer floor panels and notes that 
EPCA requires floor insulation of at least R-28 for walk-in freezers. 
(42 U.S.C. 6313(f)(1)(D)).)
    DOE also identified two types of doors in the walk-in market, 
display doors and non-display doors, which are discussed in section 
III.B.2 of this NOPR. All types of doors will be subject to the 
performance standards proposed in this rulemaking.
b. Refrigeration System
    DOE defines the refrigeration system of a walk-in as the mechanism 
(including all controls and other components integral to the system's 
operations) used to create the refrigerated environment in the interior 
of the walk-in cooler and freezer, consisting of either (1) a packaged 
system where the unit cooler and condensing unit are integrated into a 
single piece of equipment, (2) a split system with separate unit cooler 
and condensing unit sections, or (3) a unit cooler that is connected to 
a multiplex condensing system. 76 FR at 33631.
    DOE based its preliminary results used in today's proposal on an 
analysis of storage coolers and freezers. DOE did not analyze blast 
freezer walk-ins, which are designed to quickly freeze food and then 
store it at a specified holding temperature. American Panel commented 
that blast freezer performance differs from storage freezer performance 
due to the large product loads experienced with this specialized 
equipment. (American Panel, No. 0048.1 at p. 4) Heatcraft added that 
blast freezer refrigeration systems' energy consumption would be higher 
than that of storage freezers and that they require wider fin spacing 
because of a higher rate of frost accumulation. (Heatcraft, No. 0058.1 
at p. 1)
    DOE agrees with American Panel and Heatcraft that blast freezer 
refrigeration systems have different energy characteristics from 
storage freezers, but questions whether they would necessarily have a 
lower rated efficiency. DOE is not proposing to include blast freezers 
in this rulemaking analysis because they make up a small percentage of 
walk-ins currently present in the market. DOE requests comment on 
whether blast freezer refrigeration systems would have difficulty 
complying with DOE's refrigeration efficiency standards and, if so, to 
direct DOE to (and supply it with) any test procedure data supporting 
this conclusion. DOE proposes to apply the same standards to blast 
freezer refrigeration systems as to storage freezer refrigeration 
systems, unless DOE finds that blast freezer refrigeration systems 
would have difficulty complying with DOE's standards. Otherwise, DOE 
will consider excluding blast freezers from coverage under this 
rulemaking, although they would still have to comply with the already 
statutorily-prescribed standards in EPCA.
    Regarding the particular refrigerant to be used in the analysis, 
DOE analyzed refrigeration equipment using R404A, a hydrofluorocarbon 
(HFC) refrigerant blend, in the preliminary analysis. Heatcraft 
supported DOE's approach to use only HFC refrigerants in the analysis, 
but also suggested that DOE consider lower global warming potential 
(GWP) refrigerants--such as R134a, R407A, or R407C--in the analyses as 
well because of shifts in the marketplace towards these products, even 
though these refrigerants may have lower efficiencies. (Heatcraft, No. 
0069.1 at p. 3)
    DOE used R404A in its analysis for this NOPR because it is widely 
used currently in the walk-in industry. DOE appreciates Heatcraft's 
suggestion to analyze alternative refrigerants, especially those with a 
lower GWPs given the interest by many manufacturers to use these 
alternatives, and requests comment on the extent of the use or likely 
phase-in of lower GWP refrigerants and asks manufacturers to submit 
data related to the ability of the equipment (either existing or 
redesigned) using these refrigerants to meet the proposed standard, as 
well as the cost of such equipment.
3. Equipment Classes
a. Panels and Doors
    In the preliminary analysis, DOE proposed to divide the envelope 
into two separate equipment classes: display and non-display walk-ins 
(that is, walk-ins with and without glass). Display walk-ins are walk-
ins that have doors for display purposes, are typically made with 
glass, and are inherently less efficient than walk-ins without glass 
because glass is not as insulative as the insulation material used in 
non-display walk-ins (typically polyurethane or polystyrene).
    Interested parties commented on the need to separate display and 
non-display walk-ins into two different equipment classes. Nor-Lake and 
AHRI agreed with the equipment classes proposed by DOE, and AHRI 
commented that the equipment classes represent the most common walk-in

[[Page 55800]]

configurations. (Nor-Lake, No. 0049.1 at p. 1; AHRI, No. 0055.1 at p. 
2) Manitowoc stated that classification of envelopes into storage and 
display types is appropriate as it may allow for different performance 
levels for certain components. (Manitowoc, No. 0056.1 at p. 2) However, 
CrownTonka contended that it was unnecessary to have two equipment 
classes for display and non-display walk-ins and that separate classes 
for coolers and freezers are adequate. (CrownTonka, No. 0057.1 at p. 1) 
ASAP and SCE opined that one equipment class is sufficient and that the 
difference between non-display and display doors could be accounted for 
through a weighted average of the opaque and glass surface areas. 
(ASAP, Public Meeting Transcript, No. 0045 at p. 70; SCE, Public 
Meeting Transcript, No. 0045 at p. 79) However, NEAA, NPCC and 
Manitowoc countered that there should not be a single metric for both 
display and non-display doors because it would not account for the 
unique utility offered by display walk-ins (i.e., permitting the 
display of stored items). (NEAA and NPCC, Public Meeting Transcript, 
No. 0045 at p. 76; Manitowoc, Public Meeting Transcript, No. 0045 at p. 
78) NEAA and NPCC stated that, if DOE were to separate display and non-
display walk-ins into two different classes, DOE should carefully 
define the boundary between the two classes. (NEAA and NPCC, Public 
Meeting Transcript, No. 0045 at p. 77) NEAA and NPCC also suggested 
that, as an alternative to having one equipment class for display and 
non-display walk-ins with a single performance metric, DOE should move 
to component level-based classes with separate performance metrics. 
(NEAA and NPCC, Public Meeting Transcript, No. 0045 at p. 76)
    Interested parties also submitted comments about the names of the 
equipment classes. NEAA and NPCC stated that if DOE has two separate 
equipment classes for display and non-display walk-ins, DOE should 
carefully define the boundary between the two classes. (NEAA and NPCC, 
Public Meeting Transcript, No. 0045 at p. 77) Kysor stated that the 
class names DOE suggested were confusing and offered an alternative--
``coolers with glass doors'' instead of ``display coolers''--to help 
clarify the difference between the two separate equipment classes. 
(Kysor, Public Meeting Transcript, No. 0045 at p. 78)
    In light of the component level standards described in section 
III.A, DOE proposes to create separate equipment classes for panels, 
display doors, and non-display doors. These different items comprise 
the main components of a walk-in envelope. DOE proposes separate 
classes for panels, display doors, and non-display doors because each 
component type has a different utility to the consumer and possesses 
different energy use characteristics.
    In the preliminary analysis, DOE also considered the possibility of 
creating separate classes for walk-in coolers and walk-in freezers 
because EPCA specifically divides walk-in equipment into coolers (above 
32[emsp14][deg]F) and freezers (at or below 32[emsp14][deg]F), (42 
U.S.C. 6311(20)), and prescribes unique design requirements for each. 
(42 U.S.C. 6313(f)(1)(C)-(D)(3)) DOE has continued to apply this 
approach in its analysis.
Panels
    DOE has placed panels into two equipment classes: Freezer floor 
panels and non-floor panels (also called structural panels). DOE 
understands that freezer floor panels and structural panels serve two 
different utilities. Freezer floor panels, which are panels used to 
construct the floor of a walk-in, must often support the load of small 
machines like hand carts and pallet jacks on their horizontal faces. 
Non-floor panels or structural panels, which include panels used to 
construct the ceiling or wall of a walk-in, provide structure for the 
walk-in. Because of their different utilities, the two classes of 
panels are constructed differently from each other and use different 
amounts of framing material, which affects the panels' energy 
consumption.
    Structural panels are further divided into two more classes based 
on temperature--i.e., cooler versus freezer panels. Cooler structural 
panels are rated with their internal faces exposed to a temperature of 
35 [deg]F, as called for in the test procedure final rule. Freezer 
structural panels are used in walk-in freezers and rated with its 
internal face exposed to a temperature of -10 [deg]F, as required by 
the test procedure final rule. 76 FR at 21606; 10 CFR 431.303. EPCA 
also requires walk-in freezer panels to have a higher R-value than 
walk-in cooler panels. These differences result in different amounts of 
insulating foam between these panel types and affect the panel's U-
value.
Doors
    DOE has distinguished between two different door types used in 
walk-in coolers and freezers: Display doors and non-display doors. DOE 
proposed separate classes for display doors and non-display doors to 
retain consistency with the dual approach laid out by EPCA for these 
walk-in components. (42 U.S.C. 6313(f)(1)(C) and (3)) Non-display doors 
and display doors also serve separate purposes in a walk-in. Display 
doors contain mainly glass in order to display products or objects 
located inside the walk-in. Non-display doors function as passage and 
freight doors and are mainly used to allow people and products to be 
moved into and out of the walk-in. Because of their different 
utilities, display and non-display doors are made up of different 
material. Display doors are made of glass or other transparent 
material, while non-display doors are made of highly insulative 
materials like polyurethane. The different materials found in display 
and non-display doors significantly affect their energy consumption.
    DOE divided display doors into two equipment classes based on 
temperature differences: cooler and freezer display doors. Cooler 
display doors and freezer display doors are exposed to different 
internal temperature conditions, which affect the total energy 
consumption of the doors. In the test procedure final rule, DOE 
established an internal rating temperature of 35 [deg]F for walk-in 
cooler display doors and -10 [deg]F for walk-in freezer display doors. 
76 FR at 21606; 10 CFR Part 431, Subpart R, Appendix A, Section 5.3.
    DOE also separated non-display doors into two equipment classes, 
passage and freight doors. Passage doors are typically smaller doors 
and mostly used as a means of access for people and small machines, 
like hand carts. Freight doors typically are larger doors used to allow 
access for larger machines, like forklifts, into walk-ins. The 
different shape and size of passage and freight doors affects the 
energy consumption of the doors. Both passage and freight doors are 
also separated into cooler and freezer classes because, as explained 
for display doors, cooler and freezer doors are rated at different 
temperature conditions. A different rating temperature impacts the 
door's energy consumption.
    In the preliminary analysis, DOE did not consider outdoor envelopes 
as a separate equipment class. Walk-ins located outdoors have very 
similar features to walk-ins located indoors, and DOE could not 
identify any additional design options that improved the energy 
consumption only of outdoor walk-ins. The Joint Utilities, NEEA and 
NPCC, CrownTonka, Nor-Lake, and Hill Phoenix stated that DOE should 
differentiate equipment classes by their external environment. (Joint 
Utilities, No. 0061.1 at p. 5; NEEA and NPCC, No. 0059.1 at p. 6; 
CrownTonka, Public Meeting Transcript, No. 0045 at p. 81;

[[Page 55801]]

Nor-Lake, No. 0049.1 at p. 2; Hill Phoenix, No. 0066.1 at p. 2) The 
Joint Utilities requested that DOE evaluate cost-effective insulation 
levels for outdoor walk-ins, and stated that there would be a loss in 
energy savings if DOE did not consider region-specific insulation 
levels. (Joint Utilities, Public Meeting Transcript, No. 0045 at pp. 80 
and 82) Nor-Lake contested DOE's claim that walk-ins designed as 
outdoor units include no additional features that impact energy 
consumption, stating that the ambient temperature and product load will 
change the energy consumption for both the indoor and outdoor units. 
(Nor-Lake, No. 0049.1 at p.2) Hill Phoenix recommended a separate 
equipment class for outdoor walk-ins because outdoor walk-ins must have 
thicker panels to withstand environmental conditions. (Hill Phoenix, 
No. 0066.1 at p. 2) American Panel observed that a walk-in located 
outdoors has an added benefit in that no building space was constructed 
to house the walk-in, which is a significant energy savings not 
considered in the preliminary analysis. (American Panel, No. 0048.1 at 
p. 3)
    Some commenters described how DOE could include equipment classes 
that capture the external conditions. SCE suggested that DOE set a 
series of different conditions by the location of the wall such as an 
outdoor, indoor, or demising wall (i.e., a dividing wall to separate 
spaces) between a cooler and a freezer space. (SCE, Public Meeting 
Transcript, No. 0045 at pp. 80 and 82-83) NEEA and NPCC recommended 
changing the equipment classes to indoor cooler, indoor freezer, 
outdoor cooler, and outdoor freezer. (NEEA and NPCC, No. 0059.1 at p. 
6)
    Other interested parties agreed with DOE's assertion that it was 
unnecessary to consider outdoor walk-ins as a separate equipment class. 
Kysor explained that the envelope would be designed for whatever 
ambient conditions it may be subjected to, and that adding additional 
performance requirements would be unnecessary. (Kysor, Public Meeting 
Transcript, No. 0045 at p. 80) Manitowoc stated that there should not 
be any classification based on external environments as there are times 
when the envelope is exposed to both internal and external conditions. 
(Manitowoc, Public Meeting Transcript, No. 0045 at p. 82)
    DOE is not proposing to include any panel or door equipment class 
that accounts for the different external environmental conditions that 
a walk-in could experience in real world applications. DOE does not 
find outdoor and indoor walk-in envelope components to have distinct 
utilities. Components for outdoor walk-ins and indoor walk-ins are 
generally constructed with the same design and materials and serve the 
same purpose. In response to Nor-Lake's comment about DOE's assumption 
about additional features, DOE clarifies that while the difference in 
outdoor temperatures affects the real world energy consumption of the 
walk-in envelope, DOE was referring to design features, such as 
different types of insulation, which differ from the design options 
found on indoor walk-ins and improve the energy efficiency of the 
outdoor walk-in. As to Hill Phoenix's comment that a panel facing 
external conditions requires more insulation, DOE notes that panels 
with thicker insulation already surpass the baseline panel 
specifications, which would make it easier for these types of panels to 
meet the standards in today's proposal.
    Hill Phoenix also recommended that DOE divide envelopes into 
factory assembled step-in style walk-ins and larger construction-based 
walk-ins. (Hill Phoenix, No. 0066.1 at p. 1) Because it is not 
proposing standards for walk-in envelopes, but rather for the panels 
and doors that are components of the envelopes, DOE has not adopted 
Hill Phoenix's recommendation in today's proposal. DOE has, however, 
separated into different equipment classes the components typically 
found in factory-assembled walk-ins, such as passage doors and floor 
panels, and those components found in large construction-based walk-
ins, such as freight doors. DOE believes this approach will achieve the 
objective of the Hill Phoenix recommendation, namely that the proposed 
standards reflect the different energy use characteristics of factory-
assembled and construction-based walk-ins.
    Table IV-1 lists the equipment classes DOE proposes to create in 
this NOPR. In the table below, medium temperature refers to cooler 
equipment and low temperature refers to freezer equipment. The column 
entitled ``Class'' lists the codes that will be used to abbreviate each 
equipment class, and will be used throughout the NOPR.

           Table IV-1--Equipment Classes for Panels and Doors
------------------------------------------------------------------------
             Product                  Temperature            Class
------------------------------------------------------------------------
Structural Panel................  Medium............  SP.M
                                  Low...............  SP.L
Floor Panel.....................  Low...............  FP.L
Display Door....................  Medium............  DD.M
                                  Low...............  DD.L
Passage Door....................  Medium............  PD.M
                                  Low...............  PD.L
Freight Door....................  Medium............  FD.M
                                  Low...............  FD.L
------------------------------------------------------------------------

b. Refrigeration Systems
    In the preliminary analysis, DOE considered dividing walk-in 
refrigeration systems into six equipment classes based on key physical 
characteristics that affect equipment efficiency: (1) The type of 
condensing unit (i.e., whether the system has a dedicated condensing 
unit or is connected to a multiplex system), (2) the operating 
temperature, and (3) the location of the walk-in (i.e., indoors or 
outdoors). In this NOPR, DOE also proposes to differentiate 
refrigeration system classes based on capacity. DOE discusses the four 
proposed class differentiations below.
Type of Condensing Unit
    Due to the significant impact of the condensing unit on the overall 
energy consumption of the walk-in (as much as 90 percent), the 
preliminary analysis differentiated between two different condensing 
unit types: dedicated condensing systems and multiplex condensing 
systems. In a dedicated condensing system, only one condensing unit 
(consisting of one or more compressors and condensers) serves a single 
walk-in. A multiplex condensing system consists of a rack of 
compressors usually located in a mechanical room, a large condenser or 
condensers usually located on the roof, and several unit coolers or 
evaporators belonging to various types of refrigeration equipment, 
including walk-ins. The only part of a multiplex condensing system that 
would be covered under the proposed standard would be a unit cooler in 
a walk-in--a ``unit cooler connected to a multiplex condensing 
system.'' The compressor and condenser of a multiplex system would not 
be covered under the walk-in standard because they serve equipment 
other than walk-ins. Furthermore, DOE would be unable to attribute the 
portion of energy use related to only the walk-in, at the point of 
manufacture of the compressor and condenser of the multiplex system.
    DOE received several comments about the classification of 
condensing types. AHRI, Nor-Lake and Manitowoc agreed with DOE's 
equipment classes proposed in the preliminary analysis, while the Joint 
Utilities suggested redesignating

[[Page 55802]]

the multiplex and dedicated equipment classes as remote and self-
contained, respectively. (AHRI, Public Meeting Transcript, No. 0045 at 
p. 74, Nor-Lake, No. 0049.1 at p. 1, Manitowoc, No. 0056 at p. 2, 
Manitowoc, Public Meeting Transcript, No. 0045 at p. 73, Joint 
Utilities, Public Meeting Transcript, No. 0045 at p. 71) The Joint 
Utilities suggested regulating condensing units in a manner similar to 
that used by DOE for commercial refrigeration equipment, which, in 
their view, would result in coverage of most of the condensing units 
serving the walk-in industry. (Joint Utilities, No. 0061.1 at p. 11, 
12) The Joint Advocates suggested that DOE conduct a separate 
rulemaking for condensing units. (Joint Advocates, No. 0070.1 at p. 3) 
They added that DOE should reduce the number of refrigeration types to 
self-contained and unit coolers only, while the Joint Utilities 
recommended against including remote condensing units as part of this 
rulemaking. (Joint Advocates, No. 0070.1 at p. 3, Joint Utilities, No. 
0045 at p. 22)
    DOE believes the refrigeration systems covered by the two classes 
of equipment, dedicated condensing and multiplex condensing, accurately 
represent the range of refrigeration equipment used in walk-in coolers 
and freezers. Although the proposed classes differ from the classes 
designated in the commercial refrigeration equipment rulemaking, there 
are key differences between commercial refrigeration equipment 
refrigeration systems and walk-in refrigeration systems. The Joint 
Advocates and Joint Utilities refer to two types of refrigeration 
systems commonly used with commercial refrigeration equipment: ``self-
contained'' (meaning the entire refrigeration system is built into the 
case) and ``remote condensing'' (meaning the unit cooler is built into 
the case, but the whole case is connected to a central system of 
compressors and condensers, called a ``rack'' or ``multiplex condensing 
system'', connected to most or all of the refrigeration units in a 
building). ``Remote condensing'', however, can also refer to a 
configuration in which the unit cooler is connected to a dedicated 
(i.e., only serving that one unit) compressor and condenser that are 
located somewhere away from the unit cooler. This configuration is rare 
for commercial refrigeration equipment, but comprises a large 
proportion of walk-in refrigeration system applications.
    To avoid confusion over the different configurations for walk-ins 
and commercial refrigeration equipment that can be classified as 
``remote condensing'', DOE is not proposing to classify walk-in 
refrigeration systems as ``remote condensing'' and ``self-contained''. 
Also, DOE does not agree that the compressor and condenser parts should 
not be covered under the walk-in coolers and freezers rulemaking. 
Instead, DOE is proposing to include dedicated condensing units in the 
rule, even if remotely located, because these units could be viewed as 
part of the walk-in as long as they are connected only to that 
particular walk-in and not to other refrigeration equipment. For 
systems where the walk-in is connected to a multiplex condensing system 
that runs multiple pieces of equipment, the compressor and condenser 
would not be covered because they are not exclusively part of the walk-
in.
    In consideration of the above, DOE proposes to create two classes 
of refrigeration systems: dedicated condensing and multiplex 
condensing. DOE believes that dedicated remote condensing units 
represent a substantial opportunity for energy savings in a regulation 
for walk-in components because the configuration of a dedicated remote 
condensing unit is widespread in several market segments, such as 
restaurants. Manufacturers can optimize the dedicated remote condensing 
unit with the unit cooler to take advantage of certain conditions, such 
as low ambient outdoor temperatures.
    DOE does not propose to create separate classes for dedicated 
packaged systems (where the unit cooler and condensing unit are 
integrated into a single piece of equipment) and dedicated split 
systems (with separate unit cooler and condensing unit sections). 
Packaged systems are potentially more efficient than split systems 
because they do not experience as much energy loss in the refrigerant 
lines. However, because packaged systems comprise a small share of the 
refrigeration market, DOE currently believes that little additional 
energy savings could be achieved by considering them as a separate 
class. Accordingly, DOE is not proposing to consider the creation of a 
separate packaged systems class.
    DOE also notes that its proposed standards for dedicated condensing 
systems are based on an analysis of split systems. DOE requests comment 
on its proposal not to consider dedicated packaged systems and 
dedicated split systems as separate classes and whether this proposal 
would unfairly disadvantage any manufacturers.
Operating Temperature
    The second physical characteristic that DOE proposes as a basis for 
dividing refrigeration systems into equipment classes is the operating 
temperature. EPCA divides walk-in equipment into coolers (above 
32[emsp14][deg]F) and freezers (at or below 32[emsp14][deg]F) (42 
U.S.C. 6311(20)) Using this distinction, DOE is proposing to categorize 
refrigeration systems as low or medium temperature systems based on the 
temperature profiles of their unit coolers. The medium (M) and low (L) 
temperature units are differentiated by their operating temperatures, 
which are greater than 32[emsp14][deg]F (for coolers) and less than or 
equal to 32[emsp14][deg]F (for freezers). In response to DOE's 
discussion of these classes in the preliminary analysis, Ingersoll Rand 
suggested that any walk-in with defrost be rated as a freezer 
regardless of the operating temperature. (Ingersoll Rand, No. 0053.1 at 
p. 1) DOE has not adopted these suggestions because doing so would 
conflict with the statutory distinction created by Congress that relies 
on operating temperature to distinguish between walk-in coolers and 
freezers. See 42 U.S.C. 6311(2) (treating walk-ins as separate 
equipment based on whether they are coolers or freezers).
    Furthermore, applying the rating conditions for low temperature 
refrigeration systems is unlikely to enable a tester to accurately 
measure the efficiency of a medium temperature refrigeration system. 
Requiring a refrigeration system with defrost to be rated at the low 
temperature rating conditions even if it is designed to operate closer 
to the medium temperature rating conditions could lead to inaccurate 
equipment ratings for such equipment. In certain cases, applying 
temperature ratings in this manner may not permit this type of 
equipment to be rated at low temperature rating conditions if it is not 
designed to operate at those conditions.\14\
---------------------------------------------------------------------------

    \14\ For example, most medium temperature unit coolers are 
designed to operate between 15[emsp14][deg]F and 45[emsp14][deg]F, 
and would not be able to operate at the low temperature rating 
condition of -10[emsp14][deg]F.
---------------------------------------------------------------------------

Location of the Walk-In
    The third physical characteristic DOE considered is the location of 
the condensing unit (i.e., indoor or outdoor), which also affects the 
energy consumption of dedicated condensing systems. Indoor 
refrigeration systems generally operate at fixed ambient temperatures, 
while outdoor refrigeration systems experience varying temperatures 
through the year. This change in temperature affects the performance of 
the refrigeration system by requiring it to operate more during

[[Page 55803]]

warmer conditions and less during colder ones. Accordingly, the test 
procedure has one ambient rating condition for indoor systems and three 
ambient rating temperatures for outdoor systems.
    In the preliminary analysis, DOE considered creating separate 
classes for refrigeration systems with indoor (I) and outdoor (O) 
condensing units because of their different energy consumption 
characteristics. Outdoor condensing units can also implement a wide 
variety of design options to run more efficiently at low ambient 
temperatures. (In contrast, DOE did not consider indoor and outdoor 
envelope components as belonging to separate classes partly because of 
the absence of available options for improving efficiency based on the 
ambient temperature. See section IV.A.3.a for details.) Following the 
preliminary analysis, DOE did not receive any comments regarding the 
indoor and outdoor condensing unit classes, and therefore proposes the 
same differentiation in this NOPR.
Refrigeration Equipment Size
    In the preliminary analysis, DOE did not consider different 
equipment classes based on refrigeration equipment size. Heatcraft 
suggested adding sub-categories to the proposed equipment classes, 
stating that the size of refrigeration systems varies with envelope 
size. (Heatcraft, No. 0069.1 at p. 1) Manitowoc commented that small 
sized equipment would struggle to meet minimum standards if DOE based 
the metric on a larger size, largely due to the efficiency difference 
of each system size. (Manitowoc, Public Meeting Transcript, No. 0044 at 
p. 118)
    DOE is not proposing to base refrigeration system classes on 
envelope size because it is taking a component-level approach that sets 
standards for the refrigeration system independent of the envelope. In 
reaching this tentative decision, DOE examined the ability of various 
sized equipment to meet a proposed standard. For the NOPR analysis, DOE 
analyzed a wider range of equipment sizes than it did for the 
preliminary analysis, as described later in section IV.C.1.b. As a 
result of this expanded analysis, DOE observed that small sized 
equipment may have difficulty meeting an efficiency standard that is 
based on an analysis of large equipment, as Manitowoc noted. DOE found 
that this result was primarily due to a lack of availability of the 
more efficient compressor types (e.g., scroll compressors) at lower 
capacities. Additionally, certain design options, mainly controls, 
generally have a fixed cost, but their benefit decreases with lower 
capacities, so they are less cost-effective for lower-capacity 
equipment. Therefore, DOE proposes one equipment class for high-
capacity equipment and another for low-capacity equipment within the 
dedicated condensing category (because the compressor is covered only 
for DC systems). DOE has tentatively chosen 9,000 Btu/h as the capacity 
threshold for small- and large-capacity equipment based on the 
efficiency characteristics of available compressors, among other 
factors. See chapter 3 for details. DOE requests comment on the 
capacity threshold between the two capacity classes for dedicated 
condensing systems.
Proposed Classes
    Using the proposed combinations of condensing unit types, operating 
temperatures, location, and size, ten equipment classes are possible 
for walk-in cooler or freezer refrigeration systems. DOE believes that 
these ten classes accurately represent the refrigeration units used in 
the walk-in market today.
    Table IV-2 lists the equipment classes for refrigeration equipment 
that DOE is proposing in this NOPR. The column entitled ``Class'' lists 
the codes that will be used to abbreviate each equipment class, and 
will be used throughout the NOPR.

                            Table IV-2--Equipment Classes for Refrigeration Equipment
----------------------------------------------------------------------------------------------------------------
                                    Operating          Condenser        Refrigeration
        Condensing type            temperature          location       capacity (Btu/h)           Class
----------------------------------------------------------------------------------------------------------------
Dedicated.....................  Medium...........  Indoor...........            = 9,000  DC.M.I, >= 9,000
                                                   Outdoor..........            = 9,000  DC.M.O, >= 9,000
                                Low..............  Indoor...........            = 9,000  DC.L.I, >= 9,000
                                                   Outdoor..........            = 9,000  DC.L.O, >= 9,000
Multiplex.....................  Medium...........  .................  .................  MC.M
                                Low..............  .................  .................  MC.L
----------------------------------------------------------------------------------------------------------------

4. Technology Assessment
    In a technology assessment, DOE identifies technologies and designs 
that could be used to improve the energy efficiency or performance of 
covered equipment. For the preliminary analysis, DOE conducted a 
technology assessment to identify all technologies and designs that 
could be used to improve the energy efficiency of walk-ins or walk-in 
components. DOE described these technologies in chapter 3 of the 
preliminary TSD.
    DOE received several comments in response to its preliminary list 
of technology options. NEEA and NPCC recommended that DOE include 
modulating condenser fan controls in its analysis because there are 
significant potential energy savings from this technology. (NEEA and 
NPCC, No. 0059.1 at p. 8) Emerson agreed and noted that higher-
efficiency compressors often require modulating fan controls to realize 
the full benefit of the higher-efficiency compressors. (Emerson, Public 
Meeting Transcript, No. 0045 at p. 90) The Joint Utilities pointed out 
that DOE did not include variable speed controls for condenser fans. 
(Joint Utilities, No. 0061.1 at p.10) In addition, NEEA and NPCC 
recommended that DOE include liquid suction heat exchangers in its 
analysis because there are significant potential energy savings from 
this technology. (NEEA and NPCC, No. 0059.1 at p. 8)
    In response to the recommendation that DOE consider condenser fan 
controls, DOE has added condenser fan controls as a design option 
because it determined through further analysis that they could be an 
effective means of saving energy. As to NEEA and NPCC's recommendation 
that DOE include liquid suction heat exchangers, DOE also considered 
liquid suction heat exchangers in the technology

[[Page 55804]]

assessment because this technology could potentially be used to save 
energy. However, DOE screened this option from further consideration 
because further examination indicated that it would be unlikely to 
yield significant energy savings under the rating conditions used in 
setting standards for walk-in equipment. See chapters 3, 4, and 5 of 
the TSD for more details on the technologies considered in the 
analysis.

B. Screening Analysis

    DOE uses four screening criteria to determine which design options 
are suitable for further consideration in a standards rulemaking. 
Namely, design options will be removed from consideration if they (1) 
are not technologically feasible; (2) are not practicable to 
manufacture, install, or service; (3) have adverse impacts on product 
utility or product availability; or (4) have adverse impacts on health 
or safety. 10 CFR 430, subpart C, appendix A, sections (4)(a)(4) and 
(5)(b).)
1. Technologies That Do Not Affect Rated Performance
    In the preliminary analysis TSD, DOE proposed to screen out the 
following technologies because they do not improve energy efficiency: 
non-penetrative internal racks and shelving, air and water infiltration 
sensors, humidity sensors, and heat flux sensors.
    For the reasons stated in the test procedure final rule, DOE's test 
procedure establishes metrics to test the energy consumption or energy 
use of walk-in components and does not include heat load caused by 
infiltration. See 76 FR at 21594-21595. As a result, DOE included 
additional infiltration-related technologies in the following list of 
technologies that do not improve rated performance:
     Internal racks and shelving that are non-penetrative;
     Air and water infiltration sensors;
     Extruded polystyrene insulation;
     Humidity sensors;
     Heat flux sensors;
     Door gasketing improvements and panel interface systems;
     Automatic door opening and closing systems;
     Air curtains;
     Strip curtains;
     Vestibule entryways; and
     Insulation with improved moisture resistance.
    In the preliminary analysis, DOE listed hot gas defrost as a 
technology that does not improve rated performance of refrigeration 
equipment. In response, the Joint Utilities stated that DOE should 
include hot gas defrost. (Joint Utilities, Public Meeting Transcript, 
No. 0045 at p. 25; Joint Utilities, No. 0061.1 at pp. 3, 7, and 10). 
DOE has included hot gas defrost as a design option for multiplex 
condensing systems, but not for dedicated condensing systems due to its 
lack of effectiveness in improving efficiency. Specifically, for 
multiplex condensing systems, the hot gas defrost system utilizes hot 
gas generated by the compressor rack. Because at least one of the 
compressors in the rack is likely to be running (because the rack also 
has to operate with other refrigeration units) no new energy is 
consumed to generate the hot gas. In contrast, for dedicated systems, 
the condensing unit typically turns off during an electric defrost 
cycle. Running the compressor to generate hot gas at a time when it 
would normally be off results in energy use that outweighs the energy 
saved by using hot gas defrost instead of electric defrost. See 
chapters 3 and 5 of the TSD for details.
    Also as part of the preliminary analysis, DOE analyzed the envelope 
and the refrigeration system separately and did not consider design 
options that depend on the interaction between the envelope and the 
refrigeration system. SCE suggested that DOE consider control options 
that depend on the interaction between envelope components and the 
refrigeration system, such as a control that turns off the evaporator 
fan when the door is opened. SCE suggested that DOE evaluate such 
technologies by establishing a typical, nominal savings value for use 
in energy consumption equations. (SCE, Public Meeting Transcript, No. 
0045 at p. 25) Similarly, NEEA and NPCC stated that such technological 
controls have not been included in the design options. (NEEA and NPCC, 
No. 0059.1 at p. 7)
    A nominal savings value, as suggested by SCE, would be highly 
dependent on many assumptions about the application of the walk-in and 
the pairing of the refrigeration system with the walk-in. As a result, 
DOE does not believe that it would be reasonable to apply this shared 
value to all refrigeration system or door manufacturers because of the 
wide variety of equipment produced by these entities for walk-in 
applications. Moreover, DOE's proposed component level approach 
eliminates the need to consider design options whose efficacy depends 
on the interaction between different components.
    DOE also did not consider design options whose benefits would not 
be captured by the test procedure, such as economizer cooling. 
Economizer cooling consists of directly venting outside air into the 
interior of the walk-in when the outside air is as cold as or colder 
than the interior of the walk-in. This technique relieves the load on 
the refrigeration system when a pull-down load (i.e., a load due to 
items brought into the walk-in at a higher temperature than the 
operating temperature and must then be cooled to the operating 
temperature) is necessary. However, the test procedure does not include 
a method for accounting for economizer cooling, as it does not specify 
conditions for air that would be vented into the walk-in, nor does it 
provide a method for measuring the energy use of the economizer. 
Therefore, any benefits from including an economizer on a WICF would 
not be captured by the test procedure.
2. Screened-Out Technologies
a. Panels and Doors
    In the preliminary analysis, DOE screened out the following 
technologies for envelopes: revolving doors, energy storage systems, 
fiber optic natural light, non-electric anti-sweat systems, and 
automatic insulation deployment systems. DOE did not receive comments 
regarding any of the screened-out technologies, and will continue to 
exclude them from this rulemaking. DOE has also screened out additional 
technologies as part of its proposal to regulate the components of the 
envelope separately (i.e., display doors, non-display doors, and 
panels.) See chapter 4 of the TSD for more details on the screened-out 
technologies.
b. Refrigeration
    In the preliminary analysis, DOE screened out the following 
technologies for refrigeration systems: Higher-efficiency evaporator 
fan motors, improved evaporator coil, three-phase motors, and 
economizer cooling. In response to DOE's request for comment on the 
screening analysis, American Panel, AHRI and CrownTonka agreed with 
this approach to screen out these technologies. (American Panel, Public 
Meeting Transcript, No. 0045 at p. 98; AHRI. Public Meeting Transcript, 
No. 0045 at p. 99; CrownTonka, No. 0057.1 at p. 1) Emerson, however, 
disagreed with DOE's decision to screen out economizer cooling because 
there are potential energy savings under certain circumstances. 
(Emerson, Public Meeting Transcript, No. 0045 at p. 100) Also, 
Heatcraft disagreed with the exclusion of phase motor technology 
because three-phase motors are the dominant motor type in the larger 
walk-in envelopes that are a part of this rulemaking. (Heatcraft No. 
0069.1 at p. 2) Manitowoc remarked that there are

[[Page 55805]]

other ways to achieve an effective economizer cooling cycle and 
encouraged DOE to investigate other options to improve cycle 
efficiency, but did not provide any specific recommendations. 
(Manitowoc, Public Meeting Transcript, No. 0045 at p. 92)
    DOE continues to screen out three-phase motor technology. The use 
of three-phase motor technology generally provides higher energy 
savings as compared to single-phase motors. Three-phase power is 
commonly used to power large motors and heavy electrical loads; 
however, it is not available for all businesses, particularly small 
business consumers of walk-ins. DOE did not consider three-phase motor 
technology as a design option based on utility to the consumer, one of 
the four screening criteria. In addition, use of three-phase motor 
technology may also be impracticable to install and service given the 
lack of three-phase power for some businesses. DOE did find that, as 
Heatcraft noted, very large refrigeration systems typically use three-
phase power, and notes that manufacturers may use three-phase motors to 
improve the efficiency ratings of their equipment as the benefit would 
likely be captured by the test procedure. However, DOE continued to 
screen three-phase motor technology from its analysis for the reasons 
discussed above.
    DOE also did not consider economizer cooling in its analysis. 
Although there are potential energy savings under certain 
circumstances, as Emerson mentioned, these energy savings are not 
captured by the test procedure, as discussed in section IV.B.1.
    Regarding Manitowoc's remark about considering other options to 
improve cycle efficiency, DOE did not identify any options to improve 
cycle efficiency beyond what was already considered. DOE requests 
specific recommendations on how to improve cycle efficiency.
3. Screened-In Technologies
    Based on DOE's decision to regulate walk-ins on a component level, 
DOE will consider separate technologies for each covered walk-in 
component (i.e. panels, display doors, non-display doors, and 
refrigeration systems). The remaining technologies that were not 
``screened-out'' are called the ``screened-in'' technologies and will 
be used to create design options for improving the efficiency of the 
walk-in components. The ``screened-in'' technologies for each covered 
component include:
     Panels
    [cir] Insulation thickness
    [cir] Insulation material
    [cir] Framing material
     Display doors
    [cir] High-efficiency lighting
    [cir] Occupancy sensors
    [cir] Improved glass system insulation performance
    [cir] Anti-sweat heater controls
     Non-display doors
    [cir] Insulation thickness
    [cir] Insulation material
    [cir] Framing material
    [cir] Improved window glass systems
    [cir] Anti-sweat heat controls
     Refrigeration Systems
    [cir] Higher efficiency compressors
    [cir] Improved condenser coil
    [cir] Higher efficiency condenser fan motors
    [cir] Improved condenser fan blades
    [cir] Condenser fan control
    [cir] Ambient sub-cooling
    [cir] Improved evaporator fan blades
    [cir] Evaporator fan control
    [cir] Defrost controls
    [cir] Hot gas defrost
    [cir] Head pressure control

C. Engineering Analysis

    The engineering analysis determines the manufacturing costs of 
achieving increased efficiency or decreased energy consumption. DOE has 
identified the following three methodologies to generate the 
manufacturing costs needed for the engineering analysis: (1) The 
design-option approach, which provides the incremental costs of adding 
design options to a baseline model to improve its efficiency; (2) the 
efficiency-level approach, which provides the relative costs of 
achieving increases in energy efficiency levels without regard to the 
particular design options used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency based on detailed data as to costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels.
    DOE conducted the engineering analyses for this rulemaking using a 
combination of the design-option and cost-assessment approaches in 
analyzing the U-factor standards for panels, maximum energy use for 
non-display doors and display doors, and minimum AWEF for refrigeration 
systems. More specifically, DOE identified design options for analysis 
and then used the cost-assessment approach to determine the 
manufacturing costs and analytical modeling to determine the energy 
consumption at those levels. Additional details of the engineering 
analysis are in chapter 5 of the NOPR TSD.
1. Representative Equipment
a. Panels and Doors
    In presenting the preliminary analysis, DOE proposed three 
representative sizes for each envelope equipment class: Small, medium, 
and large. American Panel agreed with the sizes that DOE proposed. 
(American Panel, No. 0048.1 at p. 4) CrownTonka recommended that the 
equipment classes for envelopes be divided into only two sections, 
small and medium, because EPCA covers only walk-ins of less than 3,000 
square feet, which excludes sizes that are typically considered 
``large.'' (CrownTonka, Public Meeting Transcript, No. 0045 at p.111) 
Heatcraft agreed that the sizes chosen are small, as all the sizes 
considered must be less than 3,000 square feet, and they recommended 
that the distribution of envelope sizes include larger sizes 
approaching the 3,000 square foot limit, the maximum size limit defined 
in the statute. Heatcraft also stated that the selected envelope sizes 
will have an effect on the engineering analysis because certain 
technologies are utilized at different sizes. (Heatcraft, Public 
Meeting Transcript, No. 0045 at p. 111, No. 0058.1 at p. 4) American 
Panel suggested that DOE use three sizes and investigate using an extra 
large size. (American Panel, Public Meeting Transcript, No. 0045 at p. 
114) Manitowoc asserted that DOE did not include a large enough range 
of sizes and should consider smaller sized walk-ins to correctly 
represent the energy consumption of a given unit. Additionally, 
Manitowoc noted that as the walk-in's size increases, there are 
different base levels of performance and that if DOE sets the minimum 
efficiency based on a larger size, manufacturers will not be able to 
make small-sized equipment meeting the standards. (Manitowoc, Public 
Meeting Transcript, No. 0045 at pp. 116 and 118) Hill Phoenix 
recommended that the envelope sizes be determined by surface area or 
volume. (Hill Phoenix, No. 0066.1 at p. 2) NEEA and NPCC suggested that 
DOE establish a standard based on the square feet of panels shipped 
each year and use the square footage to determine the energy 
consumption of a complete functioning envelope. (NEEA and NPCC, No. 
0059.1 at p. 8)
    DOE notes that its proposal rests on a component-based approach and 
does not include infiltration losses. As a result, the size of the 
walk-in envelope does not affect the energy consumption of the 
components. In regard to American Panel's and Heatcraft's

[[Page 55806]]

comments about large sized walk-ins, DOE analyzed a large panel size 
that it considered to represent the large panels found in the industry. 
DOE anticipated the possibility raised by Manitowoc that small panels 
might not be able to meet a standard based on the large panel size 
previously under consideration and is now considering the adoption of 
an approach that considers small, medium, and large sizes. As Hill 
Phoenix suggested, DOE determined the size of the panel based on the 
panel's surface area. Also, similar to NEEA and NPCC's suggestion, DOE 
is proposing a standard for walk-in panels based on the panel's surface 
area.
Panels
    As explained previously, the engineering analysis for walk-in 
panels uses three different panel sizes to represent the variations 
within each class. DOE determined the sizes based on market research 
and the impact on the test metric U-factor. Table IV-3 shows each 
equipment class and the representative sizes associated with that 
class. DOE requests comment on the representative sizes used in the 
proposed analysis.

                                       Table IV-3--Sizes Analyzed: Panels
----------------------------------------------------------------------------------------------------------------
                                                                             Representative     Representative
              Equipment class                         Size code              height (feet)       width (feet)
----------------------------------------------------------------------------------------------------------------
SP.M......................................  SML..........................                  8                 1.5
                                            MED..........................                  8                 4
                                            LRG..........................                  9                 5.5
SP.L......................................  SML..........................                  8                 1.5
                                            MED..........................                  8                 4
                                            LRG..........................                  9                 5.5
FP.L......................................  SML..........................                  8                 2
                                            MED..........................                  8                 4
                                            LRG..........................                  9                 6
----------------------------------------------------------------------------------------------------------------

Doors
    Similar to the panel analysis, the engineering analyses for walk-in 
display and non-display doors both use three different sizes to 
represent the differences in doors within each size class DOE examined. 
The door sizes were determined using market research. Details are 
provided in Table IV-4 for non-display doors and Table IV-5 for display 
doors.

                                  Table IV-4--Sizes Analyzed: Non-Display Doors
----------------------------------------------------------------------------------------------------------------
                                                                            Representative      Representative
              Equipment class                         Size code              height (feet)       width (feet)
----------------------------------------------------------------------------------------------------------------
PD.M......................................  SML.........................                 6.5                 2.5
                                            MED.........................                 7                   3
                                            LRG.........................                 7.5                 4
PD.L......................................  SML.........................                 6.5                 2.5
                                            MED.........................                 7                   3
                                            LRG.........................                 7.5                 4
FD.M......................................  SML.........................                 8                   5
                                            MED.........................                 9                   7
                                            LRG.........................                12                   7
FD.L......................................  SML.........................                 8                   5
                                            MED.........................                 9                   7
                                            LRG.........................                12                   7
----------------------------------------------------------------------------------------------------------------

                                    Table IV-5--Sizes Analyzed: Display Doors
----------------------------------------------------------------------------------------------------------------
                                                                            Representative      Representative
              Equipment class                         Size code              height (feet)       width (feet)
----------------------------------------------------------------------------------------------------------------
DD.M......................................  SML.........................                5.25                2.25
                                            MED.........................                6.25                2.5
                                            LRG.........................                7                   3
DD.L......................................  SML.........................                5.25                2.25
                                            MED.........................                6.25                2.5
                                            LRG.........................                7                   3
----------------------------------------------------------------------------------------------------------------

b. Refrigeration
    In the engineering analysis for walk-in refrigeration systems, DOE 
used a range of capacities as analysis points for each equipment class. 
The name of each equipment class along with the naming convention was 
discussed in section IV.A.3.b. In addition to the multiple analysis 
points, scroll, hermetic, and semi-hermetic compressors were also 
investigated because different compressor types have different

[[Page 55807]]

efficiencies and costs.\15\ Due to the wide range of capacities 
considered for each condenser type, and the availability of compressors 
at certain capacities, compressors closely matching the condenser 
capacities were examined in terms of their performance at varying 
operating temperatures.
---------------------------------------------------------------------------

    \15\ Scroll compressors are compressors that operate using two 
interlocking, rotating scrolls that compress the refrigerant. 
Hermetic and semi-hermetic compressors are piston-based compressors 
and the key difference between the two is that hermetic compressors 
are sealed and hence more difficult to repair, resulting in higher 
replacement costs, while semi-hermetic compressors can be repaired 
relatively easily.
---------------------------------------------------------------------------

    Table IV-6 identifies, for each class of refrigeration system, the 
sizes of the equipment DOE analyzed in the engineering analysis. 
Chapter 5 of the NOPR TSD includes additional details on the 
representative equipment classes used in the analysis.

                                Table IV-6--Sizes Analyzed: Refrigeration System
----------------------------------------------------------------------------------------------------------------
                                           Sizes analyzed
            Equipment class                    (Btu/h)                       Compressors analyzed
----------------------------------------------------------------------------------------------------------------
DC.M.I, = 9,000.......................              18,000  Hermetic, Semi-hermetic, Scroll.
                                                     54,000  Semi-Hermetic, Scroll.
                                                     96,000  Semi-Hermetic, Scroll.
DC.M.O, = 9,000.......................              18,000  Hermetic, Semi-hermetic, Scroll.
                                                     54,000  Semi-Hermetic, Scroll.
                                                     96,000  Semi-Hermetic, Scroll.
DC.L.I, = 9,000.......................               9,000  Hermetic, Semi-hermetic, Scroll.
                                                     54,000  Semi-Hermetic, Scroll.
DC.L.O, = 9,000.......................               9,000  Hermetic, Semi-hermetic, Scroll.
                                                     54,000  Semi-Hermetic, Scroll.
                                                     72,000  Semi-Hermetic.
MC.M...................................               4,000
                                                      9,000
                                                     24,000
MC.L...................................               4,000
                                                      9,000
                                                     18,000
                                                     40,000
----------------------------------------------------------------------------------------------------------------

2. Energy Modeling Methodology
    In the preliminary analysis, DOE proposed using an energy 
consumption model to estimate separately the energy consumption rating 
of entire envelopes and entire refrigeration systems at various 
performance levels using a design-option approach. DOE developed the 
model as a Microsoft Excel spreadsheet. The spreadsheet calculated the 
cumulative effect on the energy consumption of adding options above the 
baseline.
    DOE continues to use a spreadsheet-based model, but is now modeling 
panels, display doors, non-display doors, and refrigeration systems 
separately because these components are tested separately. As mentioned 
above, the purpose of the engineering analysis is to determine the 
manufacturing costs of achieving increased efficiency or decreased 
energy consumption. DOE assumes that manufacturers will only incur 
costs to achieve efficiency gains or energy reductions that are 
accounted for in their certified equipment rating. Therefore, the 
energy models estimate the performance rating that the manufacturer 
would obtain by testing their equipment using the DOE test procedure 
because manufacturers are required to rate the components using the 
test procedure. The models estimate the energy ratings of baseline 
equipment and levels of performance above the baseline associated with 
specific design options that are added cumulatively to the baseline 
equipment. The model does not account for interactions between 
refrigeration systems and envelope components, nor does it address how 
a design option for one component may affect the energy consumption of 
other components, because such effects are not accounted for in the 
test procedure. Component performance results are found in appendix 5A 
of the TSD. DOE requests comment on the performance data found in 
appendix 5A of the TSD and requests data about the performance of 
panels, display doors, or non-display doors and their design options.
a. Refrigeration
    The refrigeration energy model calculates the annual energy 
consumption and the AWEF of walk-in refrigeration systems at various 
performance levels using a design option approach. AWEF is the ratio of 
the total heat removed, in Btus, from a walk-in envelope during a one-
year period of use (not including the heat generated by operation of 
the refrigeration system) to the total energy input of refrigeration 
systems, in watt-hours, during the same period. DOE proposes to base 
its standards for the refrigeration system using the AWEF metric and 
seeks comment on this approach.
    This model was used to analyze specific examples of equipment in 
each refrigeration system equipment class. For a given class, the 
analysis consists of calculating the annual energy consumption and the 
AWEF for the baseline and several levels of performance above the 
baseline. See chapter 5 of the TSD for further details about the 
analytical models used in the engineering analysis.
    For the preliminary analysis, DOE partially relied on refrigeration 
catalog information to obtain equipment specifications for its energy 
model. Manitowoc and the Joint Utilities believed that catalog 
information was not the best source from an analytical standpoint. 
Manitowoc observed that catalog information is provided mainly for 
sizing equipment and not for representing equipment performance, while 
the Joint Utilities pointed out that

[[Page 55808]]

the rating methodology that produced the data in the catalogs could be 
different from the rating methodology for walk-ins, which could make 
the data inappropriate for analyzing walk-ins. (Manitowoc, Public 
Meeting Transcript, No. 0045 at p. 31; Joint Utilities, No. 0061.1 at 
p. 3)
    In recognition of these comments, DOE conducted further research 
into refrigeration system performance and has improved the analysis for 
the NOPR in several ways. First, the energy model now calculates system 
performance based on a whole-system approach using thermodynamic 
principles. The model determines the refrigerant properties (pressure, 
temperature, etc.) at each point in the system and these properties, 
rather than catalog specifications, are used to calculate refrigeration 
capacity. Second, for any catalog information based on specific rating 
conditions, DOE ensured the rating conditions were consistent with 
those for walk-in refrigeration systems, or adjusted the specifications 
accordingly. Third, while it continued to rely on catalog data directly 
for some equipment specifications (e.g., typical number of fans and fan 
horsepower for units of the sizes analyzed), DOE also surveyed catalogs 
from various manufacturers to determine the most representative 
specifications for a particular type and size of equipment. See chapter 
5 for more details on the refrigeration system energy model and other 
enhancements made to its analysis.
    The energy consumption calculations in the engineering analysis are 
based on calculations in AHRI 1250-2009, the industry test procedure 
incorporated by reference in the walk-in test procedure. 76 FR at 
33631. These calculations involve the refrigeration system running at a 
high load for one-third of the time and a low load for two-thirds of 
the time. American Panel noted that the load profile for restaurants 
would generally be reversed (i.e., the refrigeration system is sized 
for running at a high load two-thirds of the time and a low load one-
third of the time) and requested DOE to adjust the load assumptions 
based on the walk-in application. (American Panel, No. 0048.1 at p. 8)
    DOE's assumption in the engineering analysis about the 
refrigeration load profile was made for purposes of comparing the 
performance of different types of refrigeration equipment that have 
varying features. Furthermore, the analysis attempts to assess the 
impacts of technologies manufacturers might use to improve the 
efficiencies of their equipment, including impacts on the efficiency 
ratings of the equipment. DOE will base any standards it adopts on the 
use of some or all of these technologies, and the DOE test procedure 
would serve as the basis for rating equipment and determining 
compliance. Therefore, the test procedure calculations are used in the 
analysis to determine the efficiency ratings of equipment utilizing the 
various technologies on which DOE might base the standards.
    However, DOE does not treat the load profile assumptions used in 
the engineering analysis as equivalent to the actual duty cycle of 
every class or application of refrigeration systems. Rather, where 
warranted, DOE evaluates other duty cycle assumptions in its energy use 
analysis, which examines the actual energy consumption of the 
refrigeration system under a variety of operating conditions and 
applications. In the energy use analysis, DOE has adjusted its 
assumptions for actual duty cycles based in part on American Panel's 
recommendation. See section IV.E.1 and chapter 7 of the TSD for 
details.
    In the preliminary analysis, DOE analyzed the result of adding 
design options cumulatively to the baseline. DOE observed that some 
design options (e.g., larger condenser coil) increased the efficiency 
of the refrigeration system while also increasing its capacity. To 
distinguish between these effects, DOE created a ``normalized energy 
consumption'' metric in the preliminary analysis which represented the 
energy consumption per unit capacity. DOE expected that the normalized 
energy consumption metric would generally be analogous to an efficiency 
metric. For example, for two units of the same capacity, the unit with 
lower normalized energy consumption would be more efficient because it 
would use less energy for the same heat removal capability.
    In a comment on the preliminary analysis, American Panel stated 
that it was not beneficial for the capacity of a unit to increase 
because the refrigeration system must balance the heat load to control 
temperature and humidity. (American Panel, Public Meeting Transcript, 
No. 0045 at p. 175) After interviewing manufacturers and examining 
refrigeration catalogs, DOE observed that manufacturers typically offer 
refrigeration systems in specific, discrete capacities while providing 
consumers with options for improving system efficiency. DOE reasoned 
that manufacturers would likely design their systems for a certain set 
of capacities regardless of the efficiency options available and, 
consequently, implementing efficiency options on a system would be 
unlikely to change the capacity of the system because the manufacturer 
would prefer to market the system at the established capacity. 
Therefore, DOE agrees with American Panel's assessment and has 
implemented its suggestion into the NOPR analysis.
    DOE notes that it analyzed six classes of refrigeration systems at 
various capacity points, as explained in section IV.C.1.b. When a 
design option is added to the baseline, it does not change the capacity 
of the unit; instead, other aspects of the system are adjusted to 
maintain the capacity at the specified point. See chapter 5 of the TSD 
for details.
    In the preliminary analysis, DOE considered the effects of adding 
design options to the baseline. Some interested parties commented on 
the interactive effects of design options. Thermocore stated that there 
are substantial differences in performances based on the integrated 
system as opposed to considering options separately. (Thermocore, 
Public Meeting Transcript, No. 0045 at p. 86) Emerson stated that DOE 
must account for how the technologies are combined because the effects 
will vary depending on what is already included in the system. 
(Emerson, Public Meeting Transcript, No. 0045 at p. 93) AHRI agreed 
that efficiency gains due to combinations of certain design options are 
not necessarily additive and noted that assessing the aggregate benefit 
from combined design options requires rigorous analysis and simulation 
of the total system. (AHRI, No. 0055.1 at p. 2)
    DOE recognizes that the interactive effects of design options must 
be considered because the efficacy of certain design options differs 
depending on whether they are analyzed separately or in conjunction 
with other design options. DOE has taken a system-based approach to the 
refrigeration system energy model that calculates the effect on the 
entire system of adding design options. Each efficiency level above the 
baseline consists of a design option added cumulatively and the 
interactive effects of each new design option on all previously added 
design options are considered. In formulating the cost-efficiency 
curves, DOE attempted to capture the most cost-effective design option 
at each efficiency level, given all previously added design options at 
that level. Manufacturers may use any combination of design options to 
meet the future energy conservation standard. See chapter 5 of the TSD 
for further discussion on the interactive effects of design options.

[[Page 55809]]

    Some commenters disagreed with DOE's refrigeration energy modeling 
approach. SCE recommended using DOE 2.2R (an expanded version of the 
building simulation program DOE 2.2) to directly model certain design 
options, such as modulating the fan speed for the on-cycle fan power 
for a unit cooler connected to a multiplex system. (SCE, Public Meeting 
Transcript, No. 0045 at p. 138) NEEA and NPCC also stated that the 
spreadsheet-based model does not adequately evaluate all of the design 
options and their combinations, and that DOE should consider using DOE 
2.2R for modeling instead. (NEEA and NPCC, No. 0059.1 at p. 9)
    DOE 2.2R is designed to simulate the operation of building 
refrigeration systems, such as those found in supermarkets, 
refrigerated warehouses, and industrial facilities. Although DOE 2.2R 
is a powerful simulation tool that can aid in refrigeration system 
design, DOE believes it is inappropriate for the energy modeling that 
DOE is conducting as part of this rulemaking. This rulemaking is taking 
a component-level approach and determining the performance of each 
component (the panels, the doors, and the refrigeration system) 
separately, whereas DOE 2.2R models the interactions of components that 
comprise an entire building. Also, the component performance as modeled 
in the engineering analysis must be based on the operating conditions 
and calculations contained in the test procedure, which DOE believes is 
not consistent with the simulation methodology in DOE 2.2R. To address 
the concerns of SCE, NEEA and NPCC that a spreadsheet model would be 
inadequate for certain options or combinations of options, DOE has 
modified the spreadsheet model to more accurately account for 
combinations of design options and interactive effects of design 
options within a component. To address the Joint Utilities' concerns 
with fan speed modulation, DOE included calculations for fan speed 
modulation that are consistent with the test procedure.
    Although DOE is not conducting the analysis using DOE 2.2R, DOE 
encourages interested parties to submit their own simulation results 
from DOE 2.2R modeling and compare them to DOE's engineering results.
3. Cost Assessment Methodology
a. Teardown Analysis
    To calculate the manufacturing costs of the different components of 
walk-in coolers and freezers, DOE disassembled baseline equipment. This 
process of disassembling systems to obtain information on their 
baseline components is referred to as a ``physical teardown.'' During 
the physical teardown, DOE characterized each component that makes up 
the disassembled equipment according to its weight, dimensions, 
material, quantity, and the manufacturing processes used to fabricate 
and assemble it. The information was used to compile a bill of 
materials (BOM) that incorporates all materials, components, and 
fasteners classified as either raw materials or purchased parts and 
assemblies.
    DOE also used a supplementary method, called a ``virtual 
teardown,'' which examines published manufacturer catalogs and 
supplementary component data to estimate the major physical differences 
between equipment that was physically disassembled and similar 
equipment that was not. For virtual teardowns, DOE gathered product 
data such as dimensions, weight, and design features from publicly-
available information, such as manufacturer catalogs.
    The teardown analyses allowed DOE to identify the technologies that 
manufacturers typically incorporate into their equipment. The end 
result of each teardown is a structured BOM, which DOE developed for 
each of the physical and virtual teardowns. DOE then used the BOM from 
the teardown analyses as one of the inputs to the cost model to 
calculate the manufacturer production cost (MPC) for the product that 
was torn down. The MPCs derived from the physical and virtual teardowns 
were then used to develop an industry average MPC for each equipment 
class analyzed. See chapter 5 of the NOPR TSD for more details on the 
teardown analysis.
    For display doors and non-display freight doors, limited 
information was publicly available, particularly as to the assembly 
process and shipping. To compensate for this situation, DOE conducted 
physical teardowns for two representative units, one within each of 
these equipment classes. DOE supplemented the cost data it derived from 
these teardowns with information from manufacturer interviews. The cost 
models for panels and for non-display structural doors were created by 
using public catalog and brochure information posted on manufacturer 
Web sites and information gathered during manufacturer interviews.
    For the refrigeration system, DOE conducted physical teardowns of 
unit cooler and condensing unit samples to construct a BOM. The 
selected systems were considered representative of baseline, medium-
capacity systems, and used to determine the base components and 
accurately estimate the materials, processes, and labor required to 
manufacture each individual component. From these teardowns, DOE 
gleaned important information and data not typically found in catalogs 
and brochures, such as heat exchanger and fan motor details, assembly 
parts and processes, and shipment packaging.
    Along with the physical teardowns, DOE performed several virtual 
teardowns of refrigeration units for the NOPR analysis. The complete 
set of teardowns helped DOE obtain the baseline average MPC for all 
equipment classes proposed.
b. Cost Model
    The cost model is one of the analytical tools DOE used in 
constructing cost-efficiency curves. DOE derived the cost model from 
the teardown BOMs and the raw material and purchased parts databases. 
Cost model results are based on material prices, conversion processes 
used by manufacturers, labor rates, and overhead factors such as 
depreciation and utilities. For purchased parts, the cost model 
considers the purchasing volumes and adjusts prices accordingly. 
Original equipment manufacturers (OEMs), i.e., the manufacturers of 
WICF components, convert raw materials into parts for assembly, and 
also purchase parts that arrive as finished goods, ready-to-assemble. 
DOE bases most raw material prices on past manufacturer quotes that 
have been inflated to present day prices using Bureau of Labor 
Statistics (BLS) and American Metal Market (AMM) inflators. DOE 
inflates the costs of purchased parts similarly and also considers the 
purchasing volume--the higher the volume, the lower the price. Prices 
of all purchased parts and non-metal raw materials are based on the 
most current prices available, while raw metals are priced on the basis 
of a 5-year average to smooth out spikes. Chapter 5 of the NOPR TSD 
describes DOE's cost model and definitions, assumptions, data sources, 
and estimates.
    For panels, non-display doors, and display doors DOE used a 
``parameterized'' computational cost model, which allows a user to 
manipulate the components parameters such as height and length by 
inputting different numerical values for these features to produce new 
cost estimates. This parameterized model, coupled with the design 
specifications chosen for each representative unit modeled in the 
engineering analysis, was used to develop fundamental MPC costs. The 
fundamental MPC costs were then

[[Page 55810]]

incorporated into the engineering analysis model where they were 
combined with additional costs associated with each design option. 
Costs for each design option were calculated based on discussions with 
panel, non-display, and display door manufacturers and pricing from 
commercially available sources.
    As previously mentioned in section IV.B.3, DOE is considering high 
efficiency lighting, specifically light-emitting diode (LED) lighting, 
as a design option to improve the efficiency of display doors. 
Forecasts of the LED lighting industry, including those performed by 
DOE, suggest that LED lighting is an emerging technology that will 
continue to experience significant price decreases in coming years. For 
this reason, in an effort to capture the anticipated cost reduction in 
LED fixtures in the analyses for this rulemaking, DOE incorporated 
price projections from its Solid State Lighting program into its MPC 
values. The price projections for LED lighting were developed using 
projections created for the DOE's Solid State Lighting Program's 2012 
report, Energy Savings Potential of Solid-State Lighting in General 
Illumination Applications 2010 to 2030 (``the energy savings report''). 
In the appendix of this report, price projections from 2010 to 2030 
were provided in ($/klm) for LED lamps and LED luminaires. DOE analyzed 
the models used in the Solid State Lighting program work and determined 
that the LED luminaire projection would serve as a proxy for a cost 
projection to apply to LEDs on walk-in display doors.
    The price projections presented in the Solid State Lighting 
program's energy savings report are based on the DOE's 2011 Solid State 
Lighting R&D Multi-Year Program Plan (MYPP).\16\ The MYPP is developed 
based on input from manufacturers, researchers, and other industry 
experts. This input is collected by the DOE at annual roundtable 
meetings and conferences. The projections are based on expectations 
dependent on the continued investment into solid state lighting by the 
DOE.
---------------------------------------------------------------------------

    \16\ The DOE Solid-State Lighting Research and Development 
Multi-Year Program Plan is a document that outlines DOE's research 
goals and planned methodologies with respect to the advancement of 
solid-state lighting technologies in the United States. The complete 
document is available at: http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2011_web.pdf.
---------------------------------------------------------------------------

    DOE incorporated the price projection trends from the energy 
savings report into its engineering analysis by using the data to 
develop a curve of decreasing LED prices normalized to a base year. 
That base year corresponded to the year when LED price data were 
collected for the NOPR analyses of this rulemaking from catalogs, 
manufacturer interviews, and other sources. DOE started with LED cost 
data specific to walk-in manufacturers and then applied the anticipated 
trend from the energy savings report to forecast the projected cost of 
LED fixtures at the time of required compliance with the proposed rule 
(2017). These 2017 cost figures were incorporated into the engineering 
analysis to calculate the MPC of display doors with LEDs as a design 
option. The LCC analysis (section IV.F) was carried out with the 
engineering numbers that account for the 2017 cost of LED luminaires. 
The reduction in costs of LED luminaires from 2018 to 2030 were taken 
into account in the NIA (section IV.G). The cost reductions were 
calculated for each year from 2018 and 2030 and subtracted from the 
equipment costs in the NIA.
    During the preliminary analysis, DOE developed a cost model for the 
proposed representative sizes of walk-in envelopes. Panel manufacturers 
generally make panels with a combination of raw materials and purchased 
parts, and DOE estimated manufacturing process parameters, the required 
initial material quantity, scrap, and other factors to determine the 
value of each component. DOE then aggregated all parameters related to 
manufacture and assembly to determine facility requirements at various 
manufacturing scales and the final unit cost.
    To more accurately model walk-in costs, DOE used common factory 
parameters, which affect the cost of each unit produced (e.g., labor 
and fabrication rates). American Panel commented on some of the factors 
assumed in the cost model and the resulting values. In particular, in 
its view, approximately 1 million square feet of panels are 
manufactured per year per manufacturer, and most door manufacturers 
produce 1,800 doors per year. Accordingly, these numbers suggest a 
total walk-in production volume of well under DOE's initial estimate of 
30,000 per year per manufacturer. American Panel believed that 
overestimating the amount of panels manufactured per year would cause 
the small manufacturers to be at a disadvantage. (American Panel, 
Public Meeting Transcript, No. 0045 at p. 14-15; American Panel, No. 
0048.1 at pp. 5-6)
    Assuming an average walk-in surface area of 500 ft\2\ (roughly 
corresponding to an 8-foot by 10-foot walk-in), American Panel's 
estimate equates to approximately 2,000 walk-ins per year, per 
manufacturer--much lower than DOE's estimate. DOE understands that its 
estimate may be more reasonable for a large manufacturer than a small 
one and agrees with American Panel that impacts on small manufacturers 
may be underestimated in an analysis that assumes a high production 
capacity. Thus, DOE has considered particular impacts on small 
manufacturers in the MIA by adjusting for their reduced production 
capacity as compared to larger manufacturers. See sections IV.I.3.c and 
V.B.2.d (Manufacturer Impact Analysis) and VI.B (Regulatory Flexibility 
Analysis, which specifically address the impact of the rule on small 
business manufacturers).
    Additionally, American Panel, citing its own experience, stated 
that other DOE cost estimates needed adjusting. Some examples include 
the following:
     The cost of the tongue and groove design found on panels 
should be increased by a factor of 10.8.
     The cost of the advanced door sweep should increase by a 
factor of 7.8.
     The DOE cost per square foot of panel was too high and 
actual costs were closer to $0.25 per square foot.
     The actual MSP for walk-in cooler envelopes was 70-112 
percent lower than the DOE estimate.
     The actual MSP for walk-in freezer envelopes was 24-42 
percent lower than the DOE estimate. (American Panel, Public Meeting 
Transcript, No. 0045 at pp. 14-15; American Panel, No. 0048.1 at pp. 5-
6).
    DOE appreciates the efforts made by American Panel in preparing 
detailed comments and providing useful information about factory 
parameters, material costs, and the resulting manufacturing selling 
price for walk-in envelopes. Some of the differences can be explained 
based on the parameters used in the cost model, such as the material 
costs. DOE particularly appreciates American Panel's comments related 
to the costs of certain designs and has taken these costs into 
consideration in its analysis by aggregating them with other data DOE 
has received through research and confidential manufacturer interviews. 
For instance, American Panel's cost per square foot of panel was 
particularly useful in helping DOE estimate the costs of certain 
materials that make up the panel.
    DOE was not, however, able to use some of the cost data--for 
example, costs related to infiltration-reducing measures were not used 
because DOE is no longer considering infiltration in the analysis. 
Also, DOE has not calculated costs related to the assembly of the 
entire envelope--for instance, the MSP

[[Page 55811]]

of the envelope--as part of the engineering analysis because of the 
component-based approach DOE is proposing to use. Consequently, DOE is 
now using the cost model to determine the manufacturer production costs 
and manufacturer selling prices of the individual components covered by 
the standards.
    DOE estimated installation costs for the refrigeration systems and 
the envelope components separately as part of the life-cycle cost 
analysis. DOE has proposed new manufacturer cost estimates in chapter 5 
of the TSD and seeks comment on the new parameters proposed for each 
component.
c. Manufacturing Production Cost
    Once it finalized the cost estimates for all the components in each 
teardown unit, DOE totaled the cost of the materials, labor, and direct 
overhead used to manufacture the unit to calculate the manufacturer 
production cost of such equipment. The total cost of the equipment was 
broken down into two main costs: (1) The full manufacturer production 
cost, referred to as MPC; and (2) the non-production cost, which 
includes selling, general, and administration (SG&A) costs; the cost of 
research and development; and interest from borrowing for operations or 
capital expenditures. DOE estimated the MPC at each design level 
considered for each equipment class, from the baseline through max-
tech. After incorporating all of the data into the cost model, DOE 
calculated the percentages attributable to each element of total 
production cost (i.e., materials, labor, depreciation, and overhead). 
These percentages were used to validate the data by comparing them to 
manufacturers' actual financial data published in annual reports, along 
with feedback obtained from manufacturers during interviews. DOE uses 
these production cost percentages in the MIA (see section IV.I).
    In the preliminary analysis, DOE developed both an envelope cost 
and a refrigeration system cost for each equipment class and size using 
a manufacturing cost model. See chapter 5 of the preliminary TSD. 
American Panel suggested that manufacturer cost should be estimated 
using a sample from 40 manufacturers and representative volumes. 
(American Panel, Public Meeting Transcript, No. 0045 at p. 312) In 
response to American Panel's comment, DOE believes it is infeasible to 
sample so many manufacturers because data on manufacturing cost and 
representative volumes are not publicly available for most 
manufacturers of walk-ins and walk-in components, particularly small, 
private companies. Additionally, not all manufacturers were willing to 
share cost information with DOE. DOE did hold confidential interviews 
with manufacturers, some of whom chose not to share this information. 
DOE notes that cost information it did obtain was helpful in enabling 
the agency to develop and refine its estimates of manufacturer cost. 
The interview process is explained in chapter 12 of the TSD.
d. Manufacturing Markup
    DOE uses MSPs to conduct its downstream economic analyses. DOE 
calculated the MSPs by multiplying the manufacturer production cost by 
a markup and adding the equipment's shipping cost. The production price 
of the equipment is marked up to ensure that manufacturers can make a 
profit on the sale of the equipment. DOE gathered information from 
manufacturer interviews to determine the markup used by different 
equipment manufacturers. Using this information, DOE calculated an 
average markup for each component of a walk-in. DOE requests comments 
on the proposed markups listed in Table IV-7.

                    Table IV-7--Manufacturer Markups
------------------------------------------------------------------------
                                                                Markup
                     Walk-in component                        (percent)
------------------------------------------------------------------------
Panels.....................................................           32
Display Doors..............................................           50
Non-Display Doors..........................................           62
Refrigeration Equipment....................................           35
------------------------------------------------------------------------

e. Shipping Costs
    In the preliminary analysis TSD, DOE calculated manufacturer 
shipping costs assuming that manufacturers include outbound freight as 
part of their equipment selling price. In response to DOE's request for 
comment on shipping assumptions, American Panel and NEEA and NPCC 
remarked that DOE's costs were significantly higher than actual 
industry shipping rates. (American Panel, Public Meeting Transcript, 
No. 0045 at pp. 15, 142; NEEA and NPCC, No. 0059 at p. 9) Additionally, 
American Panel stated that freight costs are typically paid in full by 
the customer and not absorbed by the manufacturer who is selling the 
equipment. (American Panel, No. 0048.1 at p. 5) Both American Panel and 
CrownTonka said that sometimes the freight cost would be included as 
part of the selling price and sometimes it would be entirely separate; 
i.e., paid by the buyer directly to the freight company. (American 
Panel, Public Meeting Transcript, No. 0045 at p. 143; CrownTonka, 
Public Meeting Transcript, No. 0045 at p. 144) NEEA and NPCC stated 
that freight costs are normally included in the packaged price to 
consumers. (NEEA and NPCC, No. 0059.1 at p. 9)
    DOE re-evaluated the shipping rates in preparing this NOPR. These 
rates were developed by conducting additional research on shipping 
rates and by interviewing manufacturers of the covered equipment. For 
example, DOE found through its research that most panel, display door, 
and non-display door manufacturers use less than truck load freight to 
ship their respective components and revised its estimated shipping 
rates accordingly. DOE also found that most manufacturers, when 
ordering component equipment for installation in their particular 
manufactured product, do not pay separately for shipping costs; rather, 
it is included in the selling price of the equipment. However, when 
manufacturers include the shipping costs in the equipment selling 
price, they typically do not mark up the shipping costs for profit, but 
instead include the full cost of shipping as part of the price quote. 
DOE has revised its methodology accordingly. Please refer to chapter 5 
of the TSD for details.
4. Baseline Specifications
a. Panels and Doors
    In the preliminary analysis, DOE set the baseline level of 
performance to correspond to the most common least efficient component 
that is compliant with the standards set forth in EPCA. (42 U.S.C. 
6313(f)(1)(3)) DOE determined specifications for each equipment class 
by surveying currently available units and models. This approach was 
used for the NOPR analyses to determine the baseline units for panels, 
display doors, and non-display doors. More detail about the 
specifications for each baseline model can be found in chapter 5 of the 
TSD.
    Because the walk-in market is comprised of panels insulated with 
polyurethane and extruded polystyrene, DOE proposed in the preliminary 
analysis that the R-value for the baseline insulation used in the walk-
in envelope would be the average of the typical long term thermal 
resistance (LTTR) R-values of polyurethane and extruded polystyrene. 
CPI opposed the use of an average R-value for extruded polystyrene and 
polyurethane because it would affect the accuracy of the normalized 
energy consumption calculation for the envelope. (CPI, No.

[[Page 55812]]

0052.1, at p.1) DOE agrees with CPI's concern and is using in the 
revised analysis foam-in-place polyurethane as the baseline insulation 
for panels and non-display doors. Polyurethane is more commonly used as 
panel or non-display door insulation, has a better long term thermal 
resistance, and is less expensive than extruded polystyrene. DOE notes 
that extruded polystyrene may outperform polyurethane in other 
respects, like moisture absorption, which are not captured in the 
energy consumption model because they are not included in the test 
procedure.
    DOE's analysis also uses wood framing members as the baseline 
framing material in panels. The analysis assumes the typical wood frame 
completely borders the insulation and is 1.5 inches wide. DOE requests 
comment on its baseline specifications for walk-in panels, specifically 
the assumptions about framing material and framing dimensions.
    The baseline display doors modeled in DOE's analysis are based on 
the minimum specifications set by EPCA. (42 U.S.C. 6313(f)(3)) DOE 
modeled baseline display cooler doors comprised of two panes of glass 
with argon gas fill and hard coat low emittance or low-e coating. The 
baseline cooler display door requires 2.9 Watts per square foot of 
anti-sweat heater wire and does not have a heater wire controller. The 
baseline display freezer doors modeled in DOE's analysis consist of 
three panes of glass, argon gas, and soft coat low-e coating. Baseline 
freezer doors use 15.23 watts per square foot of anti-sweat heater wire 
power and require an anti-sweat heater wire controller. DOE also 
estimates that each baseline door includes one fluorescent light with 
electronic ballasts, with a door shorter than 6.5 feet having a 5-foot 
fluorescent bulb and a door equal to or taller than 6.5 feet having a 
6-foot fluorescent bulb. DOE requests comment on the baseline 
assumptions for display cooler and freezer doors. In particular, DOE 
requests data illustrating the energy consumption of anti-sweat heaters 
found on cooler and freezer display doors.
    DOE's analysis assumes that the baseline non-display doors are 
constructed in a similar manner to baseline panels. Therefore, DOE's 
analysis uses baseline non-display doors that consist of wood framing 
materials 1.5 inches wide that completely border the foamed-in-place 
polyurethane insulation. DOE also includes a small window in a non-
display door that conforms to the standards set by EPCA. DOE estimates 
that all passage doors have a 2.25 square foot window regardless of the 
passage door's size. DOE analyzed two different size windows for non-
display freight doors. The small freight doors have a 2.25 square foot 
window and both the medium and large freight doors have a 4-square foot 
window. DOE requests comment on the baseline specifications for non-
display doors, and specifically on the size of the windows included in 
the baseline doors.
    DOE also received comments about the amount of energy savings 
attributed to infiltration reduction devices (IRDs) on baseline walk-in 
doors. NEEA and NPCC commented that even though EISA requires an 
infiltration reduction device on the baseline door, DOE should also 
include additional IRDs as a design option. NEEA and NPCC continued to 
suggest that DOE should re-evaluate the amount of energy savings 
associated with IRDs. (NEEA and NPCC, Public Meeting Transcript, No. 
0045 at p. 170) The Joint Utilities also believed that DOE 
overestimated the impacts of IRDs in the baseline doors and explained 
that overestimating the baseline savings from an IRD affects the amount 
of savings achieved by the design options DOE evaluated. (Joint 
Utilities, No. 0061.1 at p. 5) DOE agrees with NEEA and NPCC and the 
Joint Utilities that a baseline door must have an IRD because this is 
required by EPCA. (42 U.S.C. 6313(f)(1)(A)(B)) However, the walk-in 
test procedure does not measure energy consumption from door-opening 
infiltration so there is no rated energy saving from IRDs and DOE is 
not estimating the amount of energy saved from IRDs on baseline doors.
b. Refrigeration
    As with panels and doors, DOE set the baseline level of 
refrigeration system performance to correspond to components that were 
the least efficient but compliant with the standards set forth in EPCA. 
See 42 U.S.C. 6313(f)(1)-(3). DOE determined specifications for each 
equipment class by surveying currently available models. See chapter 5 
of the TSD for more details about the specifications for each baseline 
model.
    In the preliminary analysis, DOE analyzed several representative 
baseline units for refrigeration systems and requested comment on the 
characterization of the baseline units. In response to DOE's request 
for comment on the representative units analyzed, several stakeholders 
expressed concern that the range of refrigeration systems DOE evaluated 
was too limited. Heatcraft and the Joint Utilities encouraged DOE to 
include larger capacity equipment and different compressor types. 
(Heatcraft, No. 0058.1 at pp. 3-4; Heatcraft, No. 0069.1 at p. 2; Joint 
Utilities, No. 0061.1 at p. 3) American Panel echoed this concern and 
stated that DOE should explore the full range of condensing units and 
that WICF envelopes should be paired with different sized refrigeration 
systems based on use. (American Panel, No. 0048.1 at pp. 8-9) DOE has 
considered these comments and has expanded its analysis to include a 
larger range of refrigeration system capacities. DOE has also included 
different compressor types in the refrigeration system analysis; see 
section IV.C.5.b and chapter 5 of the TSD for details. DOE has not 
considered pairing WICF envelopes and refrigeration systems in the 
engineering analysis, however, because DOE is applying a component-
based approach.
    The preliminary analysis also presented estimated baseline 
specifications and costs for the representative units it analyzed. 
American Panel remarked that the baseline costs in the engineering 
analysis were too low and were not comparable to their data. 
Additionally, it stated that the refrigeration load will increase if 
the product is not at the same temperature as the walk-in cooler or 
freezer. (American Panel, No. 0048.1 at p. 7) Interested parties also 
commented on certain baseline unit subcomponents that were not included 
in the engineering analysis. American Panel noted that baseline units 
could include a downstream solenoid valve that would prevent 
refrigerant from migrating to the evaporator and Heatcraft encouraged 
DOE to make sure that the amount of refrigerant, piping, and insulation 
scale properly with size. (American Panel, No. 0048.1 at p. 7; 
Heatcraft, No. 0069.1 at p. 3)
    In response to American Panel's comments on refrigeration system 
costs, DOE adjusted its cost model as described in section IV.C.3 and 
believes its costs are now more representative of typical equipment. 
Regarding refrigeration load, DOE does not consider the effect of 
different product loads in the engineering analysis because the 
engineering analysis is based on the rating conditions; DOE considers 
product loads in the energy use analysis as explained in section 
IV.E.3. In response to American Panel's and Heatcraft's comments about 
subcomponents of refrigeration equipment, the revised analysis now 
includes all necessary subcomponents from the manufacturer--i.e., those 
subcomponents needed for the unit to operate. The analysis includes a 
calculation of refrigerant charge that is

[[Page 55813]]

scaled with the size of the unit, as Heatcraft suggested. DOE has 
tentatively decided not to include piping and insulation between the 
unit cooler and condensing unit, as it believes these components would 
not be supplied by the manufacturer or included in the equipment's MSP, 
but by the contractor upon installation of the equipment. DOE requests 
comment on this assumption.
    In the preliminary analysis, DOE made certain assumptions regarding 
saturated evaporator temperature (SET) and saturated condensing 
temperature (SCT) that it used in the analysis for freezers and coolers 
and indoor and outdoor units. In general, DOE based these temperatures 
on an assumed temperature difference (TD) between the coil temperature 
and the ambient temperature where the ambient temperature for indoor 
and outdoor units was specified by the rating conditions in AHRI 1250-
2009, the test procedure for refrigeration systems. 76 FR at 33631. The 
Joint Utilities and Heatcraft both submitted comments about the 
temperature set points in the baseline equipment; the Joint Utilities 
suggested a condensing temperature control point of 90[emsp14][deg]F 
for both freezers and coolers, while Heatcraft recommended different 
temperatures for several equipment classes. (Joint Utilities, No. 
0061.1 at p. 10; Heatcraft, No. 0069.1 at p. 2)
    In determining appropriate temperature set points, DOE considered 
information from various sources when formulating its assumptions, 
including comments, research, and discussions with manufacturers and 
other parties. DOE notes that the ambient temperature for the test 
procedure is 90 and 95 [deg]F for indoor and outdoor condensing units, 
respectively. Given that the system must maintain a reasonable TD 
between the SCT and the ambient temperature, the SCT during the test 
procedure would be higher than the 90-95 [deg]F assumption recommended 
by the Joint Utilities. Even though the set point during actual use may 
be lower, equipment is rated--and evaluated for meeting the standard--
at the test procedure rating points. For these reasons, DOE believes 
its SCT assumptions are reasonable for baseline equipment operating at 
the rating conditions required for the test procedure. DOE requests 
comment on this assumption, particularly whether the TDs for baseline 
and higher efficiency equipment are appropriate. See chapter 5 of the 
TSD for details.
5. Design Options
a. Panels and Doors
    For the preliminary analysis, DOE included the following design 
options for the walk-in envelope:
     Improved wall, ceiling, and floor insulation
     Improved door gaskets and panel interface systems
     Electronic lighting ballasts and high-efficiency lighting
     Occupancy sensors and automatic door opening and closing 
systems
     Air curtains and strip curtains
     Vestibule entryways
     Display and window glass system insulation enhancements
     Anti-sweat heater controls and no anti sweat heat systems
    In the preliminary analysis, DOE presented tables detailing each 
design option, including the cost of implementing each option and a 
description of the design option's properties. The discussion below 
sets forth comments received on these design options for panels and 
doors, as well as DOE's proposed approach in today's NOPR.
Panels
    Stakeholders commented on steady state IRDs that DOE initially 
considered including as design options for the walk-in envelope. Craig 
Industries commented that DOE should consider different caulking 
materials as a design option because it is inexpensive and would reduce 
infiltration by sealing the joints of walk-ins, but noted that this 
design option would conflict with the current National Sanitation 
Foundation (NSF) standards. (Craig Industries, No. 0064.1 at p. 3) 
American Panel stated that changing the gasketing or joint profile of 
an insulated panel would require a new test burden of $20,000, and that 
the improved gasketing is not necessarily going to be functional. It 
also noted that improved panel interfaces may not mate with existing 
walk-in panels, which would prevent manufacturers from supplying 
replacement panels. Lastly, in its view, the complex gasketing and 
panel interface systems could cause walk-ins to become more difficult 
to build. (American Panel, No. 0048.1 at p. 6; American Panel, Public 
Meeting Transcript, No. 0045 at p. 121) Hill Phoenix commented that 
enhancing the gasketing between panels will not have a significant 
impact on the walk-in's energy consumption. In its view, the main heat 
load caused by infiltration is from door openings as opposed to steady 
state infiltration. (Hill Phoenix, No. 0066.1 at p. 3)
    For the reasons stated in the test procedure final rule, the test 
procedure promulgated by DOE no longer requires manufacturers to 
measure a walk-in's steady-state infiltration. Therefore, design 
options for reducing steady state infiltration, including caulking and 
improved gasketing, would not impact the rated energy consumption of 
any of the walk-in components addressed in this rulemaking. 76 FR 
21580, 21595 (April 15, 2011). Furthermore, DOE would screen out any 
design options (including caulking) that would be likely to have 
significant adverse impacts on the utility of the equipment or had an 
adverse impact on health or safety, according to the screening criteria 
described in section IV.B.
    In the preliminary analysis, DOE considered design options that 
increased the baseline insulation thickness and improved insulation 
material. The preliminary analysis used a baseline insulation thickness 
of 4 inches and analyzed design options with increased insulation 
thicknesses of 5 inches, 6 inches, and 7 inches. The baseline panel 
insulation R-value was an average of extruded polystyrene and foamed-
in-place polyurethane. The improved insulation materials in the 
preliminary analysis were vacuum insulated panel (VIP) insulation and 
hybrid insulation, a combination of the baseline material and vacuum 
insulated panels.
    Many stakeholders commented on the proposed insulation 
improvements. American Panel did not agree with the initial costs DOE 
initially presented for the increased thicknesses of insulation. In its 
view, costs were higher due to the increased difficulty of 
manufacturing thicker panels. To accurately reflect this inefficiency, 
American Panel suggested DOE increase the cost of labor per panel 
because it takes more time to foam the fixture. (American Panel, No. 
0048.1 at p. 5) American Panel also remarked that most manufacturers 
possess tooling that is adjustable only from 4-6 inches. (American 
Panel, Public Meeting Transcript, No. 0045 at p. 121) Hill Phoenix 
stated that panel thicknesses above 5.5 inches will have a costly 
impact on the manufacturer and end user because manufacturers need to 
purchase more equipment to deal with the increased weight and the end-
user will need more floor space to house or site the walk-in. (Hill 
Phoenix, No. 0066.1 at p. 3) American Panel criticized the preliminary 
analysis for omitting insulating floor panels or an insulation slab 
with vertical breaks as design options. American Panel explained that 
although the payback period would be longer if these options

[[Page 55814]]

are included, DOE should still consider the long term energy savings 
that these options may yield. (American Panel, No. 0048.1 at p. 5)
    DOE agrees with American Panel that most manufacturers do not 
currently have the tooling to produce panels with more than 6 inches of 
insulation. In addition, DOE finds that constructing and handling 
panels thicker than 6 inches would be unduly burdensome to the 
manufacturer because panels thicker than 6 inches would be very 
difficult to handle, store, ship, and produce at typical industry 
production volumes. Because panels thicker than 6 inches would not be 
practicable to manufacture, DOE screened them out from its analysis. 
DOE's NOPR analysis limits the maximum insulation thickness to 6 inches 
of foam and DOE does not expect its proposed standard to require panels 
thicker than 5 inches (see chapter 5 and appendix 10D of the TSD); 
however, the agency requests comment on this assumption in the 
analysis. DOE notes Hill Phoenix's comment about the increased labor 
cost associated with increasing the panel thickness and proposes to 
account for the increased cost of handling large panels in its cost-
efficiency analysis. DOE also agrees with American Panel's comment that 
requiring insulated floor panels for walk-in coolers would produce long 
term energy savings. However, DOE is not proposing to set a standard 
for walk-in cooler floors as explained in section IV.A.2.a of this 
notice.
    Two stakeholders made comments specifically about VIPs. NanoPore 
stated that silica-carbon based core materials have a better lifetime 
performance than fiberglass core materials when using vacuum insulated 
panels, and noted that VIPs have reached a point of large scale 
commercialization. (NanoPore, No. 0067.1 at pp. 1 and 6) However, Hill 
Phoenix commented that VIPs are impractical because of the high cost to 
the manufacturer, and that vacuum insulated panels would require 
additional labor and tooling. (Hill Phoenix, No. 0066.1 at p. 3)
    DOE included hybrid insulation (half foam-in-place polyurethane and 
half VIP) as a design option to improve the efficiency of walk-in 
panels and non-display doors. It did not, however, include VIP 
insulation as a design option because DOE cannot definitively conclude 
that VIPs have the structural capability of supporting typical walk-in 
loads, particularly since VIPs can easily be punctured, which would 
cause a loss in thermal insulation (see chapter 5 of the TSD for 
details). DOE notes that while NanoPore stressed the benefits of 
silica-carbon based VIP, DOE did not specify the type of VIP used in 
the engineering analysis in order to maximize manufacturer flexibility 
in meeting the proposed standard. DOE agrees with Hill Phoenix that 
VIPs are more expensive and may require additional tooling, but DOE 
does not find this increased cost would prevent manufacturers from 
implementing VIPs. DOE also notes that the high costs of VIPs are 
captured in the engineering analysis for panels and non-display doors.
    In its engineering analysis for walk-in panels, DOE included design 
options which increase the baseline insulation thickness, change the 
baseline insulation material from foam-in-place polyurethane to a 
hybrid of polyurethane and VIP, change the baseline framing material 
from wood to high density polyurethane, and eliminate a structural 
panel's framing material. DOE assumed in its analysis that freezer 
floor panels retain some type of framing material to maintain 
structural integrity because the foam itself may be unable to support 
heavy, perpendicular loads--e.g. personnel, machinery, and products--to 
the panel's face. DOE also assumed that high density polyurethane 
framing materials used in a panel have the same dimensions as the wood 
framing materials used in a wood-framed panel. DOE seeks comment on 
these panel design options, particularly with respect to the 
specifications for high density polyurethane framing materials.
Doors
    Stakeholders also commented on design options that would reduce the 
infiltration from door openings: namely, automatic door opening and 
closing systems, which automatically open and close the door by sensing 
when a person is about to pass or has passed through; air curtains and 
strip curtains, both of which provide a secondary barrier to air 
infiltration when the door is open; and vestibule entryways, which 
consist of a series of two doors separated by a space through which one 
would pass to enter the walk-in. Hired Hand noted that the engineering 
analysis omitted automatic roll-up doors or bi-folding envelope doors, 
and that these doors cannot be adequately subsumed under ``automatic 
door opening and closing'' (which DOE did include) because this option 
does not capture the full benefit of these doors. (Hired Hand, No. 
0050.1 at pp. 1-2) American Panel was skeptical that automatic door 
opening and closing sensors existed in the industry and did not agree 
with DOE's proposed cost of the technology. (American Panel, No. 0048.1 
at p. 6) American Panel also stated that a vestibule is not a practical 
design option because the cost of the floor space and the layout of 
standard stores would be prohibitive to the end user. It noted that the 
cost of a vestibule is higher than DOE estimated, and predicted that 
the cost for materials and equipment would be well over $2,500. 
(American Panel, No. 0048.1 at pp. 3 and 6)
    For the reasons stated in its recent final rule, the test procedure 
does not include a method for measuring the door opening infiltration 
associated with walk-ins. See 76 FR at 21595. Therefore, the energy 
consumption caused by door opening infiltration is not accounted for in 
the panel, display door, or non-display door engineering analyses, and 
design options related to door opening infiltration would not affect 
the energy consumption of the walk-in components.
    Some stakeholders specifically commented about the strip curtains 
design option. NEEA and NPCC stated that strip curtains are already 
required by EPCA, and should not be considered a design option, but 
that infiltration load could still be reduced by additional IRDs. (NEEA 
and NPCC, Public Meeting Transcript, No. 0045 at p. 170; NEEA and NPCC, 
No. 0059.1 at p. 8) NEEA, NPCC and Master-Bilt disagreed with DOE's 
assumption that strip curtains can reduce the total energy consumption 
of a walk-in by half. NEEA and NPCC suggested strip curtains would more 
likely reduce the energy consumption by one third, according to a 
Pacific Northwest study, and Master-Bilt commented that strip curtains 
reduce the compressor load by less than 5 percent according to their 
own field tests. (NEEA and NPCC, Public Meeting Transcript, No. 0045 at 
p. 152; NEEA and NPCC, No. 0059.1 at p. 8; Master-Bilt, Public Meeting 
Transcript, No. 0045 at p. 159; Master-Bilt, No. 0046.1 at p. 1) 
American Panel noted that strip curtain manufacturers indicated that 
the device achieves a 25 percent reduction in air infiltration, much 
lower than DOE's assumption of 90 percent effectiveness. (American 
Panel, Public Meeting Transcript, No. 0045 at p. 154; American Panel, 
No. 0048.1 at p. 6) Lastly, AHRI also commented that DOE overestimated 
the benefit of strip curtains, and that DOE should verify their 
assumptions with field data; AHRI did not provide any alternative data 
on the benefit of strip curtains. (AHRI, No. 0055.1 at p. 2) As 
explained in section IV.B.1 of this document, however, infiltration 
devices are no longer included in the engineering analysis.

[[Page 55815]]

    Stakeholders also commented on the door lighting design options 
presented in the preliminary analysis; specifically, occupancy sensors 
that cause the lights to operate only when people are present; 
electronic lighting ballasts, which are more efficient than typical 
magnetic ballasts; and high-efficiency light-emitting diode (LED) 
lighting, a type of lighting that uses semiconducting materials to 
produce light and uses less energy per lumen than incandescent or 
fluorescent lighting. American Panel stated that LED lighting is not a 
viable design option because the LED fixture and bulb payback period is 
2.5 years. (American Panel, No. 0048.1 at p. 6) The Joint Utilities 
suggested that DOE should add LED lighting with motion controls as a 
design option for display cases. (Joint Utilities, Public Meeting 
Transcript, No. 0045 at p. 26; Joint Utilities, Public Meeting 
Transcript, No. 0045 at p. 89; Joint Utilities, No. 0061.1 at p. 3)
    In response to American Panel's concern about the cost of LED 
lighting, DOE accounts for the cost of the bulb and fixture when 
estimating the total cost of LED lighting. However, DOE has not 
automatically eliminated LED lighting from consideration based on 
payback period but includes it in the range of design options it is 
considering. For more details on the payback period analysis, see 
section IV.F. In response to the suggestion from Joint Utilities, a 
combined design option with LED lighting and motion control sensors is 
not warranted because DOE already includes a lighting sensor and LED 
lighting as separate design options in the walk-in display door 
engineering analysis. A separate design option for lighting sensors 
allows the sensor to be applied to fluorescent as well as LED lighting.
    Some stakeholders commented on the anti-sweat heater wire design 
option. CrownTonka commented that anti-sweat heater wire should be 
applied to non-display freezer doors and any windows in non-display 
doors. (CrownTonka, Public Meeting Transcript, No. 0045 at p. 89) Craig 
Industries supported the inclusion of self-regulating heater wire and 
noted that this wire is readily available and more efficient than other 
types of heater wires. (Craig Industries, No. 0064.1 at p. 1) DOE 
agrees with CrownTonka and proposes to include anti-sweat heater wire 
around the outer edge of non-display freezer doors as well as on the 
windows located on non-display doors as design options. In response to 
Craig Industries' suggestion, the energy savings from self-regulating 
anti-sweat heater wire alone cannot be captured in the proposed 
engineering analysis for display and non-display doors because the 
energy savings are not captured by the test procedure. The test 
procedure credits the manufacturer with energy savings if a 
preinstalled timer, control system or other auto-shut-off system is 
used in conjunction with anti-sweat heater wire. The credit is called a 
percent time off (PTO) credit, which reduces the calculated power 
associated with the device. 76 FR 33631, 33635, 33637 (June 9, 2011).
    The display door design options used in the analysis include 
improved glass packs--where ``glass pack'' refers to the combination of 
glass panes, gas fill, and low-emission coatings making up the 
transparent part of the door; anti-sweat heater controls for cooler 
doors; LED lighting; and lighting sensors that control when the lights 
turn on and off. DOE did not analyze anti-sweat heater controls for 
freezer display doors because baseline freezer doors are already 
required to have a controller to regulate the power consumed by the 
anti-sweat heater wire. EISA requires all freezer doors to have an 
anti-sweat heater control if the anti-sweat heater wire consumes more 
than 7.1 watts per square foot of door opening, and DOE estimated that 
baseline display doors consume 15.2 watts per square foot of door 
opening. Therefore, baseline display doors already have an anti-sweat 
heater wire control system in order to comply with EISA.
    As explained previously, the walk-in cooler and freezer test 
procedure credits the manufacturer for having a control. The type or 
amount of controls does not change the credit nor increase the energy 
savings realized by the DOE test procedure. For these reasons, DOE did 
not include control systems as a design option. Additionally, DOE did 
not consider eliminating anti-sweat heater wire as a separate design 
option. The improvements made to the glass pack cause a reduction in 
the power draw of the anti-sweat heater wire. In the case of display 
cooler doors, the performance of the glass pack is improved enough so 
that anti-sweat heater wire is no longer required on the door. DOE also 
did not consider higher efficiency ballasts in its analysis because it 
found that electronic ballasts already incorporated into baseline units 
and DOE is not aware of more efficient ballasts. DOE requests comment 
on its analyzed design options and specifically seeks any heat transfer 
data for the improved glass packs detailed in chapter 5 of the TSD.
    The design options that DOE analyzed in the engineering analysis 
for non-display doors include increasing the insulation thickness, 
changing the insulation material from baseline to a hybrid of 
polyurethane and VIP, changing the baseline framing material from wood 
to high density polyurethane, improving the window's glass pack, and 
adding an anti-sweat heater wire controller to the door. These options 
are more fully described in chapter 5 of the TSD. DOE requests comment 
on the non-display door design options it analyzed, particularly with 
respect to the cost of the window improvements detailed in chapter 5 of 
the TSD.
    American Panel suggested that DOE consider low cost methods for 
extending the envelope and door lifetimes. (American Panel, No. 0048.1 
at p. 9) DOE has not considered options in this analysis that do not 
improve the rated performance of the equipment, as described in section 
IV.B.1. The purpose of the engineering analysis is to analyze the 
manufacturing cost and the performance of the covered equipment as 
rated by the test procedure. Examining methods to extend the life of 
walk-in equipment, including the impact of such methods on standards 
adopted by DOE, would complicate and create a significant impediment to 
completion of this rulemaking, without any clear prospect that it would 
affect the standards DOE ultimately adopts. For this reason, DOE has 
decided not to pursue this issue.
    After considering all the comments it received on the design 
options, DOE is including the following design options in the NOPR 
analysis for panels, display doors, and non-display doors:
Panels
     Increased insulation thickness up to 6 inches
     Improved insulation material
     Improved framing material
Display Doors
     High-efficiency lighting
     Occupancy sensors
     Display and window glass system insulation performance
     Anti-sweat heater controls
Non-Display Doors
     Increased insulation thickness up to 6 inches
     Improved insulation material
     Improved panel framing material
     Display and window glass system insulation performance
     Anti-sweat heater controls
     No anti-sweat systems
b. Refrigeration
    In the preliminary analysis, DOE included the following design 
options for the walk-in refrigeration system:
     High-efficiency compressors

[[Page 55816]]

     Improved condenser coil
     High-efficiency condenser fan motors
     Improved condenser fan blades
     Improved evaporator coil
     Improved evaporator fan blades
     Evaporator fan controls
     Floating head pressure
     Defrost controls
    The preliminary analysis contained tables detailing each design 
option, including the cost of implementing each option and a 
description of the design option's properties. The discussion below 
sets forth comments received on these design options for refrigeration 
systems, as well as DOE's proposed approach in today's NOPR.
    One option DOE considered was high-efficiency compressors. For 
example, DOE suggested using scroll compressors to represent the 
performance associated with higher efficiency compressors in walk-in 
applications. In response, Master-Bilt and Heatcraft commented that 
scroll compressors are not necessarily more efficient than other 
compressor types and are limited by their application and the prevalent 
conditions in which the compressor operates. (Master-Bilt, Public 
Meeting Transcript, No. 0045 at p. 1; Heatcraft, No. 0058.1 at p. 2) 
Heatcraft also stated that with increasing horsepower, fewer compressor 
types are available. (Heatcraft, No. 0069.1 at p. 1) The Joint 
Utilities added that for larger walk-in units, semi-hermetic 
compressors are more efficient than scroll types--except at low 
temperatures where, in their view, scroll compressors are more often 
utilized--but they did not provide information supporting the same. In 
addition, the Joint Utilities stated that hermetic compressors hold an 
added cost advantage over semi-hermetic compressors. (Joint Utilities, 
No. 0061.1 at pp. 6 and 10) With regard to the types of compressors 
used in the food service market, American Panel suggested that hermetic 
compressors were dominant and stated that semi-hermetic compressors' 
high initial cost made them less prevalent generally. (American Panel, 
No. 0048.1 at p. 9)
    DOE conducted additional research on available compressors and 
found that the prevalence of some compressor types varied at certain 
sizes. DOE also ensured that its analysis accounted for the effect that 
different applications and conditions may have on the relative 
efficiency of compressor types. In particular, the NOPR analysis 
includes an evaluation of a wide range of refrigeration capacities, and 
DOE has separately evaluated the different compressor types available 
at each capacity point. DOE believes that this modified analysis 
adequately captures the performance of each compressor type at each 
size and set of operating conditions.
    To obtain data on compressor performance, DOE's preliminary 
analysis relied on manufacturer Web sites and related product 
specification sheets and did not consider the effect of the return gas 
conditions. The compressor data were based on return gas conditions 
under which the individual compressors were rated. The Joint Utilities 
stated that the return gas conditions were inconsistent with the 
typical operating conditions of walk-ins. (Joint Utilities, Public 
Meeting Transcript, No. 0045 at p. 27 and No. 0061.1 at p. 11) In 
consideration of the Joint Utilities' comment, DOE investigated the 
effect of the return gas conditions on compressor performance and has 
updated the compressor characteristics using return gas conditions that 
are consistent with the rating conditions in AHRI 1250-2009, which are 
different from the rating conditions for individual compressors. The 
conditions are contained within AHRI 1250-2009 itself, which DOE has 
incorporated into its test procedure. 76 FR at 33631.
    After considering the stakeholder comments and conducting further 
research, DOE expanded its initial compressor range beyond scroll 
compressors and hermetic compressors to now include semi-hermetic 
compressors in the list of compressor options in order to capture most 
of the market share. This was done specifically due to the varying 
compressor efficiencies at different operating temperatures, and the 
lack of availability of certain compressor types at all capacity 
ranges. For example, it is difficult to obtain hermetic compressors at 
capacities exceeding 30,000 Btu/h, so manufacturers may be more likely 
to use semi-hermetic compressors at these capacities as a lower-cost 
alternative to scroll compressors.
    The preliminary TSD discusses the evaporator and condensing coil 
baseline and improved efficiency as coil size increases. In that 
analysis, DOE selected increased coil size as a design option because 
increasing the coil size corresponds to a drop in temperature 
difference, which would increase compressor capacity and result in 
lower normalized energy consumption.
    DOE received several comments about heat exchanger coil size and 
the associated savings. The Joint Utilities, Manitowoc and Heatcraft 
commented that the analysis did not consider an increase in fan power 
with an increase in coil size. (Joint Utilities, Public Meeting 
Transcript, No. 0045 at p. 27 and No. 0061.1 at p. 6; Manitowoc, No. 
0056.1 at p. 2; Heatcraft, No. 0058.1 at pp. 2 and 3) American Panel 
stated that increasing condenser coil size would also require an 
increase in evaporator coil size, while Manitowoc suggested that the 
coil heat transfer equation should use log-mean temperature. (American 
Panel, No. 0048.1 at p. 6; Manitowoc, No. 0056.1 at p. 2)
    After carefully considering these comments, DOE modified its 
analysis by increasing fan power proportionally to coil size. DOE found 
through its analysis, however, that as coil size increases, the 
decrease in compressor power far exceeds the increase in fan power, 
which ultimately decreases the net energy consumption. As a result, DOE 
retained increased coil size as a design option in its analysis. DOE 
agrees with Manitowoc's comment that using log mean temperature 
difference is a more accurate way to calculate heat transfer because 
this method accounts for changes in air temperature and refrigerant 
temperature across the refrigerant coil rather than assuming that these 
temperatures are constant. DOE's analysis had used a simplified form of 
the heat transfer equations in the preliminary analysis, but now 
includes a log mean temperature difference in its analysis for the 
NOPR. In response to American Panel's comment about requiring an 
increase in evaporator coil with condenser coil, DOE has taken a 
complete system modeling approach in analyzing the refrigeration 
system's performance to capture any effects on the evaporator 
conditions from condenser coil changes. At this point, DOE believes 
that increasing the coil size of the condenser does not necessarily 
require an increase in coil size for the evaporator because the 
manufacturer would balance other aspects of the system to maintain the 
same capacity. DOE requests comment on this assumption, particularly 
from manufacturers who currently utilize larger condenser coils.
Condenser Fan Motors
    In chapter 5 of the preliminary TSD, DOE discussed more efficient 
condenser fan motors as a viable design option. EPCA requires that 
walk-in condenser fan motors of less than 1 horsepower must use 
permanent split capacitor motors, electronically commutated motors, or 
three-phase motors. (42 U.S.C. 6313(f)(1)(F)) Permanent split capacitor 
(PSC) motors are less expensive and less efficient than electronically-
commutated (EC) motors and are currently used by the majority of 
manufacturers. DOE also assumed the

[[Page 55817]]

same motor efficiencies for PSC and EC motors that were assumed in the 
ANSI/ARI Standard 1200-2006--that is, 29 percent and 66 percent 
respectively. (The analysis screened out three-phase motors as a design 
option based on utility to the consumer, as explained in section 
IV.B.2.b, although manufacturers may still use this technology to 
improve the overall efficiency of the equipment they manufacture.)
    DOE received comments about the assumed efficiency of fan motors. 
Manitowoc commented that DOE's assumed efficiency for PSC motors was 
too low and should be about 50 percent, while Heatcraft stated that PSC 
motor efficiency would likely be between 45 and 55 percent, three-phase 
motor efficiency would be approximately 80 percent, and EC motor 
efficiency would range from 60 to 90 percent. (Manitowoc, No. 0056.1 at 
p. 2; Heatcraft, No. 0058.1 at p. 2 and No. 0069.1 at p. 2) The Joint 
Utilities suggested that the methodology of determining input power 
from efficiency ratings for small motors was inaccurate. (Joint 
Utilities, No. 0061.1 at p. 8) Heatcraft provided a list of parts to be 
added to the engineering analysis. (Heatcraft, No. 0069.1 at p. 1)
    DOE has considered the suggestions of Manitowoc and Heatcraft 
regarding motor efficiency and has changed its assumptions for PSC 
motors to 50 percent and EC motors to 75 percent after researching 
currently available motors. Additionally, regarding comments received 
from Heatcraft about three-phase motors, DOE did not include three-
phase motors as a design option or as part of the design of smaller 
baseline equipment due to adverse utility to the consumer and 
impracticability to manufacture, install and service, because many 
consumers do not have three-phase power sources; however, DOE assumed 
that larger baseline equipment would use three-phase motors. See 
section IV.B.2.b for more details. DOE also included in its analysis 
the fan motor parts Heatcraft identified after evaluating teardown data 
and conducting further analysis of those parts. In response to the 
Joint Utilities' comment that DOE should not determine input power from 
efficiency ratings, DOE has used this method as its best estimate for 
motor power consumption. DOE has not identified a more accurate 
methodology for determining input power and requests feedback on this 
issue.
    Chapter 5 of the preliminary TSD presented several fan blade 
options for the evaporator and condenser fan blade design option. 
Responding to these options, Heatcraft suggested the inclusion of swept 
fan blades as they are more aerodynamic and reduce vibrations and noise 
that result in inefficiencies. In addition, it also suggested that 
motor efficiency is independent from fan blade efficiency because more 
efficient fan blades do not result in high efficiencies for motors and 
vice versa. Rather, the efficiency of each component is due to its own 
intrinsic characteristics. After considering Heatcraft's comment, DOE 
is continuing to treat the motor and fan blade options separately.
    The preliminary analysis examined evaporator fan controls as a 
design option. The impacts of fan controls were analyzed consistent 
with the test procedure requirement that ``controls shall be adjusted 
so that the greater of a 25 percent duty cycle or the manufacturer 
default is used for measuring off-cycle fan energy. For variable-speed 
controls, the greater of 25 percent fan speed or the manufacturer's 
default fan speed shall be used for measuring off-cycle fan energy.'' 
Because of this requirement, DOE set a 75 percent reduction in off-
cycle fan energy as the energy savings achieved for the fan control 
technology option. DOE did not differentiate between modulated fan 
controls and variable speed fan controls in the preliminary analysis. 
DOE received comments both on its characterization of the fan control 
design option and on the energy results for that design option. NEEA 
and NPCC expressed concern that DOE's analysis caused the evaporator 
fan control option to appear less cost-effective compared to other 
design options, possibly indicating that DOE underestimated its 
potential energy savings. (NEEA and NPCC, No. 0059.1 at p. 7) The Joint 
Utilities cited studies indicating that fan speed control is one of the 
most, if not the most, cost-effective design option for many 
refrigeration systems. (Joint Utilities, Public Meeting Transcript, No. 
0045 at p. 28; No. 0061.1 at pp. 2 and 6) The Joint Utilities also 
criticized DOE's initial approach of not distinguishing between fan 
cycling and fan speed control. They indicated that the approach taken 
by DOE overly simplified the analysis, which then yielded considerably 
smaller projected savings for multiplex systems. Because of the 
complexity of the size ranges and system variations of these units, a 
more detailed analysis than the single design option used in the 
preliminary analysis is, in their view, required to sufficiently 
evaluate the potential energy savings from using a fan control system. 
They recommended that an analysis of fan speed controls include the 
benefit of operating at reduced fan speeds for the majority of the time 
the system operates. (Joint Utilities, No. 0061.1 at pp. 6 and 9) NEEA 
and NPCC agreed with DOE's approach insofar as fan controls that adjust 
envelope interior temperature conditions should be applied to every 
walk-in. (NEEA and NPCC, No. 0059.1 at p. 7)
    Some interested parties also cautioned DOE about the unintended 
consequences of implementing different types of fan controls. The Joint 
Utilities stated that a fan duty-cycling control strategy would be 
unacceptable in many applications because of the increased likelihood 
of uneven temperatures and the related concern for perishable products. 
(Joint Utilities, No. 0061.1 at p. 9) Zero Zone stated that variable 
speed evaporator fan motors could prevent the walk-in from maintaining 
the desired product temperature. (Zero Zone, No. 0051.1 at p. 1) 
American Panel stated that if fan controls cause the compressor to run 
for longer periods, energy consumption will increase because the 
compressor draws more power than the fans. American Panel also 
recommended that DOE ensure that whatever standards it may propose, 
that air defrost evaporators still be able to defrost ice build-up on 
refrigeration coils during off-cycle periods using lower fan speeds. 
(American Panel, No. 0048.1 at p. 7)
    One interested party commented on DOE's assumed cost of the fan 
control option. The Joint Utilities stated that the assumed cost of 
$300 for fan control would likely be lower, particularly for small 
walk-ins, because the EC motors have inherent variable speed capability 
and the microcontrollers used to control these motors can provide the 
required voltage signal to control the EC motors. (Joint Utilities, No. 
0061.1 at p. 9)
    To address these concerns, DOE has made several changes to its fan 
control analysis. DOE is now considering both modulated (fan cycling) 
and variable speed controls as potential design options. Modulated fan 
controls cycle the fans at 50 percent runtime at 100 percent speed when 
the compressor is off, while variable speed controls set the fan speed 
to 50 percent of maximum speed at 100 percent runtime when the 
compressor is off. DOE's analysis applies the commonly used fan power 
laws, which describe the relationship between power and speed during a 
fan's operation. A reduction in fan speed causes a reduction in fan 
power to the third power. For example, reducing speed to 50 percent of 
full speed reduces the power to 12.5 percent of full power. Thus, 
variable speed controls

[[Page 55818]]

would be expected to save more energy than modulated fan controls for 
the particular control strategies analyzed.
    DOE applied both modulated fan controls and variable speed fan 
controls as a design option for all classes analyzed. DOE did not, 
however, consider controls that respond to specific box conditions 
because, as stated in the test procedure final rule, the impact of 
these controls would not be captured using the component-level 
approach, which analyzes refrigeration systems separately from envelope 
components. DOE notes that, as a result of the enhancements made to its 
analytical approach, the NOPR analysis indicates that modulated and 
variable speed fan controls would likely be among the primary options 
to improve walk-in refrigeration system efficiency.
    DOE appreciates the concerns about fan controls raised by American 
Panel, the Joint Utilities, and Zero Zone. DOE's research does not 
indicate that air defrost would be adversely affected by fan controls. 
Therefore, air defrost would likely still be adequate with reduced fan 
speed. To address commenters' concerns about the potential effects of 
fan controls on food safety, DOE estimates that the outcome of using 
such controls would be equivalent to an overall 50 percent decrease in 
runtime (for a cycle control) or a 50 percent decrease in speed (for a 
variable-speed control) and has tentatively concluded that the impact 
of the controls it analyzed will be limited and not affect the 
maintenance of safe food temperatures. See chapter 5 for details. DOE 
requests comment from interested parties as to whether food 
temperatures would be adequately maintained in the specific control 
cases it has analyzed and, if not, what an appropriate control strategy 
would be. DOE seeks any data that interested parties can provide to 
show the relationship between fan controls and food temperatures. DOE 
also seeks information as to whether additional components are 
necessary to ensure food temperature, such as extra thermostats located 
in certain areas of the walk-in. To address American Panel's comment 
about compressor runtime, DOE does not expect compressor runtime to 
increase from the inclusion of fan control implementation because the 
fans run at full speed while the compressor is running and fan speed or 
cycling controls are activated only when the compressor is off. DOE 
also does not expect controls to increase the amount of time the 
compressor is off because the compressor cycles on based on the walk-
in's interior temperature, which DOE believes will not be significantly 
affected by the fan control strategy modeled in the analysis.
Defrost Controls
    In the preliminary analysis, DOE evaluated several defrost control 
options available in the market. DOE considered using time-initiated, 
time-terminated defrost as the baseline. The design option involved a 
generic defrost control that would result in half as many defrosts per 
day. Heatcraft and American Panel doubted whether existing defrost 
controls could achieve the 50 percent reduction in defrosts assumed in 
the preliminary analysis. (American Panel, No. 0048.1 at p. 7; 
Heatcraft, No. 0058.1 at p. 4) In addition, Heatcraft, American Panel 
and the Joint Utilities suggested DOE replace time termination with 
temperature termination in the base case. (Heatcraft, No. 0058.1 at p. 
4; American Panel, No. 0048.1 at p. 7; Joint Utilities, Public Meeting 
Transcript, No. 0045 at p. 26) Heatcraft and the Joint Utilities also 
noted that defrost time should be dependent on system size to account 
for the greater surface area of larger units and suggested that the 
baseline defrost control strategy be a time-initiated, temperature-
terminated scheme, which is the industry standard. (Heatcraft, No. 
0058.1 at pp. 3-4; Joint Utilities, No. 0061.1 at p. 3)
    In response to comments received about defrost control, DOE's 
analysis now applies a temperature-terminated defrost approach for all 
defrost control schemes (baseline or higher). The defrost cycle ends 
once the coil temperature reaches 45[emsp14][deg]F. For the defrost 
design option, DOE is continuing to apply a generic defrost control 
that would reduce the number of defrosts per day. The magnitude of the 
reduction is set at 40 percent, which is less than the 50 percent level 
originally assumed in the preliminary analysis. DOE chose this reduced 
level because it would result in significant energy savings while still 
maintaining adequate defrost capability. Further details about the 
defrost control parameters are found in chapter 5 of the TSD.
Floating Head Pressure
    In the preliminary analysis, DOE also considered floating head 
pressure as a design option. With floating head pressure, the 
compressor pressure and the saturated condensing temperature (SCT) 
float down to the minimum level at which the compressor can operate. 
DOE assumed that floating head pressure would allow the SCT to float 
down to 70[emsp14][deg]F. DOE also assumed that the SCT would decrease 
at the same rate as the ambient temperature such that the system would 
maintain the same temperature difference (TD) between the SCT and the 
ambient air. This change resulted in a predicted reduction in energy 
consumption because compressors generally run more efficiently at a 
lower SCT. The capacity of the system was related to the SCT and the 
TD.
    Some interested parties commented on DOE's assumptions relating to 
floating head pressure. Heatcraft disagreed with DOE's assumption that 
the TD would be constant as SCT decreases and stated that the TD 
increases as SCT decreases. To illustrate its point, Heatcraft 
calculated the TD of a system at an SCT of 115[emsp14][deg]F and again 
at an SCT of 70[emsp14][deg]F and found that the ratio of the condenser 
TD between these two SCT conditions would be approximately 1.19, not 
1.0 (where a ratio of 1.0 would correspond to no change in TD as SCT 
decreases). This value was calculated using the total heat of rejection 
(THR) of the condenser. (Heatcraft, No. 0058.1 at p. 4) The Joint 
Utilities had several comments relating to the implementation of 
floating head pressure. They recommended that DOE account for the 
additional fan power required for floating head pressure, and stated 
that varying the speed of condenser fans as part of a floating head 
pressure control has effects on the system such as more stable 
operation of the expansion valve and less likelihood of compressor 
damage due to liquid refrigerant reaching the compressor. (Joint 
Utilities, No. 0061.1 at pp. 6 and 10) The Joint Utilities also 
identified two different head pressure control types that have an 
impact on projected energy savings: fan control or fan cycling and a 
condenser valve to maintain the minimum condensing temperature. (Joint 
Utilities, No. 0061.1 at p. 10) Finally, the Joint Utilities pointed 
out that if a lower initial or baseline SCT value is assumed, the 
estimated savings for floating head pressure will be less. (Joint 
Utilities, No. 0061.1 at p. 10)
    To account for the suggestions made by commenters, DOE has 
implemented changes to its NOPR analysis of floating head pressure. 
First, DOE investigated the control methods identified by the Joint 
Utilities. In the current model used for the NOPR analysis, fan 
modulation is implemented in the baseline to maintain a fixed head 
pressure. When floating head pressure is implemented, a valve and 
accompanying controls are added to maintain a minimum condensing 
temperature. Regarding the comments on fan power submitted by the Joint 
Utilities, DOE agrees that at lower ambient temperatures, the

[[Page 55819]]

required fan airflow is higher when floating head pressure is 
implemented because the TD is smaller. DOE's current energy model 
calculates the fan power necessary to maintain adequate heat transfer 
when floating head pressure is implemented. DOE assumed that condenser 
fans would be modulated in the baseline; variable speed condenser fans 
are considered as a separate design option. DOE's model calculates the 
energy savings of variable speed condenser fans with or without 
floating head pressure implemented. The energy model does not capture 
increased stability in the expansion valve or the reduced possibility 
of compressor damage because the energy model attempts to capture the 
performance as rated by the test procedure, and for the reasons stated 
in the test procedure final rule, the test procedure established by DOE 
is designed to rate only certain aspects of the equipment--e.g., AWEF 
and capacity. 76 FR 21580, 21597-21598 (April 15, 2011).
    DOE also assumes that a system tested by the manufacturer would 
likely be a new system, which is unlikely to experience decreased 
stability in the expansion valve; therefore, DOE did not capture 
expansion valve stability in the energy model. The energy model also 
does not capture long-term compressor damage because DOE assumes the 
test procedure would be performed at the point of manufacture of the 
equipment, and would therefore not capture such damage to the 
compressor. Compressor replacement is, however, addressed in the life 
cycle cost analysis (see section IV.F.6). Any additional benefits that 
accrue due to reduced maintenance are also not captured in the 
engineering analysis.
    DOE also acknowledges the Joint Utilities' observation that the 
savings for the floating head pressure option depends on the baseline 
SCT and DOE's energy modeling confirms their assertion that the 
floating head pressure option would appear to save less energy if the 
baseline SCT were lower. However, DOE chose certain baseline SCT values 
for each class that would be realistic considering the equipment rating 
conditions, as explained in section IV.C.4.b. To address Heatcraft's 
comment that TD would increase with decreasing SCT, DOE analyzed the 
total heat of rejection of sample systems using the specified 
temperatures in the test procedure and found an average TD ratio 
corresponding to each compressor type analyzed. DOE implemented the TD 
ratio in the engineering analysis. See chapter 5 of the TSD for more 
details on the floating head pressure design option. DOE requests 
comment on its assumptions and implementation of this option, 
particularly regarding the cost to implement various floating head 
pressure control schemes and the energy savings that would be achieved.
Refrigeration Summary
    After considering all the comments it received on the design 
options, DOE is including the following design options in the NOPR 
analysis:
     Higher efficiency compressors
     Improved condenser coil
     Higher efficiency condenser fan motors
     Improved condenser and evaporator fan blades
     Ambient sub-cooling
     Evaporator and condenser fan control
     Defrost control
     Hot gas defrost
     Head pressure control
    Each design option is explained in detail in chapter 5 of the TSD.
6. Cost-Efficiency Results
a. Panels and Doors
    In the preliminary analysis, DOE plotted total energy consumption 
in kilowatt-hours per day versus the increasing cost of representative 
walk-in envelopes. Because DOE is proposing to set component level 
standards, each of the three main products that make up walk-in 
envelopes have independent cost-efficiency curves. For panels, DOE 
measured the U-factor, a measure of thermal conductivity expressed in 
British thermal units per hour-square foot-Fahrenheit (Btu/h-ft\2\-F); 
that is, the heat conducted through the panel per unit time, per square 
foot of panel surface area, per degree Fahrenheit. A lower U-factor 
corresponds to less heat conducted through the panel, indirectly 
decreasing the energy use of the walk-in because the refrigeration 
system does not have to expend additional energy to remove heat from 
the walk-in. DOE plotted the decrease in U-factor versus the increase 
in cost of a single panel. For non-display doors and display doors, DOE 
plotted energy consumption in kWh/day versus the increasing cost of an 
individual non-display door. For a more detailed description of the 
engineering analysis results, see appendix 5A of the TSD.
b. Refrigeration
    In the preliminary analysis, DOE chose refrigeration system sizes 
that best represented the market, but did not attempt to match the 
refrigeration systems to any particular envelope in the engineering 
analysis. DOE received several comments on the preliminary analysis 
regarding matching the refrigeration system to the envelope size. 
American Panel suggested that, because of their interdependence, 
refrigeration and walk-in size should be analyzed together. (American 
Panel, Public Meeting Transcript, No. 0045 at p. 115) NEEA, NPCC, 
Heatcraft, and American Panel recommended that the refrigeration system 
size match the envelope size. (NEEA and NPCC, No. 0059.1 at p. 9, 
Heatcraft, No. 0069.1 at p. 1, American Panel, No. 0048.1 at p. 4)
    DOE is proposing to regulate the refrigeration system as an 
individual component in accordance with its proposed component-level 
approach, and is also analyzing the individual components of an 
envelope (panels and doors), rather than the entire envelope. For these 
reasons, DOE did not attempt to match refrigeration systems with any 
particular envelope size. Rather, DOE chose refrigeration system sizes 
for the analysis that capture the range of systems that might be used 
in a walk-in.
    In the preliminary analysis, DOE plotted the cost-efficiency data 
points using normalized energy consumption for its engineering 
analysis. AHRI recommended using AWEF and commented that the normalized 
values favor design options, which, in its view, do not necessarily 
reduce energy consumption. The Joint Utilities believed that non-
normalized values would be helpful to understand the analyses. (AHRI, 
No. 0055.1 at pp. 2-3; Joint Utilities, Public Meeting Transcript, No. 
0045 at p. 171) Consistent with the test procedure final rule and 
AHRI's suggestion, DOE is using AWEF to construct its cost-efficiency 
curves. See 76 FR 21597-21598, 10 CFR 431.302.
    In chapter 5, Appendix A of the preliminary TSD, DOE provided cost-
efficiency curves for all the equipment classes. Numerous stakeholders 
requested that DOE provide more detail about the methodology behind the 
cost efficiency curves because they are concerned about the accuracy of 
these curves. (Emerson, Public Meeting Transcript, No. 0045 at p. 165; 
AHRI, Public Meeting Transcript, No. 0045 at p. 169 and No. 0055.1 at 
p. 2,4; Manitowoc, No. 0056.1 at p. 2 and Public Meeting Transcript, 
No. 0045 at p. 125) Additionally, Manitowoc suggested that a broader 
view of the industry's costs and sizes is required to improve the 
accuracy of the results (Manitowoc, Public Meeting Transcript, No. 0045 
at p. 162)
    DOE appreciates the stakeholder comments and notes that it has 
updated

[[Page 55820]]

its initial cost-efficiency curves based on changes to its analysis. 
DOE has provided more detail in this NOPR and the NOPR TSD about the 
calculation methodology used in the engineering analysis, particularly 
due to the publication of the test procedure final rule. DOE also 
updated its analysis with the most recent pricing data related to the 
costs of materials and purchased parts and adjusted the projected 
energy savings of certain design options as detailed in section 
IV.C.5.b.
c. Numerical Results
    Table IV-8, Table IV-9, Table IV-10, and Table IV-11 present cost-
efficiency data for panels, display doors, non-display doors, and 
refrigeration systems, respectively. For refrigeration systems, because 
of the large number of analysis points, DOE presents results for only 
one type of system, DC.L.O, in this notice. See appendix 5A of the TSD 
for complete cost-efficiency results.

                                                     Table IV-8--Cost-Efficiency Results for Panels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Efficiency level
             Class/size                                       ------------------------------------------------------------------------------------------
                                                                 Baseline        1            2            3            4            5            6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M.SML............................  Cost [$]...............          $54          $58          $61          $67          $73          $86         $231
                                      U-factor [Btu/h-ft-F]..        0.082        0.046        0.040        0.032        0.027        0.024        0.011
SP.M.MED............................  Cost [$]...............         $153         $159         $165         $179         $192         $229         $615
                                      U-factor [Btu/h-ft-F]..        0.061        0.043        0.038        0.030        0.025        0.024        0.011
SP.M.LRG............................  Cost [$]...............         $240         $247         $256         $276         $296         $354         $951
                                      U-factor [Btu/h-ft-F]..        0.056        0.042        0.037        0.030        0.025        0.024        0.011
SP.L.SML............................  Cost [$]...............          $56          $61          $67          $73          $86         $231  ...........
                                      U-factor [Btu/h-ft-F]..        0.073        0.040        0.032        0.027        0.024        0.011  ...........
SP.L.MED............................  Cost [$]...............         $159         $165         $179         $192         $229         $615  ...........
                                      U-factor [Btu/h-ft-F]..        0.053        0.038        0.030        0.025        0.024        0.011  ...........
SP.L.LRG............................  Cost [$]...............         $249         $256         $276         $296         $354         $951  ...........
                                      U-factor [Btu/h-ft-F]..        0.050        0.037        0.030        0.025        0.024        0.011  ...........
FP.L.SML............................  Cost [$]...............          $85          $93          $97         $104         $111         $270  ...........
                                      U-factor [Btu/h-ft-F]..        0.071        0.041        0.036        0.030        0.025        0.018  ...........
FP.L.MED............................  Cost [$]...............         $176         $190         $195         $209         $222         $566  ...........
                                      U-factor [Btu/h-ft-F]..        0.059        0.039        0.035        0.029        0.024        0.015  ...........
FP.L.LRG............................  Cost [$]...............         $301         $322         $331         $353         $374         $973  ...........
                                      U-factor [Btu/h-ft-F]..        0.054        0.039        0.035        0.028        0.024        0.014  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                  Table IV-9--Cost-Efficiency Results for Display Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Efficiency level
             Class/size                                       ------------------------------------------------------------------------------------------
                                                                 Baseline        1            2            3            4            5            6
--------------------------------------------------------------------------------------------------------------------------------------------------------
DD.M.SML............................  Cost [$]...............         $277         $274         $340         $423         $544         $710       $1,375
                                      Energy Use [kWh/day]...         2.50         1.74         0.98         0.84         0.68         0.58         0.38
DD.M.MED............................  Cost [$]...............         $357         $354         $420         $530         $651         $870       $1,751
                                      Energy Use [kWh/day]...         2.91         2.15         1.14         0.96         0.80         0.66         0.40
DD.M.LRG............................  Cost [$]...............         $470         $478         $544         $692         $813       $1,108       $2,291
                                      Energy Use [kWh/day]...         3.76         2.78         1.43         1.18         0.99         0.81         0.46
DD.L.SML............................  Cost [$]...............         $509         $506         $627         $793         $960       $1,375  ...........
                                      Energy Use [kWh/day]...         5.22         4.34         4.14         2.73         2.02         1.66  ...........
DD.L.MED............................  Cost [$]...............         $643         $640         $761         $980       $1,202       $1,751  ...........
                                      Energy Use [kWh/day]...         6.47         5.58         5.39         3.49         2.56         2.08  ...........
DD.L.LRG............................  Cost [$]...............         $831         $839       $1,135       $1,432       $1,553       $2,291  ...........
                                      Energy Use [kWh/day]...         8.54         7.40         4.83         3.57         3.36         2.70  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                               Table IV-10--Cost-Efficiency Results for Non-Display Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Efficiency level
             Class/size                                    ---------------------------------------------------------------------------------------------
                                                              Baseline      1        2        3        4        5        6        7        8        9
--------------------------------------------------------------------------------------------------------------------------------------------------------
PD.M.SML...........................  Cost [$].............         $180     $184     $210     $214     $222     $273     $281     $487     $655  .......
                                     Energy Use [kWh/day].         0.30     0.27     0.22     0.22     0.21     0.17     0.16     0.04     0.02  .......
PD.M.MED...........................  Cost [$].............         $210     $214     $240     $245     $255     $306     $316     $522     $741  .......
                                     Energy Use [kWh/day].         0.32     0.28     0.24     0.23     0.22     0.18     0.17     0.05     0.03  .......
PD.M.LRG...........................  Cost [$].............         $265     $270     $296     $303     $316     $368     $381     $587     $904  .......

[[Page 55821]]

 
                                     Energy Use [kWh/day].         0.36     0.31     0.27     0.25     0.24     0.20     0.19     0.06     0.04  .......
PD.L.SML...........................  Cost [$].............         $235     $240     $291     $342     $351     $359     $425     $553     $728  .......
                                     Energy Use [kWh/day].         7.08     6.96     6.52     6.26     6.23     6.20     6.07     6.01     5.98  .......
PD.L.MED...........................  Cost [$].............         $265     $270     $322     $373     $383     $393     $459     $587     $814  .......
                                     Energy Use [kWh/day].         7.82     7.69     7.25     6.99     6.95     6.92     6.79     6.72     6.67  .......
PD.L.LRG...........................  Cost [$].............         $322     $328     $380     $431     $445     $459     $524     $653     $978  .......
                                     Energy Use [kWh/day].         9.03     8.88     8.43     8.18     8.11     8.07     7.94     7.88     7.79  .......
FD.M.SML...........................  Cost [$].............         $356     $362     $388     $398     $417     $469     $489     $694   $1,119  .......
                                     Energy Use [kWh/day].         0.39     0.35     0.30     0.28     0.26     0.22     0.21     0.08     0.05  .......
FD.M.MED...........................  Cost [$].............         $574     $581     $647     $662     $692     $738     $768     $860   $1,225   $1,899
                                     Energy Use [kWh/day].         0.65     0.60     0.46     0.44     0.40     0.36     0.34     0.31     0.25     0.19
FD.M.LRG...........................  Cost [$].............         $719     $727     $793     $813     $853     $898     $938   $1,029   $1,394   $2,296
                                     Energy Use [kWh/day].         0.73     0.66     0.53     0.49     0.45     0.41     0.38     0.35     0.29     0.21
FD.L.SML...........................  Cost [$].............         $416     $423     $474     $526     $546     $566     $632     $760   $1,194  .......
                                     Energy Use [kWh/day].        10.25    10.08     9.63     9.38     9.29     9.23     9.10     9.03     8.92  .......
FD.L.MED...........................  Cost [$].............         $679     $688     $753     $845     $875     $905     $997   $1,225   $1,911  .......
                                     Energy Use [kWh/day].        13.71    13.49    12.58    12.13    11.99    11.90    11.67    11.55    11.35  .......
FD.L.LRG...........................  Cost [$].............         $828     $838     $904     $995   $1,035   $1,075   $1,167   $1,394   $2,310  .......
                                     Energy Use [kWh/day].        15.62    15.36    14.45    14.00    13.81    13.69    13.45    13.34    13.06  .......
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                 Table IV-11--Cost-Efficiency Results for Refrigeration Systems
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Efficiency level
               Class/size                                                -----------------------------------------------------------------------------------------------------------------------
                                                                          Baseline     1        2        3        4        5        6        7        8        9         10        11       12
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DC.L.O HER*.............................  Cost [$]......................     $1591    $1616    $1641    $1671    $1745    $1749    $1760    $1798    $1848    $1898      $2058  .......  .......
6 kBtu..................................
                                          AWEF Btu/Wh...................      2.40     2.62     2.81     2.97     3.30     3.31     3.34     3.43     3.56     3.62       3.65  .......  .......
DC.L.OHER 9 kBtu........................  Cost [$]......................     $1720    $1745    $1770    $1800    $1876    $1881    $1919    $1969    $1980    $2144      $2194  .......  .......
                                          AWEF Btu/Wh...................      2.91     3.10     3.27     3.47     3.86     3.87     3.96     4.07     4.09     4.38       4.44  .......  .......
DC.L.O SCR 6 kBtu.......................  Cost [$]......................     $1838    $1863    $1888    $1918    $1992    $1996    $2034    $2084    $2095    $2250      $2300  .......  .......
                                          AWEF Btu/Wh...................      2.86     3.14     3.39     3.70     4.07     4.09     4.24     4.44     4.48     4.79       4.89  .......  .......
DC.L.O SCR 9 kBtu.......................  Cost [$]......................     $1944    $1969    $1999    $2024    $2100    $2105    $2143    $2193    $2204    $2381      $2531    $2581  .......
                                          AWEF Btu/Wh...................      3.70     3.98     4.35     4.64     5.11     5.13     5.28     5.48     5.52     5.86       6.15     6.25  .......
DC.L.O SCR 54 kBtu......................  Cost [$]......................     $6938    $6968    $7018    $7068    $7188    $7288    $7312    $7362    $7512    $7594     $10312   $10337   $11062
                                          AWEF Btu/Wh...................      4.09     4.44     4.92     5.38     5.93     6.27     6.34     6.43     6.58     6.64       7.77     7.78     7.91
DC.L.O SEM 6 kBtu.......................  Cost [$]......................     $2095    $2120    $2145    $2175    $2248    $2253    $2291    $2341    $2352    $2402      $2555  .......  .......
                                          AWEF Btu/Wh...................      2.47     2.69     2.90     3.15     3.48     3.50     3.60     3.74     3.77     3.84       3.93  .......  .......
DC.L.O SEM 9 kBtu.......................  Cost [$]......................     $2270    $2295    $2320    $2350    $2426    $2430    $2468    $2518    $2666    $2677      $2727  .......  .......
                                          AWEF Btu/Wh...................      2.78     2.96     3.12     3.40     3.77     3.78     3.86     3.96     4.28     4.30       4.36  .......  .......
DC.L.O SEM 54 kBtu......................  Cost [$]......................     $7776    $7806    $7856    $7906    $8006    $8129    $8208    $8258    $8340   $11254     $11720   $11804  .......
                                          AWEF Btu/Wh...................      3.36     3.63     3.99     4.32     4.74     5.24     5.36     5.43     5.47     6.37       6.52     6.54  .......
DC.L.O SEM 72 kBtu......................  Cost [$]......................     $9772    $9802    $9877    $9952   $10075   $10175   $10225   $10304   $10427   $11091     $13999   $14083  .......
                                          AWEF Btu/Wh...................      3.41     3.70     4.11     4.50     4.96     5.36     5.44     5.53     5.58     5.79       6.71     6.72  .......
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* HER indicates a hermetic compressor, SCR indicates a scroll compressor, and SEM indicates a semi-hermetic compressor.

D. Markups Analysis

    This section explains how DOE developed the distribution channel 
and supply chain markups to determine installed costs for the end-users 
of refrigeration systems and envelope components.
    In the preliminary analysis, DOE described different distribution 
channels for the two broadly defined segments of the WICF market: the 
food sales (grocery) segment and the food service segment for the 
purposes of

[[Page 55822]]

calculating markups. In the food sales segment, the refrigeration 
systems are predominantly unit coolers connected to multiplex 
condensing systems. In the food service and convenience store market 
segment, the refrigeration systems are mostly dedicated condensing 
systems. DOE acknowledged that walk-in units may also be assembled in 
the field, with key components sourced from different vendors through 
different channels. However, in the preliminary analysis, DOE conducted 
the markups analysis on complete walk-in systems and did not apply 
separate markups for different components. Consequently, DOE assumed in 
the preliminary analysis that the refrigeration system and the envelope 
followed identical distribution channels even if they were manufactured 
by a different set of manufacturers.
    One interested party recommended that DOE include an additional 
distribution channel. Heatcraft commented that the refrigeration system 
manufacturers often sell directly to the envelope manufacturers, who 
integrate the refrigeration systems with the envelopes and then sell 
the assembled units. (Heatcraft, Public Meeting Transcript, No. 0045 at 
p. 187) Heatcraft identified this market segment as OEMs and observed 
that this important channel of distribution was not considered by DOE, 
even though 50 percent of the refrigeration system business is 
distributed through the OEM market segment.
    The revised NOPR analysis uses component-level standards for 
specific envelope components and for the refrigeration systems. Because 
of this component-level standards approach, DOE conducts all the key 
analysis steps separately for the refrigeration systems and the 
selected envelope components in the NOPR analysis. As part of this 
approach, DOE includes a distinct OEM distribution channel in the 
markup analysis. Based on interviews with several manufacturers, DOE 
estimates that the percentage share of the aggregate shipments of 
refrigeration systems attributable to the OEM segment of the market is 
55 percent for all dedicated condensing refrigeration systems, similar 
to the 50 percent share indicated by Heatcraft.
    Another interested party commented on the relative shares of the 
different market segments DOE identified. In the preliminary analysis, 
DOE estimated that for walk-ins with dedicated condensing units, 50 
percent of aggregate sales were for the food service segment and the 
remaining 50 percent were for the convenience and small grocery stores 
segment. American Panel commented that for walk-in equipment sold with 
dedicated condensing equipment, the share of the food service segment 
across the two broad market segments should be 80 percent and the share 
of the convenience and small grocery stores segment should be 20 
percent. (American Panel, No. 0048.1 at p. 8) In the NOPR, DOE revised 
its shipment analysis as described in chapter 9 of the TSD and noted 
that for the walk-ins with dedicated condensing equipment, the relative 
shares for the food service segment and the convenience and small 
grocery stores segment are now 78 percent and 22 percent, respectively, 
compared to 50 percent each for these two segments estimated in the 
preliminary analysis. These new values closely match the percentage 
shares indicated by American Panel.
    Several interested parties commented on the shares of different 
distribution channels across the market segments that DOE previously 
applied. In the preliminary analysis, DOE indicated that the percentage 
share of the aggregate shipments of refrigeration systems through 
refrigeration wholesalers was 15 percent for multiplex equipment and 
57.5 percent for dedicated condensing equipment on an average basis for 
all the market segments. Heatcraft stated that the percentage share of 
the aggregate shipments of refrigeration systems through the 
refrigeration wholesalers is 50 percent. (Heatcraft, Public Meeting 
Transcript, No. 0045 at p. 284) Based on information gathered through 
interviews with manufacturers of refrigeration systems, DOE has revised 
its estimates for the percentage share of the aggregate shipments of 
refrigeration systems through wholesalers. For the NOPR, DOE revised 
these estimates to 42 percent for dedicated condensing systems and 45 
percent for the unit coolers connected to a multiplex condensing 
system.
    In the preliminary analysis, DOE assumed that the share of 
electronic commerce (E-commerce) resellers in the food service market 
for dedicated condensing systems is 10 percent. American Panel 
commented that this figure was too high and should be 1 percent or, at 
most, 2 percent. (American Panel, Public Meeting Transcript, No. 0045 
at p. 195 and No. 0048.1 at p. 8) Manitowoc pointed out that E-commerce 
resellers often represent food service equipment distributors selling 
to territories outside the specific territory assigned to them by the 
manufacturer and that their sales could be considered distributor 
sales. In its view, if this aspect is considered, then the share of the 
E-commerce business estimated by DOE in the preliminary analysis is too 
high. (Manitowoc, Public Meeting Transcript, No. 0045 at p. 195) NEEA 
and NPCC reinforced the observations made by American Panel and 
Manitowoc, and suggested that DOE adjust the markup analysis 
accordingly. (NEEA and NPCC, No. 0059.1 at p. 9) DOE agrees with 
Manitowoc's observation that the E-commerce share of total sales is 
essentially composed of sales through the distributor segment and, 
therefore, there is no need to identify this channel of distribution 
separately. As a result of this observation, DOE did not identify this 
as a separate distribution channel in the NOPR analysis.
    American Panel noted that the distribution channel shares described 
by DOE for walk-ins with dedicated condensing equipment sold in the 
food service market segment are accurate for the national accounts and 
distributors under the current economic situation, but it expected to 
see the market share of the national chains increase to 20 percent with 
the economy improving in the next 2 to 3 years. (American Panel, Public 
Meeting Transcript, No. 0045 at p. 144) American Panel also pointed out 
that, for walk-ins with dedicated condensing equipment sold to the food 
service segment, the market share for contractors should be 5 percent 
instead of 10 percent. (American Panel, Public Meeting Transcript, No. 
0045 at p. 194) In the NOPR markup analysis, DOE has factored American 
Panel's estimates and revised the corresponding market shares to 10 
percent for the national chains and 5 percent for the contractors.
    Regarding the values of the markup multipliers presented in chapter 
6 of the preliminary TSD, several interested parties commented on the 
methodology for arriving at the multiplier. AHRI stated that, when 
multiple-stage markups (manufacturer, distributor, dealer, and 
contractor) are estimated separately and multiplied to estimate the 
overall markups, the errors in the different stages are compounded in 
the final result. (AHRI, No. 0055.1 at p. 3) AHRI suggested that DOE 
avoid compounding errors and instead use retail prices in the analysis. 
DOE notes that the current methodology of the markup analysis is 
standardized in DOE's economic analysis in its energy conservation 
rulemaking activities. A retail price analysis is not feasible, because 
a representative sample of direct end-user prices is difficult to 
obtain from distributors and contractors because pricing data are 
considered business-sensitive. Furthermore, these

[[Page 55823]]

parties often use aggregate markups on the entire contract and separate 
markups for labor and/or equipment installations cannot be established. 
Therefore, DOE continues to use a markup analysis in this NOPR.
    Craig Industries commented that the mechanical contractor may not 
always purchase envelope components from the distributor, but can 
purchase them directly from the manufacturers and, therefore, the 
baseline markup for the mechanical contractor should not include the 
distributor markup. (Craig Industries, No. 0064.1 at p. 1) In the NOPR, 
DOE is proposing component-level standards for the envelope components 
and has revised the markup analysis accordingly. DOE assumes that the 
general contractors would purchase the envelope components directly 
from the manufacturer, and hence, did not include the markup 
percentages of the distributors in the estimated overall markups for 
sales through the contractor channel in the NOPR analysis.
    Regarding the values of the markup multipliers presented in chapter 
6 of the preliminary TSD, American Panel commented that the markup 
multiplier values were too high and should correspond to approximately 
10-12 percent of the markup. (American Panel, Public Meeting 
Transcript, No. 0045 at p. 201) American Panel also questioned DOE's 
assumption that the markup multipliers for unit coolers connected to 
multiplex systems would be substantially lower than the multipliers for 
the dedicated condensing equipment, when both types of equipment move 
through the same channel of distribution. (American Panel, No. 0048.1 
at p. 8) In response to the first comment, DOE notes that the markup 
multipliers obtained in the revised analysis are consistent with the 
markup multipliers derived for other refrigeration products that often 
share the same distribution channels with walk-in coolers and freezers. 
Therefore, DOE considers the markup multipliers to be representative of 
the industry. Regarding the second comment, DOE notes that the overall 
markup multipliers depend not only on the channels through which the 
products are sold, but also on the relative shares of sales of the 
distribution channels. Because unit coolers connected to multiplex 
condensing systems are predominantly used in food sales, and a larger 
percentage of such equipment is sold directly to contractors, the 
equipment would be expected to have lower weighted average markup 
multipliers. The NOPR analysis uses weighted average baseline markup 
multipliers for multiplex and non-multiplex equipment of 1.43 and 1.51, 
respectively.
    One interested party commented on DOE's data sources. NEEA and NPCC 
recommended that, in view of the several comments DOE received on the 
markup analysis and ongoing restructuring and consolidation of the food 
retailing industry, DOE should obtain manufacturer assistance in re-
crafting the markup estimates for each distribution channel. (NEEA and 
NPCC, No. 0059.1 at p. 9) In the NOPR analysis, DOE has revised many of 
its estimates of the shares of individual channels based on comments 
received from interested parties. Given their general reliability, in 
estimating the markup multipliers in specific distribution channels, 
DOE uses data from trade associations and economic census data from the 
U.S. Census Bureau. The NOPR analysis relies on the most recently 
available data to derive the markup multipliers.
    Table IV-12 shows the overall weighted average baseline and 
incremental markups for sales of refrigeration systems and envelope 
components. Chapter 6 and appendix 6A of the TSD provide complete 
details of the methodology and data used in the estimation of the 
markup multipliers.

    Table IV-12--Overall Markup Multipliers for All Equipment Classes
------------------------------------------------------------------------
                                                Markup multipliers
             Equipment class             -------------------------------
                                             Baseline       Incremental
------------------------------------------------------------------------
DC.M.I *................................            1.51            1.19
DC.L.I *
DC.M.O *................................            1.51            1.19
DC.L.O *
MC.M....................................            1.43            1.25
MC.L
SP.M....................................            1.16            1.09
SP.L
DD.M....................................            1.41            1.29
DD.L
PD.M....................................            1.16            1.09
PD.L
FD.M....................................            1.16            1.09
FD.L
------------------------------------------------------------------------
* For DC refrigeration systems, markups apply to both capacity ranges.

E. Energy Use Analysis

    The energy use analysis estimates the annual energy consumption of 
refrigeration systems serving walk-ins and the energy consumption that 
can be directly ascribed to the selected components of the WICF 
envelopes. These estimates are used in the subsequent LCC and PBP 
analyses (chapter 8 of the TSD) and NIA (chapter 10 of the TSD).
    In the preliminary analysis, DOE estimated the annual energy 
consumption for a complete theoretical walk-in consisting of an 
envelope and a matched refrigeration system, each at a specific 
efficiency level, using a set of assumptions for product loading, duty 
cycle, and other associated conditions. In the NOPR, DOE is proposing 
energy consumption standards separately for the refrigeration systems 
and a selected set of envelope components: Panels, non-display doors, 
and display doors. Consequently, DOE revised the methodology for 
estimating the annual energy consumption to reflect the new approach.
    A key change from the preliminary analysis methodology for 
estimating the annual energy consumption is that in the NOPR analysis, 
DOE is no longer matching the refrigeration systems to specific 
envelope sizes. The estimates for the annual energy consumption of each 
analyzed representative refrigeration system (see section IV.C.2) were 
reached by assuming that (1) the refrigeration system is sized such 
that it follows a specific daily duty cycle for a given number of hours 
per day at full rated capacity, and (2) the refrigeration systems 
produce no additional refrigeration effect for the remaining period of 
the 24-hour cycle. These assumptions are consistent with the present 
industry practice for sizing refrigeration systems. This methodology 
assumes that the refrigeration system is paired with an envelope that 
generates a load profile such that the rated hourly capacity of the 
paired refrigeration system, operated for the given number of run hours 
per day, produces adequate refrigeration effect to meet the daily 
refrigeration load of the envelope with a safety margin to meet 
contingency situations. Thus, the annual energy consumption estimates 
for the refrigeration system depends on the methodology adopted for 
sizing, the implied assumptions and the extent of oversizing. The 
sizing methodology adopted in this NOPR analysis is further discussed 
later in this section.
    For the envelopes, the estimates of product and infiltration loads 
are no longer used in estimating energy consumption in the analysis 
because these factors are not intended to be mitigated by any of the 
component standards. DOE calculated only the transmission loads across 
the envelope components under test procedure conditions and combined 
that with the annual energy efficiency ratio (AEER) to arrive at the 
annual refrigeration energy consumption associated with the specific 
component. AEER is a ratio of the net amount of heat removed from

[[Page 55824]]

the envelope in Btu by the refrigeration system and the annual energy 
consumed in watt-hours using bin temperature data specified in AHRI 
1250-2009 to calculate AWEF. The annual electricity consumption 
attributable to any envelope component is the sum of the direct 
electrical energy consumed by electrically-powered sub-components 
(e.g., lights and anti-sweat heaters) and the refrigeration energy, 
which is computed by dividing the transmission heat load traceable to 
the envelope component by the AEER metric, where the AEER metric 
represents the efficiency of the refrigeration system with which the 
envelope is paired.
    In the preliminary analysis, DOE estimated aggregate refrigeration 
loads of three sizes of complete WICF envelopes in each of the four 
envelope classes (i.e., storage and display coolers and freezers.) In 
the NOPR, given the component-level approach, DOE estimated the annual 
energy consumption per unit of the specific envelope components by 
calculating the transmission load of the component over 24 hours under 
the test procedure conditions, and then calculating the annual 
refrigeration energy consumption attributed to that component by 
applying an appropriate AEER value.
1. Sizing Methodology for the Refrigeration System
    In the preliminary analysis, DOE calculated the required size of 
the refrigeration system for a given envelope by assuming that the 
rated capacity of the refrigeration system would be adequate to meet 
the refrigeration load of a walk-in cooler or freezer during the high-
load condition. The load profile of WICF equipment that DOE used 
broadly followed the load profile assumptions of the industry test 
procedure for refrigeration systems--AHRI 1250-2009, Standard for 
Performance Rating of Walk-In Coolers and Freezers (``AHRI 1250-
2009''). As noted earlier, that protocol was incorporated into DOE's 
test procedure. 76 FR 33631 (June 9, 2011).
    As a result, the DOE test procedure incorporates an assumption 
that, during a 24-hour period, a WICF refrigeration system experiences 
a high-load period of 8 hours corresponding to frequent door openings, 
product loading events, and other design load factors, and a low-load 
period for the remaining 16 hours, corresponding to a minimum load 
resulting from conduction, internal heat gains from non-refrigeration 
equipment, and steady-state infiltration across the envelope surfaces. 
During the high-load period, the ratio of the envelope load to the net 
refrigeration system capacity is 70 percent for coolers and 80 percent 
for freezers. During the low-load period, the ratio of the envelope 
load to the net refrigeration system capacity is 10 percent for coolers 
and 40 percent for freezers. The relevant load equations correspond to 
a duty cycle for refrigeration systems, where the system runs at full 
design point refrigeration capacity for 7.2 hours per day for coolers 
and 12.8 hours per day for freezers. Specific equations to vary load 
based on the outdoor ambient temperature are also specified.
    DOE received several comments on its duty cycle assumptions in the 
preliminary analysis. American Panel pointed out that the average 
envelope load hourly distributions for low and high loads used by DOE 
in the preliminary analysis represented a light loading condition and 
should be reversed, implying that a typical refrigeration system would 
experience 16 hours of high load and 8 hours of low load per day, 
rather than DOE's assumptions of 8 hours and 16 hours for high and low 
load, respectively. (American Panel, Public Meeting Transcript, No. 
0045 at p. 212) For the restaurant market segment in particular, 
American Panel noted that the high-load and low-load periods would both 
typically be 12 hours each. (American Panel, No. 0048.1 at p. 8) 
American Panel also commented that its own heat load calculations use 
18 hours of maximum refrigeration system run time for the freezers and 
noted that this is the industry standard. (American Panel, No. 0048.1 
at p. 3) Manitowoc and Heatcraft, however, agreed with DOE's 
assumptions of the hourly load distributions for the high-load and low-
load periods, which are consistent with AHRI 1250-2009. (Manitowoc, 
Public Meeting Transcript, No. 0045 at p. 215; Heatcraft, Public 
Meeting Transcript, No. 0045 at p. 213) NEEA and NPCC noted that the 
duty cycle assumptions for the energy use analysis were credible and 
did not recommend any changes to this part of the analysis. (NEEA and 
NPCC, No. 0059.1 at p. 10) AHRI also commented that the assumptions 
made by DOE to calculate the duty cycle are acceptable for the 
analysis. (AHRI, No. 0055.1 at p. 3) Manitowoc noted that the envelope 
load assumptions are not supported with measurements from real life 
walk-in monitoring but are based on conservative sizing practices 
followed by the industry to ensure that even in worst-case situations, 
the walk-in will maintain the necessary temperature. (Manitowoc, No. 
0056.1 at p. 3)
    In light of the comments received from American Panel on current 
industry sizing practices, and Manitowoc's comment that actual duty 
cycles differ from the AHRI test procedure conditions, DOE tentatively 
concludes that the duty cycle assumptions of AHRI 1250-2009 should not 
be used for the sizing purposes because they may not represent the 
average conditions for WICF refrigeration systems for all applications 
under all conditions. DOE recognizes that test conditions are often 
designed to effectively compare the performance of equipment with 
different features under the same conditions.
    For the energy use analysis, DOE revisited the duty cycle issue and 
found that the current industry practice for sizing the refrigeration 
system is based on providing a 10 percent safety margin multiplier to 
the calculated aggregate refrigeration load over a 24-hour daily cycle 
and assuming a nominal run time of 16 hours for coolers and 18 hours 
for freezers for sizing the refrigeration system. DOE's key assumption 
in the preliminary analysis of equating the refrigeration capacity to 
the high-box load is not practiced in the industry and DOE has made no 
attempt to model the peak load. The nominal run time varies only in 
special situations--such as when freezers use hot gas defrost or when 
the temperature of the evaporator coil is higher than 32[emsp14][deg]F. 
Consequently, DOE adopted the industry practice described above for 
calculating the energy use and load characterization.
    In this NOPR, DOE proposes a nominal run time of 16 hours per day 
for coolers and 18 hours per day for freezers to calculate the capacity 
of a ``perfectly'' sized refrigeration system. A fixed oversize factor 
is then applied to this size to calculate the actual runtime. With the 
oversize factor applied, DOE assumes that the runtime of the 
refrigeration system is 13.3 hours per day for coolers and 15 hours per 
day for freezers at full design point capacity. The reference outside 
ambient temperatures for the design point capacity conform to the AHRI 
1250-2009 conditions incorporated into the DOE test procedure and are 
95[emsp14][deg]F and 90[emsp14][deg]F for refrigeration systems with 
outdoor and indoor condensers, respectively.
    DOE notes that the AHRI assumptions for high-load and low-load 
conditions were supported by some interested parties and acknowledges 
that the distribution of high-load and low-load hour assumptions could 
be relevant to the equipment energy consumption. DOE has observed, 
however, that the high-load situation is not taken into account by the 
industry in its standard sizing methods and would not represent

[[Page 55825]]

current industry practices. Thus, for the NOPR analysis, DOE has 
revised its sizing methodology to be consistent with its understanding 
of the current industry practice. DOE requests comment on the sizing 
methodology.
2. Oversize Factors
    American Panel commented that DOE's preliminary analysis 
assumptions regarding duty cycle and sizing conflicted with the 
prevalent practice in the industry, which resulted in considerable 
oversizing of the refrigeration systems when paired with a given 
envelope. Oversizing leads to higher first cost estimates for the 
refrigeration equipment and distorts the LCC and PBP results because 
the energy savings are not commensurate with the first costs. American 
Panel further commented that because the refrigeration systems examined 
as part of the preliminary analysis are poorly matched to the 
envelopes, no meaningful conclusion can be drawn from the accompanying 
LCC, PBP, and NIA results. (American Panel, No. 0048.1 at p. 8 and p. 
11) Regarding the annual energy calculations presented in chapter 7 of 
the TSD, American Panel did not believe that DOE properly matched the 
refrigeration systems and envelopes--which yielded an estimated 8 hours 
or less of runtime per day. In its view, this preliminary estimate is 
incorrect. (American Panel, No. 0048.1 at p. 9) American Panel also 
submitted additional documentation demonstrating its own methodology 
for matching the selected refrigeration system capacity to the 
estimated heat load of a walk-in expressed in Btu/h. (American Panel, 
No. 0048.1 at p. 9) DOE investigated further and found that the load 
calculation manuals and sizing software of several refrigeration system 
manufacturers supported American Panel's recommendation on the approach 
to sizing.
    As stated previously, DOE observed that the typical and widespread 
industry practice for sizing the refrigeration system is to calculate 
the daily heat load on the basis of a 24-hour cycle and divide by 16 
hours of runtime for coolers and 18 hours of runtime for freezers. DOE 
also found that it is customary in the industry to allow for a 10 
percent safety margin to the aggregate 24-hour load resulting in 10 
percent oversizing of the refrigeration system.
    In the preliminary analysis, DOE considered a scaled mismatch 
factor in addition to the oversizing related to its duty cycle 
assumptions. DOE recognized that an exact match for the calculated 
refrigeration capacity may not be available for the refrigeration 
systems available in the market because most refrigeration systems are 
mass-produced in discrete capacities. The capacity of the best matched 
refrigeration system is likely to be the nearest higher capacity 
refrigeration system available. This consideration led DOE to develop a 
scaled mismatch factor that could be as high as 33 percent for the 
smaller refrigeration system sizes, and was scaled down for the larger 
sized units. In the preliminary analysis, DOE applied this mismatch 
oversizing factor to the required refrigeration capacity at the high-
load condition to determine the required capacity of the refrigeration 
system to be paired with a given envelope.
    DOE received multiple comments regarding the mismatch factor. 
Manitowoc pointed out that the mismatch factors used by DOE in the 
preliminary analysis are high. DOE assumed that compressors are 
available only in capacity increments of 6000 Btu/h but Manitowoc noted 
that compressors are available at capacity increments of 2000 Btu/h and 
1500 Btu/h for medium- and low-temperature systems, respectively. 
(Manitowoc, No. 0056.1 at p. 3; Manitowoc, Public Meeting Transcript, 
No. 0045 at p. 220 and p. 222) American Panel pointed out that the 
maximum mismatch factor could be 15 percent. (American Panel, Public 
Meeting Transcript, No. 0045 at p. 220) Heatcraft stated that DOE's 
assumption that the sizes of refrigeration systems available in the 
market are at 0.5-ton intervals is not applicable for larger sized 
systems. For sizes from 5-10 horsepower, the compressors are available 
in 2.5-horsepower intervals, and for sizes from 10-30 horsepower, 
compressors are available in 5-horsepower intervals. (Heatcraft, No. 
0069.1 at p. 2)
    Based on these comments, DOE recalculated the mismatch factor 
because compressors for the lower capacity units are available at 
smaller size increments than what DOE assumed in the preliminary 
analysis. DOE also agrees with Manitowoc that for larger sizes, the 
size increments of available capacities are higher than size increments 
available for the lower capacities. DOE further noted as part of the 
revised analysis that under current industry practice, if the exact 
calculated size of the refrigeration system with a 10 percent safety 
margin is not available in the market, the user may choose the closest 
matching size even if it has a lower capacity, allowing the daily 
runtimes to be somewhat higher than their intended values. The designer 
would recalculate the revised runtime with the available lower capacity 
and compare it with the target runtime of 16 hours for coolers and 18 
hours for freezers and, if this value falls within acceptable limits, 
then the chosen size of the refrigeration system is accepted and there 
is no mismatch oversizing.
    DOE further examined the data of available capacities in published 
catalogs of several manufacturers and noted that the range of available 
capacities depends on compressor type and manufacturer. Furthermore, 
because smaller capacity increments are available for units in the 
lower capacity range and larger capacity increments are available for 
units in the higher capacity range, the mismatch factor is generally 
uniform over the range of equipment sizes. For the NOPR, DOE 
tentatively concluded from these data that a scaled mismatch factor 
linked to the target capacity of the unit may not be applicable, but 
that the basic need to account for discrete capacities available in the 
market is still valid. To this end, DOE is now applying a uniform 
average mismatch factor of 10 percent over the entire capacity range of 
refrigeration systems.
3. Product Load
    The NOPR analysis does not include an explicitly modeled product 
load to determine the annual energy consumption. Instead, the annual 
energy consumption estimates for the refrigeration systems are based on 
industry practice duty cycle assumptions. This approach does not 
require any explicit modeling of the product load. However, for the 
shipment analysis of refrigeration systems, DOE expressed annual 
shipments and stocks in terms of installed refrigeration capacity (Btu/
h). The shipments of the refrigeration system were linked to the 
shipments of envelopes, which required DOE to estimate the required 
refrigeration capacity for the units shipped. DOE included several 
assumptions about product loads in these calculations. These 
assumptions are discussed in the relevant section on shipment (Section 
IV.G of this NOPR).
4. Other Issues
    DOE received one comment on the issue of the interaction of 
building air-conditioning systems with WICF systems installed within 
them. Ingersoll Rand stated that envelope improvements may not lead to 
significant energy savings because the load on the refrigeration 
systems of the WICF unit would be replaced by the load on the building 
air-conditioning system. DOE did not account for the

[[Page 55826]]

difference in overall energy use that could be directly attributed to 
the improvement of envelope components on the whole building cooling 
load and, correspondingly, any space-cooling energy impacts. At the 
same time, any envelope component improvements may also result in a 
decrease in the use of heating energy within the buildings. This impact 
on building heating and cooling loads would only occur for WICF units 
located indoors. The relative cooling-energy-use penalty to heating-
energy-use benefit is a function of the climate of the region in which 
the building is located, the building type and size, and the placement 
of the WICF units within the building. The relative monetary benefits 
are also a function of the relative heating and cooling fuel costs. The 
quantification of the relative benefits impact would have required an 
extensive analysis of building climate-control performance, which is 
both unnecessary and outside the scope framed by Congress.
    For the refrigeration systems, DOE calculated the annual energy 
consumption for all six classes of refrigeration systems at various 
capacity points with all available compressor options and at all 
efficiency levels for which results of engineering analysis were 
available. The annual energy consumption results were used as inputs to 
the LCC and PBP analyses. Based on the results of the LCC analysis, DOE 
selected the most cost-efficient combination of compressors and other 
components at a given AWEF level for a specific capacity point. 
Fourteen efficiency options were selected from the entire range of 
available AWEF values for each capacity point analyzed. To simplify 
further analysis, however, DOE chose two points from a set of four or 
five capacity points in each of the four dedicated condensing equipment 
classes, and one for each of the two multiplex condensing equipment 
classes. DOE used the shipment data to derive a shipment weighted AEER 
value for each TSL option for the refrigeration system. For the 
envelope components, DOE estimated the associated refrigeration energy 
at each of the TSL options and each level of efficiency of the 
components. The units of analysis were the unit area for the panels and 
each whole door for the doors. DOE added the direct electrical energy 
consumed for each of the doors at different efficiency levels to the 
refrigeration energy to arrive at the total annual energy consumption. 
The annual energy consumption results for the components were used as 
inputs to the LCC and PBP analyses for the components. Chapter 7 of the 
TSD shows the annual average energy consumption estimates by equipment 
class and efficiency level for both the refrigeration system and the 
components.

F. Life-Cycle Cost and Payback Period Analyses

    DOE conducts LCC and PBP analyses to evaluate the economic impacts 
of potential energy conservation standards for walk-ins on individual 
consumers--that is, buyers of the equipment. As stated previously, DOE 
adopted a component-based approach for developing performance standards 
for walk-in coolers and freezers. Consequently, the LCC and PBP 
analyses were conducted separately for the refrigeration system and the 
envelope components: panels, non-display doors, and display doors.
    The LCC is defined as the total consumer expense over the life of a 
product, consisting of purchase, installation, and operating costs 
(expenses for energy use, maintenance, and repair). To calculate the 
operating costs, DOE discounts future operating costs to the time of 
purchase and sums them over the lifetime of the product. The PBP is 
defined as the estimated number of years it takes consumers to recover 
the increased purchase cost (including installation) of a more 
efficient product. The increased purchase cost is derived from the 
higher first cost of complying with the higher energy conservation 
standard. DOE calculates the PBP by dividing the increase in purchase 
cost (normally higher) by the change in the average annual operating 
cost (normally lower) that results from the standard.
    NEEA and NPCC suggested that, when estimating equipment lifetimes, 
DOE should consider both the economic and physical lifetimes of WICF 
equipment. (NEEA and NPCC, No. 0559.1 at p. 11) The physical lifetime 
refers to the duration before the equipment fails or is replaced, 
whereas the economic lifetime refers to the duration before the walk-in 
cooler and freezer equipment is taken out of service because the owner 
is no longer in business. In its energy conservation standards 
rulemakings, DOE does not typically consider the change of ownership of 
a distressed property due to business failure or insolvency of the 
first owner. The underlying assumption in this approach is that the 
higher efficiency equipment would continue to serve over its physical 
lifetime irrespective of ownership changes. Interested parties 
commented, however, that, in the case of walk-ins, the economic 
lifetime could be significantly lower. Owners at high risk of business 
failure or insolvency would be less likely to buy higher efficiency 
equipment because they likely would not see the long-term life cycle 
benefits of energy savings.
    In response to these comments, DOE attempted to include alternative 
Weibull probability distributions in the NOPR analysis to capture the 
effects of a reduced economic lifetime of WICF equipment for small 
restaurants, but due to the increased complexity resulting from the 
component-level approach and lack of data on reduced lifetimes on 
account of change of ownership of walk-in equipment, DOE did not 
incorporate a shorter restaurant sector economic lifetime in the NOPR 
life cycle cost model. In many, if not most, cases when there is a 
change in ownership, equipment is not disassembled, but is sold ``as 
is.''
    For any given efficiency level, DOE measures the PBP and the change 
in LCC relative to the base-case equipment efficiency levels. The base-
case estimate reflects the market without new or amended energy 
conservation standards. For walk-ins, the base-case estimate assumes 
that newly manufactured walk-in equipment complies with the existing 
EPCA requirements and either equals or exceeds the efficiency levels 
achievable by EPCA-compliant equipment. Inputs to the economic analyses 
include the total installed operating, maintenance, and repair costs.
    Inputs to the calculation of total installed cost include the cost 
of the product--which consists of manufacturer costs, manufacturer 
markups, distribution channel markups, and sales taxes--and 
installation costs. Inputs to the calculation of operating expenses 
include annual energy consumption, energy prices and price projections, 
repair and maintenance costs, product lifetimes, discount rates, and 
the year that compliance with standards is required. DOE created 
probability distributions for product lifetime inputs to account for 
their uncertainty and variability.
    DOE developed refrigeration and envelope component spreadsheet 
models used for calculating the LCC and PBP. Chapter 8 of the TSD and 
its appendices provide details on the refrigeration and envelope 
subcomponent spreadsheet models and on all the inputs to the LCC and 
PBP analyses.
    Table IV-13 summarizes DOE's approach and data used to derive 
inputs to the LCC and PBP calculations for both the preliminary TSD and 
the changes made for today's NOPR. The

[[Page 55827]]

subsections that follow discuss the initial inputs and methods and the 
changes DOE made for the NOPR.
    For refrigeration systems, DOE analyzed all possible compressor 
technology options available for a given capacity of the refrigeration 
system. From the results of the individual compressor technology LCC 
analysis, DOE developed LCC savings plots in which the LCC savings over 
the LCC cost at the lowest total installed price option was plotted 
against the refrigeration system efficiency metric (AWEF). The LCC 
savings plots for the individual compressor technologies were 
superimposed into a single plot. A full range of optimal technology 
options were obtained by choosing the compressor technology available 
from the suite of available technologies that can reach a given 
efficiency level with the highest calculated LCC savings. The series of 
technology choices over the entire range of AWEF values from baseline 
to the highest achievable efficiency level obtained in this manner 
comprise the optimal path in developing higher efficiency equipment.

Table IV-13--Summary of Inputs and Methods in the LCC and PBP Analysis *
------------------------------------------------------------------------
                                      Preliminary       Changes for the
             Inputs                    analysis              NOPR
------------------------------------------------------------------------
                             Installed Costs
------------------------------------------------------------------------
Equipment Cost..................  Derived by          Included factor
                                   multiplying         for estimating
                                   manufacturer cost   price trends due
                                   by manufacturer     to manufacturer
                                   and retailer        experience.
                                   markups and sales
                                   tax, as
                                   appropriate.
Installation Costs..............  Based on RS Means   Based on RS Means
                                   Mechanical Cost     Mechanical Cost
                                   Data 2009.          Data 2012.
                                   Assumed no change   Assumed no change
                                   with efficiency     with efficiency
                                   level.              level.
------------------------------------------------------------------------
                             Operating Costs
------------------------------------------------------------------------
Annual Energy Use...............  DOE calculated the  Daily load profile
                                   average annual      of the
                                   energy use for      refrigeration
                                   each WICF           system revised to
                                   envelope class      13.3 hours
                                   matched with        runtime per day
                                   outdoor condenser   for coolers and
                                   systems using a     15 hours for
                                   load profile        freezers, at full
                                   described in AHRI   rated capacity
                                   1250-2009 (8        and at outside
                                   hours of high       air temperatures
                                   load and 16 hours   corresponding to
                                   of low load per     the reference
                                   day).               rating
                                                       temperatures.
Energy Prices...................  EIA (Energy         Source for
                                   Information         Commercial and
                                   Administration).    Industrial Retail
                                   Form EIA-861 for    Prices of
                                   2006.               Electricity: Form
                                                       EIA-826 Database
                                                       Monthly Electric
                                                       Utility Sales and
                                                       Revenue Data (EIA-
                                                       826 Sales and
                                                       Revenue
                                                       Spreadsheets).
                                                       www.eia.doe.gov/cneaf/electricity/page/eia826.html.
                                                       Accessed
                                                       September 30,
                                                       2012.
Energy Price Trends.............  Forecasted using    Forecasts updated
                                   AEO2009 price       using AEO2013.
                                   forecasts.
Repair and Maintenance Costs....  Annualized repair   Revised to RS
                                   and maintenance     Means 2012 walk-
                                   costs of the        in cooler and
                                   combined system     freezer
                                   were derived from   maintenance data
                                   RS Means 2009       and maintenance
                                   walk-in cooler      data; maintenance
                                   and freezer         and repair costs
                                   maintenance data.   for the
                                   Doors and           refrigeration
                                   refrigeration       system and the
                                   systems were        envelope
                                   replaced during     components were
                                   the lifetime.       individually
                                                       estimated.
------------------------------------------------------------------------
                 Present Value of Operating Cost Savings
------------------------------------------------------------------------
Equipment Lifetime..............  Based on            Revised to reflect
                                   manufacturer        stakeholder
                                   interviews.         comments.
                                   Variability:
                                   characterized
                                   using Weibull
                                   probability
                                   distributions.
Discount Rates..................  Based on the 2009   Based on Damodaran
                                   commercial          Online, October
                                   refrigeration       2012.
                                   equipment final
                                   rule (72 FR
                                   1092); vary
                                   across commercial
                                   building types.
Compliance Date.................  2015..............  2017.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the TSD.

1. Equipment Cost
    To calculate consumer equipment costs, DOE multiplied the MSPs from 
the engineering analysis by the supply-chain markups described above 
(along with sales taxes). DOE used different markups for baseline 
products and higher efficiency products because, as discussed 
previously, DOE applies an incremental markup to the MSP increase 
associated with higher-efficiency products.
    On February 22, 2011, DOE published a notice of data availability 
(NODA, 76 FR 9696) stating that DOE may consider improving its 
regulatory analysis by addressing equipment price trends. Consistent 
with the NODA, DOE examined historical producer price indices (PPI) for 
refrigeration equipment in general and found both positive and negative 
short-term real price trends. Over the historical long term DOE found 
slightly negative time real price trends. Therefore, DOE assumes in its 
price forecasts for this NOPR that the real prices of refrigeration 
equipment decrease slightly over time. DOE performed a sensitivity 
analysis of the NPV results for refrigeration equipment to the observed 
range of uncertainty in this long term price trend. DOE projected the 
price of the panels and doors using constant real 2012$ prices (See 
chapter 8 and chapter 10 of the TSD). DOE is aware that there have been 
significant changes in both the regulatory environment and equipment 
technologies during this period that create analytical challenges for 
estimating longer-term product price trends from the product-specific 
PPI data. DOE performed price trend sensitivity calculations to examine 
the dependence of the analysis results on different analytical 
assumptions. A more detailed discussion of price trend modeling and 
calculations is provided

[[Page 55828]]

in Appendix 8D of the TSD. DOE invites comment on methods to improve 
its equipment price forecasting, as well as any data supporting 
alternate methods.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. For the 
preliminary analysis, DOE derived baseline installation costs for walk-
in coolers and freezers from data in RS Means Mechanical Cost Data 
2009.
    DOE estimated installation costs separately for panels, non-display 
doors, and display doors. Installation costs for panels were calculated 
per square foot of area while installation costs for non-display doors 
were calculated per door. Display door installation costs were omitted 
and assumed to be included in the panel installation costs for display 
walk-ins. DOE assumed that display doors are either installed by the 
assembler or manufacturer of the walk-in unit, and the installation 
costs for the display doors are included in the ``mark-up'' amounts for 
the OEM channel.
    For the NOPR analysis, DOE included refrigeration system component 
installation costs based on RS Means Mechanical Cost Data 2012. 
Refrigeration system installation costs included separate installation 
costs for the condensing unit and unit cooler. American Panel commented 
that these units are installed simultaneously by the same installation 
crew and quoted as a combined price. (American Panel, Public Meeting 
Transcript, No. 0045 at p. 246 and No. 0048.1 at p. 9) RS Means 2012 
provides these installation costs separately, although the installation 
activities may be performed by the same crew. DOE proposes to be 
consistent with the approach of the cost data source because this 
approach permits one to estimate the installation costs of many 
combinations of unit coolers and condensing units.
    In the preliminary analysis, DOE did not distinguish between 
installation costs for indoor and outdoor systems. Manitowoc stated 
that indoor and outdoor systems would likely incur different 
installation costs. (Manitowoc, Public Meeting Transcript, No. 0045 at 
p. 245) Installation cost differences between indoor and outdoor 
condensing units were not reported in the RS Means data because the 
costs shown are based only on unit capacity. DOE assumed that the 
installation costs reported in the RS Means data are based on a 
weighted average of outdoor and indoor units--accordingly, DOE used 
identical installation costs for indoor and outdoor condensing units.
3. Annual Energy Consumption
    To estimate the annual energy consumption, DOE assumed that the 
installed refrigeration capacity is 20 percent larger than the 
refrigeration load calculated in the sizing methodology. The prevailing 
industry practice is to recommend that the rated capacity for 
refrigeration equipment selection includes a 10 percent ``safety 
factor''. DOE chose to use a somewhat higher oversizing factor to 
account for the differences between the sizes calculated, using load 
estimation software programs, and the discrete sizes available in the 
market (that is, the mismatch factor). To determine annual energy 
consumption, DOE calculated, using the industry practice described 
above, that a refrigeration system with the selected oversizing factor 
would be required to run 13.3 hours per day for coolers and 15 hours 
per day for freezers at full rated capacity at the reference outside 
air temperatures to meet the aggregate refrigeration load of the paired 
walk-in envelope. These time periods were determined from DOE's sizing 
methodology, as discussed in section IV.E.1. DOE used reference 
temperatures of 90[emsp14][deg]F and 95[emsp14][deg]F for indoor and 
outdoor condensing refrigeration systems, respectively, which is 
consistent with the standard rating conditions incorporated by DOE from 
AHRI 1250-2009.
4. Energy Prices
    DOE calculated average commercial electricity prices using Form 
EIA-826 Database Monthly Electric Utility Sales and Revenue Data (EIA-
826 Sales and Revenue Spreadsheets) (www.eia.doe.gov/cneaf/electricity/page/eia826.html; accessed September 30, 2012). DOE calculated an 
average national commercial price by (1) estimating an average 
commercial price for each utility by dividing the commercial revenues 
by commercial sales; and (2) weighting each utility by the number of 
commercial consumers it served in that state, across the nation. For 
the preliminary TSD, DOE used the electricity price data from 2009. DOE 
updated the NOPR analysis using 2012 data.
5. Energy Price Projections
    To estimate energy prices in future years for the preliminary TSD, 
DOE multiplied the average state energy prices described above by the 
forecast of annual average commercial energy price indices developed in 
the Reference Case from AEO2013, which forecasted prices through 
2040.\17\ AHRI supported DOE's approach for estimating current and 
future energy prices. (AHRI, No. 0055.1 at p. 3) DOE did not change its 
general approach, but today's NOPR analysis updates the initial energy 
price forecasts using AEO2013, which has an end year of 2035.\18\ To 
estimate the price trends after 2035, DOE used the average annual rate 
of change in prices from 2026 to 2035.
---------------------------------------------------------------------------

    \17\ The spreadsheet tool that DOE used to conduct the LCC and 
PBP analyses allows user0s to select price forecasts from either 
AEO's High Economic Growth or Low Economic Growth Cases. Users can 
thereby estimate the sensitivity of the LCC and PBP results to 
different energy price forecasts.
    \18\ U.S. Energy Information Administration. Annual Energy 
Outlook 2013. May 2013. U.S. Energy Information Administration: 
Washington, DC.
---------------------------------------------------------------------------

6. Maintenance and Repair Costs
    DOE calculated both maintenance and repair costs for the analysis. 
Maintenance costs are associated with maintaining the equipment 
operation, whereas repair costs are associated with repairing or 
replacing components that have failed in the refrigeration system and 
the envelope (i.e. panels and doors). In the preliminary analysis, DOE 
considered only general maintenance costs (e.g., checking and 
maintaining refrigerant charge levels, checking settings, and cleaning 
heat exchanger coils) and lighting maintenance activities. The NOPR 
analysis applies the same lighting maintenance assumptions for display 
doors with lights as DOE previously applied during the preliminary 
analysis phases. The remaining data on general maintenance for an 
entire walk-in were apportioned between the refrigeration system and 
the envelope doors. Based on the descriptions of maintenance activities 
in the RS Means 2012 Facilities Maintenance and Repair Cost Data 
(available on CD-ROM) and manufacturer interviews, DOE assumed that the 
general maintenance associated with the panels is minimal and did not 
include any maintenance costs for panels in its analysis. RS Means 2012 
data provided general maintenance costs for display and storage walk-
ins.
    In response to this approach, American Panel suggested that DOE 
contact the Commercial Food Equipment Service Association (CFESA) to 
obtain additional maintenance and repair information. (American Panel, 
No. 0048.1 at p. 8) At American Panel's recommendation, DOE contacted 
CFESA, who explained that they did not have the information requested.
    Of the total annual maintenance costs for a walk-in unit, which 
ranges from $170-$262, DOE assumed $150 would

[[Page 55829]]

be spent on the refrigeration system and the rest would be spent on the 
display and passage doors of the envelope. DOE made this assumption as 
part of its preliminary analyses based on comments and research that 
pointed to this value as the likely amount that would need to be 
expended to cover refrigeration system-related costs. Maintenance costs 
were assumed to be the same across small, medium, and large door sizes 
in the case of both non-display doors and display doors. (DOE derived 
the envelope-related costs as the difference between the total 
maintenance costs for a walk-in and the assumed maintenance costs for 
the refrigeration system.) As stated previously, annual maintenance 
costs for the envelope wall and floor panels were assumed to be 
negligible and were not considered.
    Interested parties commented on maintenance costs associated with 
refrigerant leakage and refrigerant charge. Emerson stated that DOE's 
estimated maintenance costs should account for higher refrigerant costs 
due to higher leakage rates and other issues in systems with higher 
refrigerant charge. (Emerson, Public Meeting Transcript, No. 0045 at p. 
238) However, Emerson also commented that higher refrigerant costs 
could lead to the use of refrigerant leakage-reduction devices that 
offset the increased repair costs due to higher refrigerant charge and 
loss. (Emerson, Public Meeting Transcript, No. 0045 at p. 239) DOE did 
not receive any data for refrigeration maintenance costs, but based on 
the comments from Emerson, DOE assumes as part of the NOPR analysis 
that the $150 maintenance cost for a refrigeration system would include 
expenses related to refrigerant charge maintenance costs. DOE seeks 
data from interested parties on refrigerant charge maintenance costs 
applicable to walk-ins.
    Other interested parties commented on potential climate change 
legislation. AHRI suggested that DOE study the impact of climate change 
legislation on the future availability and price of HFC refrigerants. 
(AHRI, No. 0055.1 at p. 3) Emerson also said that any future cap-and-
trade bill would increase refrigerant costs significantly. (Emerson, 
Public Meeting Transcript, No. 0045 at p. 238) NEEA and NPCC suggested 
that refrigerant leakage and climate change responses should be 
evaluated in a manner that seeks to reduce refrigerant leakage rather 
than focusing solely on managing refrigerant replacement costs, 
particularly since maintenance costs are rising. (NEEA and NPCC, No. 
0059.1 at p. 10) DOE acknowledges the concerns of interested parties 
regarding the effect of climate change legislation on refrigerant 
leakage and refrigerant costs. DOE does not speculate on pending 
legislation, which is outside the scope of this rulemaking.
    DOE also updated its methodology for determining repair costs for 
the NOPR in response to earlier comments. In the preliminary analysis, 
DOE assumed that both the unit cooler and the condensing unit of the 
refrigeration system are replaced when the refrigeration system fails. 
Master-Bilt commented that repairing a failed refrigeration system 
typically would require replacement of the compressors, not the entire 
system, and that approximately five percent of refrigeration systems 
would require a compressor replacement during a 10-year span. (Master-
Bilt, Public Meeting Transcript, No. 0045 at p. 287) American Panel 
agreed and noted that, when a refrigeration system fails the entire 
refrigeration system is not typically replaced; rather, only 
compressors or fan motors are replaced. (American Panel, Public Meeting 
Transcript, No. 0045 at p. 11) After carefully considering these 
comments, DOE assumed for the NOPR analysis that 5 percent of systems 
require compressor replacement and 10 and 15 percent of systems require 
fan motor replacement for evaporators and condensers, respectively, 
over the lifetime of the system. Aftermarket prices for fan motors and 
compressors were obtained from data collected during the engineering 
analysis and multiplied by a trade channel markup. DOE estimated 
installation costs using the RS Means Mechanical Cost Data 2012 and 
calculated the total repair cost per occasion of replacement. DOE then 
calculated the annualized repair costs by multiplying the discounted 
total replacement cost per occasion by the replacement lifetime 
percentage.
    Under this approach, the NOPR analysis factored repair costs for 
lighting repairs pertaining to the lighting of the display doors. Data 
from the RS Means Electrical Cost Data 2012 were used to obtain the 
labor installation cost for lighting replacements. For refrigeration 
systems, DOE observed that estimated repair costs often increased with 
increasing efficiency levels, particularly for higher-efficiency 
compressors and fan motors.
    In the preliminary analysis, DOE assumed that annualized 
maintenance and repair costs were constant across all efficiency 
levels. Manitowoc and Master-Bilt stated that maintenance and repair 
cost increases across efficiency levels should not be negligible 
because more efficient equipment is more complex and may have design 
options that lead to the incorporation of additional or more expensive 
parts, which would cost more to maintain and replace. (Manitowoc, 
Public Meeting Transcript, No. 0045 at p. 241; Master-Bilt, No. 0046.1 
at p. 1) Heatcraft agreed that maintenance and repair costs may 
increase with higher efficiency levels, stating that more efficient 
equipment would incur higher maintenance and repair costs because 
higher efficiency evaporator and condenser coils are larger and 
heavier, making them more difficult and costly to maintain. (Heatcraft, 
No. 0069.1 at p. 1) AHRI stated that larger evaporator and condenser 
coils require more refrigerant and concluded that the maintenance and 
cost repair differences across efficiency levels are evident. (AHRI, 
No. 0055.1 at p. 3 and 4) NEEA and NPCC stated, however, that there are 
no data available to support the contention that the complexity of 
electronics systems used in the controls of higher efficiency equipment 
leads to higher maintenance costs. (NEEA and NPCC, No. 0059.1 at p. 10)
    In the NOPR analysis, DOE considered these comments and examined 
whether each design option would have higher maintenance and repair 
costs associated with it. As stated earlier, DOE agreed with comments 
made by Master-Bilt and American Panel on repair costs and found that 
certain design options that entail substitution of either evaporator 
and condenser fan motors or higher efficiency compressors would likely 
incur higher maintenance and repair costs because of the higher cost of 
these components. The NOPR analysis accounts for these observations. In 
summary, DOE believes that repair costs will increase with efficiency 
level whereas all non-lighting maintenance costs will not increase with 
efficiency level.
7. Product Lifetime
    In the preliminary analysis, DOE estimated an average product 
lifetime of 15 years for envelopes and 7 years for refrigeration 
systems. The NOPR analysis alters this approach by estimating lifetimes 
for the individual components analyzed, instead of the entire envelope. 
DOE estimated an average lifetime of 15 years for panels and 14 years 
for display and non-display doors. DOE also revised the average 
refrigeration system lifetime to 12 years. Weibull distributions were 
derived around average lifetime estimates to obtain specific failure 
rates at each year of equipment life. See chapter 8 of the NOPR TSD for 
further

[[Page 55830]]

details on the method and sources DOE used to develop product 
lifetimes.
8. Discount Rates
    In calculating LCC, DOE applies discount rates to estimate the 
present value of future operating costs. DOE did not have sufficient 
information in preparing its preliminary analysis to derive discount 
rates for walk-ins. Instead, DOE used discount rates from the 2009 
commercial refrigeration equipment final rule as a surrogate to 
approximate the rates that would apply to walk-ins. 72 FR at 1123 
(January 9, 2009). For the NOPR, DOE derived the discount rates for the 
walk-in cooler and freezer equipment analysis by estimating the cost of 
capital for a large number of companies similar to those that could 
purchase walk-in cooler and freezer equipment and then sampling them to 
characterize the effect of a distribution of potential customer 
discount rates. The cost of capital is commonly used to estimate the 
present value of cash flows to be derived from a typical company 
project or investment. Most companies use both debt and equity capital 
to fund investments, so their cost of capital is the weighted average 
of the cost to the company of equity and debt financing. Average 
discount rates (real) in these updated analyses by service building 
type are as follows:
     Grocery: 3.7 percent
     Food service: 3.9 percent
     Convenience Store: 5.0 percent
     Restaurant: 6.2 percent
     Other Food Service: 3.8 percent
    DOE estimated the cost of equity financing by using the Capital 
Asset Pricing Model (CAPM).\19\ The CAPM, among the most widely used 
models to estimate the cost of equity financing, assumes that the cost 
of equity is proportional to the amount of systematic risk associated 
with a company. The cost of equity financing tends to be high when a 
company faces a large degree of systematic risk, and it tends to be low 
when the company faces a small degree of systematic risk.
---------------------------------------------------------------------------

    \19\ Harris, R.S. Applying the Capital Asset Pricing Model. UVA-
F-1456. Available at SSRN: http://ssrn.com/abstract=909893.
---------------------------------------------------------------------------

    See chapter 8 of the TSD for further details on the development of 
commercial discount rates.
9. Compliance Date of Standards
    EPCA prescribes that DOE establish performance-based standards for 
walk-ins by 2012. (42 U.S.C. 6313(f)(4)(A)) The standards apply to 
equipment manufactured beginning on the date 3 years after the final 
rule is published unless DOE determines, by rule, that a 3-year period 
is inadequate, in which case DOE may extend the compliance date for 
that standard by an additional 2 years. (42 U.S.C. 6314(f)(4)(B)) In 
the absence of any information indicating that 3 years is inadequate, 
DOE proposes a compliance date for the standards of 2017. Therefore, 
DOE calculated the LCC and PBP for walk-in coolers and freezers under 
the assumption that compliant equipment would be purchased in the year 
when compliance with the new standard is required--2017. DOE seeks 
comments and information on the adequacy of the 3-year compliance date.
10. Base-Case and Standards-Case Efficiency Distributions
    To accurately estimate the share of consumers who would likely be 
impacted by a standard at a particular efficiency level, DOE's LCC 
analysis considers the projected distribution of product efficiencies 
that consumers purchase under the base case (i.e., the case without new 
energy efficiency standards). DOE refers to this distribution of 
product efficiencies as a base-case efficiency distribution. DOE 
examined the range of standard and optional equipment features offered 
by manufacturers. For refrigeration systems, DOE estimated that 75 
percent of the equipment sold under the base case would be at DOE's 
assumed baseline level--that is, the equipment would comply with the 
existing standards in EPCA, but have no additional features that 
improve efficiency. The remaining 25 percent of equipment would have 
features that would increase its efficiency. While manufacturers could 
have many options, DOE assumed that the average efficiency level of 
this equipment would correspond to the efficiency level achieved by the 
baseline equipment with the first design option in the sequence of 
design options in the engineering analysis ordered by their relative 
cost-effectiveness. DOE estimated that for panels and non-display 
doors, 100 percent of the equipment sold under the base case would 
consist of equipment at DOE's assumed baseline level--that is, 
minimally compliant with EPCA. For cooler display doors, DOE assumed 
that 25 percent of the current shipments are minimally compliant with 
EISA and the remaining 75 percent are higher-efficiency (45 percent are 
assumed to have LED lighting, corresponding to the first efficiency 
level above the baseline in the engineering analysis, and 30 percent 
are assumed to have LED lighting plus anti-sweat heater wire controls, 
corresponding to the second efficiency level above the baseline). For 
freezer display doors, DOE assumed that 80 percent of the shipments 
would be minimally compliant with EPCA and the remaining 20 percent 
have LED lighting, corresponding to the first efficiency level above 
the baseline. (See Section IV.C and chapter 5 of the TSD for a 
discussion of the efficiency levels and design options in the 
engineering analysis). The current analysis assumes that all consumers 
purchase only the minimally compliant equipment from 2017 on, when the 
walk-in cooler and freezer standard is in effect. DOE requests comment 
on the distribution of product efficiencies in the absence of 
standards, particularly with respect to the magnitude of market 
penetration of any specific higher-efficiency technologies. For further 
information on DOE's estimate of base-case efficiency distributions, 
see chapter 8 of the TSD.
11. Inputs to Payback Period Analysis
    The payback period is the number of years that it takes the 
consumer to recover the additional installed cost of more efficient 
products, compared to baseline products, through energy cost savings. 
The simple payback period does not account for changes in operating 
expense over time or the time value of money. Payback periods that 
exceed the life of the product mean that the increased total installed 
cost is not recovered in reduced operating expenses (based on the first 
year's estimated operating cost).
    The inputs to the PBP calculation are the total installed costs to 
the consumer of the equipment for each efficiency level and the average 
annual operating expenditures for each efficiency level in the first 
year. The PBP calculation uses the same inputs as the LCC analysis, 
except that discount rates are not used.
    Interested parties raised several concerns regarding the LCC and 
PBP analyses. American Panel commented that the LCC and PBP presented 
in the preliminary analysis may be inaccurate because the refrigeration 
systems were not properly matched to the walk-in envelope, and the 
refrigeration system would be oversized for food safety and have a 
shorter run time. American Panel recommended that DOE select the 
refrigeration system capacity based on the heat load of the envelope 
size to achieve realistic LCC and PBP results. (American Panel, No. 
0048.1 at p. 8) To account for this possibility, the current analysis 
now assumes that the refrigeration system is oversized by 20 percent 
over the aggregate refrigeration load of the walk-in unit.

[[Page 55831]]

    American Panel submitted several comments relating to PBP issues 
for specific market segments. During the public meeting, American Panel 
commented that small business owners, such as non-chain restaurants or 
independent food service operators, generally attempt to avoid higher 
first costs due to the uncertainty of business success, while food 
service franchisees can afford to consider a longer term view of future 
savings. (American Panel, Public Meeting Transcript, No. 0045 at p. 
252) American Panel cited data from the National Restaurant Association 
indicating that approximately 70 percent of all restaurants and 90 
percent of small restaurants that open in the same building as a 
previously failed business fail in the first year due to insufficient 
up-front capital. American Panel predicted from these data that 
increased equipment costs resulting from new energy standards would 
have a serious negative impact on the small business restaurant owner, 
especially during the first year of restaurant operation, and that 
these entities would be able to sustain equipment efficiency 
improvements with a payback period of only 1 year or less. (American 
Panel, No. 0048.1 at p. 10) Owners and operators of franchised 
restaurant chains could afford to consider a longer payback period 
(e.g., 2 years or more). (American Panel, Public Meeting Transcript, 
No. 0045 at p. 254)
    DOE will continue to use the standard LCC and PBP methods to convey 
the economic impacts of energy efficiency standards on walk-ins. DOE 
recognizes the particular PBP considerations of various market 
segments, however, including small businesses and independent 
restaurants. In preparing this NOPR, DOE examined the ``business 
lifetime'' (also referred to as the ``economic lifetime''), which is an 
issue prevalent in the restaurant market sector. According to submitted 
comments, the economic lifetime of WICF equipment used in certain 
businesses may significantly differ from the operational lifetime. This 
issue could potentially impact the LCC and NIA analyses and is further 
discussed in section IV.G.1.b of this document. The walk-in lifetime 
details are also discussed in chapter 8 of the TSD.
12. Rebuttable-Presumption Payback Period
    As noted above, EPCA, as amended, establishes a rebuttable 
presumption that a standard is economically justified if the Secretary 
finds that the additional cost to the consumer of purchasing a product 
that complies with an energy conservation standard level will be less 
than three times the value of the consumer's first-year energy (and, as 
applicable, water) savings derived as a result of the standard, as 
calculated under the test procedure in place for that standard. (42 
U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE 
determined the value of the first year's energy savings by calculating 
the quantity of those savings in accordance with the applicable DOE 
test procedure, and multiplying that amount by the average energy price 
forecast for the year in which compliance with the new standard would 
be required.
    American Panel commented that the 3-year PBP established in EPCA 
should be decreased to 1 or 1.5 years at the most. (American Panel, No. 
0048.1 at p. 11) DOE acknowledges the economic impacts on small 
businesses resulting from implementing energy efficiency standards but 
has maintained the 3-year PBP guideline as an initial step for 
determining economic justification, consistent with 42 U.S.C. 6295(o). 
However, DOE routinely conducts a full economic analysis that considers 
the full range of impacts to the consumer, manufacturer, nation, and 
environment and will consider other applicable criteria in determining 
whether a proposed standard is economically justified, including 
impacts on small businesses. For the results of DOE's detailed analysis 
of economic impacts on commercial customers and manufacturers, see 
sections V.B.1 and V.B.2.
    For the NOPR analysis, DOE calculated a rebuttable presumption 
payback period at each TSL for WICF equipment. Rather than using 
distributions for input values, DOE used discrete values and, as 
required by EPCA, based the calculation on the assumptions in the DOE 
WICF test procedure. As a result, DOE calculated a single rebuttable 
presumption payback value, rather than a distribution of payback 
periods. Table IV-14 and Table IV-15 show the rebuttable presumption 
payback periods at TSL 4 for refrigeration systems and envelope 
components, respectively.

Table IV-14--WICF Refrigeration Systems Rebuttable Payback Period at TSL
                                    4
------------------------------------------------------------------------
                                                              Rebuttable
           Equipment class                Compressor type       payback
                                             analyzed           period
------------------------------------------------------------------------
DC.M.I, = 9,000....................  SCR...................         1.8
DC.M.O, = 9,000....................  SCR...................         3.1
DC.L.I, = 9,000....................  SCR...................         2.3
DC.L.O, = 9,000....................  SCR...................         3.1
MC.M................................  ......................         0.8
MC.L................................  ......................         0.7
------------------------------------------------------------------------

 Table IV-15 WICF Envelope Components Rebuttable Payback Period at TSL 4
------------------------------------------------------------------------
                                                              Rebuttable
          Equipment class                Equipment size        payback
                                                                period
------------------------------------------------------------------------
SP.M...............................  Small.................          5.3
                                     Medium................          5.2
                                     Large.................          5.1
SP.L...............................  Small.................          3.1
                                     Medium................          3.8
                                     Large.................          4.1
FP.L...............................  Small.................          3.8
                                     Medium................          4.6
                                     Large.................          5.1
DD.M...............................  Small.................          2.5
                                     Medium................          2.2
                                     Large.................          1.9
DD.L...............................  Small.................          N/A
                                     Medium................          N/A
                                     Large.................          0.4
PD.M...............................  Small.................          6.2
                                     Medium................          6.1
                                     Large.................          6.0
PD.L...............................  Small.................          4.7
                                     Medium................          4.7
                                     Large.................          4.6
FD.M...............................  Small.................          6.0
                                     Medium................          6.0
                                     Large.................          5.9
FD.L...............................  Small.................          3.5
                                     Medium................          2.4
                                     Large.................          2.4
------------------------------------------------------------------------

    While DOE examined the rebuttable-presumption criterion, it 
considered whether the standard levels considered are economically 
justified through a more detailed analysis of the economic impacts of 
these levels consistent with the approach laid out in 42 U.S.C. 
6295(o)(2)(B)(i). The results of this analysis serve as the basis for 
DOE to evaluate the economic justification for a potential standard 
level (thereby supporting or rebutting the results of any preliminary 
determination of economic justification).

G. National Impact Analysis--National Energy Savings and Net Present 
Value

    The NIA assesses the national energy savings (NES) and the net 
present value (NPV) of total consumer costs and savings that would be 
expected to result

[[Page 55832]]

from the new energy conservation standards. (``Consumer'' in this 
context refers to customers of the product being regulated.) The NES 
and NPV are analyzed at specific efficiency levels separately for the 
refrigeration systems and components of the envelope (panels, non-
display doors, and display doors). DOE calculates the NES and NPV based 
on projections of annual equipment shipments, along with the annual 
energy consumption and total installed cost data from the energy use 
and LCC analyses. For the NOPR analysis, DOE forecasted the energy 
savings, operating cost savings, product costs, and NPV of consumer 
benefits for products sold from 2017 through 2073--the year in which 
the last standards--compliant equipment shipped during the 30-year 
analysis period beginning in 2017 operates.
    DOE evaluates the impacts of the new standards by comparing base-
case projections with standards-case projections. The base-case 
projections characterize energy use and consumer costs for each 
equipment class in the absence of any new energy conservation 
standards. DOE compares these projections with projections 
characterizing the market for each equipment class if DOE adopted the 
new standard at specific energy efficiency levels (that is, the TSLs or 
standards cases) for that equipment class. For the base case forecast, 
DOE considered a mix of two levels of efficiency for the refrigeration 
systems and a single efficiency level for the components, except for 
cooler display doors as noted in Table IV-16. For the standards cases, 
DOE considered a ``roll-up'' scenario in which DOE assumes that product 
efficiencies that do not meet the standard level under consideration 
would roll-up to meet the new standard level, and those already above 
the proposed standard level would remain unaffected.
    DOE uses a Microsoft Excel spreadsheet model to calculate the 
energy savings and the national consumer costs and savings from each 
TSL. The NOPR TSD and other documentation that DOE provides during the 
rulemaking helps explain the models and how to use them and also allow 
interested parties to review DOE's analyses. The NIA spreadsheet model 
uses average values as inputs (as opposed to probability distributions 
of key input parameters from a set of possible values).
    For the current analysis, the NIA used projections of energy prices 
and commercial building starts from the AEO2013 Reference case. In 
addition, DOE analyzed scenarios that used inputs from the AEO2013 Low 
Economic Growth and High Economic Growth cases. These cases have higher 
and lower energy price trends compared to the Reference case, as well 
as higher and lower commercial building starts, which result in higher 
and lower walk-in shipments to new commercial buildings. NIA results 
based on these cases are presented in appendix 10E of the NOPR TSD.
    Table IV-16 summarizes the inputs and key assumptions DOE used for 
both the preliminary analysis and NOPR with respect to the NIA 
analysis. Discussion of these inputs and changes follows the table. See 
chapter 10 of the NOPR TSD for further details.

   Table IV-16--Summary of Inputs and Key Assumptions for the National
                             Impact Analysis
------------------------------------------------------------------------
                                                    Changes for the NOPR
           Inputs             Preliminary analysis        analysis
------------------------------------------------------------------------
Shipments...................  Annual shipments      Annual shipments
                               from the shipments    from the shipments
                               model for complete    model calculated
                               walk-in units.        separately for
                                                     refrigeration
                                                     systems and
                                                     components.
Compliance Date of Standard.  2015................  2017.
Base-Case Forecasted          No efficiency         Refrigeration
 Efficiencies.                 distributions         systems: For EISA *
                               assumed for the       shipments, 75
                               base case and the     percent of
                               current baseline      shipments are
                               level was assumed     assumed to be at
                               to represent the      the baseline and 25
                               market for the        percent of
                               forecasted            shipments are
                               shipments of          assumed to be
                               complete walk-in      equivalent to the
                               systems.              first efficiency
                                                     level in the
                                                     engineering
                                                     analysis. Panels
                                                     and non-display
                                                     doors: For EISA
                                                     shipments, 100
                                                     percent of
                                                     shipments are
                                                     assumed to be at
                                                     the baseline.
                                                    Display doors: For
                                                     EISA shipments, 25
                                                     percent of cooler
                                                     display doors are
                                                     assumed to be at
                                                     the baseline and 75
                                                     percent are higher-
                                                     efficiency (45
                                                     percent with LED
                                                     lighting and 30
                                                     percent with LED
                                                     lighting and
                                                     lighting controls);
                                                     and 80 percent of
                                                     freezer doors are
                                                     assumed to be at
                                                     the baseline and 20
                                                     percent are higher-
                                                     efficiency (with
                                                     LED lighting).
Standards-Case Forecasted     No efficiency         No efficiency
 Efficiencies.                 distributions         distributions
                               assumed for the       assumed for
                               standards case. A     standards compliant
                               single efficiency     shipments. Shipped
                               level was assumed     efficiencies for
                               to represent the      the forecasted
                               market for the        shipments of
                               forecasted            refrigeration
                               shipments of          systems and
                               complete walk-in      components are
                               systems.              represented by a
                                                     roll up to the
                                                     minimum standard
                                                     level being
                                                     analyzed.
Annual Energy Consumption     DOE calculated the    DOE changed the
 per Unit.                     average annual        daily load profile
                               energy use for each   of the
                               WICF envelope class   refrigeration
                               matched with          system to 13.3
                               outdoor condenser     hours runtime per
                               systems using a       day for coolers and
                               load profile          15 hours for
                               described in AHRI     freezers, at full
                               1250-2009 (8 hours    rated capacity
                               of high load and 16   corresponding to
                               hours of low load     the reference
                               per day).             rating outside air
                                                     temperatures.
Total Installed Cost per      Manufacturer's        Updated to RS Means
 Unit.                         selling price is      Mechanical Cost
                               estimated from        Data 2012.
                               Engineering
                               Analysis.
                               Installation costs
                               are based on RS
                               Means Mechanical
                               Cost Data 2009.
                               Assumed no change
                               with efficiency
                               level.

[[Page 55833]]

 
Annual Energy Cost per Unit.  Annual Energy         No change.
                               consumption per
                               unit was multiplied
                               by the Annual
                               energy cost. Costs
                               were discounted and
                               summed over the
                               analysis period for
                               the net present
                               value calculations.
Repair and Maintenance Cost   Annualized repair     Updated to RS Means
 per Unit.                     and maintenance       2012 walk-in cooler
                               costs of the          and freezer repair
                               combined system       and maintenance
                               were derived from     data; repair and
                               RS Means 2009 walk-   maintenance costs
                               in cooler and         for the
                               freezer maintenance   refrigeration
                               data. Doors and       system and the
                               refrigeration         envelope components
                               systems could be      were estimated
                               replaced during the   separately.
                               lifetime of the
                               envelope.
Energy Prices...............  Forecasted using      Updated to AEO2013
                               AEO2009 price         forecasts.
                               forecasts.
Energy Site-to-Source         Varies yearly and is  Updated to modified
 Conversion Factor.            generated by NEMS-    NEMS-BT** (2012),
                               BT (2009); applied    and applied from
                               from 2014 through     2017 through 2073.
                               2045.
Discount Rate...............  3% and 7% real......  No change.
Present Year................  Future expenses       Future expenses
                               discounted to 2010.   discounted to 2013.
------------------------------------------------------------------------
* EISA 2007 amended EPCA to establish prescriptive standards for walk-in
  coolers and freezers manufactured on or after January 1, 2009. EISA
  shipments refer to the shipments complying with these prescriptive
  standards. This is in contrast to pre-EISA shipments, which would
  refer to shipments before 2009 when there was no Federal energy
  efficiency standard in place.
** Site-to-source factors modified by Lawrence Berkley National
  Laboratories.

    American Panel noted that the NIA results in the preliminary 
analysis were not meaningful because the refrigeration system 
capacities were not properly matched to the walk-in envelope. As stated 
earlier in the LCC and PBP sections, American Panel contended that DOE 
should select the refrigeration system capacity based on the envelope 
heat load to make the economic analyses realistic. (American Panel, No. 
0048.1 at p. 11) In the NOPR, DOE conducted the NIA analysis for the 
refrigeration systems and the selected envelope components independent 
of each other and then combined the results to arrive at the trial 
standard levels. This approach did not directly pair the walk-in units 
with the matched capacity refrigeration system because minor 
inconsistencies in the matching of individual units could have large 
effects on the overall NIA results, as noted by American Panel. Rather, 
the NOPR analysis involved combining the results in the aggregate to 
arrive at a more accurate estimate of overall energy savings across the 
range of covered equipment.
1. Shipments
    Forecasts of product shipments are used to calculate the national 
impacts of standards on energy use, NPV, and future manufacturer cash 
flows. DOE developed shipment forecasts for refrigeration systems and 
envelope components based on an analysis of growth trends of specific 
building types housing the walk-in units. In DOE's shipments model, 
shipments of walk-in units and their components are driven by new 
purchases and stock replacements due to failures. The envelope 
component model and refrigeration system shipments model take an 
accounting approach, tracking market shares of each equipment class and 
the vintage of units in the existing stock. Stock accounting uses 
product shipments as inputs to estimate the age distribution of in-
service product stocks for all years. The age distribution of in-
service product stocks is a key input to calculations of both the NES 
and NPV because operating costs for any year depend on the age 
distribution of the stock. DOE also considers the impacts on shipments 
from changes in product purchase price and operating cost associated 
with higher energy efficiency levels.
    American Panel, NEEA and NPCC suggested that DOE contact the 
National Association of Food Equipment Manufacturers (NAFEM) and major 
refrigeration system manufacturers such as Heatcraft and Russell to 
obtain shipment information. (American Panel, Public Meeting 
Transcript, No. 0045 at pp. 274-275; NEEA and NPCC, Public Meeting 
Transcript, No. 0045 at p. 281) DOE contacted NAFEM, which provided DOE 
with copies of that organization's ``Size and Shape of the Industry'' 
reports. These reports contain data on the annual sales of walk-in 
units in the food service sector for 2002-2010. DOE analyzed the data 
received from NAFEM and also obtained other data from manufacturer 
interviews and other sources. DOE used these data to develop equipment 
class size share distributions, and are documented in the current 
shipment models.
a. Share of Shipments and Stock Across Equipment Classes
    In response to the shipments analysis results in the preliminary 
analysis, DOE received several comments regarding the share of 
shipments and stock across equipment classes, dedicated condensing and 
multiplex systems, indoor and outdoor systems, cooler and freezer 
envelopes, and envelope sizes.
    In the preliminary analysis, DOE estimated that 46 percent of the 
existing stock of walk-in systems is served by multiplex systems. 
American Panel commented that the ratio between multiplex to dedicated 
condensing refrigeration systems was too high and stated that, 
historically, 68 percent of their sales are for dedicated condensing 
refrigeration systems. American Panel suggested that DOE's estimate of 
the share of stocks of dedicated condensing refrigeration systems 
should be 70 percent. (American Panel, Public Meeting Transcript, No. 
0045 at pp. 192 and 275; American Panel, No. 0048.1 at p. 4) Heatcraft 
supported this observation by stating that multiplex medium temperature 
refrigeration system stock share should be only 15 percent. (Heatcraft, 
Public Meeting Transcript, No. 0045 at p. 269)
    DOE considered these comments and re-examined its analyses in 
developing its revised analysis for the NOPR. As part of this revised 
analysis, DOE developed a shipment model that provided the key inputs 
required by the shipment models for the envelope components and 
refrigeration systems. Based on this shipment analysis, DOE estimated 
that dedicated condensing units account for approximately 70 percent of 
the refrigeration market and

[[Page 55834]]

the remaining 30 percent consists of unit coolers connected to 
multiplex condensing systems. DOE estimated that medium temperature 
unit coolers connected to multiplex systems account for about 25 
percent of the shipments and stock. Regarding American Panel's comment 
on the relative shares of stock between the multiplex and the dedicated 
condensing refrigeration systems shown in the preliminary TSD (Table 
3.2.8), DOE noted that Table 3.2.8 addressed shipments and not 
refrigeration system stock data. (American Panel, Public Meeting 
Transcript, No. 0045 at p. 269)
    DOE received two comments regarding the stock share for outdoor and 
indoor dedicated condensing refrigeration systems. Heatcraft stated 
that a 30 percent share for outdoor dedicated condensing refrigeration 
systems was a reasonable assumption for DOE's economic analyses. 
(Heatcraft, Public Meeting Transcript, No. 0045 at p. 268) Manitowoc 
stated that the share of indoor dedicated condensing refrigeration 
systems should be higher than predicted, approximately 10 percent. 
(Manitowoc, Public Meeting Transcript, No. 0045 at p. 274) DOE 
considered these comments in light of other available data and 
estimated for the NOPR analysis that approximately 66 percent and 3 
percent of the shipments and stocks of the refrigeration systems are 
accounted for by the outdoor and indoor dedicated condensing 
refrigeration systems, respectively.
    Regarding the relative shares of stock or shipment between walk-in 
coolers and freezers, American Panel commented that DOE's estimates of 
70 percent and 30 percent shares for cooler and freezer envelopes, 
respectively, were reasonable. (American Panel, Public Meeting 
Transcript, No. 0045 at p. 275) DOE has slightly adjusted these 
estimates in the NOPR shipment model to 71 percent (coolers) and 29 
percent (freezers) based on updated calculations and data.
    NEEA and NPCC stated that DOE correctly apportioned walk-ins by 
business type in the preliminary analysis, but noted that significant 
market shifts are taking place in the grocery and convenience store 
sectors. (NEEA and NPCC, No. 0059.1 at p. 11) NEEA and NPCC did not 
elaborate on the significance or nature of the market shifts. American 
Panel stated that DOE's estimate of twice as many large walk-in coolers 
as small walk-in coolers seemed inaccurate, and stated it would provide 
data. (American Panel, Public Meeting Transcript, No. 0045 at p. 293) 
American Panel then submitted a written comment with its own historical 
shipment data showing that walk-in cooler and freezer shipments for 
small, medium, and large units are 40 percent, 56 percent, and 4 
percent, respectively, which differs significantly from DOE's estimates 
of 14 percent, 58 percent, and 28 percent for small, medium, and large 
units, respectively, in the preliminary analysis. (American Panel, No. 
0048.1 at p. 11) In the NOPR analysis, DOE adjusted its estimates based 
in part on American Panel's feedback. For the NOPR, DOE estimated that 
size distributions of stocks and shipments of walk-in units are 52 
percent, 40 percent, and 8 percent for small, medium, and large, 
respectively.
b. Lifetimes and Replacement Rates
    As discussed in the previous section on LCC and PBP analyses, the 
preliminary analysis assumed an envelope lifetime of approximately 15 
years. American Panel agreed with DOE's 15-year lifetime estimate for 
the envelopes. (American Panel, Public Meeting Transcript, No. 0045 at 
p. 283) Kysor mentioned that the envelope lifetime could vary depending 
on the traffic within it. For example, an 8- to 10-year envelope 
lifetime can be expected if pallet jack or forklifts are used in the 
walk-in, while a longer envelope lifetime is likely if activity is 
limited to foot traffic or lighter hand trucks. (Kysor, Public Meeting 
Transcript, No. 0045 at p. 287) Master-Bilt suggested that most 
envelopes have a 20-year lifetime. (Master-Bilt, No. 0046.1 at p. 1) 
American Panel concurred with the 5 percent replacement rate for walk-
in cooler and freezer envelopes, which corresponds to a 20-year 
lifetime. (American Panel, No. 0048.1 at p. 11) AHRI commented that 
based on its own experience, it believes envelope wall and floor panels 
tend to have a longer lifetime--12 to 25 years would be typical--but 
provided no data in support of this view. (AHRI, No. 0055.1 at p. 4) 
Hill Phoenix noted that failure of envelope components is usually 
evident by visual inspection, and panels would not usually fail from 
condensation or ice formation in the insulation. (Hill Phoenix, No. 
0066.1 at p. 3) Given that most of these comments provided only 
anecdotal evidence and not supporting data, DOE continues to assume a 
15-year average lifetime for panels in the current analysis.
    DOE assumed the typical lifetime of envelope doors to be 5 years in 
the preliminary analysis. American Panel commented that the door 
replacement rate of 5 years is not supported by its in-house data, 
which show a door replacement rate of 5 percent, with the door lasting 
throughout the walk-in cooler and freezer envelope lifetime. (American 
Panel, No. 0048.1 at p. 9) In addition, American Panel stated that the 
number of replacement non-display doors represented 5 percent of their 
annual door shipments, which is inconsistent with the assumption that 
doors only last 5 years. (American Panel, Public Meeting Transcript, 
No. 0045 at p. 14 and p. 284) In light of these comments on the door 
replacement rates, DOE has revised its assumptions of door lifetimes to 
more closely match envelope lifetimes. The NOPR shipment model assumes 
an average lifetime of approximately 14 years for both display and non-
display doors.
    For refrigeration systems, DOE assumed an average lifetime of 7 
years in the preliminary analysis. Master-Bilt stated that 
refrigeration system lifetimes were comparable to the envelope lifetime 
of approximately 20 years--it estimated that refrigeration system 
lifetimes would be about 80-100 percent of envelope lifetimes. (Master-
Bilt, Public Meeting Transcript, No. 0045 at p. 287) Master-Bilt also 
stated that a 15 percent replacement rate for the refrigeration 
systems, which corresponds to a lifetime of 7 years, is too high, and 
actual replacement rates should be only half as much. (Master-Bilt, No. 
0046.1 at p. 1) AHRI stated that a typical mechanical equipment 
lifetime is between 8 and 12 years. (AHRI, No. 0055.1 at p. 4) Master-
Bilt also mentioned that the economy has reduced the frequency at which 
walk-in coolers and freezers are completely replaced with new equipment 
because of the high cost. Instead, existing equipment is often being 
refurbished with users typically replacing only one or a few individual 
components. (Master-Bilt, No. 0046.1 at p. 1) Master-Bilt also stated 
that doors are the most commonly repaired or replaced envelope 
component, while the most common replacement part for a refrigeration 
system is the compressor. It noted that only 5 percent of refrigeration 
systems require replacement compressors over a 10-year span. (Master-
Bilt, Public Meeting Transcript, No. 0045 at p. 287) American Panel 
agreed that the entire refrigeration system is not typically replaced 
and only a compressor or fan motor is replaced when the system fails. 
Consequently, American Panel disagreed with the 15 percent average 
replacement rate used in the preliminary analysis for the refrigeration 
systems and suggested DOE use a refrigeration system replacement rate 
of

[[Page 55835]]

10 percent. (American Panel, No. 0048.1 at p. 11) In view of the 
comments received from interested parties, DOE revised its assumption 
of the average lifetime of the refrigeration system to 12 years, 
corresponding to a replacement rate of about 8 percent.
    In the preliminary analysis, DOE assumed a higher replacement rate 
for refrigeration systems than for envelopes. American Panel commented 
that DOE's estimated shipment ratio of 3 to 1 between refrigeration 
systems and envelopes was too high and that a more appropriate shipment 
ratio between refrigeration systems and envelopes would be about 1.3 to 
1. (American Panel, Public Meeting Transcript, No. 0045 at p. 192 and 
No. 0048.1 at p. 4) As explained, in the NOPR shipment model, the 
refrigeration system lifetime has been revised downward from 15 to 12 
years. (DOE has retained the 15-year lifetime for envelopes.) In the 
revised shipment model, refrigeration system replacements account for 
about 30-41 percent of all refrigeration system shipments. While this 
estimate exceeds the suggested shipment ratio of 1.3, DOE believes that 
the average lifetimes of walk-in envelopes and refrigeration systems, 
which are based on manufacturer interviews and stakeholder comments, 
are reasonable.
    NEEA and NPCC stated that economic lifetimes are different from 
physical lifetimes and suggested that DOE use both economic and 
physical lifetimes depending on the building type in which the walk-in 
cooler and freezer resides. (NEEA and NPCC, No. 0059.1 at p. 11) The 
physical lifetime refers to the duration before the equipment fails or 
is replaced, whereas the economic lifetime refers to the duration 
before the walk-in cooler and freezer equipment is taken out of service 
because the owner is no longer in business. In the event of an economic 
lifetime failure, however, a WICF would likely not leave the national 
stock, but would instead be sold to a third party, which would 
represent a transfer of goods and would not impact WICF shipments or 
stock at a national level. For a more detailed discussion of economic 
lifetimes see life-cycle cost discussion in section IV.F.7.
c. Growth Rates
    The preliminary analysis used a shipments growth rate of 
approximately 2 percent. Several interested parties commented on this 
assumption. American Panel agreed with DOE's assumption that walk-in 
growth will match growth seen in building stock square footage. 
(American Panel, No. 0048.1 at p. 11) Others stated that the 
preliminary analysis shipment growth rate was overestimated. AHRI, NEEA 
and NPCC predicted that the walk-in market would be flat and any growth 
would be less than 1 percent. (AHRI, No. 0055.1 at p. 4; NEEA and NPCC, 
Public Meeting Transcript, No. 0045 at p. 292) Master-Bilt, NEEA and 
NPCC stated that the shipment analysis should use a maximum growth rate 
of 1 percent. (Master-Bilt, No. 0046.1 at p.1; NEEA and NPCC, Public 
Meeting Transcript, No. 0045 at p. 292) One stakeholder stated that its 
business has grown annually at a simple rate of 10 percent, although it 
added that this may not be representative and may have been driven by 
gaining market share from other manufacturers. (American Panel, Public 
Meeting Transcript, No. 0045 at pp. 290-291) American Panel suggested 
that NAFEM may provide walk-in growth rates across industry. American 
Panel observed that shipments grow about 7 percent in normal financial 
times; however, they can decline 10 percent per year during a 
recession. In particular, the restaurant sector business has dropped by 
60 percent while walk-in cooler and freezer business in the school 
sector has grown. (American Panel, No. 0048.1 at p. 11) Considering 
these stakeholder comments, DOE modeled its growth rate projections for 
the NOPR analysis using the commercial building floor space growth 
rates from the AEO 2013 NEMS-BT model.
d. Other Issues
    DOE developed a core shipment model for estimating the annual 
shipments and stocks of complete WICFs that formed the basis for the 
shipment analysis of refrigeration systems and envelope components. DOE 
expressed annual shipments and stocks of refrigeration systems in terms 
of installed refrigeration capacity (Btu/h) which required DOE to 
estimate the required refrigeration capacity for the WICF units 
shipped. As part of the process, product loads were estimated for 
different envelope sizes and types.
    In the preliminary analysis, product load estimates were central to 
the annual energy consumption projections and were presented in the 
same context. American Panel stated that while the product-specific 
heat and product pull-down temperature values used in the preliminary 
analysis were correct, it disagreed with the product-loading values 
assumed for various types of equipment. American Panel suggested that 
the product-loading estimates should be 2 pounds per cubic foot for 
small coolers and 1 pound per cubic foot for medium and large coolers 
(not 4 and 2 respectively, as DOE had assumed), and 1 pound per cubic 
foot for small, medium, and large freezers (not 1 for small freezers 
and 0.5 for medium and large freezers, as DOE had assumed). (American 
Panel, Public Meeting Transcript, No. 0045 at p. 209) Master-Bilt 
stated that it is difficult to have product load assumptions that are 
valid for all applications and DOE should explicitly state that the 
product load assumptions currently used are valid only for specific 
situations but may not necessarily be representative of all 
applications. (Master-Bilt, No. 0046.1 at p. 1)
    DOE agrees with Master-Bilt's observation that it is difficult to 
make assumptions on product load that are valid for all sizes and all 
applications. DOE revisited the issue and concluded that the loading 
ratios indicated by American Panel could be representative of the food 
service segment of the market, which accounts for about 35 percent of 
the aggregate installed refrigeration capacity for the walk-ins. From 
the available product brochures and indicated product loads for 
different sizes of WICF equipment, DOE believes that the loading ratios 
used for the other market segments are closer to ratios used in the 
preliminary analysis. Consequently, DOE did not change the loading 
ratios for the NOPR analysis.
2. Forecasted Efficiency in the Base Case and Standards Cases
    A key component of the NIA is the trend in energy efficiency 
forecasted for the base and standards cases. Using data collected from 
manufacturers and an analysis of market information, DOE developed a 
base-case energy efficiency distribution (which yields a shipment-
weighted average efficiency) for each of the considered equipment 
classes for the first year of the forecast period. To project the 
efficiency trend over the entire forecast period, DOE considered the 
current market distribution and recent trends. For envelope components, 
all base case shipments are assumed to have only a single EPCA-
compliant efficiency level except for display doors. For cooler display 
doors, shipments would be a mix of 25 percent EPCA-compliant equipment 
and 75 percent higher efficiency equipment. For freezer display doors, 
shipments would be a mix of 80 percent EPCA-compliant equipment and 20 
percent higher efficiency equipment. For refrigeration systems, DOE 
assumed, based on manufacturer interviews, that in the absence of 
standards (the base case), shipments would be a mix of 75 percent EPCA-
compliant equipment and 25 percent higher efficiency equipment.

[[Page 55836]]

For both refrigeration systems and envelope components, DOE assumed no 
improvement of energy efficiency in the base case and held the base-
case energy efficiency distribution constant throughout the forecast 
period. DOE requests comment on this assumption.
    To estimate efficiency trends in the standards cases, DOE has used 
a ``roll-up'' scenario in its standards rulemakings. The roll-up 
scenario represents a standards case in which all product efficiencies 
in the base case that do not meet the standard would roll up to meet 
the new standard level. Consumers in the base case who purchase walk-in 
equipment above the standard level are not affected as they are assumed 
to continue to purchase the same equipment. The roll-up scenario 
characterizes consumers primarily driven by the first-cost of the 
analyzed products and characterizes the efficiency trends currently 
found in the market.
    In summary, under the roll-up 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.
3. National Energy Savings
    For each year in the forecast period, DOE calculates the NES for 
each standard level by multiplying the stock of equipment affected by 
the energy conservation standards by the per-unit annual energy 
savings. DOE typically considers the impact of a rebound effect, 
introduced in the energy-use analysis, in its calculation of national 
energy savings for a given product. A rebound effect occurs when users 
operate higher efficiency equipment more frequently and/or for longer 
durations, thus offsetting estimated energy savings. However, DOE 
assumed a rebound factor of one, or no effect, because walk-ins must 
cool their contents at all times and it is not possible for consumers 
to operate them more frequently. For a further discussion of the 
rebound effect, see chapter 10 of the TSD. DOE seeks comment on the 
assumption that there is no rebound effect associated with these 
products.
    To estimate the national energy savings expected from appliance 
standards, DOE uses a multiplicative factor to convert site energy 
consumption (at the home or commercial building) into primary or source 
energy consumption (the energy required to convert and deliver the site 
energy). These conversion factors account for the energy used at power 
plants to generate electricity and losses in transmission and 
distribution, as well as for natural gas losses from pipeline leakage 
and energy used for pumping. For electricity, the conversion factors 
vary over time due to projected changes in generation sources (that is, 
the power plant types projected to provide electricity to the country). 
The factors that DOE developed are marginal values, which represent the 
response of the system to an incremental decrease in consumption 
associated with appliance standards.
    In the preliminary analysis, DOE used annual site-to-source 
conversion factors based on the version of NEMS that corresponds to 
AEO2009. For this NOPR, DOE updated its conversion factors based on the 
U.S. energy sector model NEMS-BT corresponding to AEO2013.
    DOE has historically presented NES in terms of primary energy 
savings. In response to the recommendations of a committee on ``Point-
of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 
Standards'' appointed by the National Academy of Science, DOE announced 
its intention to use full-fuel-cycle (FFC) measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (August 18, 2011) While DOE stated in that 
notice that it intended to use the Greenhouse Gases, Regulated 
Emissions, and Energy Use in Transportation (GREET) model to conduct 
the analysis, it also said it would review alternative methods, 
including the use of NEMS. After evaluating both models and the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in the Federal Register in which DOE 
explained its determination that NEMS is a more appropriate tool for 
its FFC analysis and its intention to use NEMS for that purpose. 77 FR 
49701 (August 17, 2012). DOE received one comment, which was supportive 
of the use of NEMS for DOE's FFC analysis.\20\
---------------------------------------------------------------------------

    \20\ Docket ID: EERE-2010-BT-NOA-0028, comment by Kirk 
Lundblade.
---------------------------------------------------------------------------

    The approach used for today's NOPR, and the FFC multipliers that 
were applied, are described in appendix 10G of the NOPR TSD. NES 
results are presented in both primary and summarized by TSL in terms of 
FFC savings in section V.B.3.a.
4. Net Present Value of Consumer Benefit
    The inputs for determining the NPV of the total costs and benefits 
experienced by walk-in equipment consumers are: (1) Total annual 
installed cost; (2) total annual savings in operating costs; and (3) a 
discount factor. DOE calculates net savings each year as the difference 
between the base case and each standards case in total savings in 
operating costs and total increases in installed costs. DOE calculates 
operating cost savings over the life of each product shipped during the 
forecast period.
    DOE multiplies the net savings in future years by a discount factor 
to determine their present value. For the preliminary analysis, DOE 
estimated the NPV of appliance consumer benefits using both a 3 percent 
and a 7 percent real discount rate. 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. NEEA and NPCC urged DOE to 
focus on the 3-percent discount rate as the primary basis for the 
analyses because the issues largely pertain to the aggregate costs and 
benefits accruing to society at large. (NEEA and NPCC, No. 0059.1 at p. 
12) DOE uses these discount rates in accordance with guidance provided 
by the Office of Management and Budget (OMB) to Federal agencies on the 
development of regulatory analysis.\21\ Therefore, for today's NOPR, 
DOE continued to estimate the NPV of appliance consumer benefits using 
both a 3 percent and a 7 percent real discount rate as directed by OMB.
---------------------------------------------------------------------------

    \21\ OMB Circular A-4 (Sept. 17, 2003), section E, ``Identifying 
and Measuring Benefits and Costs.'' Available at: 
www.whitehouse.gov/omb/memoranda/m03-21.html.
---------------------------------------------------------------------------

5. Benefits From Effects of Standards on Energy Prices
    The reduction in electricity consumption associated with new 
standards for walk-ins could reduce the electricity prices charged to 
consumers in all sectors of the economy and thereby reduce their 
electricity expenditures. In chapter 2 of the preliminary TSD, DOE 
explained that, because the power industry is a complex mix of fuel and 
equipment suppliers, electricity producers and distributors, it did not 
plan to estimate the value of potentially reduced electricity costs for 
all consumers

[[Page 55837]]

associated with new or amended standards for walk-ins.
    For this rule, DOE used NEMS-BT to assess the impacts of the 
reduced need for new electric power plants and infrastructure projected 
to result from standards. In NEMS-BT, changes in power generation 
infrastructure affect utility revenue requirements, which in turn 
affect electricity prices. DOE estimated the impact on electricity 
prices associated with each considered TSL. Although the aggregate 
benefits for electricity users are potentially large, there may be 
negative effects on some entities involved in electricity supply, 
particularly power plant providers and fuel suppliers. Given the 
uncertainty about the extent to which the benefits for electricity 
users from reduced electricity prices would be a transfer from those 
involved in electricity supply to electricity users, DOE continues to 
investigate the extent to which electricity price changes projected to 
result from standards represent a net gain to society.

H. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended standards on 
commercial consumers, DOE evaluates the impact on identifiable groups 
(i.e., subgroups) of consumers, such as different types of businesses 
that may be disproportionately affected by an energy conservation 
standard. DOE gathered data for all business types identified in the 
analysis: grocery stores; convenience stores (including specialty food 
stores); convenience stores without gasoline stations; and restaurants 
that purchase their own walk-in coolers or freezers.
    Comments submitted by American Panel and Manitowoc recommended that 
DOE consider non-chain restaurants independently of chain restaurants. 
(American Panel, Public Meeting Transcript, No. 0045 at p. 252; 
Manitowoc, Public Meeting Transcript, No. 0045 at p. 254) Further 
comments by American Panel suggested that small restaurants are more 
vulnerable to potential economic consequences of an efficiency 
standard. (American Panel, No. 0048.1 at p. 10) DOE agrees with these 
comments and believes that its current models accurately represent 
chain restaurants because data used to characterize the restaurant 
business type is dominated by multi-establishment chain restaurants. 
Hence, small, non-chain restaurants are included in the subgroup 
analysis.
    After reviewing the data and submitted comments (see TSD chapter 11 
for more details), DOE identified small restaurant owners because this 
subgroup likely includes owners of high-cost walk-in coolers and 
freezers, has the highest capital costs of all subgroups, and 
potentially experiences the shortest equipment economic lifetimes. 
These conditions make it likely that this subgroup will have the lowest 
life-cycle cost savings of any major consumer group.
    DOE estimated the impact on the identified consumer subgroup using 
the LCC spreadsheet model. The standard LCC and PBP analyses (described 
in section IV.F) include various types of businesses that own and use 
walk-in coolers and freezers. The LCC spreadsheet model allows for the 
identification of one or more subgroups of businesses, which can then 
be analyzed by sampling only each subgroup. The results of DOE's LCC 
subgroup analysis are summarized in section V.B and described in detail 
in chapter 11 of the TSD.

I. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impact of energy 
conservation standards on manufacturers of walk-in equipment and to 
calculate the impact of such standards on employment and manufacturing 
capacity. Manufacturers of panels, doors, and refrigeration, as well as 
manufacturers of completed walk-ins, were considered in the analysis.
    The MIA has both quantitative and qualitative aspects. The 
quantitative portion of the MIA primarily relies on the Government 
Regulatory Impact Model (GRIM), an industry cash-flow model customized 
for this rulemaking. The key GRIM inputs are data on the industry cost 
structure, product costs, shipments, and assumptions about markups and 
conversion expenditures. The key output is the industry net present 
value (INPV). Different sets of assumptions (markup scenarios) will 
produce different results. The qualitative portion of the MIA addresses 
factors such as product characteristics and industry and market trends. 
Chapter 12 of the NOPR TSD describes the complete MIA.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the walk-in cooler and freezer 
industry, which includes a top-down cost analysis of manufacturers that 
DOE used to derive preliminary financial inputs for the GRIM (e.g., 
sales general and administration (SG&A) expenses; research and 
development (R&D) expenses; and tax rates). DOE used public sources of 
information, including company Securities and Exchange Commission (SEC) 
10-K filings, Moody's company data reports, corporate annual reports, 
the U.S. Census Bureau's Economic Census, and Dun and Bradstreet 
reports.
    In Phase 2 of the MIA, DOE prepared an industry cash-flow analysis 
to quantify the impacts of a new energy conservation standard. In 
general, new or more stringent energy conservation standards can affect 
manufacturer cash flow in three distinct ways: (1) Create a need for 
increased investment, (2) raise production costs per unit, and (3) 
alter revenue due to higher per-unit prices and possible changes in 
sales volumes.
    In Phase 3 of the MIA, DOE conducted interviews with a 
representative cross-section of manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. See section IV.I.4 for a description of the key 
issues manufacturers raised during the interviews.
    Phase 3 also includes an evaluation of sub-groups of manufacturers 
that may be disproportionately impacted by standards or that may not be 
accurately represented by the average cost assumptions used to develop 
the industry cash-flow analysis. For example, small manufacturers, 
niche players, or manufacturers exhibiting a cost structure that 
largely differs from the industry average could be more negatively 
affected. Thus, during Phase 3, DOE analyzed small manufacturers as a 
subgroup.
    The Small Business Administration (SBA) defines a small business 
for North American Industry Classification System (NAICS) 333415 ``Air-
Conditioning and Warm Air Heating Equipment and Commercial and 
Industrial Refrigeration Equipment Manufacturing'' as having 750 
employees or fewer. During its research, DOE identified multiple 
companies that manufacture products covered by this rulemaking and 
qualify as a small business under the SBA definition. The small 
businesses were further sub-divided into small manufacturers of panels, 
doors, and refrigeration equipment to better understand the impacts of 
the rulemaking on those entities. The small business subgroup is 
discussed in sections V.B.2.d and VI.B of today's notice and in Chapter 
12 of the NOPR TSD.

[[Page 55838]]

2. Government Regulatory Impact Model Analysis
    As discussed previously, DOE uses the GRIM to quantify the changes 
in cash flow that result in a higher or lower industry value from new 
standards. The GRIM analysis uses a discounted cash-flow methodology 
that incorporates manufacturer costs, markups, shipments, and industry 
financial information as inputs. The GRIM models changes in costs, 
distribution of shipments, investments, and manufacturer margins that 
could result from new energy conservation standards. The GRIM 
spreadsheet uses the inputs to arrive at a series of annual cash flows 
beginning in 2013 (the base year of the analysis) and continuing to 
2046. DOE calculated INPVs by summing the stream of annual discounted 
cash flows during these periods. DOE applied discount rates derived 
from industry financials and then modified them according to feedback 
during manufacturer interviews. Discount rates ranging from 9.4 to 10.5 
percent were used depending on the component being manufactured.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the base case and each TSL (the 
standards case). Essentially, the difference in INPV between the base 
case and a standards case represents the financial impact of the new 
standard on manufacturers. Additional details about the GRIM, the 
discount rate, and other financial parameters can be found in chapter 
12 of the TSD.
    DOE typically presents its estimates of industry impacts by 
grouping the major equipment classes served by the same manufacturers. 
For the WICF industry, DOE groups results by panels, doors, and 
refrigeration systems.
a. Government Regulatory Impact Model Key Inputs
i. Manufacturer Production Costs
    Manufacturing a higher-efficiency product is typically more 
expensive than manufacturing a baseline product due to the use of more 
expensive components and larger quantities of raw materials. The 
changes in the manufacturer production cost (MPC) of the analyzed 
products can affect revenues, gross margins, and cash flow of the 
industry, making these product cost data key GRIM inputs for DOE's 
analysis.
    In the MIA, DOE used the MPCs for each considered efficiency level 
calculated in the engineering analysis, as described in section IV.C 
and further detailed in chapter 5 of the TSD. In addition, DOE used 
information from its teardown analysis, described in section IV.C.3.a, 
to disaggregate the MPCs into material, labor, and overhead costs. To 
calculate the MPCs for products above the baseline, DOE added the 
incremental material, labor, and overhead costs from the engineering 
cost-efficiency curves to the baseline MPCs. These cost breakdowns and 
product mark-ups were validated with manufacturers during manufacturer 
interviews.
ii. Shipments Forecast
    The GRIM estimates manufacturer revenues based on total unit 
shipment forecasts and the distribution of shipments by equipment 
class. For the base-case analysis, the GRIM uses the NIA base-case 
shipment forecasts from 2013, the base year for the MIA analysis, to 
2046, the last year of the analysis period.
    For the standards case shipment forecast, the GRIM uses the NIA 
standards case shipment forecasts. The NIA assumes zero elasticity in 
demand as explained in section 9.3.1 in chapter 9 of the TSD. 
Therefore, the total number of shipments per year in the standards case 
is equal to the total shipments per year in the base case. DOE assumes 
a new efficiency distribution in the standards case, however, based on 
the energy conservation standard. DOE assumed that product efficiencies 
in the base case that did not meet the standard under consideration 
would ``roll up'' to meet the new standard in the standard year.
iii. Product and Capital Conversion Costs
    New energy conservation standards will cause manufacturers to incur 
conversion costs to bring product designs into compliance. DOE 
evaluated the level of conversion-related capital expenditures needed 
to comply with each efficiency level in each equipment class. For the 
purpose of the MIA, DOE classified these conversion costs into two 
major groups: (1) Product conversion costs and (2) capital conversion 
costs. Product conversion costs are investments in research, 
development, testing, and marketing focused on making product designs 
comply with the new energy conservation standards. Capital conversion 
costs are investments in property, plant, and equipment to adapt or 
change existing production facilities so that new equipment designs can 
be fabricated and assembled.
    To evaluate the level of capital conversion expenditures 
manufacturers would likely incur to comply with energy conservation 
standards, DOE used the manufacturer interviews to gather data on the 
level of capital investment required at each efficiency level. DOE 
validated manufacturer comments through estimates of capital 
expenditure requirements derived from the product teardown analysis and 
engineering model described in sections IV.C.2 and IV.C.3.
    DOE assessed the product conversion costs at each level by 
integrating data from quantitative and qualitative sources. DOE 
considered feedback from multiple manufacturers at each efficiency 
level to determine conversion costs such as R&D expenditures and 
certification costs. Manufacturer numbers were aggregated to better 
reflect the industry as a whole and to protect confidential 
information.
    In general, DOE assumes that all conversion-related investments 
occur between the year of publication of the final rule and the year by 
which manufacturers must comply with the standard. The investment 
figures used in the GRIM can be found in section V.B.2.a of today's 
notice. For additional information on the estimated product conversion 
and capital conversion costs, see chapter 12 of the TSD.
b. Government Regulatory Impact Model Scenarios
i. Markup Scenarios
    As discussed above, MSPs include direct manufacturing production 
costs (i.e., labor, material, and overhead estimated in DOE's MPCs) and 
all non-production costs (i.e., SG&A, R&D, and interest), along with 
profit. To calculate the MSPs in the GRIM, DOE applied non-production 
cost markups to the MPCs estimated in the engineering analysis for each 
equipment class and efficiency level. Modifying these markups in the 
standards case yields different sets of impacts on manufacturers. For 
the MIA, DOE modeled two standards case markup scenarios to represent 
the uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of new 
energy conservation standards: (1) A preservation of gross margin 
percentage and (2) a preservation of operating profit. These scenarios 
lead to different markups values which, when applied to the input MPCs, 
result in varying revenue and cash flow impacts.
    Under the ``preservation of gross margin percentage'' scenario, DOE 
applied a single uniform gross margin percentage markup across all 
efficiency levels. As production costs increase

[[Page 55839]]

with efficiency, this scenario implies that the absolute dollar markup 
will increase as well. DOE assumed the non-production cost markup--
which includes SG&A expenses, research and development expenses, 
interest, and profit--to be 1.32 for panels, 1.50 for solid doors, 1.62 
for display doors, and 1.35 for refrigeration. These markups are 
consistent with the ones DOE assumed in the engineering analysis. 
Manufacturers have indicated that it is optimistic to assume that, as 
manufacturer production costs increase in response to an energy 
conservation standard, manufacturers would be able to maintain the same 
gross margin percentage markup. Therefore, DOE assumes that this 
scenario represents a high bound to industry profitability under an 
energy conservation standard.
    In the preservation of operating profit scenario, manufacturer 
markups are set so that operating profit one year after the compliance 
date of the new energy conservation standards is the same as in the 
base case. Under this scenario, as the cost of production and the cost 
of sales rise, manufacturers are generally required to reduce their 
markups to a level that maintains base case operating profit. The 
implicit assumption behind this markup scenario is that the industry 
can maintain only its operating profit in absolute dollars after the 
standard. Operating margin in percentage terms is reduced between the 
base case and standards case.
3. Discussion of Comments
    Interested parties commented on the assumptions and results of the 
preliminary analysis, particularly on the cumulative regulatory burden, 
inventory levels, and scope of the manufacturer impact analysis.
a. Cumulative Regulatory Burden
    AHRI stated that DOE must take into account the impact of new 
regulations that California is working on as part of Title 20 that will 
establish new prescriptive design requirements for walk-in coolers and 
freezers in 2011. (AHRI, Public Meeting Transcript, No. 0045 at p. 5)
    DOE reviewed California Code of Regulations Title 20, Section 1605, 
which establishes walk-in requirements for insulation levels, motor 
types, and use of automatic door-closers. The latest set of 
regulations, published in the 2010 Appliance Efficiency Regulations and 
effective 2011, includes design standards required for all walk-ins 
manufactured on or after January 1, 2009. These state regulations are 
identical to Federal regulations that are set forth in EPCA (see 42 
U.S.C. 6313(f)), and that are already in place. As a practical matter, 
the Federal regulations mirror those that the State of California had 
previously prescribed. As a result there was no incremental cost 
differential between the Federal standards promulgated in 2007 and 
California standards. The energy conservation standards that DOE is 
considering in this standards rulemaking are more stringent than the 
already-prescribed levels.
    AHRI also expressed concern over California regulations to limit 
greenhouse gas emissions, in particular the California Air Resources 
Board (CARB) provisions to reduce the use of high global warming 
potential refrigerants, such as hydrofluorocarbons (HFCs). (AHRI, 
Public Meeting Transcript, No. 0045 at p. 5)
    CARB is currently limiting the in-state use of high-GWP 
refrigerants in non-residential refrigeration systems through its 
Refrigerant Management Program, effective January 1, 2011. According to 
this new regulation, facilities with refrigeration systems that have a 
refrigerant capacity exceeding 50 pounds must repair leaks within 14 
days of detection, maintain on-site records of all leak repairs, and 
keep receipts of all refrigerant purchases. The regulation applies to 
any person or company that installs, services, or disposes of 
appliances with high-GWP refrigerants. According to EPCA, walk-in 
coolers and freezers are enclosed storage spaces that can be walked 
into and have a total chilled storage area of less than 3,000 square 
feet. (42 U.S.C. 6311(20) (defining the term ``walk-in cooler; walk-in 
freezer'')) Due to this size limit, it is unlikely that a walk-in 
refrigeration system will contain over 50 pounds of refrigerant, making 
application of the CARB provisions unlikely.\22\
---------------------------------------------------------------------------

    \22\ DOE estimates that walk-ins meeting the statutory 
definition would likely use between 5 and 40 pounds of refrigerant, 
below the threshold established under the California regulations.
---------------------------------------------------------------------------

b. Inventory Levels
    In the preliminary analysis, DOE determined from U.S. Census data 
that the end-of-year inventory for the air-conditioning and warm air 
heating equipment and commercial and industrial refrigeration equipment 
manufacturing industry (NAICS code 333415) was approximately 10 percent 
of shipment value from 2002 to 2007 (U.S. Census Bureau Annual Survey 
of Manufacturers) and presented these data in Table 12.3.3 of chapter 
12 in the preliminary TSD. American Panel expressed concerns that the 
inventory percentages shown in Table 12.3.3 of chapter 12 in the 
Preliminary TSD are inaccurate and noted that their end-of-year 
inventory value has been only 2.5 percent of annual shipment value on 
average. (American Panel, No. 0048.1 at p. 11) The U.S. Census 
percentages represent values for the air-conditioning and warm-air 
heating equipment and commercial and industrial refrigeration equipment 
manufacturing industry, which includes a wide range of products and 
companies. DOE agrees that the U.S. Census figures may not necessarily 
be representative of inventory levels for specific walk-in cooler and 
freezer manufacturers. The figure is used to characterize the industry 
and is not a component of any quantitative analysis. DOE has factored 
American Panel's inventory number into its qualitative understanding of 
the walk-in industry.
c. Manufacturer Subgroup Analysis
    AHRI suggested that DOE should enlarge the scope of the 
manufacturer impact analysis to examine the impact of the rulemaking on 
all manufacturers of different equipment classes--including panel, 
door, and refrigeration system manufacturers. (AHRI, Public Meeting 
Transcript, No. 0045 at p. 4)
    To better reflect the structure of the rulemaking, DOE has expanded 
its analysis of manufacturers to include the impact of the rulemaking 
on key component suppliers, including panel manufacturers, door 
manufacturers, and refrigeration system manufacturers. Additionally, 
small manufacturers of panels, doors, and refrigeration systems are 
considered as separate sub-groups in the MIA.
4. Manufacturer Interviews
    As part of the MIA, DOE discussed potential impacts of standards 
with eight panel manufacturers, six door manufacturers, and three 
refrigeration systems manufacturers. In the interviews, DOE asked 
manufacturers to describe their major concerns about this rulemaking. 
The following sections discuss manufacturers' most significant 
concerns.
a. Cost of Testing
    All door, panel, and refrigeration manufacturers expressed concern 
regarding the cost of testing. The majority of walk-ins sold are not 
standard combinations of box sizes, refrigeration components, and 
doors. Almost every walk-in unit is tailored to meet consumer 
specifications. According to manufacturers, DOE-mandated testing of 
every configuration sold is not realistic and could become

[[Page 55840]]

a financial burden that would negatively impact manufacturers' 
profitability.
    The cost of compliance testing includes the engineering support 
necessary to design and run tests, the cost of the units tested, and 
the cost of third-party testing support. Some manufacturers indicated 
that it may be necessary to set up new test labs to deal with 
compliance requirements. Beyond DOE compliance testing, energy 
conservation standards may lead to product redesigns that require new 
certifications, such as Underwriters Laboratories (UL) fire safety, NSF 
2 food service, and NSF 7 commercial refrigerator and freezer standards 
compliance.
    Multiple door, panel, and refrigeration manufacturers expressed 
concern that these compliance and certification testing costs may lead 
to less customization in the industry. As an example, one door 
manufacturer was concerned that walk-in manufacturers would offer fewer 
door choices and partner with fewer door companies to reduce testing 
burden. As another example, a manufacturer that produces only unit 
coolers indicated that the need to certify the complete refrigeration 
system would force them to leave the WICF market. As the unit cooler 
supplier, the manufacturer does not have the ability to certify the 
entire system because they do not supply the condensing unit portion of 
the system. Today, the manufacturer's consumers pair the unit coolers 
with condensing units from other suppliers to assemble a walk-in 
refrigeration system. The manufacturer speculated that, in a regulated 
environment, their consumers would switch from buying refrigeration 
components from manufacturers of unit coolers to buying complete 
systems with matched unit coolers and condensing units from larger 
competitors that build complete systems rather than components. Their 
customers would make this change to avoid the test burden on 
refrigeration systems. Other manufacturers mentioned that the cost of 
testing could ultimately lead to conditions in which small panel 
manufacturers would be forced out of the market.
    Finally, walk-in manufacturers were concerned about pricing and 
availability of third-party testing. Several walk-in manufacturers 
noted that it is unclear whether a sufficient number of qualified third 
parties exist to carry out the performance testing mandated by DOE for 
the entire industry. One manufacturer was concerned that an 
insufficient number of test facilities would lead to higher testing 
costs and delays in achieving compliance.
b. Enforcement and Compliance
    All of the interviewed manufacturers expressed concern that an 
energy conservation standard rulemaking could result in unfair 
competition if the standard is not properly enforced. Interviewed 
manufacturers claimed that numerous manufacturers, particularly small 
one-to-two person operations, are not currently complying with the 
existing walk-in regulations in EPCA, which took effect January 1, 
2009. The manufacturers explained that smaller operations often have an 
incentive to be non-compliant. By using materials that do not comply 
with existing regulations, the non-compliant manufacturers maintain a 
price advantage over compliant manufacturers.
    Manufacturers emphasized the need to have well-defined compliance 
responsibilities. WICF units can be manufactured and delivered as per 
standard by the manufacturer, but the end user may decide to remove 
some of the efficiency features, such as strip curtains. Additionally, 
the quality of installation at the client site is often a factor that 
manufacturers cannot control because field assembly is managed by 
contractors. Manufacturers also noted that, for some installations, the 
contractors purchase the walk-in envelope and refrigeration equipment 
from separate suppliers, making it impossible for the equipment 
manufacturers to determine the efficiency of the installed product. 
Multiple manufacturers requested clarification to better understand 
which party bears responsibility for ensuring field-assembled walk-ins 
meet federal standards.
    In this NOPR, DOE discusses issues surrounding compliance and 
enforcement. In particular, DOE proposes that each component 
manufacturer would be responsible for certifying to DOE that the 
components they manufacture comply with the standards. DOE believes 
that the component-based approach provides for effective certification 
and enforcement of any standards while ensuring that the walk-in 
industry has sufficient flexibility to meet the applicable standards. 
For more details on DOE's proposed approach, see section III.D.
c. Profitability Impacts
    Walk-in manufacturers discussed how new energy conservation 
standards could affect profit levels. Manufacturers considered the 
walk-in industry to be a low margin-business. Price competition can be 
very aggressive, particularly for large orders and for name-brand 
client accounts. Manufacturers stated that low margins leave little 
room for the added costs that energy conservation standards could 
impose. Manufacturers noted that they will have to absorb the 
additional costs or pass the costs onto the consumer.
    Specifically, manufacturers emphasized their concerns about the 
impact of thicker panels, thicker doors, and more efficient 
refrigeration on profitability. Thicker panels require more material 
and longer processing times. The end result could be a reduction in 
factory throughput coupled with increased cost. Additionally, 
manufacturers noted that thicker panels are heavier, which leads to 
higher shipping costs. Similar concerns exist for solid doors. To 
achieve higher refrigeration efficiencies, manufacturers would have to 
purchase larger coils, more efficient compressors, and more expensive 
control systems. All these components increase the cost of goods sold 
for the completed walk-in.
    Manufacturers speculated that passing all these costs onto their 
customers would lead to lower-volume orders, as consumers with set 
budgets would not be able to purchase as many walk-ins (in the case of 
chain stores) or as much walk-in space (in the case of individual 
operations) for the same dollar amount. Alternatively, absorbing these 
costs would significantly reduce profit margins.
    In the manufacturer impact analysis, DOE has examined the impacts 
of standards on manufacturers' profit margins. For the results of DOE's 
analysis, see section V.B.2.a.
d. Excessive Conversion Cost
    According to panel manufacturers, a new energy conservation 
standard that requires increased levels of thickness could result in 
high conversion costs. Much of the existing production equipment is 
designed to produce panels 3.5-5 inches thick. Panels that are 6 or 
more inches thick are less common in the industry. Any standard that 
results in the market moving to 5-inch thick panels would require some 
conversion cost as factories that use foam-in-place technology must 
accommodate increased curing times. Manufacturers indicated that the 
conversion costs could range from $100,000 to $500,000, depending on 
the manufacturer's existing equipment. Any standard that requires 6-
inch thick panels would involve significant additional investment by 
most manufacturers. At this level of thickness, manufacturers estimate 
conversion costs would range from $200,000 to $1 million. Any standard 
that requires 7-inch thick panels would

[[Page 55841]]

require all manufacturers to reevaluate their manufacturing process. 
Conversion costs would range from $1.5 million to $4 million. Based on 
manufacturer statements, any standard that moved the industry to 6-inch 
thick panels would likely put some of the top 10 panel manufacturers 
out of business.
    DOE considers conversion costs in the manufacturer impact analysis. 
For details on DOE's findings, see section V.B.2.a.
e. Disproportionate Impact on Small Businesses
    Most interviewed manufacturers noted that new energy conservation 
standards could have a disproportionate impact on small businesses as 
compared to larger businesses. The cost of testing, the potential 
increase in materials, and the potential need to obtain financing are 
the factors that could affect small business manufacturers producing 
refrigeration systems, panels, and doors more severely.
    Manufacturers voiced concerns regarding the cost of both compliance 
testing and certification testing (e.g., UL and NSF certifications) on 
small businesses. According to manufacturers, the price tag for testing 
is likely to be similar for both small and large companies due to the 
high level of product customization in the industry. For small 
businesses, the cost will spread across smaller sales volumes, making 
recuperation of the testing investment more difficult. Some 
manufacturers thought that compliance testing costs alone could force 
small manufacturers to exit the industry.
    Additionally, small manufacturers indicated that they face a 
significant price disadvantage for foaming agents (used for insulation) 
and components due to their small purchasing quantities when compared 
to large manufacturers. Any standard that requires small manufacturers 
to use more foam or more expensive components will exacerbate the 
pricing gap. Given the price-sensitive nature and low margin of the 
industry, the small envelope manufacturers were concerned that 
requiring thicker panels provided a competitive advantage to large 
manufacturers that could obtain foaming agents at a lower price based 
on order quantities that are of larger magnitude.
    Several interviewed manufacturers expressed concern that the 
current tightness in financial markets and reduced economic activity 
could negatively impact their ability to obtain the financing necessary 
to cover compliance costs, particularly for small business operations, 
which generally have greater difficulty obtaining financing.
    DOE has examined the impact on small manufacturers in its 
manufacturer sub-group analysis and regulatory flexibility analysis. 
For the results of these analyses, see sections V.B.2.d and VI.B.
f. Refrigerant Phase-Out
    Interviewed manufacturers noted the impacts of mandated changes in 
blowing agents and refrigerants. Currently, walk-in manufacturers use 
HFC-404 and HFC-134a refrigerants. While HFC-404 is used exclusively as 
a refrigerant, HFC-134a is used as both a refrigerant and a blowing 
agent in the walk-in manufacturing industry.
    Several manufacturers expressed concern about the impact of a 
potential phase-down or phase-out of HFCs. The concern is acute because 
manufacturers stated that there is no clear alternative or substitute 
to HFCs for the industry. Without a clear replacement, manufacturers 
are concerned that any phase-out would create a period of uncertainty 
as the industry identifies suitable alternatives and then redesigns 
both products and processes around the replacement. In the 
manufacturers' experience, past phase-outs have led to more expensive 
and less efficient refrigerant replacements.
    Panel manufacturers expressed concern that conversion to a new 
blowing agent would be costly as they would have to go through a 
transition period in which foam would need to be reformulated. 
Production processes and facilities would need to adapt to the new foam 
blend. Manufactures stated that previous, replacement blowing agents 
have been more expensive and have presented challenges to the 
production process because of different flow characteristics from the 
agents they replace. They also noted that blowing agent substitutes 
have led to foam blends with lower R-value, providing less insulation. 
Panel manufacturers were concerned that lower insulation effectiveness 
results in thicker panels needed to meet a standard, which leads to 
increased production cost and lower profit margins.
    Refrigeration system manufacturers expressed that an HFC phase-out 
would be costly as it would require redesign of all products. Some 
manufacturers stated that an HFC phase-out would force them to use 
flammable refrigerants. Manufacturers noted that some alternative 
refrigerants may require substantially larger systems to achieve the 
same levels of performance.
    As discussed in section IV.A.2.b, DOE has only considered HFC 
refrigerants in the analysis. DOE did not consider whether foam blowing 
agents would cost more, less or stay the same and DOE understands there 
is a range of non-HFC foam blowing used already in these applications.

J. Employment Impact Analysis

    Employment impacts are one factor DOE considers in selecting an 
efficiency standard. Employment impacts include direct and indirect 
impacts. Direct employment impacts are any changes that affect 
employment of WICF manufacturers. Indirect impacts are those employment 
changes in the larger economy that occur because of the shift in 
expenditures and capital investment caused by the purchase and 
operation of more efficient walk-ins. The MIA results in section 
V.B.2.b of this notice and chapter 12 of the TSD address only the 
direct employment impacts on walk-in manufacturers. Chapter 13 of the 
TSD provides further information about other, primarily indirect, 
employment impacts discussed in this section.
    Indirect employment impacts from WICF standards consist of the net 
jobs created or eliminated in the national economy, excluding the 
manufacturing sector being regulated, as a consequence of (1) reduced 
spending by end-users on electricity, which could potentially be offset 
by the increased spending on maintenance and repair of higher 
efficiency equipment); (2) reduced spending on new energy supply by the 
utility industry; (3) increased spending on the purchase price of new 
walk-in coolers and freezers; and (4) the effects of those three 
factors throughout the economy. DOE expects the net monetary savings 
from standards to stimulate other forms of economic activity. DOE also 
expects these shifts in spending and economic activity to affect the 
demand for labor.
    In developing this analysis in the NOPR, DOE estimated indirect 
national employment impacts using an input/output model of the U.S. 
economy, called ImSET (Impact of Sector Energy Technologies) developed 
by DOE's Building Technologies Program. ImSET is a personal-computer 
based, economic analysis model that characterizes the interconnections 
among 188 sectors of the economy as national input/output structural 
matrices using data from the U.S. Department of Commerce's 1997 
Benchmark U.S. input-output table. The ImSET model estimates changes in 
employment, industry output, and wage income in the overall U.S. 
economy resulting from changes in expenditures in various sectors of 
the economy. DOE estimated changes in expenditures using the NIA model. 
ImSET then estimated

[[Page 55842]]

the net national indirect employment impacts efficiency standards would 
have on employment by sector.
    The ImSET input/output model suggests that the proposed standards 
could increase the net demand for labor in the economy, and the gains 
would most likely be very small relative to total national employment. 
For more details on the employment impact analysis and its results, see 
chapter 13 of the TSD and section IV.J of this notice.

K. Utility Impact Analysis

    The utility impact analysis estimates several important effects on 
the utility industry of the adoption of new or amended standards. For 
this analysis, DOE used the NEMS-BT model to generate forecasts of 
electricity consumption, electricity generation by plant type, and 
electric generating capacity by plant type, that would result from each 
considered TSL. DOE obtained the energy savings inputs associated with 
efficiency improvements to considered products from the NIA. DOE 
conducts the utility impact analysis as a scenario that departs from 
the latest AEO Reference case. In the analysis for today's rule, the 
estimated impacts of standards are the differences between values 
forecasted by NEMS-BT and the values in the AEO2013 Reference case. For 
more details on the utility impact analysis, see chapter 14 of the TSD.

L. Emissions Analysis

    In the emissions analysis, DOE estimates the reduction in power 
sector emissions of carbon dioxide (CO2), nitrogen oxides 
(NOX), sulfur dioxide (SO2), and mercury (Hg) 
from potential energy conservation standards for walk-in coolers and 
freezers. In addition, DOE estimates emissions impacts in production 
activities (extracting, processing, and transporting fuels) that 
provide the energy inputs to power plants. These are referred to as 
``upstream'' emissions. Together, these emissions account for the full-
fuel-cycle (FFC). In accordance with DOE's FFC Statement of Policy (76 
FR 51282 (Aug. 18, 2011)), the FFC analysis includes impacts on 
emissions of methane (CH4) and nitrous oxide 
(N2O), both of which are recognized as greenhouse gases.
    DOE conducted the emissions analysis using emissions factors that 
were derived from data in EIA's Annual Energy Outlook 2013 (AEO 2013), 
supplemented by data from other sources. DOE developed separate 
emissions factors for power sector emissions and upstream emissions. 
The method that DOE used to derive emissions factors is described in 
chapter 15 of the NOPR TSD.
    EIA prepares the Annual Energy Outlook using the National Energy 
Modeling System (NEMS). Each annual version of NEMS incorporates the 
projected impacts of existing air quality regulations on emissions. AEO 
2013 generally represents current legislation and environmental 
regulations, including recent government actions, for which 
implementing regulations were available as of December 31, 2011.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs. Title IV of the Clean Air Act sets an annual emissions cap on 
SO2 for affected EGUs in the 48 contiguous States and the 
District of Columbia (DC). SO2 emissions from 28 eastern 
states and DC were also limited under the Clean Air Interstate Rule 
(CAIR; 70 FR 25162 (May 12, 2005)), which created an allowance-based 
trading program that operates along with the Title IV program. CAIR was 
remanded to the U.S. Environmental Protection Agency (EPA) by the U.S. 
Court of Appeals for the District of Columbia Circuit but it remained 
in effect. See North Carolina v. EPA, 550 F.3d 1176 (DC Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (DC Cir. 2008). On August 21, 2012, 
the DC Circuit issued a decision to vacate CSAPR. See EME Homer City 
Generation, LP v. EPA, 696 F.3d 7, 38 (DC Cir. 2012). The court ordered 
EPA to continue administering CAIR. The AEO 2013 emissions factors used 
for today's NOPR assume that CAIR remains a binding regulation through 
2040.
    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, any excess SO2 
emissions allowances resulting from the lower electricity demand caused 
by the adoption of an efficiency standard could be used to permit 
offsetting increases in SO2 emissions by any regulated EGU. 
In past rulemakings, DOE recognized that there was uncertainty about 
the effects of efficiency standards on SO2 emissions covered 
by the existing cap-and-trade system, but it concluded that negligible 
reductions in power sector SO2 emissions would occur as a 
result of standards.
    Beginning in 2015, however, SO2 emissions will fall as a 
result of the Mercury and Air Toxics Standards (MATS) for power plants, 
which were announced by EPA on December 21, 2011. 77 FR 9304 (Feb. 16, 
2012).\23\ In the final MATS rule, EPA established a standard for 
hydrogen chloride as a surrogate for acid gas hazardous air pollutants 
(HAP), and also established a standard for SO2 (a non-HAP 
acid gas) as an alternative equivalent surrogate standard for acid gas 
HAP. The same controls are used to reduce HAP and non-HAP acid gas; 
thus, SO2 emissions will be reduced as a result of the 
control technologies installed on coal-fired power plants to comply 
with the MATS requirements for acid gas. AEO 2013 assumes that, in 
order to continue operating, coal plants must have either flue gas 
desulfurization or dry sorbent injection systems installed by 2015. 
Both technologies, which are used to reduce acid gas emissions, also 
reduce SO2 emissions. Under the MATS, NEMS shows a reduction 
in SO2 emissions when electricity demand decreases (e.g., as 
a result of energy efficiency standards). Emissions will be far below 
the cap that would be established by CSAPR, so it is unlikely that 
excess SO2 emissions allowances resulting from the lower 
electricity demand would be needed or used to permit offsetting 
increases in SO2 emissions by any regulated EGU. Therefore, 
DOE believes that efficiency standards will reduce SO2 
emissions in 2015 and beyond.
---------------------------------------------------------------------------

    \23\ On July 20, 2012, EPA announced a partial stay, for a 
limited duration, of the effectiveness of national new source 
emission standards for hazardous air pollutants from coal- and oil-
fired electric utility steam generating units. http://www.epa.gov/airquality/powerplanttoxics/pdfs/20120727staynotice.pdf.
---------------------------------------------------------------------------

    CSAPR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia. Energy conservation standards are 
expected to have little effect on NOX emissions in those 
States covered by CSAPR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
permit offsetting increases in NOX emissions. However, 
standards would be expected to reduce NOX emissions in the 
States not affected by the caps, so DOE estimated NOX 
emissions reductions from the standards considered in today's NOPR for 
these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. DOE estimated mercury 
emissions reduction using emissions factors based on AEO 2013, which 
incorporates the MATS.

[[Page 55843]]

M. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this amended rule, DOE considered the 
estimated monetary benefits likely to result from the reduced emissions 
of CO2 and NOX that are expected to result from 
each of the TSLs considered. In order to make this calculation similar 
to the calculation of the NPV of consumer benefit, DOE considered the 
reduced emissions expected to result over the lifetime of products 
shipped in the forecast period for each TSL. This section summarizes 
the basis for the monetary values used for each of these emissions and 
presents the values considered in this rulemaking.
    For today's NOPR, DOE is relying on a set of values for the social 
cost of carbon (SCC) that was developed by an interagency process. A 
summary of the basis for these values is provided below, and a more 
detailed description of the methodologies used is provided as an 
appendix to chapter 16 of the TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide. A domestic SCC value is 
meant to reflect the value of damages in the United States resulting 
from a unit change in carbon dioxide emissions, while a global SCC 
value is meant to reflect the value of damages worldwide.
    Under section 1(b) of Executive Order 12866, agencies must, to the 
extent permitted by law, ``assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs.'' The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed these SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of serious 
challenges. A report from the National Research Council \24\ points out 
that any assessment will suffer from uncertainty, speculation, and lack 
of information about (1) future emissions of greenhouse gases, (2) the 
effects of past and future emissions on the climate system, (3) the 
impact of changes in climate on the physical and biological 
environment, and (4) the translation of these environmental impacts 
into economic damages. As a result, any effort to quantify and monetize 
the harms associated with climate change will raise serious questions 
of science, economics, and ethics and should be viewed as provisional.
---------------------------------------------------------------------------

    \24\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. National Academies Press: 
Washington, DC (2009).
---------------------------------------------------------------------------

    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Most Federal regulatory actions can 
be expected to have marginal impacts on global emissions. For such 
policies, the agency can estimate the benefits from reduced (or costs 
from increased) emissions in any future year by multiplying the change 
in emissions in that year by the SCC value appropriate for that year. 
The net present value of the benefits can then be calculated by 
multiplying each of these future benefits by an appropriate discount 
factor and summing across all affected years. This approach assumes 
that the marginal damages from increased emissions are constant for 
small departures from the baseline emissions path, an approximation 
that is reasonable for policies that have effects on emissions that are 
small relative to cumulative global carbon dioxide emissions. For 
policies that have a large (non-marginal) impact on global cumulative 
emissions, there is a separate question of whether the SCC is an 
appropriate tool for calculating the benefits of reduced emissions. 
This concern is not applicable to this notice, however.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    Economic analyses for Federal regulations have used a wide range of 
values to estimate the benefits associated with reducing carbon dioxide 
emissions. The model year 2011 Corporate Average Fuel Economy final 
rule, the U.S. Department of Transportation (DOT) used both a 
``domestic'' SCC value of $2 per metric ton of CO2 and a 
``global'' SCC value of $33 per metric ton of CO2 for 2007 
emission reductions (in 2007$), increasing both values at 2.4 percent 
per year. DOT also included a sensitivity analysis at $80 per metric 
ton of CO2.\25\ A 2008 regulation proposed by DOT assumed a 
domestic SCC value of $7 per metric ton of CO2 (in 2006$) 
for 2011 emission reductions (with a range of $0-$14 for sensitivity 
analysis), also increasing at 2.4 percent per year.\26\ A regulation 
for packaged terminal air conditioners and packaged terminal heat pumps 
finalized by DOE in 2008 used a domestic SCC range of $0 to $20 per 
metric ton CO2 for 2007 emission reductions (in 2007$). 73 
FR 58772, 58814 (Oct. 7, 2008) In addition, EPA's 2008 Advance Notice 
of Proposed Rulemaking on Regulating Greenhouse Gas Emissions Under the 
Clean Air Act identified what it described as ``very preliminary'' SCC 
estimates subject to revision. 73 FR 44354 (July 30, 2008). EPA's 
global mean values were $68 and

[[Page 55844]]

$40 per metric ton CO2 for discount rates of approximately 2 
percent and 3 percent, respectively (in 2006$ for 2007 emissions).
---------------------------------------------------------------------------

    \25\ See Average Fuel Economy Standards Passenger Cars and Light 
Trucks Model Year 2011, 74 FR 14196 (March 30, 2009) (Final Rule); 
Final Environmental Impact Statement Corporate Average Fuel Economy.
    \26\ See, Average Fuel Economy Standards, Passenger Cars and 
Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 
(Proposed Rule); Draft Environmental Impact Statement Corporate 
Average Fuel Economy Standards, Passenger Cars and Light Trucks, 
Model Years 2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy)
---------------------------------------------------------------------------

    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per metric ton of CO2. These interim values 
represented the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules.
c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specifically, the group considered public comments and further explored 
the technical literature in relevant fields. The interagency group 
relied on three integrated assessment models commonly used to estimate 
the SCC: the FUND, DICE, and PAGE models. These models are frequently 
cited in the peer-reviewed literature and were used in the last 
assessment of the Intergovernmental Panel on Climate Change. Each model 
was given equal weight in the SCC values that were developed.
    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four sets of SCC values for use in 
regulatory analyses. Three sets of values are based on the average SCC 
from the three integrated assessment models, at discount rates of 2.5, 
3, and 5 percent. The fourth set, which represents the 95th percentile 
SCC estimate across all three models at a 3-percent discount rate, is 
included to represent higher-than-expected impacts from temperature 
change further out in the tails of the SCC distribution. The values 
estimated for 2010 grow in real terms over time, as depicted in Table 
IV-17. 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,\27\ although preference is given to 
consideration of the global benefits of reducing CO2 
emissions. Table IV-17 presents the values in the 2010 interagency 
group report,\28\ which is reproduced in appendix 16-A of the NOPR TSD.
---------------------------------------------------------------------------

    \27\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
    \28\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, February 2010. http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.

                     Table IV-17--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                        [In 2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                                 Discount rate
                                                             ---------------------------------------------------
                                                                   5%           3%          2.5%          3%
                                                             ---------------------------------------------------
                                                                                                         95th
                                                                Average      Average      Average     percentile
----------------------------------------------------------------------------------------------------------------
2010........................................................          4.7         21.4         35.1         64.9
2015........................................................          5.7         23.8         38.4         72.8
2020........................................................          6.8         26.3         41.7         80.7
2025........................................................          8.2         29.6         45.9         90.4
2030........................................................          9.7         32.8         50.0        100.0
2035........................................................         11.2         36.0         54.2        109.7
2040........................................................         12.7         39.2         58.4        119.3
2045........................................................         14.2         42.1         61.7        127.8
2050........................................................         15.7         44.9         65.0        136.2
----------------------------------------------------------------------------------------------------------------

    The SCC values used for today's notice were generated using the 
most recent versions of the three integrated assessment models that 
have been published in the peer-reviewed literature.\29\ Table IV-18 
shows the updated sets of SCC estimates in five year increments from 
2010 to 2050. The full set of annual SCC estimates between 2010 and 
2050 is reported in appendix 16-A of the NOPR TSD. The central value 
that emerges is the average SCC across models at the 3 percent discount 
rate. However, for purposes of capturing the uncertainties involved in 
regulatory impact analysis, the interagency group emphasizes the 
importance of including all four sets of SCC values.
---------------------------------------------------------------------------

    \29\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013. http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.

[[Page 55845]]

                     Table IV-18--Annual SCC Values From 2013 Interagency Update, 2010-2050
                                      [In 2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                                Discount rate %
                                                             ---------------------------------------------------
                                                                   5            3           2.5           3
                            Year                             ---------------------------------------------------
                                                                                                         95th
                                                                Average      Average      Average     percentile
----------------------------------------------------------------------------------------------------------------
2010........................................................           11           33           52           90
2015........................................................           12           38           58          109
2020........................................................           12           43           65          129
2025........................................................           14           48           70          144
2030........................................................           16           52           76          159
2035........................................................           19           57           81          176
2040........................................................           21           62           87          192
2045........................................................           24           66           92          206
2050........................................................           27           71           98          221
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the Federal agencies participating in the 
interagency process to estimate the SCC. The interagency group intends 
to periodically review and reconsider those estimates to reflect 
increasing knowledge of the science and economics of climate impacts, 
as well as improvements in modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the values from the 
2013 interagency report, adjusted to 2012$ using the GDP price 
deflator. For each of the four cases specified, the values used for 
emissions in 2015 were $12.9, $40.8, $62.2, and $117 per metric ton 
avoided (values expressed in 2012$). DOE derived values after 2050 
using the relevant growth rates for the 2040-2050 period in the 
interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the potential standards it considered. As 
noted above, DOE has taken into account how new or amended energy 
conservation standards would reduce NOX emissions in those 
22 states not affected by the CAIR. DOE estimated the monetized value 
of NOX emissions reductions resulting from each of the TSLs 
considered for today's NOPR based on estimates found in the relevant 
scientific literature. Available estimates suggest a very wide range of 
monetary values per ton of NOX from stationary sources, 
ranging from $468 to $4809 per ton in 2012$).\30\ In accordance with 
OMB guidance,\31\ DOE calculated the monetary benefits using each of 
the economic values for NOX and real discount rates of 3 
percent and 7 percent.
---------------------------------------------------------------------------

    \30\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
    \31\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of SO2 and Hg 
emissions in energy conservation standards rulemakings. It has not 
included monetization in the current analysis.

V. Analytical Results

A. Trial Standard Levels

    As discussed in section III.B, DOE is proposing to set separate 
performance standards for the refrigeration system and for the 
envelope's doors and panels. The manufacturers of these components 
would be required to comply with the applicable performance standards. 
For a fully assembled WICF unit in service, the aggregate energy 
consumption would depend on the individual efficiency levels of both 
the refrigeration system and the components of the envelope.
    The refrigeration system removes heat from the interior of the 
envelope and accounts for most of the walk-in's energy consumption. 
However, the refrigeration system and envelope interact with each other 
and affect each other's energy performance. On the one hand, because 
the envelope components reduce the transmission of heat from the 
exterior to the interior of the walk-in, the energy savings benefit for 
any efficiency improvement for these envelope components depends on the 
efficiency level of the refrigeration system. Thus, any potential 
standard level for the refrigeration system would affect the energy 
that could be saved through standards for the envelope components. On 
the other hand, the economics of higher-efficiency refrigeration 
systems depend on the refrigeration load profile of the WICF unit as a 
whole, which is partially impacted by the envelope components.
    To accurately characterize the total benefits and burdens for each 
of its proposed standard levels, DOE developed TSLs that each consist 
of a combination of standard levels for both the refrigeration system 
and the set of envelope components that comprise a walk-in. In other 
words, each TSL DOE proposes in this NOPR consists of a standard for 
refrigeration systems, a standard for panels, a standard for non-
display doors, and a standard for display doors.
1. Trial Standard Level Selection Process
    The paragraphs that follow describe how DOE selected the TSLs. 
First, DOE selected seven potential levels for refrigeration systems by 
performing LCC and NIA analyses for refrigeration

[[Page 55846]]

systems. Second, DOE selected four levels for the envelope components 
by performing LCC and NIA analyses for the envelope components paired 
with each of the seven selected refrigeration system levels alone. 
Third, DOE chose six composite TSLs from the combinations of the seven 
potential levels for the refrigeration systems and the four potential 
levels for the envelope components. This process accounts for the fact 
that, as described above, the choice of refrigeration efficiency level 
affects the energy savings and NPV of the envelope component levels. 
These steps are described below.
    In selecting potential levels for the refrigeration systems, DOE 
focused on certain capacity points in the range it considered in the 
engineering analysis. (For a list of all points considered in the 
engineering analysis, see section IV.C.1.b.) In selecting the 
refrigeration capacity points for further analysis, DOE chose 
capacities with the highest relative shares of shipments in each 
equipment class. The proposed standard levels for each equipment class 
were then based on the analyzed capacities in each capacity range. The 
cost-efficiency tradeoff for the design options is similar over the 
range of sizes analyzed in the engineering analysis.

           Table V-1--Refrigeration Equipment Class Capacities
------------------------------------------------------------------------
                                                               Analyzed
                      Equipment class                         capacities
                                                              (kBtu/hr)
------------------------------------------------------------------------
DC.M.I, = 9,000...........................................           18
DC.M.O, = 9,000...........................................        18,54
DC.L.I, = 9,000...........................................            9
DC.L.O, = 9,000...........................................         9,54
MC.M.......................................................            9
MC.L.......................................................            9
------------------------------------------------------------------------

    DOE enumerated seven potential levels for each of the refrigeration 
system classes. Each analyzed capacity point in any refrigeration 
system class has between 3 and 13 efficiency levels, each corresponding 
to an added applicable design option (described in section IV.C). DOE 
also analyzed three competing compressor technologies for each 
dedicated condensing refrigeration system class. These compressor 
technologies are: hermetic reciprocating, semi-hermetic, and scroll.
    At a given efficiency level, the compressor with the best life-
cycle cost result was selected to represent the equipment at that 
efficiency level. From the set of possible efficiency levels for a 
given class, DOE selected seven for further analysis. For analyzed 
equipment having less than seven engineering design options (e.g., in 
the multiplex refrigeration system classes), the same efficiency level 
appeared more than once in the suite of seven efficiency levels. Five 
of the seven refrigeration system levels were based on their relative 
energy saving potential. The other two were based on maximizing the 
national net present value (``Max NPV''), and on achieving the maximum 
energy savings that is possible using all of the compressor 
technologies (``All Compressors'').
    DOE decided to include an all-compressors criterion for the 
refrigeration systems in response to stakeholder comments that DOE did 
not consider all types of compressors in the preliminary analysis 
(these comments were discussed in sections IV.C.4.b and IV.C.5.b). In 
particular, interested parties noted that the choice of compressor 
could affect the potential energy savings, but that it was 
inappropriate to treat compressor choice as a design option because not 
all compressor types are available at all capacities for all types of 
equipment. In response to these comments, DOE developed performance 
curves in the engineering analysis for refrigeration systems with each 
compressor type independently--identifying the maximum efficiency level 
for systems with each compressor type. The highest refrigeration system 
efficiency level that could be obtained by any compressor type for a 
given capacity unit was identified. In its set of TSL options, DOE 
included a highest efficiency level for the refrigeration systems at 
which all compressor technologies can compete (``All Compressors''). 
See chapter 10 of the TSD for further details on DOE's process for 
selecting potential TSLs.
    After the seven potential efficiency levels for each refrigeration 
system class were selected as described above, DOE proceeded with the 
LCC and NIA analysis of the envelope components (panels and doors). DOE 
conducted the LCC and NIA analyses on the envelope components by 
pairing them with each of the seven refrigeration system efficiency 
levels. Each panel and door class has between five and nine potential 
efficiency levels, each corresponding to an engineering design option 
applicable to that class (described in section IV.C). These LCC and NPV 
results represent the entire range of the economic benefits to the 
consumer at various combinations of efficiency levels of the 
refrigeration systems and the envelope components. The pairing of 
refrigeration system efficiency levels with the efficiency levels of 
envelope component classes is discussed in detail in chapter 10 of the 
TSD.
    DOE selected envelope component levels for further analysis based 
on the following criteria: maximum NPV, maximum NES with positive NPV, 
and Max Tech. DOE also considered a fourth criterion: maximum NES with 
positive NPV for display doors only, and no new standard for panels and 
non-display doors. DOE considered this level because it observed that, 
due to the nature of the panel and non-display door industry, any 
standard could have a large effect on small panel and door 
manufacturers. This effect is described in detail in chapter 12 of the 
TSD, Manufacturer Impact Analysis.
    Finally, DOE chose six composite TSLs by selecting from the 
combinations of the seven potential levels for the refrigeration 
systems and the four potential levels for the envelope components. The 
composite TSLs and criteria for each one are shown in Table V-2.

                             Table V-2--Criteria Description for the Composite TSLs
----------------------------------------------------------------------------------------------------------------
                                                           Refrigeration system criteria
                                 -------------------------------------------------------------------------------
       Component criteria                                                 Max NES with NPV>0
                                    All compressors         Max NPV                *               Max tech
----------------------------------------------------------------------------------------------------------------
Display Doors Only..............  ..................  2: All display
                                                       doors only at
                                                       NPV>0.
Maximum NPV.....................  1: All              4: Maximum NPV for
                                   compressors, max    both
                                   NPV.                refrigeration
                                                       system and
                                                       components.

[[Page 55847]]

 
Maximum NES with NPV>0..........  3: All              ..................  5: Max NES with
                                   compressors,                            NPV>0 for both
                                   NPV>0.                                  Refrigeration
                                                                           system and
                                                                           Components.
Max-Tech........................  ..................  ..................  ..................  6: Max-tech for
                                                                                               both
                                                                                               Refrigeration
                                                                                               system and
                                                                                               Components.
----------------------------------------------------------------------------------------------------------------
* Not counted as a separate efficiency level for the refrigeration system, as it corresponds to the Max Tech
  level in the current analysis.

    In Table V-2, the column headings identify the criteria for the TSL 
option for the refrigeration system and the row headings identify the 
criteria for the TSL option for the envelope components. The 
intersection of the row and the column define the respective choices 
for the composite TSL. The composite TSLs are numbered from 1 to 6 in 
order of least to most energy savings.
    DOE describes each TSL, from highest to lowest energy savings, as 
follows. TSL 6 is the max-tech level for each equipment class for all 
components. TSL 5 represents the maximum efficiency level of the 
refrigeration system equipment classes with a positive NPV at a 7-
percent discount rate, combined with the maximum efficiency level with 
a positive NPV at a 7-percent discount rate for each envelope component 
(panel, non-display door, or display door). TSL 4 corresponds to the 
efficiency level with the maximum NPV for refrigeration system classes 
and the efficiency level with the maximum NPV for envelope component 
classes. TSL 3 is the highest efficiency level for refrigeration 
systems at which all compressor technologies can compete, combined with 
the maximum efficiency level with a positive NPV at a 7-percent 
discount rate for each envelope component. TSL 2 is the efficiency 
level with the maximum NPV at a 7-percent discount rate for 
refrigeration systems, combined with the efficiency level with a 
maximum NPV at a 7-percent discount rate for display doors only, and 
does not include a new energy standard for panels and non-display 
doors. DOE is considering TSL 2 because a standard for panels and non-
display doors may be unduly burdensome to a large number of small 
business manufacturers (see sections V.B.2.d and VI.B for further 
discussion of the impact of the rule on small manufacturers). TSL 1 is 
the highest efficiency level for refrigeration systems at which all 
compressor technologies can compete, combined with the efficiency level 
with the maximum NPV at a 7-percent discount rate for each envelope 
component when the components are combined with the selected 
refrigeration efficiency level. For more details on the criteria for 
the proposed TSLs, see chapter 10 of the TSD.
2. Trial Standard Level Equations
    For panels and doors, DOE expresses the TSLs in terms of a 
normalization metric. For panels, the normalization metric is the ratio 
of the edge area to the core area. The TSLs are expressed in terms of 
polynomial equations that establish maximum U-factor limits in the form 
of:
[GRAPHIC] [TIFF OMITTED] TP11SE13.003

    The form of the equation allows the efficiency requirements to be 
determined for panels of any dimension within an equipment class. 
Coefficients A, B, and C were uniquely derived for each equipment class 
by plotting the U-factor of each representative size in an equipment 
class versus the edge area to core area ratio of the representative 
size and modeling the relationship as a polynomial equation. The core 
and edge areas for both floor and structural panels are defined in the 
walk-in cooler and freezer test procedure final rule. 76 FR at 33632 
(June 9, 2011).
    For display and non-display doors, respectively, the normalization 
metric is the surface area of the door. The TSLs are expressed in terms 
of linear equations that establish maximum daily energy consumption 
(MEC) limits in the form of:

MEC = D x (Surface Area) + E

    Coefficients D and E were uniquely derived for each equipment class 
by plotting the energy consumption at a given performance level versus 
the surface area of the door and determining the slope of the 
relationship, D, and the offset, E, where the offset represents the 
theoretical energy consumption of a door with no surface area (the 
offset is necessary because not all energy-consuming components of the 
door scale directly with surface area). The surface area is defined in 
the walk-in cooler and freezer test procedure final rule. 76 FR at 
33632.
    For refrigeration systems, the proposed TSLs are expressed as a 
minimum efficiency level (AWEF) that the system must meet. For 
dedicated condensing systems, DOE calculated the AWEF differently for 
small and large classes based DOE's expectation that small sized 
equipment may have difficulty meeting the same efficiency standard as 
large equipment (see section IV.A.3.b for details). Specifically, DOE 
observed that higher-capacity equipment tended to be more efficient 
because of the availability of scroll compressors above a certain 
capacity. DOE expressed the AWEF for large capacity dedicated 
condensing systems as a single value corresponding to the AWEF of the 
lowest capacity system analyzed in the large capacity class. DOE 
expressed the AWEF for the small capacity dedicated condensing systems 
as a linear equation normalized to the system gross capacity, where the 
equation was based on the AWEFs for the smallest two capacities 
analyzed but adjusted such that the equation would be continuous with 
the standard level

[[Page 55848]]

for the large capacity class at the boundary capacity point between the 
classes (i.e., 9,000 Btu/h). DOE calculated a single minimum efficiency 
for each class of multiplex condensing systems because DOE found that 
equipment capacity did not have a significant effect on the efficiency 
of the equipment. See appendix 10D of the TSD for further details on 
how the AWEF values were calculated. DOE requests comment on the AWEF 
equations and the methodology for determining them. In particular, DOE 
asks interested parties to submit data on how the efficiency of typical 
refrigeration systems varies by capacity. Based on comments and 
additional data DOE receives on the NOPR, DOE may consider other 
methods of calculating the minimum AWEF associated with the TSLs for 
each equipment class.
    The following tables present the equations and AWEFs for all TSLs 
under consideration. Table V-3, Table V-4, Table V-5, Table V-6, Table 
V-7, and Table V-8 show the standards equations for structural cooler 
panels, structural freezer panels, freezer floor panels, display doors, 
non-display passage doors, and non-display freight doors, respectively. 
Table V-9 shows the AWEFs for refrigeration systems and indicates that 
the equations and AWEFs for a particular class of equipment may be the 
same across more than one TSL. This occurs when the criteria for two 
different TSLs are satisfied by the same efficiency level for a 
particular component. For example, for all refrigeration classes the 
max-tech level has a positive NPV; thus, the efficiency level with the 
maximum energy savings with positive NPV (TSL 5) is the same as the 
efficiency level corresponding to max-tech (TSL 6).
[GRAPHIC] [TIFF OMITTED] TP11SE13.004

[[Page 55849]]

[GRAPHIC] [TIFF OMITTED] TP11SE13.005

[GRAPHIC] [TIFF OMITTED] TP11SE13.006

[[Page 55850]]

                                 Table V-6--Equations for All Display Door TSLs
----------------------------------------------------------------------------------------------------------------
                                                  Equations for maximum energy consumption (kWh/day)
                TSL                 ----------------------------------------------------------------------------
                                                      DD.M                                  DD.L
----------------------------------------------------------------------------------------------------------------
Baseline...........................  0.14 x Add + 0.82                      0.36 x Add + 0.88
TSL 1..............................  0.049 x Add + 0.39                     0.33 x Add + 0.38
TSL 2..............................  0.049 x Add + 0.39                     0.33 x Add + 0.38
TSL 3..............................  0.049 x Add + 0.39                     0.06 x Add + 3.8
TSL 4..............................  0.049 x Add + 0.39                     0.33 x Add + 3.8
TSL 5..............................  0.049 x Add + 0.39                     0.33 x Add + 0.38
TSL 6..............................  0.0080 x Add + 0.29                    0.11 x Add + 0.32
----------------------------------------------------------------------------------------------------------------

                                 Table V-7--Equations for All Passage Door TSLs
----------------------------------------------------------------------------------------------------------------
                                                  Equations for maximum energy consumption (kWh/day)
                TSL                 ----------------------------------------------------------------------------
                                                      PD.M                                  PD.L
----------------------------------------------------------------------------------------------------------------
Baseline...........................  0.0040 x And + 0.24                    0.141 x And + 4.81
TSL 1..............................  0.0032 x And + 0.22                    0.138 x And + 4.04
TSL 2..............................  0.0040 x And + 0.24                    0.141 x And + 4.81
TSL 3..............................  0.0032 x And + 0.22                    0.135 x And + 3.91
TSL 4..............................  0.0032 x And + 0.22                    0.138 x And + 4.04
TSL 5..............................  0.0032 x And + 0.22                    0.135 x And + 3.91
TSL 6..............................  0.00093 x And + 0.0083                 0.131 x And + 3.88
----------------------------------------------------------------------------------------------------------------

                                 Table V-8--Equations for All Freight Door TSLs
----------------------------------------------------------------------------------------------------------------
                                                  Equations for maximum energy consumption (kWh/day)
                TSL                 ----------------------------------------------------------------------------
                                                      FD.M                                  FD.L
----------------------------------------------------------------------------------------------------------------
Baseline...........................  0.0078 x And + 0.11                    0.12 x And + 5.6
TSL 1..............................  0.0073 x And + 0.082                   0.11 x And + 5.3
TSL 2..............................  0.0078 x And + 0.11                    0.12 x And + 5.6
TSL 3..............................  0.0073 x And + 0.082                   0.10 x And + 5.2
TSL 4..............................  0.0073 x And + 0.082                   0.11 x And + 5.4
TSL 5..............................  0.0073 x And + 0.082                   0.10 x And + 5.2
TSL 6..............................  0.00092 x And + 0.13                   0.094 x And + 5.2
----------------------------------------------------------------------------------------------------------------

                                                                       Table V-9--AWEFs for All Refrigeration System TSLs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Equations for minimum AWEF (Btu/W-h)
           Equipment class           -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Baseline                             TSLs 1 and 3                           TSLs 2 and 4                           TSLs 5 and 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DC.M.I, = 9,000....................  4.52                                   6.19                                   6.90                                   6.90
DC.M.O, = 9,000....................  4.91                                   9.06                                   12.21                                  12.21
DC.L.I, = 9,000....................  2.77                                   3.15                                   3.63                                   3.67
DC.L.O, = 9,000....................  2.91                                   4.35                                   6.15                                   6.25
MC.M................................  6.80                                   10.82                                  10.74                                  10.82
MC.L................................  4.66                                   5.91                                   5.53                                   5.91
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
    Consumers affected by new or amended standards usually incur higher 
purchase prices and experience lower operating costs. DOE evaluates 
these impacts on individual consumers by calculating changes in LCC and 
the PBP associated with the TSLs. Using the approach described in 
section IV.F, DOE calculated the LCC impacts and PBPs for the 
efficiency levels considered in this NOPR. Inputs used for calculating 
the LCC include total installed costs (i.e., equipment price plus 
installation costs), annual energy savings, and average electricity 
costs by consumer, energy price trends, repair costs, maintenance 
costs, equipment lifetime, and consumer discount rates. DOE based the 
LCC and PBP analyses on energy consumption under conditions of actual 
product use. DOE created

[[Page 55851]]

distributions of values for some inputs, with probabilities attached to 
each value, to account for their uncertainty and variability. DOE used 
probability distributions to characterize equipment lifetime, discount 
rates, sales taxes and several other inputs to the LCC model.
    The computer model DOE uses to calculate the LCC and PBP, which 
incorporates Crystal Ball (a commercially available software program), 
relies on a Monte Carlo simulation to incorporate uncertainty and 
variability into the analysis. The Monte Carlo simulations randomly 
sample input values from the probability distributions of the input 
variables and calculate the LCC and PBP from these. Details of the 
spreadsheet model, and of all the inputs to the LCC and PBP analyses, 
are contained in TSD chapter 8 and its appendices.
    DOE's LCC and PBP analysis results for each refrigeration system 
are reported in Table V-10 through Table IV-14 at each TSL for the 
representative sizes of walk-in refrigeration systems in each equipment 
class. Each table includes the installed cost, total LCC, average LCC 
savings, the median payback period, and also the percentage of 
customers who will experience a benefit, cost, or no change under a 
proposed standard by performing a Monte Carlo analysis. DOE noted that 
for all classes of refrigeration systems, consumer LCCs were positive 
up through TSL 6, which corresponds to the maximum technologically 
feasible level (max-tech) refrigeration level. The median PBP values 
vary between 2-6 years for the dedicated condensing unit (DC) classes 
and were less than 1 year for the multiplex classes for all TSLs for 
medium temperature systems and for TSL2 and TSL 4 for low temperature 
systems. The median PBP exceeded 2 year only for the other TSLs 
considered. DOE also noted that higher benefits are experienced by 
users of larger capacity systems than by the smaller capacity systems. 
The LCC savings and PBP for all the sizes analyzed by DOE are shown in 
TSD chapter 8.
    DOE's LCC and PBP analysis results for all envelope component 
equipment classes at each TSL are reported in Table V-15 through Table 
V-17. DOE analyzed three sizes (small, medium and large) in each 
component equipment class. Results for the components of different 
sizes in the equipment class are averaged on the basis of their 
shipment weights and reported in these tables. LCC and PBP results for 
all sizes may be found in chapter 8 of the TSD. Table V-10 through 
Table V-17 show that for all the components, LCC savings are 
significantly negative and payback periods are very high at the max-
tech level (TSL 6).

              Table V-10--Summary LCC and PBP Results for Medium Temperature Dedicated Condensing Refrigeration Systems--Outdoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-cycle cost savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
              Trial standard level                              Discounted                                % of Consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        4,368        7,363       11,731  ...........  ...........  ...........  ...........  ...........
TSL1............................................        4,891        5,791       10,682        1,048            0            0          100          1.3
TSL2............................................        5,387        4,766       10,153        1,577            0            0          100          2.5
TSL3............................................        4,992        5,622       10,614        1,117            0            0          100          1.8
TSL4............................................        5,286        4,936       10,222        1,509            0            0          100          2.0
TSL5............................................        5,532        4,591       10,123        1,608            1            0           99          3.0
TSL6............................................        5,532        4,591       10,123        1,608            1            0           99          3.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

               Table V-11--Summary LCC and PBP Results for Medium-Temperature Dedicated Condensing Refrigeration Systems--Indoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-cycle cost savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
              Trial standard level                              Discounted                                % of Consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        4,033        7,746       11,779  ...........  ...........  ...........  ...........  ...........
TSL1............................................        4,501        6,998       11,499          280            1            0           99          3.2
TSL2............................................        4,931        6,238       11,169          611            4            0           96          4.4
TSL3............................................        4,501        6,998       11,499          280            1            0           99          3.2
TSL4............................................        4,931        6,238       11,169          611            4            0           96          4.4
TSL5............................................        4,931        6,238       11,169          611            4            0           96          4.4
TSL6............................................        4,931        6,238       11,169          611            4            0           96          4.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

              Table V-12--Summary of LCC and PBP Results for Low-Temperature Dedicated-Condensing Refrigeration Systems--Outdoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-cycle cost savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
              Trial standard level                              Discounted                                % of Consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        4,093       10,471       14,564  ...........  ...........  ...........  ...........  ...........
TSL1............................................        4,673        8,564       13,236        1,328            5            0           95          1.2
TSL2............................................        5,377        6,791       12,168        2,001            5            0           95          2.3
TSL3............................................        4,673        8,564       13,236        1,328            5            0           95          1.2

[[Page 55852]]

 
TSL4............................................        5,377        6,791       12,168        2,001            5            0           95          2.3
TSL5............................................        5,591        6,584       12,175        1,994            5            0           95          2.8
TSL6............................................        5,591        6,584       12,175        1,994            5            0           95          2.8
--------------------------------------------------------------------------------------------------------------------------------------------------------

               Table V-13--Summary of LCC and PBP Results for Low-Temperature Dedicated-Condensing Refrigeration Systems--Indoor Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-cycle cost savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
              Trial standard level                              Discounted                                % of Consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        4,161       13,051       17,212  ...........  ...........  ...........  ...........  ...........
TSL1............................................        4,688       12,019       16,707          505            0            0          100          2.8
TSL2............................................        5,187       11,018       16,205        1,117            0            0          100          2.7
TSL3............................................        4,688       12,019       16,707          505            0            0          100          2.8
TSL4............................................        5,187       11,018       16,205        1,117            0            0          100          2.7
TSL5............................................        5,272       10,970       16,242        1,080            0            0          100          3.1
TSL6............................................        5,272       10,970       16,242        1,080            0            0          100          3.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

                         Table V-14--Summary LCC and PBP Results for Medium- and Low-Temperature Multiplex Refrigeration Systems
                                                                   [Unit coolers only]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-cycle cost savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
        Trial standard level          Efficiency                Discounted                                % of Consumers that experience       (years)
                                        level      Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Medium Temperature Multiplex
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Baseline        1,583        6,143        7,726  ...........  ...........  ...........  ...........  ...........
TSL1...............................          EL2        2,251        3,759        6,010        1,715            0            0          100          0.6
TSL2...............................          EL2        2,231        3,771        6,002        1,724            0            0          100          0.5
TSL3...............................          EL2        2,251        3,759        6,010        1,715            0            0          100          0.6
TSL4...............................          EL2        2,231        3,771        6,002        1,724            0            0          100          0.5
TSL5...............................          EL3        2,251        3,759        6,010        1,715            0            0          100          0.6
TSL6...............................          EL3        2,251        3,759        6,010        1,715            0            0          100          0.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Low Temperature Multiplex
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Baseline        1,583       10,295       11,878  ...........  ...........  ...........  ...........  ...........
TSL1...............................          EL2        2,776        7,252       10,028        1,849            0            0          100          2.5
TSL2...............................          EL2        2,231        7,585        9,817        2,061            0            0          100          0.4
TSL3...............................          EL2        2,776        7,252       10,028        1,849            0            0          100          2.5
TSL4...............................          EL2        2,231        7,585        9,817        2,061            0            0          100          0.4
TSL5...............................          EL5        2,776        7,252       10,028        1,849            0            0          100          2.5
TSL6...............................          EL5        2,776        7,252       10,028        1,849            0            0          100          2.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                         Table V-15--Summary LCC and PBP Results for Structural and Floor Panels
                                                               [Weighted across all sizes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-cycle cost savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
              Trial standard level                              Discounted                                % of Consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Medium Temperature Structural Panel
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,007           97        1,104  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,007           97        1,104           16           14            0           86          3.8
TSL2............................................          977          119        1,095            0            0          100            0          0.0

[[Page 55853]]

 
TSL3............................................        1,043           85        1,128           -9           75            0           25          6.8
TSL4............................................        1,007           80        1,088            8           34            0           66          4.5
TSL5............................................        1,043           65        1,109          -22           93            0            7          9.0
TSL6............................................        3,206           19        3,225       -2,139          100            0            0        146.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Low Temperature Structural Panel
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,122          278        1,400  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,122          278        1,400          122            2            0           98          2.9
TSL2............................................        1,010          399        1,410            0            0          100            0          0.0
TSL3............................................        1,373          215        1,588          -66           79            0           21          7.4
TSL4............................................        1,122          216        1,338           72            7            0           93          3.6
TSL5............................................        1,373          161        1,533         -140           94            0            6         10.0
TSL6............................................        3,208           76        3,284       -1,890          100            0            0         43.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Low Temperature Floor Panel
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,202          243        1,445  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,202          243        1,445           66            6            0           94          3.5
TSL2............................................        1,103          318        1,421            0            0          100            0          0.0
TSL3............................................        1,348          166        1,515           -4           62            0           38          6.0
TSL4............................................        1,202          189        1,390           30           28            0           72          4.5
TSL5............................................        1,348          124        1,473          -65           88            0           12          8.0
TSL6............................................        2,982           79        3,061       -1,653          100            0            0         48.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                Table V-16--Summary LCC and PBP Results for Display Doors
                                                               [Weighted across all sizes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-Cycle Cost Savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
              Trial standard level                              Discounted                                % of consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Medium Temperature Display Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,100          530        1,630  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,205          186        1,391          239            0            0          100          2.1
TSL2............................................        1,205          180        1,385          228            0            0          100          2.2
TSL3............................................        1,205          186        1,391          239            0            0          100          2.1
TSL4............................................        1,205          180        1,385          228            0            0          100          2.2
TSL5............................................        1,205          177        1,382          222            0            0          100          2.2
TSL6............................................        4,182           73        4,255       -2,650          100            0            0         37.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Low Temperature Display Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,594        1,412        3,006  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,756        1,033        2,789          217            0            0          100          N/A
TSL2............................................        1,756          954        2,710          200            0            0          100          N/A
TSL3............................................        2,046          972        3,019          -12           64            0           36          6.0
TSL4............................................        1,756          954        2,710          200            0            0          100          N/A
TSL5............................................        1,756          942        2,698          198            0            0          100          N/A
TSL6............................................        4,242          371        4,613       -1,717          100            0            0         18.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                              Table V-17--Summary LCC and PBP Results for Non-Display Doors
                                                               [Weighted across all sizes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Life-cycle cost (2012$)                   Life-cycle cost savings (2012$)             Payback
                                                 -------------------------------------------------------------------------------------------    period
              Trial standard level                              Discounted                                % of consumers that experience       (years)
                                                   Installed    operating       LCC        Average   ---------------------------------------------------
                                                      cost         cost                    savings      Net cost    No impact   Net benefit     Median
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Medium Temperature Passage Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................          691           89          780  ...........  ...........  ...........  ...........  ...........

[[Page 55854]]

 
TSL1............................................          691           89          780            2           27            0           73          4.5
TSL2............................................          683           91          774            0            0          100            0          0.0
TSL3............................................          691           89          780            2           27            0           73          4.5
TSL4............................................          691           83          774            0           52            0           48          5.5
TSL5............................................          691           80          772            0           64            0           36          6.0
TSL6............................................        1,637           19        1,655         -884          100            0            0         78.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Low Temperature Passage Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,070        2,205        3,274  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,070        2,205        3,274           74           14            0           86          4.3
TSL2............................................          880        2,261        3,142            0            0          100            0          0.0
TSL3............................................        1,226        2,138        3,364          -16           66            0           34          6.2
TSL4............................................        1,070        2,020        3,090           52           27            0           73          4.7
TSL5............................................        1,226        1,937        3,163          -52           75            0           25          7.0
TSL6............................................        1,863        1,913        3,776         -665          100            0            0         18.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Medium Temperature Freight Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,277          147        1,424  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,277          143        1,420            3           25            0           75          4.5
TSL2............................................        1,265          144        1,409            0            0          100            0          0.0
TSL3............................................        1,277          143        1,420            3           25            0           75          4.5
TSL4............................................        1,277          131        1,408            1           50            0           50          5.4
TSL5............................................        1,277          126        1,403            0           62            0           38          5.9
TSL6............................................        2,511           49        2,560       -1,157          100            0            0         81.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Low Temperature Freight Door
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................................        1,670        3,424        5,094  ...........  ...........  ...........  ...........  ...........
TSL1............................................        1,670        3,424        5,094          152            6            0           94          3.8
TSL2............................................        1,426        3,491        4,917            0            0          100            0          0.0
TSL3............................................        1,914        3,305        5,219           28           56            0           44          5.8
TSL4............................................        1,543        3,237        4,780          136            1            0           99          2.9
TSL5............................................        1,914        2,987        4,901          -32           69            0           31          6.5
TSL6............................................        3,273        2,932        6,205       -1,337          100            0            0         21.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Life-Cycle Cost Subgroup Analysis
    Using the LCC spreadsheet model, DOE estimated the impact of 
increased WICF efficiency standards at each TSL on the following 
consumer subgroup: small restaurants that purchase their own walk-in 
units. These restaurants are typically identified by the Small Business 
Administration as restaurants with annual receipts of $10 million or 
less.\32\ The small restaurant subgroup was analyzed because in the 
``food service and drinking places'' business class in the 2007 
Census,\33\ almost 60 percent of employment and sales can be attributed 
to small restaurants and more than 78 percent of these establishments 
are considered small businesses. Furthermore, DOE received comments 
suggesting small restaurant owners could be particularly vulnerable to 
potential negative consequences of higher efficiency standards and 
potentially face shorter equipment lifetimes. DOE's LCC analysis shows 
that restaurants had among the highest financing costs (based on 
weighted average cost of capital of entities using walk-in coolers and 
freezers). Therefore, this group was expected to have the least LCC 
savings and longest PBP of any identifiable consumer group.
---------------------------------------------------------------------------

    \32\ Small Business Administration. ``Table of Small business 
Size Standards.'' SBA.gov. http://www.sba.gov/content/guide-size-standards. Accessed July 2011.
    \33\ U.S. CENSUS. 2007. U.S. Census Bureau American Fact Finder, 
2002 Economic Census-Sector 44: Retail Trade: Subject Series-Estab & 
Firm Size: Single Unit and Multiunit Firms for the United States: 
2007, Washington, DC, Accessed July 2011. http://www.census.gov/econ/census07/www/data_release_schedule/whats_been_released.html#44.
---------------------------------------------------------------------------

    DOE estimated the LCC and PBP for the small restaurants subgroup. 
Table V-18 and Table V-19 show the LCC savings for refrigeration 
systems and envelope component equipment, respectively, which meet the 
proposed energy conservation standards for the small restaurant 
subgroup. Table V-20 and Table V-21 show the corresponding PBPs (in 
years) for this subgroup.
    For example, DOE's analysis shows that at TSL 4, structural cooler 
panels for small restaurants have lower LCC savings and longer payback 
periods than other business types; however, LCC savings values are 
still positive for this subgroup at this TSL for panels. In addition, 
payback periods are typically increased by less than 10 percent 
compared with the walk-in market as a whole. For a more detailed 
discussion on the LCC subgroup analysis and its results, see chapter 11 
of the TSD.

[[Page 55855]]

                                           Table V-18--Life-Cycle Cost Savings for WICF Refrigeration Systems
                                                                         [2012$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Equipment class                           Business                  TSL1         TSL2         TSL3         TSL4         TSL5         TSL6
--------------------------------------------------------------------------------------------------------------------------------------------------------
DC.M.I.006.............................  Small Business...................       $67.25      $352.58       $67.25      $352.58      $352.58      $352.58
                                         All Business Types...............        70.30       370.28        70.30       370.28       370.28       370.28
DC.M.I.018.............................  Small Business...................     1,294.98     1,762.74     1,294.98     1,762.74     1,762.74     1,762.74
                                         All Business Types...............     1,350.45     1,837.93     1,350.45     1,837.93     1,837.93     1,837.93
DC.M.O.006.............................  Small Business...................       567.37       718.28       567.37       718.28       784.16       784.16
                                         All Business Types...............       589.85       748.02       748.02       589.85       818.57       818.57
DC.M.O.018.............................  Small Business...................     1,749.53     2,761.13     1,749.53     2,761.13     2,761.13     2,761.13
                                         All Business Types...............     1,817.33     2,874.34     1,817.33     2,874.34     2,874.34     2,874.34
DC.M.O.054.............................  Small Business...................    12,021.21    12,566.27    12,021.21    12,566.27    12,566.27    12,566.27
                                         All Business Types...............    12,493.74    13,068.28    12,493.74    13,068.28    13,068.28    13,068.28
DC.L.I.006.............................  Small Business...................       754.45     1,073.48       754.45     1,073.48     1,035.60     1,035.60
                                         All Business Types...............       788.39     1,120.12       788.39     1,120.12     1,081.45     1,081.45
DC.L.I.009.............................  Small Business...................       136.23     1,031.11       136.23     1,031.11     1,031.11     1,031.11
                                         All Business Types...............       142.04     1,112.07       142.04     1,112.07     1,077.14     1,077.14
DC.L.O.006.............................  Small Business...................     1,764.83     1,747.88     1,764.83     1,747.88     1,773.85     1,773.85
                                         All Business Types...............     1,833.48     1,814.48     1,833.48     1,814.48     1,843.63     1,843.63
DC.L.O.009.............................  Small Business...................     1,022.91     2,218.75     1,022.91     2,218.75     2,184.74     2,184.74
                                         All Business Types...............     1,059.59     2,307.72     1,059.59     2,307.72     2,273.00     2,273.00
DC.L.O.054.............................  Small Business...................    13,619.19    14,061.17    13,619.19    14,061.17    13,231.20    13,231.20
                                         All Business Types...............    14,125.72    14,590.39    14,125.72    14,590.39    13,760.51    13,760.51
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Multiplex refrigeration systems are not typically used in small restaurants.

                                   Table V-19--Life-Cycle Cost Savings for WICF Envelope Components (Panels and Doors)
                                                                         [2012$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Equipment class                           Business                  TSL1         TSL2         TSL3         TSL4         TSL5         TSL6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M...................................  Small Business...................       $12.65  ...........      ($8.05)        $6.20     ($16.17)  ($2,141.42)
                                         All Business Types...............        15.55  ...........       (8.98)         7.63      (22.44)   (2,138.75)
SP.L...................................  Small Business...................       109.66  ...........      (75.54)        67.73      (92.45)   (1,901.81)
                                         All Business Types...............       121.93  ...........      (65.50)        71.61     (139.77)   (1,890.34)
FP.L...................................  Small Business...................        58.43  ...........      (12.64)        26.98      (52.29)   (1,661.22)
                                         All Business Types...............        65.59  ...........       (4.45)        30.28      (64.89)   (1,652.86)
DD.M...................................  Small Business...................       225.18       214.71       225.17       214.71       209.52   (2,660.23)
                                         All Business Types...............       238.77       227.69       238.77       227.69       222.46   (2,650.38)
DD.L...................................  Small Business...................       210.44       193.37      (11.78)       193.37       191.01   (1,739.58)
                                         All Business Types...............       217.30       200.08      (12.17)       200.08       197.59   (1,716.84)
PD.M...................................  Small Business...................         1.80  ...........         1.80         0.11       (0.88)     (886.46)
                                         All Business Types...............         2.13  ...........         2.13         0.32       (0.30)     (883.91)
PD.L...................................  Small Business...................        64.25  ...........      (37.17)        42.91      (65.11)     (677.42)
                                         All Business Types...............        73.75  ...........      (15.74)        51.91      (51.65)     (664.59)
FD.M...................................  Small Business...................         2.96  ...........         2.96         0.35       (6.14)   (1,160.14)
                                         All Business Types...............         3.46  ...........         3.46         0.70       (0.24)   (1,156.91)
FD.L...................................  Small Business...................       137.63  ...........        13.37       126.39      (58.05)   (1,357.39)
                                         All Business Types...............       152.18  ...........        27.62       136.42      (32.13)   (1,337.03)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Dashes represent components at baseline efficiency and therefore do not have a payback period. Numbers in parentheses indicate negative values.

                                                Table V-20--Payback Period for WICF Refrigeration Systems
                                                                         [Years]
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Equipment                              Business                  TSL1         TSL2         TSL3         TSL4         TSL5         TSL6
--------------------------------------------------------------------------------------------------------------------------------------------------------
DC.M.I.006.............................  Small Business...................         3.63         5.20         3.63         5.20         5.20         5.46
                                         All Business Types...............         3.40         4.88         3.40         4.88         4.88         4.88
DC.M.I.018.............................  Small Business...................         2.31         2.28         2.31         2.28         2.28         2.28
                                         All Business Types...............         2.17         2.14         2.17         2.14         2.14         2.14
DC.M.O.006.............................  Small Business...................         2.20         3.35         5.52         0.02         4.46         4.46
                                         All Business Types...............         2.11         3.21         3.21         2.11         4.30         4.30
DC.M.O.018.............................  Small Business...................         1.02         2.64         1.02         2.64         2.64         2.64
                                         All Business Types...............         0.98         2.54         0.98         2.54         2.54         2.54
DC.M.O.054.............................  Small Business...................         1.02         1.79         1.02         1.79         1.79         1.79
                                         All Business Types...............         0.98         1.74         0.98         1.74         1.74         1.74
DC.L.I.006.............................  Small Business...................         3.52         2.74         3.52         2.74         3.16         3.16
                                         All Business Types...............         3.32         2.58         3.32         2.58         2.98         2.98
DC.L.I.009.............................  Small Business...................         2.19         2.22         2.19         2.22         3.35         3.35
                                         All Business Types...............         2.07         2.78         2.07         2.78         3.16         3.16
DC.L.O.006.............................  Small Business...................         2.10         1.77         2.10         1.77         2.88         2.88

[[Page 55856]]

 
                                         All Business Types...............         2.03         1.72         2.03         1.72         2.80         2.80
DC.L.O.009.............................  Small Business...................         0.76         2.93         0.76         2.93         3.12         3.12
                                         All Business Types...............         0.74         2.84         0.74         2.84         3.02         3.02
DC.L.O.054.............................  Small Business...................         0.50         0.63         0.50         0.63         3.23         3.23
                                         All Business Types...............         0.48         0.61         0.48         0.61         3.15         3.15
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Multiplex refrigeration systems are not typically used in small restaurants.

                                       Table V-21--Payback Period for WICF Envelope Components (Panels and Doors)
                                                                         [Years]
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Equipment                              Business                  TSL1         TSL2         TSL3         TSL4         TSL5         TSL6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M...................................  Small Business...................         3.77  ...........         6.77         4.46         8.92       146.06
                                         All Business Types...............         3.81  ...........         6.80         4.49         8.95       146.40
SP,L...................................  Small Business...................         2.82  ...........         7.33         3.60         9.86        42.58
                                         All Business Types...............         2.85  ...........         7.43         3.63         9.95        42.97
FP.L...................................  Small Business...................         3.47  ...........         5.88         4.42         7.92        48.28
                                         All Business Types...............         3.50  ...........         5.96         4.46         7.99        48.69
DD.M...................................  Small Business...................         2.10         2.17         2.10         2.17         2.21        37.28
                                         All Business Types...............         2.13         2.19         2.13         2.19         2.22        37.56
DD.L...................................  Small Business...................          N/A          N/A         6.20          N/A          N/A        18.91
                                         All Business Types...............          N/A          N/A         6.01          N/A          N/A        18.48
PD.M...................................  Small Business...................         4.52  ...........         4.52         5.48         6.01        78.77
                                         All Business Types...............         4.54  ...........         4.54         5.51         6.03        78.73
PD.L...................................  Small Business...................         4.26  ...........         6.22         4.70         7.02        18.26
                                         All Business Types...............         4.27  ...........         6.23         4.69         7.02        18.31
FD.M...................................  Small Business...................         4.44  ...........         4.44         5.38         5.90        81.55
                                         All Business Types...............         4.46  ...........         4.46         5.41         5.92        81.51
FD.L...................................  Small Business...................         3.76  ...........         5.76         2.92         6.54        21.62
                                         All Business Types...............         3.76  ...........         5.77         2.92         6.54        21.70
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Dashes represent components at baseline efficiency and therefore do not have a payback period.

2. Economic Impacts on Manufacturers
    DOE performed a manufacturer impact analysis (MIA) to estimate the 
impact of new energy conservation standards on manufacturers of walk-in 
cooler and freezer refrigeration, panels, and doors. The section below 
describes the expected impacts on manufacturers at each considered TSL. 
Chapter 12 of the TSD explains the analysis in further detail.
a. Industry Cash-Flow Analysis Results
    Table V-22 through Table V-24 depict the financial impacts on 
manufacturers and the conversion costs DOE estimates manufacturers 
would incur at each TSL. The financial impacts on manufacturers are 
represented by changes in industry net present value (INPV).
    The impact of energy efficiency standards were analyzed under two 
markup scenarios: (1) The preservation of gross margin percentage and 
(2) the preservation of operating profit. As discussed in section 
IV.I.2.b, DOE considered the preservation of gross margin percentage 
scenario by applying a uniform ``gross margin percentage'' markup 
across all efficiency levels. As production cost increases with 
efficiency, this scenario implies that the absolute dollar markup will 
increase. DOE assumed the nonproduction cost markup--which includes 
SG&A expenses; research and development expenses; interest; and profit 
to be 1.32 for panels, 1.50 for solid doors, 1.62 for display doors, 
and 1.35 for refrigeration. These markups are consistent with the ones 
DOE assumed in the engineering analysis and the base case of the GRIM. 
Manufacturers have indicated that it is optimistic to assume that as 
their production costs increase in response to an efficiency standard, 
they would be able to maintain the same gross margin percentage markup. 
Therefore, DOE assumes that this scenario represents a high bound to 
industry profitability under an energy-conservation standard.
    The preservation of earnings before interest and taxes (EBIT) 
scenario reflects manufacturer concerns about their inability to 
maintain their margins as manufacturing production costs increase to 
reach more-stringent efficiency levels. In this scenario, while 
manufacturers make the necessary investments required to convert their 
facilities to produce new standards-compliant equipment, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue.
    Each of the modeled scenarios results in a unique set of cash flows 
and corresponding industry values at each TSL. In the following 
discussion, the INPV results refer to the difference in industry value 
between the base case and each standards case that result from the sum 
of discounted cash flows from the base year 2013 through 2046, the end 
of the analysis period. To provide perspective on the short-run cash 
flow impact, DOE includes in the discussion of the results a comparison 
of free cash flow between the base case and the standards case at each 
TSL in the year before new standards take effect.
    Table V-22 through Table V-24 show the MIA results for each TSL 
using the markup scenarios described above for WICF panel, door and 
refrigeration manufacturers, respectively:

[[Page 55857]]

                                                                Table V-22--Manufacturer Impact Analysis Results for WICF Panels
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Trial standard level
                                    Units       Base  ------------------------------------------------------------------------------------------------------------------------------------------
                                                case             1                      2                      3                      4                       5                      6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................  2012 $M.....    207.3  182.2 to 195.8.......  207.3 to 207.3.......  144.1 to 177.0.......  182.2 to 195.8.......  144.1 to 177.0........  -212.9 to 441.9.
Change in INPV................  2012 $M.....  .......  -25.0 to -11.5.......  0.0 to 0.0...........  -63.1 to -30.2.......  -25.0 to -11.5.......  -63.1 to -30.2........  -420.2 to 234.7.
                                %...........  .......  -12.1 to -5.6........  0.0 to 0.0...........  -30.5 to -14.6.......  -12.1 to -5.6........  -30.5 to -14.6........  -202.7 to 113.2.
Free Cash Flow (FCF) (2016)...  2012 $M.....     18.4  10.7.................  18.4.................  -3.4.................  10.7.................  -3.4..................  -54.6.
Change in FCF (2016)..........  2012 $M.....  .......  -7.7.................  0.0..................  -21.8................  -7.7.................  -21.8.................  -73.0.
                                %...........  .......  -41.6................  0.0..................  -118.7...............  -41.6................  -118.7................  -396.9.
Conversion Costs..............  2012 $M.....  .......  21...................  0....................  58...................  21...................  58....................  195.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                 Table V-23--Manufacturer Impact Analysis Results for WICF Doors
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Trial standard level
                                    Units       Base  ------------------------------------------------------------------------------------------------------------------------------------------
                                                case             1                      2                      3                      4                       5                      6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................  2012 $M.....    454.6  437.6 to 470.7.......  446.2 to 470.2.......  428.2 to 467.8.......  437.8 to 470.6.......  427.3 to 466.4........  260.8 to 1145.1.
Change in INPV................  2012 $M.....  .......  -17.0 to 16.1........  -8.4 to 15.6.........  -26.4 to 13.2........  -16.8 to 16.0........  -27.3 to 11.8.........  -193.8 to 690.5.
                                %...........  .......  -3.7 to 3.5..........  -1.8 to 3.4..........  -5.8 to 2.9..........  -3.7 to 3.5..........  -6.0 to 2.6...........  -42.6 to 151.9.
FCF (2016)....................  2012 $M.....     36.1  34.1.................  36.1.................  30.4.................  34.1.................  30.5..................  0.6.
Change in FCF (2016)..........  2012 $M.....  .......  -2.07................  0.00.................  -5.7.................  -2.1.................  -5.7..................  -35.6.
                                %...........  .......  -5.7.................  0.0..................  -15.8................  -5.7.................  -15.7.................  -98.5.
Conversion Costs..............  2012 $M.....  .......  6....................  0.0..................  15...................  6....................  15....................  92.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                         Table V-24--Manufacturer Impact Analysis Results for WICF Refrigeration Systems
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Trial standard level
                                    Units       Base  ------------------------------------------------------------------------------------------------------------------------------------------
                                                case             1                      2                      3                      4                       5                      6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................  2012 $M.....    189.1  170.9 to 183.3.......  153.6 to 184.8.......  170.9 to 183.3.......  153.6 to 184.8.......  145.8 to 188.3........  145.8 to 188.3.
Change in INPV................  2012 $M.....  .......  -18.3 to -5.9........  -35.5 to -4.4........  -18.3 to -5.9........  -35.5 to -4.4........  -43.3 to -0.8.........  -43.3 to -0.8.
                                %...........  .......  -9.7 to -3.1.........  -18.8 to -2.3........  -9.7 to -3.1.........  -18.8 to -2.3........  -22.9 to -0.4.........  -22.9 to -0.4.
FCF (2016)....................  2012 $M.....     16.3  11.7.................  9.1..................  11.7.................  9.1..................  8.0...................  8.0.
Change in FCF (2016)..........  2012 $M.....  .......  -4.6.................  -7.2.................  -4.6.................  -7.2.................  -8.3..................  -8.3.
                                %...........  .......  -28.2................  -44.0................  -28.2................  -44.0................  -51.0.................  -51.0.
Conversion Costs..............  2012 $M.....  .......  15...................  24...................  15...................  24...................  28....................  28.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Walk-In Cooler and Freezer Panel MIA Results
    At TSL 1, DOE models the impacts on panel INPV to be negative under 
both mark-up scenarios. The change in panel INPV ranges from -$25.0 
million to -$11.5 million, or a change in INPV of -12.1 percent to -5.6 
percent. At this level, panel industry free cash flow \34\ is estimated 
to decrease by as much as $7.7 million, or 41.6 percent compared to the 
base-case value of $18.4 million in 2016, the year before the 
compliance date. The primary driver of the drop in INPV is the standard 
for low-temperature side panels, which goes up to EL 2. At EL 2, 
manufacturers would likely use 5-inch thick side panels for low-
temperature applications to meet the panel standard. At this level, DOE 
estimates conversion costs to be $21 million for the industry.
---------------------------------------------------------------------------

    \34\ Free cash flow (FCF) is a metric commonly used in financial 
valuation. DOE calculates this value by adding back depreciation to 
net operating profit after tax and subtracting increases in working 
capital and capital expenditures.
---------------------------------------------------------------------------

    At TSL 2, the standard for all panel equipment classes are set to 
the baseline efficiency. As a result, there are no changes to INPV, no 
changes in industry free cash flow, and no conversion costs.
    At TSL 3, DOE estimates impacts on panel INPV to range from -$63.1 
million to -$30.2 million, or a change in INPV of -30.5 percent to -
14.6 percent. At this level, panel industry free cash flow is estimated 
to decrease by as much as $21.8 million, or 118.7% compared to the 
base-case value of $18.4 million in the year before the compliance 
date. The large percentage drop in cash flow in the GRIM indicates that 
conversion costs are high relative to the size of the industry and 
relative to annual operating profits. Conversion costs are expected to 
total $58 million. The conversion costs are driven by the need for 6-
inch panels for both low temperature floor and side panels, as 
described in section 12.4.8 of the TSD. During manufacturer interviews, 
some panel manufacturers stated they would evaluate leaving the 
industry rather than make the required investments to meet the 
standard.
    At TSL 4, the standard for all panel equipment classes are 
identical to those at TSL 1.
    DOE estimates TSL 5 impacts on panel INPV to be range from -$63.1 
million to -$30.2 million, or a change in INPV of -30.5 percent to -
14.6 percent. At this level, panel industry free cash flow is estimated 
to decrease by as much as $21.8 million, or 118.7 percent compared to 
the base-case value of $18.4 million in the year before the compliance 
date. At this TSL, conversion costs total $58 million for the industry. 
These conversion costs are based on DOE's analysis indicating that 
industry would likely adopt 6-inch side floor panels to meet the 
standard. As in TSL 3, some panel manufacturers would likely leave the 
industry at this level of burden.

[[Page 55858]]

    TSL 6 represents the use of max-tech design options for all 
equipment classes. DOE estimates impacts on panel INPV to be range from 
-$420.2 million to $234.7 million, or a change in INPV of -202.7 
percent to 113.2 percent. At this level, panel industry free cash flow 
is estimated to decrease by as much as $73.0 million, or 396.9 percent 
compared to the base-case value of $18.4 million in the year before the 
compliance date. Impacts at the most negative end of the range would 
likely force many manufacturers out of the industry.
Walk-In Cooler and Freezer Door MIA Results
    For TSL 1, DOE models the change in INPV for doors to range from -
$17.0 million to $16.1 million, or a change in INPV of -3.7 percent to 
3.5 percent. At this standard level, door industry free cash flow is 
estimated to decrease by as much as $2.1 million, or 5.7 percent 
compared to the base case value of $36.1 million in the year before the 
compliance date. DOE expects solid door manufacturers to pursue design 
options that reduce the loss of heat through door frames and through 
embedded windows. Changes to door frame design may require new tooling. 
Total conversion costs for the door industry are expected to reach $6 
million.
    At TSL 2, DOE estimates the impacts on door INPV to range from -
$8.4 million to $15.6 million, or a change in INPV of -1.8 percent to 
3.4 percent. At this level, door industry free cash flow is estimated 
to decrease by a negligible amount in the year before the compliance 
year. Furthermore, there are minimal conversion costs. To meet the 
standard, display door manufacturers would need to replace existing 
lighting with LEDs and reduce anti-sweat wire energy consumption. For 
solid door manufacturers, the standard is set at the baseline. Total 
conversion costs are expected to total $0.1 million for the industry. 
These costs are primarily product conversion costs associated 
incorporating heater wire controls and updating marketing literature.
    For TSL 3, DOE estimates the change in door INPV to range from -
$26.4 million to $13.2 million, or a change in INPV of -5.8 percent to 
2.9 percent. At this level, door industry free cash flow is estimated 
to decrease by as much as $5.7 million, or 15.8 percent compared to the 
base-case value of $36.1 million in the year before the compliance 
date. At this level, display doors would need to incorporate lighting 
sensors. Solid doors for low temperature walk-ins would likely need to 
be redesigned to 6-inches of thickness. The additional production 
equipment and the cost of product redesigns drive conversion costs up 
to $15 million, more than double the conversion costs at TSL 1 and TSL 
2. This conversion cost number assumes that manufacturers that produce 
both panels and solid doors would use the same foaming equipment and 
presses to produce both products since DOE models panel manufacturers 
also going to 6-inch side panels for low temperature applications at 
TSL 3. Manufacturers that exclusively produce freight doors and passage 
doors will not be able to spread their investment over as many 
equipment classes.
    For TSL 4, DOE estimates impacts on door INPV to range from -$16.8 
million to $16.0 million, or a change in INPV of -3.7 percent to 3.5 
percent. At this considered level, door industry free cash flow is 
estimated to decrease by as much as $2.1 million, or 5.7 percent 
compared to the base-case value of $36.1 million in the year before the 
compliance date. The standard levels for doors at TSL 4 are nearly 
identical to the standard levels at TSL 2, except that the standard is 
one efficiency level lower for the low temperature freight door 
equipment class. As mentioned above, DOE expects display door 
manufacturers to pursue design changes that do not require new 
manufacturing equipment. Manufacturers are expected to use LEDs in 
display doors and reduce anti-sweat wire energy consumption for medium 
temperature applications. DOE expects solid door manufacturers to 
pursue design options that reduce the loss of heat through door frames 
and through embedded windows. Changes to door frame design may require 
new tooling. Total conversion costs are expected to reach $6 million 
for the industry.
    For TSL 5, DOE estimates impacts on door INPV to range from -$27.3 
million to $11.8 million, or a change in INPV of -6.0 percent to 2.6 
percent, at TSL 5. At this level, door industry free cash flow is 
estimated to decrease by as much as $5.7 million, or 15.7 percent 
compared to the base-case value of $36.1 million in the year before the 
compliance date. This standard level for doors at TSL 5 is nearly 
identical to the standard levels at TSL 3. Total conversion costs are 
expected to reach $15 million.
    For TSL 6, DOE estimates impacts on door INPV to range from -$193.8 
million to $690.5 million, or a change in INPV of -42.6 percent to 
151.9 percent. At this level, door industry free cash flow is estimated 
to decrease by as much $35.6 million, or 98.5 percent compared to the 
base-case value of $36.1 million in the year before the compliance 
date. Conversion costs would total $92 million. At this level, some 
door manufacturers would likely choose to leave the industry rather 
than make the necessary investments to comply with standards.
Walk-In Cooler and Freezer Refrigeration MIA Results
    At TSL 1, DOE estimates impacts on refrigeration INPV to range from 
-$18.3 million to -$5.9 million, or a change in INPV of -9.7 percent to 
-3.1 percent. At this level, refrigeration industry free cash flow is 
estimated to decrease by as much as $4.6 million, or 28.2 percent 
compared to the base-case value of $16.3 million in 2016, the year 
before the compliance year. For dedicated condensing, medium 
temperature, indoor refrigeration systems, DOE's engineering analysis 
indicates that manufacturers would need to incorporate multiple design 
options to achieve this standard. The design options would likely 
include variable speed evaporator fan motors and larger condensing 
coils. For dedicated condensing, low temperature, indoor refrigeration 
systems, manufacturers may need to further include improved condenser 
fan, improved evaporator fan blades, and electronically commutated 
motors. For dedicated condensing, medium temperature, outdoor 
refrigeration systems, design options necessary to meet TSL 1 would 
include variable speed evaporator fan motors, improved condenser fan 
blades, electronically commutated condenser fan motors, and improved 
evaporator fan blades. For dedicated condensing, low temperature, 
outdoor refrigeration systems, additional design options required to 
meet the trial standard level include ambient sub-cooling, variable 
speed condenser fans, and defrost control strategies. For multiplex 
refrigeration, manufacturers would need to evaluate design 
improvements, such as variable speed evaporator fan motors, improved 
fan blade designs, defrost control, and hot gas defrost. Integration of 
these design options across equipment classes will require extensive 
engineering investments. As a result, conversion costs total $15 
million for the industry.
    At TSL 2, DOE estimates impacts on refrigeration INPV to range from 
-$35.5 million to -$4.4 million, or a change in INPV of -18.8 percent 
to -2.3 percent. At this level, refrigeration industry free cash flow 
is estimated to decrease by as much as $7.2 million, or 44.0 percent 
compared to the base-case value of $16.3 million in the year before the 
compliance date. From TSL 1 to TSL 2,

[[Page 55859]]

standards increase for most equipment classes. For dedicated 
condensing, medium temperature, indoor systems, a manufacturer would 
need to consider including electronically commutated condenser fan 
motors, improved condenser fan blades, and improved evaporator fan 
blades. For dedicated condensing, medium temperature, outdoor systems, 
the most cost effective options include using ambient subcooling, 
variable speed condenser fan motors, and floating head pressure with 
electronic expansion valves. For dedicated condensing, low temperature, 
outdoor systems, manufacturers will need to consider incorporating 
improved evaporator fan blades, larger condenser coils, and floating 
head pressure with electronic expansion valves. The range of changes 
does not require significant amounts of new production equipment, but 
could require substantial development and engineering time. DOE 
estimates the WICF refrigeration industry's conversion costs to 
increase to $24 million.
    At TSL 3, the standards and the impacts on the walk-in 
refrigeration industry are identical to those at TSL 1.
    At TSL 4, the standards and the impacts on the walk-in 
refrigeration industry are identical to those at TSL 2.
    TSL 5 and TSL 6 represent max-tech for WICF refrigeration systems. 
DOE estimates impacts on refrigeration INPV to range from -$43.3 
million to -$0.8 million, or a change in INPV of -22.9 percent to -0.4 
percent. At this level, refrigeration industry free cash flow is 
estimated to decrease by as much as $8.3 million, or 51.0 percent 
compared to the base-case value of $16.3 million in the year before the 
compliance year. DOE's engineering analysis indicates that 
manufacturers would need to incorporate design changes beyond those for 
TSL 4 and TSL 3 to achieve this standard. Additional design changes for 
dedicated condensing, low temperature, indoor and outdoor refrigeration 
would include defrost controls. For multiplex units, the standard 
levels at TSL 5 and 6 are identical to those at TSL 1. Total conversion 
costs are expected to reach $28 million for the industry.
b. Impacts on Direct Employment
Methodology
    To quantitatively assess the impacts of energy conservation 
standards on employment, DOE used the GRIM to estimate the domestic 
labor expenditures and number of employees in the base case and at each 
TSL from 2013 through 2046. DOE used statistical data from the U.S. 
Census Bureau's 2011 Annual Survey of Manufacturers (ASM), the results 
of the engineering analysis, and interviews with manufacturers to 
determine the inputs necessary to calculate industry-wide labor 
expenditures and domestic employment levels. Labor expenditures related 
to manufacturing of the product are a function of the labor intensity 
of the product, the sales volume, and an assumption that wages remain 
fixed in real terms over time. The total labor expenditures in each 
year are calculated by multiplying the MPCs by the labor percentage of 
MPCs.
    The total labor expenditures in the GRIM were then converted to 
domestic production employment levels by dividing production labor 
expenditures by the annual payment per production worker (production 
worker hours multiplied by the labor rate found in the U.S. Census 
Bureau's 2011 ASM). The estimates of production workers in this section 
cover workers, including line supervisors who are directly involved in 
fabricating and assembling a product within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor. DOE's estimates only account for 
production workers who manufacture the specific products covered by 
this rulemaking. To further establish a lower bound to negative impacts 
on employment, DOE reviewed design options, conversion costs, and 
market share information to determine the maximum number of 
manufacturers that would leave the industry at each TSL.
    In evaluating the impact of energy efficiency standards on 
employment, DOE performed separate analyses on all three walk-in 
component manufacturer industries: panels, doors and refrigeration 
systems.
    Using the GRIM, DOE estimates in the absence of new energy 
conservation standards, there would be 3,482 domestic production 
workers for walk-in panels, 1,187 domestic production workers for walk-
in doors, and 346 domestic production workers for walk-in refrigeration 
systems in 2017.
    Table V-25, Table V-26, and Table V-27 show the range of the 
impacts of potential new energy conservation standards on U.S. 
production workers in the panel, door, and refrigeration system 
markets, respectively. Additional detail on the analysis of direct 
employment can be found in chapter 12 of the TSD.

                           Table V-25--Potential Changes in the Total Number of Domestic Production Workers in 2017 for Panels
--------------------------------------------------------------------------------------------------------------------------------------------------------
             TSL                        1                    2                    3                    4                   5                   6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Potential Changes in Domestic  -435 to 134........  0..................  -871 to 490........  -435 to 134.......  -871 to 490.......  -1,741 to 3,243
 Production Workers 2017
 (from a base case employment
 of 3,462).
--------------------------------------------------------------------------------------------------------------------------------------------------------

                           Table V-26--Potential Changes in the Total Number of Domestic Production Workers in 2017 for Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
             TSL                        1                    2                    3                    4                   5                   6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Potential Changes in Domestic  -60 to 149.........  0 to 97............  -120 to 196........  -60 to 146........  -120 to 192.......  -349 to 2,409
 Production Workers 2017
 (from a base case employment
 of 1,187).
--------------------------------------------------------------------------------------------------------------------------------------------------------

                   Table V-27--Potential Changes in the Total Number of Domestic Production Workers in 2017 for Refrigeration Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
             TSL                        1                    2                    3                    4                   5                   6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Potential Changes in Domestic  0 to 31............  -88 to 74..........  0 to 31............  -88 to 74.........  -116 to 99........  -116 to 99
 Production Workers 2017
 (from a base case employment
 of 346).
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 55860]]

    The employment impacts shown in Table V-25 through Table V-27 
represent the potential production employment changes that could result 
following the compliance date of new energy conservation standards. The 
upper end of the results in the table estimates the maximum increase in 
the number of production workers after the implementation of new energy 
conservation standards and it assumes that manufacturers would continue 
to produce the same scope of covered products within the United States. 
The lower end of the range represents the maximum decrease to the total 
number of U.S. production workers in the industry due to manufacturers 
leaving the industry. However, in the long-run, DOE would expect the 
manufacturers that do not leave the industry to add employees to cover 
lost capacity and to meet market demand.
    The employment impacts shown are independent of the employment 
impacts from the broader U.S. economy, which are documented in the 
Employment Impact Analysis, chapter 13 of the TSD.
c. Impacts on Manufacturing Capacity
Panels
    Manufacturers indicated that design options that necessitate 
thicker panels could lead to longer production times for panels. In 
general, every additional inch of foam increases panel cure times by 
roughly 20 minutes. DOE understands from manufacturer interviews, 
however, that the industry is not currently operating at full capacity. 
Given this fact, and the number of manufacturers able to produce panels 
above the baseline today, an increase in thickness at lower panel 
standards--that is, a standard that is based on 4-inch or 5-inch 
panels--is not likely to lead to product shortages in the industry. 
However, a standard that necessitates 6-inch panels for any of the 
panel equipment classes would require manufacturers to add equipment to 
maintain throughput due to longer curing times or to purchase all new 
tooling to enable production if the manufacturer's current equipment 
cannot accommodate 6-inch panels. These conversion costs are discussed 
further in chapter 12 of the TSD.
Doors
    Display door manufacturers did not identify any design options 
which would lead to capacity constraints. However, manufacturers 
commented on differences between the two types of low-emittance 
coatings analyzed: hard low emittance coating (``hard-coat''), the 
baseline option, and soft low emittance coating (``soft-coat''), the 
corresponding design option. Hard-coat is applied to the glass pane at 
high temperatures during the formation of the pane and is extremely 
durable, while soft-coat is applied in a separate step after the glass 
pane is formed and is less durable than hard low emittance coating but 
has better performance characteristics. Manufacturers indicated that 
soft-coat is significantly more difficult to work with and may require 
new conveyor equipment. As manufacturers adjust to working with soft-
coat, longer lead times may occur.
    The production of solid doors is very similar to the production of 
panels and faces the same capacity challenges as panels. As indicated 
in the panel discussion above, DOE does not anticipate capacity 
constraints at a standard that moves manufacturers to 5 inches of 
thickness.
Refrigeration
    DOE did not identify any significant capacity constraints for the 
design options being evaluated for this rulemaking. For most 
refrigeration manufacturers, the walk-in market makes up a relatively 
small percentage of their overall revenues. Additionally, most of the 
design options being evaluated are available as product options today. 
As a result, the industry should not experience capacity constraints 
directly resulting from an energy conservation standard.
d. Impacts on Small Manufacturer Sub-Group
    As discussed in section IV.I.1, using average cost assumptions to 
develop an industry cash-flow estimate may not be adequate for 
assessing differential impacts among manufacturer sub-groups. Small 
manufacturers, niche equipment manufacturers, and manufacturers 
exhibiting a cost structure substantially different from the industry 
average could be affected disproportionately. DOE used the results of 
the industry characterization to group manufacturers exhibiting similar 
characteristics. Consequently, DOE analyzes small manufacturers as a 
sub-group.
    DOE evaluated the impact of new energy conservation standards on 
small manufacturers, specifically ones defined as ``small businesses'' 
by the SBA. The SBA defines a ``small business'' as having 750 
employees or less for NAICS 333415, ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' Based on this definition, DOE identified 2 
refrigeration system manufacturers, 42 panel manufacturers, and 5 door 
manufacturers in the WICF industry that are small businesses. DOE 
describes the differential impacts on these small businesses in today's 
notice at section VI.B, Review Under the Regulatory Flexibility Act.
    Section VI.B concludes that larger manufacturers could have a 
competitive advantage in multiple component markets due to their size, 
engineering and testing resources, and ability to access capital. 
Additionally, in some market segments, larger manufacturers have 
significantly higher production volumes over which to spread costs. In 
particular, DOE's analysis shows that this rule could drive 
consolidation in the walk-in cooler and freezer panel industry. While 
DOE cannot certify that today's rule would not have a significant 
economic impact on a substantial number of small manufacturers, DOE has 
considered these potential impacts and sought to mitigate any such 
impacts in choosing the TSL proposed in today's rule. For example, DOE 
specifically considered TSL 2, which would not raise the efficiency 
requirement on panel manufacturers above the base case level in order 
to minimize impacts on panel manufacturers. . In addition to the range 
of TSLs considered, alternatives to the proposed rule that were 
considered include the following policy alternatives: (1) No new 
regulatory action, (2) commercial consumer rebates, and (3) commercial 
consumer tax credits. Chapter 17 of the TSD associated with this 
proposed rule includes a report referred to in Section VI.A in the 
preamble as the regulatory impact analysis (RIA). The energy savings of 
these regulatory alternatives are one to two orders of magnitude 
smaller than those expected from the standard levels under 
consideration. The range of economic impacts of these regulatory 
alternatives is an order of magnitude smaller than the range of impacts 
expected from the standard levels under consideration. For a complete 
discussion of the impacts on small businesses, see section VI.B and 
chapter 12 of the TSD.
e. Cumulative Regulatory Burden
    While any one regulation may not impose a significant burden on 
manufacturers, the combined effects of several impending regulations 
may have serious consequences for some manufacturers, groups of 
manufacturers, or an entire industry. Assessing the impact of a single 
regulation may overlook this cumulative regulatory burden. Multiple 
regulations affecting the same manufacturer can strain profits

[[Page 55861]]

and can lead companies to abandon product lines or markets with lower 
expected future returns than competing products. For these reasons, DOE 
conducts an analysis of cumulative regulatory burden as part of its 
rulemakings pertaining to appliance and equipment efficiency.
    For the cumulative regulatory burden analysis, DOE looks at other 
regulations that could affect walk in cooler and freezer manufacturers 
that will take effect approximately 3 years before or after the 
compliance date of new energy conservation standards for these 
products. In addition to the new energy conservation regulations on 
walk-ins, several other Federal regulations apply to these products and 
other equipment produced by the same manufacturers. While the 
cumulative regulatory burden focuses on the impacts on manufacturers of 
other Federal requirements, DOE also describes a number of other 
regulations in section VI.B because it recognizes that these 
regulations also impact the products covered by this rulemaking.
    Companies that produce a wide range of regulated products may be 
faced with more capital and product development expenditures than 
competitors with a narrower scope of products. Regulatory burdens can 
prompt companies to exit the market or reduce their product offerings, 
potentially reducing competition. Smaller companies in particular can 
be affected by regulatory costs since these companies have lower sales 
volumes over which they can amortize the costs of meeting new 
regulations. DOE discusses below the regulatory burdens manufacturers 
could experience, mainly, DOE regulations for other products or 
equipment produced by walk-in manufacturers and other Federal 
requirements including the United States Clean Air Act, the Energy 
Independence and Security Act of 2007. While this analysis focuses on 
the impacts on manufacturers of other Federal requirements, in this 
section DOE also describes a number of other regulations that could 
also impact the WICF equipment covered by this rulemaking: potential 
climate change and greenhouse gas legislation, State conservation 
standards, and food safety regulations. DOE discusses these and other 
requirements, and includes the full details of the cumulative 
regulatory burden, in chapter 12 of the NOPR TSD.
DOE Regulations for Other Products Produced by Walk-In Cooler and 
Freezer Manufacturers
    In addition to the new energy conservation standards on walk in 
cooler and freezer equipment, several other Federal regulations apply 
to other products produced by the same manufacturers. DOE recognizes 
that each regulation can significantly affect a manufacturer's 
financial operations. Multiple regulations affecting the same 
manufacturer can strain manufacturers' profits and possibly cause an 
exit from the market. DOE is conducting an energy conservation standard 
rulemaking for commercial refrigeration equipment. In its Notice of 
Proposed Rulemaking for commercial refrigeration equipment, DOE 
initially estimated conversion costs for the CRE industry to total 
$87.5 million. Conversion costs are one-time expenses the industry will 
bear between the announcement date of the standard and the effective 
date of the standard.
Federal Clean Air Act
    The Clean Air Act defines the EPA's responsibilities for protecting 
and improving the nation's air quality and the stratospheric ozone 
layer. The most significant of these additional regulations is the EPA-
mandated phase-out of hydrochlorofluorocarbons (HCFCs). The Act 
requires that, on a quarterly basis, any person who produced, imported, 
or exported certain substances, including HCFC refrigerants, report the 
amount produced, imported and exported. Additionally--effective January 
1, 2015--selling, manufacturing, and using any such substance is banned 
unless such substance (1) has been used, recovered, and recycled; (2) 
is used and entirely consumed in the production of other chemicals; or 
(3) is used as a refrigerant in appliances manufactured prior to 
January 1, 2020. Finally, production phase-outs will continue until 
January 1, 2030 when such production will be illegal. These bans could 
trigger design changes to natural or low global warming potential 
refrigerants and could impact the insulation used in products covered 
by this rulemaking.
State Conservation Standards
    Since 2004, the State of California has had established energy 
standards for walk-in coolers and freezers. California's Code of 
Regulations (Title 20, Section 1605) prescribe requirements for 
insulation levels, motor types, and use of automatic door-closers used 
for WICF applications. These requirements have since been amended and 
mirror those standards that Congress prescribed as part of EISA 2007. 
Other States, notably, Connecticut, Maryland, and Oregon, have recently 
established energy efficiency standards for walk-ins that are also 
identical to the ones contained in EPCA. These standards would not be 
preempted until any Federal standards that DOE may adopt take effect. 
See 42 U.S.C. 6316(h)(2). Once DOE's standards are finalized, all other 
State standards that are in effect would be pre-empted. As a result, 
these State standards do not pose any regulatory burden above that 
which has already been established in EPCA.
Food Safety Standards
    Manufacturers expressed concern regarding Federal, State, and local 
food safety regulations. A walk-in must perform to the standards set by 
NSF, state, country, and city health regulations. There is general 
concern among manufacturers about conflicting regulation scenarios as 
new energy conservation standards may potentially prevent or make it 
more difficult for them to comply with food safety regulations.
3. National Impact Analysis
a. Amount and Significance of Energy Savings
    To estimate the national energy savings attributable to the TSLs 
under consideration, DOE compared the energy consumption of the 
refrigeration systems under the base case to their anticipated energy 
consumption under each TSL. Because all the TSLs except TSL 6 combine 
high efficiency refrigeration systems with envelope components having 
small efficiency gains over the baseline levels, DOE projected that the 
additional impact from higher efficiency levels for envelope components 
on the capacity of refrigeration systems sold for each system, and 
subsequently on the aggregate shipped capacity, would not significantly 
impact the energy savings estimate for each TSL. Consequently, DOE 
calculated the baseline energy consumption and the energy savings for 
higher efficiency refrigeration systems independent of the envelope 
component efficiency level at the TSLs considered. DOE did, however, 
estimate this reduction in capacity from improved envelope component 
efficiency on an aggregate basis at each TSL and accounted for the 
economic benefit in the calculation of the national net present value 
for each TSL as discussed in section V.3.b.
    By contrast, the energy savings benefits for the envelope 
components are influenced directly by the efficiency of the 
refrigeration system. Because of this, the energy savings for the 
envelope levels are calculated such that both the baseline and the 
higher efficiency

[[Page 55862]]

envelope components are paired with the refrigeration system at the 
efficiency level corresponding to the specific TSL.
    Table V-28 through Table V-30 present DOE's forecasts of the 
national primary energy savings for each TSL of the refrigeration 
systems and selected envelope components, and the combination of 
refrigeration systems and envelope components. In addition Table V-30 
shows the FFC energy savings for each TSL. These forecasts were 
calculated using the approach described in section IV.G. Chapter 10 of 
the NOPR TSD presents tables that also show the magnitude of the energy 
savings.

               Table V-28--WICF Refrigeration Systems: Cumulative National Energy Savings in Quads
                                            [Primary energy savings]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard levels
                 Equipment class                 ---------------------------------------------------------------
                                                        1,3             2,4              5               6
----------------------------------------------------------------------------------------------------------------
DC.M.I*.........................................           0.024           0.041           0.041           0.041
DC.M.O*.........................................           1.825           2.446           2.524           2.524
DC.L.I*.........................................           0.009           0.016           0.017           0.017
DC.L.O*.........................................           0.768           1.162           1.256           1.256
MC.M............................................           0.378           0.376           0.378           0.378
MC.L............................................           0.099           0.084           0.099           0.099
----------------------------------------------------------------------------------------------------------------
* For DC refrigeration systems, results include both capacity ranges.

               Table V-29--Component Equipment Class: Cumulative National Energy Savings in Quads
                                            [Primary energy savings]
----------------------------------------------------------------------------------------------------------------
                                                                Trial standard levels
          Equipment class          -----------------------------------------------------------------------------
                                         1            2            3            4            5            6
----------------------------------------------------------------------------------------------------------------
SP.M..............................        0.259        0.000        0.324        0.221        0.273        0.553
SP.L..............................        0.447        0.000        0.564        0.380        0.447        0.619
FP.L..............................        0.048        0.000        0.069        0.040        0.055        0.069
DD.M..............................        0.405        0.394        0.405        0.394        0.394        0.620
DD.L..............................        0.021        0.020        0.029        0.020        0.020        0.095
PD.M..............................        0.009        0.000        0.009        0.007        0.007        0.073
PD.L..............................        0.113        0.000        0.141        0.106        0.128        0.140
FD.M..............................        0.000        0.000        0.000        0.000        0.000        0.004
FD.L..............................        0.010        0.000        0.013        0.007        0.012        0.013
----------------------------------------------------------------------------------------------------------------

   Table V-30--Refrigeration Systems and Components Combined: Cumulative National Primary and Full-Fuel Cycle
                                             Energy Savings in Quads
----------------------------------------------------------------------------------------------------------------
                                                                Trial standard levels
            Application            -----------------------------------------------------------------------------
                                         1            2            3            4            5            6
----------------------------------------------------------------------------------------------------------------
Medium Temperature................        2.900        3.257        2.965        3.486        3.617        4.193
Low Temperature...................        1.515        1.283        1.692        1.816        2.032        2.308
Primary Energy Savings Total......        4.415        4.540        4.658        5.302        5.649        6.501
Upstream Energy Savings...........        0.072        0.074        0.076        0.086        0.092        0.106
                                   -----------------------------------------------------------------------------
    FFC Total.....................        4.487        4.614        4.734        5.388        5.741        6.607
----------------------------------------------------------------------------------------------------------------

    Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. For this rulemaking, DOE undertook 
a sensitivity analysis using nine rather than 30 years of product 
shipments. The choice of a 9-year period is a proxy for the timeline in 
EPCA for the review of certain energy conservation standards and 
potential revision of and compliance with such revised standards. We 
would note that the review timeframe established in EPCA generally does 
not overlap with the product lifetime, product manufacturing cycles or 
other factors specific to walk-in coolers and freezers. Thus, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology. The NES of 
estimated primary energy savings results based on a 9-year analytical 
period are presented in Table V-31 through Table V-33. The impacts are 
counted over the lifetime of products purchased in 2017-2025.

[[Page 55863]]

  Table V-31--WICF Refrigeration Systems: Cumulative National Primary Energy Savings in Quads for Units Sold in
                                                    2017-2025
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard levels
                 Equipment class                 ---------------------------------------------------------------
                                                        1,3             2,4              5               6
----------------------------------------------------------------------------------------------------------------
DC.M.I*.........................................           0.007           0.012           0.012           0.012
DC.M.O*.........................................           0.547           0.733           0.756           0.756
DC.L.I*.........................................           0.003           0.005           0.005           0.005
DC.L.O*.........................................           0.230           0.348           0.376           0.376
MC.M............................................           0.113           0.113           0.113           0.113
MC.L............................................           0.030           0.025           0.030           0.030
----------------------------------------------------------------------------------------------------------------
* For DC refrigeration systems, results include multiple capacity ranges.

                 Table V-32--Component Equipment Class: Cumulative National Primary Energy Savings in Quads for Units Sold in 2017-2025
                                                                [Primary energy savings]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                     Equipment class                     -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M....................................................           0.063           0.000           0.079           0.054           0.066           0.134
SP.L....................................................           0.108           0.000           0.137           0.092           0.108           0.150
FP.L....................................................           0.012           0.000           0.017           0.010           0.013           0.017
DD.M....................................................           0.123           0.119           0.123           0.119           0.119           0.188
DD.L....................................................           0.006           0.006           0.009           0.006           0.006           0.029
PD.M....................................................           0.003           0.000           0.003           0.002           0.002           0.021
PD.L....................................................           0.033           0.000           0.041           0.031           0.037           0.041
FD.M....................................................           0.000           0.000           0.000           0.000           0.000           0.001
FD.L....................................................           0.002           0.000           0.003           0.002           0.003           0.003
--------------------------------------------------------------------------------------------------------------------------------------------------------

  Table V-33--Refrigeration Systems and Components Combined: Cumulative National Primary and Full-Fuel Cycle Energy Savings in Quads for Units Sold in
                                                                        2017-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                       Application                       -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Medium Temperature......................................           0.855           0.977           0.871           1.033           1.069           1.226
Low Temperature.........................................           0.425           0.384           0.470           0.519           0.579           0.651
Primary Energy Savings Total............................           1.280           1.361           1.341           1.552           1.648           1.877
Upstream Energy Savings.................................           0.021           0.022           0.022           0.025           0.027           0.031
                                                         -----------------------------------------------------------------------------------------------
    FFC Total...........................................           1.301           1.383           1.363           1.577           1.675           1.908
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV to the nation of the total costs 
and savings for consumers that would result from particular composite 
standard levels for the refrigeration systems and components. In 
accordance with OMB guidelines on regulatory analysis (OMB Circular A-
4, section E, September 17, 2003), DOE calculated NPV using both a 7-
percent and a 3-percent real discount rate. The 7-percent rate is an 
estimate of the average before-tax rate of return on private capital in 
the U.S. economy, and reflects the returns on real estate and small 
business capital, including corporate capital. DOE used this discount 
rate to approximate the opportunity cost of capital in the private 
sector, since recent OMB analysis has found the average rate of return 
on capital to be near this rate. In addition, DOE used the 3-percent 
rate to capture the potential effects of standards on private 
consumption. This rate represents the rate at which society discounts 
future consumption flows to their present value. It can be approximated 
by the real rate of return on long-term government debt (i.e., yield on 
Treasury notes minus annual rate of change in the Consumer Price 
Index), which has averaged about 3 percent on a pre-tax basis for the 
last 30 years.
    Table V-34 through Table V-39 show the consumer NPV results for 
each of the TSLs DOE considered for the combination of refrigeration 
systems and envelope components, using both a 7-percent and a 3-percent 
discount rate. In each case, the impacts cover the lifetime of products 
purchased in 2017-2046. For a particular TSL combination, improving 
component efficiency should result in reduced refrigeration load on the 
paired refrigeration system and consequently, the refrigeration system 
can be downsized, resulting in additional consumer benefits. In 
estimating the ``first cost benefits,'' DOE made several assumptions 
and has shown the results only in the summary table. For a discussion 
of these assumptions, see chapter 10 of the TSD.

[[Page 55864]]

 Table V-34--WICF Refrigeration Systems: Net Present Value in Millions (2012$) at a 7-Percent Discount Rate for
                                             Units Sold in 2017-2046
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard levels
                Equipment classes                ---------------------------------------------------------------
                                                        1,3             2,4              5               6
----------------------------------------------------------------------------------------------------------------
DC.M.I *........................................              38              52              52              52
DC.M.O *........................................           3,417           3,943           3,937           3,937
DC.L.I *........................................              12              19              19              19
DC.L.O *........................................           1,488           1,995           1,913           1,913
MC.M............................................             835             843             835             835
MC.L............................................             161             189             161             161
----------------------------------------------------------------------------------------------------------------
* For DC refrigeration systems, results include both capacity ranges.

    Table V-35--Envelope Component Equipment Classes: Net Present Value in Millions (2012$) at a 7-Percent Discount Rate for Units Sold in 2017-2046
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                     Equipment class                     -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M....................................................             289               0             121             207              11         -17,715
SP.L....................................................             662               0             269             520              21          -4,298
FP.L....................................................              63               0              52              48              22            -578
DD.M....................................................             571             545             571             545             543         -11,200
DD.L....................................................              54              51               0              51              50            -395
PD.M....................................................               4               0               4               1               1          -1,764
PD.L....................................................             106               0              38              88               6            -513
FD.M....................................................               0               0               0               0               0            -106
FD.L....................................................              10               0               5               9               2             -59
--------------------------------------------------------------------------------------------------------------------------------------------------------

  Table V-36--Refrigeration Systems and Components Combined: Net Present Value in Millions (2012$) at a 7-Percent Discount Rate for Units Sold in 2017-
                                                                          2046
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                       Application                       -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Medium temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................           5,155           5,384           4,987           5,592           5,380         -25,961
First cost benefits.....................................               6               3              18              34              45             153
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................           5,161           5,386           5,004           5,627           5,425         -25,809
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Low temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................           2,555           2,255           2,025           2,919           2,193          -3,751
First cost benefits.....................................              49               0              89              96             246             344
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................           2,604           2,255           2,114           3,015           2,438          -3,408
                                                         -----------------------------------------------------------------------------------------------
        Total--All......................................           7,765           7,641           7,118           8,642           7,864         -29,217
--------------------------------------------------------------------------------------------------------------------------------------------------------

 Table V-37--WICF Refrigeration Systems: Net Present Value in Millions (2012$) at a 3-Percent Discount Rate for
                                             Units Sold in 2017-2046
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard levels
                 Equipment class                 ---------------------------------------------------------------
                                                        1,3             2,4              5               6
----------------------------------------------------------------------------------------------------------------
DC.M.I *........................................             107             159             159             159
DC.M.O *........................................           9,161          11,047          11,147          11,147
DC.L.I *........................................              36              61              60              60
DC.L.O *........................................           3,951           5,483           5,455           5,455
MC.M............................................           2,143           2,157           2,143           2,143
MC.L............................................             450             483             450             450
----------------------------------------------------------------------------------------------------------------
* For DC refrigeration systems, results include both capacity ranges.

[[Page 55865]]

    Table V-38--Envelope Component Equipment Classes: Net Present Value in Millions (2012$) at a 3-Percent Discount Rate for Units Sold in 2017-2046
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                     Equipment class                     -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M....................................................             990               0             779             770             484         -32,834
SP.L....................................................           2,151               0           1,468           1,694             797          -7,144
FP.L....................................................             219               0             216             167             134            -985
DD.M....................................................           1,667           1,602           1,667           1,602           1,597         -20,987
DD.L....................................................             135             128              41             128             126            -640
PD.M....................................................              21               0              21              13              12          -3,329
PD.L....................................................             364               0             270             319             189            -803
FD.M....................................................               1               0               1               1               1            -200
FD.L....................................................              36               0              31              32              23             -92
--------------------------------------------------------------------------------------------------------------------------------------------------------

  Table V-39--Refrigeration Systems and Components Combined: Net Present Value in Millions (2012$) at a 3-Percent Discount Rate for Units Sold in 2017-
                                                                          2046
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                       Application                       -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Medium temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................          14,091          14,965          13,880          15,748          15,543         -43,901
First cost benefits.....................................              12               5              34              66              87             294
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................          14,102          14,970          13,914          15,814          15,630         -43,607
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Low temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................           7,191           6,155           6,464           8,297           7,234          -3,700
First cost benefits.....................................              94               0             172             185             473             663
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................           7,285           6,155           6,636           8,482           7,707          -3,037
                                                         -----------------------------------------------------------------------------------------------
        Total--All......................................          21,387          21,125          20,550          24,296          23,337         -46,644
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V-40 through Table V-45. The impacts are 
counted over the lifetime of products purchased in 2017-2025. As 
mentioned previously, this information is presented for informational 
purposes only and is not indicative of any change in DOE's analytical 
methodology or decision criteria.

 Table V-40--WICF Refrigeration Systems: Net Present Value in Millions (2012$) at a 7-Percent Discount Rate for
                                             Units Sold in 2017-2025
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard levels
                Equipment classes                ---------------------------------------------------------------
                                                        1,3             2,4              5               6
----------------------------------------------------------------------------------------------------------------
DC.M.I *........................................              21              30              30              30
DC.M.O *........................................           1,864           2,175           2,178           2,178
DC.L.I *........................................               7              11              11              11
DC.L.O *........................................             810           1,095           1,060           1,060
MC.M............................................             451             455             451             451
MC.L............................................              89             102              89              89
----------------------------------------------------------------------------------------------------------------
* For DC refrigeration systems, results include both capacity ranges.

    Table V-41--Envelope Component Equipment Classes: Net Present Value in Millions (2012$) at a 7-Percent Discount Rate for Units Sold in 2017-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                     Equipment class                     -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M....................................................             128               0              35              89             -17          -9,275
SP.L....................................................             306               0              92             238             -27          -2,293
FP.L....................................................              29               0              21              21               6            -307
DD.M....................................................             326             312             326             312             311          -5,473
DD.L....................................................              29              28               3              28              27            -186

[[Page 55866]]

 
PD.M....................................................               3               0               3               1               1            -870
PD.L....................................................              62               0              30              53              13            -244
FD.M....................................................               0               0               0               0               0             -53
FD.L....................................................               5               0               2               4               0             -30
--------------------------------------------------------------------------------------------------------------------------------------------------------

  Table V-42--Refrigeration Systems and Components Combined: Net Present Value in Millions (2012$) at a 7-Percent Discount Rate for Units Sold in 2017-
                                                                          2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                       Application                       -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Medium temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................           2,883           3,061           2,791           3,156           3,153         -12,843
                                                         -----------------------------------------------------------------------------------------------
First cost benefits.....................................               3               1               9              17              23              77
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................           2,886           3,062           2,800           3,174           3,176         -12,766
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Low temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................           1,322           1,125           1,045           1,479           1,416          -1,829
First cost benefits.....................................              23               0              42              33             124             174
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................           1,345           1,125           1,087           1,512           1,540          -1,655
                                                         -----------------------------------------------------------------------------------------------
        Total--All......................................           4,230           4,188           3,887           4,686           4,716         -14,421
--------------------------------------------------------------------------------------------------------------------------------------------------------

 Table V-43--WICF Refrigeration Systems: Net Present Value in Millions (2012$) at a 3-Percent Discount Rate for
                                             Units Sold in 2017-2025
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard levels
                 Equipment class                 ---------------------------------------------------------------
                                                        1,3             2,4              5               6
----------------------------------------------------------------------------------------------------------------
DC.M.I *........................................              42              63              63              63
DC.M.O *........................................           3,564           4,330           4,377           4,377
DC.L.I *........................................              14              24              24              24
DC.L.O *........................................           1,535           2,143           2,145           2,145
MC.M............................................             828             832             828             828
MC.L............................................             177             187             177             177
----------------------------------------------------------------------------------------------------------------
* For DC refrigeration systems, results include both capacity ranges.

    Table V-44--Envelope Component Equipment Classes: Net Present Value in Millions (2012$) at a 3-Percent Discount Rate for Units Sold in 2017-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                     Equipment class                     -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M....................................................             296               0             197             224             101         -12,538
SP.L....................................................             651               0             385             503             167          -2,879
FP.L....................................................              64               0              61              48              34            -392
DD.M....................................................             675             650             675             650             648          -7,204
DD.L....................................................              52              50              21              50              49            -203
PD.M....................................................               9               0               9               6               5          -1,161
PD.L....................................................             147               0             118             129              87            -261
FD.M....................................................               0               0               0               0               0             -71
FD.L....................................................              11               0               8              10               6             -35
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 55867]]

  Table V-45--Refrigeration Systems and Components Combined: Net Present Value in Millions (2012$) at a 3-Percent Discount Rate for Units Sold in 2017-
                                                                          2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Trial standard levels
                       Application                       -----------------------------------------------------------------------------------------------
                                                                 1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Medium temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................           5,414           5,875           5,315           6,106           6,022         -15,707
First cost benefits.....................................               4               2              12              24              32             107
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................           5,418           5,877           5,328           6,130           6,054         -15,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Low temperature
--------------------------------------------------------------------------------------------------------------------------------------------------------
Combined NPV............................................           2,624           2,403           2,319           3,092           2,688          -1,425
First cost benefits.....................................              34               0              62              67             172             240
                                                         -----------------------------------------------------------------------------------------------
    Sub-Total...........................................           2,658           2,403           2,382           3,159           2,859          -1,185
                                                         -----------------------------------------------------------------------------------------------
        Total--All......................................           8,076           8,281           7,709           9,289           8,913         -16,785
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Employment Impacts
    Besides the direct impacts on manufacturing employment discussed in 
section V.B.2.b, DOE develops general estimates of the indirect 
employment impacts of proposed standards on the economy. As discussed 
above, DOE expects energy conservation standards for walk-ins to reduce 
energy bills for commercial consumers, and the resulting net savings to 
be redirected to other forms of economic activity. DOE also realizes 
that these shifts in spending and economic activity by WICF owners 
could affect the demand for labor. Thus, 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 the imposition of standards. These 
impacts may affect a variety of businesses not directly involved in the 
decision to make, operate, or pay the utility bills for walk-ins. To 
estimate these indirect economic effects, DOE used an input/output 
model of the U.S. economy using U.S. Department of Commerce, Bureau of 
Economic Analysis (BEA) and Bureau of Labor Statistics (BLS) data (as 
described in section IV.J; see chapter 13 of the TSD for more details).
    In this input/output model, the dollars saved on utility bills from 
more efficient walk-in equipment are centered in economic sectors that 
create more jobs than are lost in the electric utility industry when 
spending is shifted from electricity to other products and services. 
Thus, the proposed walk-in energy conservation standards are likely to 
slightly increase the net demand for labor in the economy. However, the 
net increase in jobs might be offset by other, unanticipated effects on 
employment. Neither the BLS data nor the input/output model used by DOE 
indicates the quality of jobs lost or gained. As shown in Table V-46, 
DOE estimates that net indirect employment impacts from a proposed WICF 
standard are small relative to the national economy.

                 Table V-46--Net Change in Jobs From Indirect Employment Effects Under WICF TSLs
----------------------------------------------------------------------------------------------------------------
                                                                   Net national change in jobs (thousands)
                                           Trial standard  -----------------------------------------------------
                  Year                          level           Envelope        Refrigeration
                                                               components          systems            Total
----------------------------------------------------------------------------------------------------------------
2017....................................                 1               0.2               0.5               0.7
                                                         2               0.1               0.7               0.8
                                                         3               0.2               0.5               0.7
                                                         4               0.2               0.7               0.9
                                                         5               0.2               0.8               1.0
                                                         6               0.3               0.8               1.1
2021....................................                 1               0.8               2.5               3.4
                                                         2               0.3               3.4               3.7
                                                         3               1.0               2.5               3.5
                                                         4               0.8               3.4               4.2
                                                         5               0.9               3.6               4.4
                                                         6               1.4               3.6               5.0
----------------------------------------------------------------------------------------------------------------

4. Impact on Utility or Performance of Equipment
    In performing the engineering analysis, DOE generally considers 
design options that would not lessen the utility or performance of the 
individual classes of equipment. See 42 U.S.C. 6295(o)(2)(B)(i)(IV). As 
presented in the screening analysis (chapter 4 of the TSD), DOE 
eliminates design options that reduce the utility of the equipment from 
consideration. For this notice, DOE tentatively concludes that none of 
the efficiency levels proposed for walk-in cooler and freezer equipment 
would be likely to reduce the utility or performance of the equipment.

[[Page 55868]]

5. Impact of Any Lessening of Competition
    DOE has also considered any lessening of competition that is likely 
to result from amended standards. The Attorney General determines the 
impact, if any, of any lessening of competition likely to result from a 
proposed standard, and transmits such determination to the Secretary, 
together with an analysis of the nature and extent of such impact. (42 
U.S.C. 6295(o)(2)(B)(i)(V) and (ii))
    To assist the Attorney General in making such determination, DOE 
will provide DOJ with copies of this NOPR and the TSD for review. DOE 
will consider DOJ's comments on the proposed rule in preparing the 
final rule, and DOE will publish and respond to DOJ's comments in that 
document.
    DOE also notes that during MIA interviews, domestic manufacturers 
indicated that foreign manufacturers do not generally enter the walk-in 
market and have not done so for the past several years; however, some 
walk-in equipment may be manufactured in Mexico or Canada. 
Manufacturers also stated that consolidation has occurred among walk-in 
manufacturers in recent years, due largely to the competitive nature of 
the industry and the recently enacted standards established by 
Congress. DOE believes that these trends will continue in this market 
regardless of the proposed standard levels chosen, but could accelerate 
if higher standard levels are set.
    DOE does not believe that the proposed standards would result in 
domestic firms moving their production facilities outside the United 
States. The vast majority of walk-ins sold in the United States are 
manufactured in the United States, in large part because walk-in 
equipment is generally bulky, making it difficult and expensive to ship 
internationally. Manufacturers generally indicated during interviews 
that they would modify their existing facilities to comply with the 
amended energy conservation standards that DOE develops.
6. Need of the Nation To Conserve Energy
    An improvement in the energy efficiency of the products subject to 
today's rule is likely to improve the security of the nation's energy 
system by reducing overall demand for energy. Reduced electricity 
demand may also improve the reliability of the electricity system. 
Reductions in national electric generating capacity estimated for each 
considered TSL are reported in chapter 14 of the TSD.
    Energy savings from amended standards for WICF equipment classes 
covered in today's NOPR could also produce environmental benefits in 
the form of reduced emissions of air pollutants and greenhouse gases 
associated with electricity production. Table V-47 provides DOE's 
estimate of cumulative emissions reductions projected to result from 
the TSLs considered in this rulemaking. The table includes both power 
sector emissions and upstream emissions. The upstream emissions were 
calculated using the multipliers discussed in section IV.G. DOE reports 
annual CO2, NOX, and Hg emissions reductions for 
each TSL in chapter 15 of the NOPR TSD. As discussed in section IV.J, 
DOE did not include NOX emissions reduction from power 
plants in States subject to CAIR, because an energy conservation 
standard would not affect the overall level of NOX emissions 
in those States due to the emissions caps mandated by CSAPR.

          Table V-47--Cumulative Emissions Reduction for WICF TSLs for Equipment Purchased in 2017-2046
----------------------------------------------------------------------------------------------------------------
                                                                            TSL
                                         -----------------------------------------------------------------------
                                               1           2           3           4           5           6
----------------------------------------------------------------------------------------------------------------
                                        Power Sector and Site Emissions *
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............      234.32      240.95      246.75      281.35      299.79      345.05
NOX (thousand tons).....................      178.96      183.22      188.62      214.60      228.76      263.66
Hg (tons)...............................        0.52        0.53        0.54        0.62        0.66        0.76
N2O (thousand tons).....................        5.22        5.33        5.51        6.26        6.67        7.70
CH4 (thousand tons).....................       29.18       29.98       30.74       35.03       37.33       42.98
SO2 (thousand tons).....................      313.03      322.01      329.61      375.89      400.52      460.93
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............       13.87       14.27       14.61       16.66       17.75       20.43
NOX (thousand tons).....................      190.90      196.36      201.02      229.24      244.26      281.10
Hg (tons)...............................        0.01        0.01        0.01        0.01        0.01        0.01
N2O (thousand tons).....................        0.14        0.14        0.15        0.17        0.18        0.21
CH4 (thousand tons).....................    1,159.66    1,192.72    1,221.16    1,392.52    1,483.77    1,707.59
SO2 (thousand tons).....................        2.97        3.06        3.13        3.57        3.80        4.38
----------------------------------------------------------------------------------------------------------------
                                                 Total Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...............      248.19      255.22      261.36      298.01      317.54      365.48
NOX (thousand tons).....................      369.85      379.58      389.64      443.84      473.02      544.76
Hg (tons)...............................        0.52        0.54        0.55        0.63        0.67        0.77
N2O (thousand tons).....................        5.36        5.48        5.65        6.43        6.85        7.90
CH4 (thousand tons).....................    1,188.84    1,222.70    1,251.90    1,427.56    1,521.10    1,750.57
SO2 (thousand tons).....................      316.00      325.06      332.74      379.46      404.32      465.31
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this NOPR, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that DOE estimated for each of the TSLs considered. 
As discussed in section IV.M.1, DOE used values for the SCC developed 
by an interagency process. The interagency group selected four sets of 
SCC values for use in regulatory analyses. Three sets are based on the 
average SCC from three integrated assessment models, at discount rates 
of 2.5 percent, 3 percent, and 5 percent. The fourth set, which 
represents the 95th-percentile SCC

[[Page 55869]]

estimate across all three models at a 3-percent discount rate, is 
included to represent higher-than-expected impacts from temperature 
change further out in the tails of the SCC distribution. The four 
values for CO2 emissions reductions in 2015, expressed in 
2012$, are $12.9/ton, $40.8/ton, $62.2/ton, and $117.0/ton. The values 
for later years are higher due to increasing damages as the magnitude 
of climate change increases.
    Table V-48 presents the global value of CO2 emissions 
reductions at each TSL. DOE calculated domestic values as a range from 
7 percent to 23 percent of the global values, and these results are 
presented in chapter 16 of the NOPR TSD.

                            Table V-48--Cumulative Emissions Reduction for WICF TSLs
                                               [2017 through 2073]
----------------------------------------------------------------------------------------------------------------
                                                                           SCC case \*\
                                                 ---------------------------------------------------------------
                       TSL                          5% discount     3% discount    2.5% discount    3% discount
                                                   rate, average   rate, average   rate, average    rate, 95th
                                                         *               *               *         percentile *
----------------------------------------------------------------------------------------------------------------
                                            Primary Energy Emissions
----------------------------------------------------------------------------------------------------------------
                                                                           Million 2012$
                                                 ---------------------------------------------------------------
1...............................................         1,477.1         7,031.6        11,276.4        21,608.4
2...............................................         1,532.4         7,269.9        11,648.3        22,334.5
3...............................................         1,552.5         7,396.3        11,863.3        22,730.2
4...............................................         1,777.9         8,455.6        13,556.7        25,982.3
5...............................................         1,892.8         9,004.8        14,438.5        27,670.6
6...............................................         2,173.0        10,348.6        16,597.3        31,802.7
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................            86.8           415.1           665.9         1,277.0
2...............................................            90.0           429.1           687.8         1,319.6
3...............................................            91.2           436.7           700.6         1,343.3
4...............................................           104.4           499.1           800.6         1,535.4
5...............................................           111.2           531.6           852.7         1,635.2
6...............................................           127.7           610.9           980.2         1,879.4
----------------------------------------------------------------------------------------------------------------
                                                 Total Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................         1,563.8         7,446.7        11,942.3        22,885.4
2...............................................         1,622.4         7,698.9        12,336.1        23,654.1
3...............................................         1,643.7         7,832.9        12,563.9        24,073.6
4...............................................         1,882.4         8,954.8        14,357.3        27,517.7
5...............................................         2,003.9         9,536.4        15,291.2        29,305.8
6...............................................         2,300.7        10,959.5        17,577.5        33,682.1
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.9, $40.8, $62.2 and
  $117.0 per metric ton (2012$).

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to evolve rapidly. Thus, any value placed in 
this NOPR on reducing CO2 emissions is subject to change. 
DOE, together with other Federal agencies, will continue to review 
various methodologies for estimating the monetary value of reductions 
in CO2 and other GHG emissions. This ongoing review will 
consider the comments on this subject that are part of the public 
record for this NOPR and other rulemakings, as well as other 
methodological assumptions and issues. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this NOPR the most 
recent values and analyses resulting from the ongoing interagency 
review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX and Hg emissions 
reductions anticipated to result from amended ballast standards. Table 
V-49 presents the present value of cumulative NOX emissions 
reductions for each TSL calculated using the average dollar-per-ton 
values at 7-percent and 3-percent discount rates.

Table V-49--Cumulative Present Value of NOX Emissions Reduction for WICF
                                  TSLs
                           [2017 through 2073]
------------------------------------------------------------------------
                                          3% discount      7% discount
                  TSL                         rate             rate
------------------------------------------------------------------------
                         Power Sector Emissions
------------------------------------------------------------------------
                                                  Million 2012$
                                       ---------------------------------
1.....................................            219.7             96.3

[[Page 55870]]

 
2.....................................            227.7            101.0
3.....................................            231.0            100.9
4.....................................            264.4            116.2
5.....................................            281.5            123.6
6.....................................            323.3            141.4
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.....................................            240.1            105.4
2.....................................            249.4            110.5
3.....................................            252.3            110.5
4.....................................            289.1            127.2
5.....................................            307.7            135.3
6.....................................            353.1            154.8
------------------------------------------------------------------------
                             Total Emissions
------------------------------------------------------------------------
1.....................................            459.8            201.6
2.....................................            477.1            211.4
3.....................................            483.3            211.4
4.....................................            553.5            243.5
5.....................................            589.2            258.9
6.....................................            676.5            296.3
------------------------------------------------------------------------
Note: Present value of NOX emissions calculated with at $2,639 per ton.

    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the consumer 
savings calculated for each TSL considered in this NOPR.
    Table V-50 presents the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced 
CO2 and NOX emissions in each of four valuation 
scenarios to the NPV of consumer savings calculated for each TSL 
considered in this rulemaking, at both a 7-percent and a 3-percent 
discount rate. The CO2 values used in the columns of each 
table correspond to the four scenarios for the valuation of 
CO2 emission reductions discussed above.

Table V-50--WICF TSLs: Net Present Value of Consumer Savings Combined with Net Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Consumer NPV at 3% discount rate added with:
                                                     ---------------------------------------------------------------------------------------------------
                         TSL                            SCC Value of $12.9/      SCC Value of $40.8/      SCC Value of $62.2/      SCC Value of $117.0/
                                                      metric ton CO2* and low    metric ton CO2* and      metric ton CO2* and      metric ton CO2* and
                                                          value for NOX**       medium value for NOX**   medium value for NOX**    high value for NOX**
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 billion 2012$
                                                     ---------------------------------------------------------------------------------------------------
1...................................................                    23.03                    29.29                    33.79                    45.11
2...................................................                    22.83                    29.30                    33.94                    45.65
3...................................................                    22.28                    28.87                    33.60                    45.50
4...................................................                    26.28                    33.80                    39.21                    52.82
5...................................................                    25.45                    33.46                    39.22                    53.72
6...................................................                   -44.22                   -35.01                   -28.39                   -11.73
--------------------------------------------------------------------------------------------------------------------------------------------------------

 
                                                                                 Consumer NPV at 7% discount rate added with:
                                                     ---------------------------------------------------------------------------------------------------
                         TSL                            SCC Value of $12.9/      SCC Value of $40.8/      SCC Value of $62.2/      SCC Value of $117.0/
                                                      metric ton CO2* and low    metric ton CO2* and      metric ton CO2* and      metric ton CO2* and
                                                          value for NOX**       medium value for NOX**   medium value for NOX**    high value for NOX**
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 billion 2012$
                                                     ---------------------------------------------------------------------------------------------------
1...................................................                     9.36                    15.41                    19.91                    31.02
2...................................................                     9.30                    15.55                    20.19                    31.68
3...................................................                     8.80                    15.16                    19.89                    31.58
4...................................................                    10.57                    17.84                    23.24                    36.60
5...................................................                     9.91                    17.66                    23.41                    37.64
6...................................................                   -26.86                   -17.96                   -11.34                     5.01
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Low Value corresponds to $468 per ton of NOX emissions. Medium Value corresponds to $2,639 per ton of NOX emissions. High Value corresponds to
  $4,809 per ton of NOX emissions.

[[Page 55871]]

 
* These label values represent the global SCC in 2015, in 2012$. The present values have been calculated with scenario-consistent discount rates.

    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, the following 
should be considered: (1) The national consumer savings are domestic 
U.S. consumer monetary savings found in market transactions, while the 
values of emissions reductions are based on estimates of marginal 
social costs, which, in the case of CO2, are based on a 
global value; and (2) the assessments of consumer savings and emission-
related benefits are performed with different computer models, leading 
to different timeframes for analysis. For walk-ins, the present value 
of national consumer savings is measured for the period in which units 
shipped (2017-2046) continue to operate. However, the time frames of 
the benefits associated with the emission reductions differ. For 
example, the value of CO2 emissions reductions reflects the 
present value of all future climate-related impacts due to emitting a 
ton of CO2 in that year, out to 2300.
    Chapter 15 of the NOPR TSD presents calculations of the combined 
NPV, including benefits from emissions reductions for each TSL.
7. Other Factors
    Consistent with EPCA, DOE examined whether other factors might be 
relevant in determining whether the proposed standards are economically 
justified. See generally 42 U.S.C. 6295(o)(2)(B)(i)(VII). DOE 
identified none other than those discussed above.
    DOE prepared a regulatory impact analysis (RIA) for this 
rulemaking, which is contained in the TSD. The RIA is subject to review 
by the Office of Information and Regulatory Affairs (OIRA) in the OMB. 
The RIA consists of (1) a statement of the problem addressed by this 
regulation and the mandate for Government action, (2) a description and 
analysis of policy alternatives to this regulation, (3) a quantitative 
review of the potential impacts of the alternatives, and (4) the 
national economic impacts of the proposed standard.
    The RIA assesses the effects of feasible policy alternatives to 
walk-in equipment standards and provides a comparison of the impacts of 
the alternatives. DOE evaluated the alternatives in terms of their 
ability to achieve significant energy savings at reasonable cost, and 
compared them to the effectiveness of the proposed rule. DOE analyzed 
these alternatives with reference to the particular market dynamics of 
the WICF industry.
    DOE identified the following major policy alternatives for 
achieving increased WICF efficiency:
     No new regulatory action
     Commercial consumer tax credits
     Commercial consumer rebates
     Voluntary energy efficiency targets
     Bulk government purchases
     Early replacement
    DOE qualitatively evaluated each alternative's ability to achieve 
significant energy savings at reasonable cost and compared it to the 
effectiveness of the proposed rule. DOE assumed that each alternative 
policy would induce commercial consumers to voluntarily purchase at 
least some higher efficient at any of the trial standard levels (TSLs). 
In contrast to a standard at one of the TSLs, the adoption rate of the 
alternative non-regulatory policy cases may not be 100 percent, which 
would result in lower energy savings than a standard. The following 
paragraphs discuss each policy alternative. (See chapter 17 of the TSD, 
Regulatory Impact Analysis, for further details.)
    No new regulatory action. The case in which no regulatory action is 
taken for WICF equipment constitutes the base case (or no action) 
scenario. By definition, no new regulatory action yields zero energy 
savings and a net present value of zero dollars.
    Commercial consumer tax credits. Consumer tax credits are 
considered a viable non-regulatory market transformation program. From 
a consumer perspective, the most important difference between rebate 
and tax credit programs is that a rebate can be obtained quickly, 
whereas receipt of tax credits is delayed until income taxes are filed 
or a tax refund is provided by the Internal Revenue Service (IRS). From 
a societal perspective, tax credits (like rebates) do not change the 
installed cost of the equipment, but rather transfer a portion of the 
cost from the consumer to taxpayers as a whole. DOE, therefore, assumed 
that equipment costs in the consumer tax credits scenario were 
identical to the NIA base case.
    Commercial consumer rebates. Consumer rebates cover a portion of 
the difference in incremental product price between products meeting 
baseline efficiency levels and those meeting higher efficiency levels, 
resulting in a higher percentage of consumers purchasing more efficient 
models and decreased aggregated energy use compared to the base case. 
Although a rebate program would reduce the total installed cost to the 
consumer, it is financed by tax revenues. Therefore, from a societal 
perspective, the installed cost at any efficiency level does not change 
with the rebate program; rather, part of the cost is transferred from 
the consumer to taxpayers as a whole. Consequently, DOE assumed that 
equipment costs in the rebates scenario were identical to the NIA base 
case.
    Voluntary energy efficiency targets. While it is possible that 
voluntary programs for equipment would be effective, DOE lacks a 
quantitative basis to determine how effective such a program might be. 
As noted previously, broader economic and social considerations are in 
play than simple economic return to the equipment purchaser. DOE lacks 
the data necessary to quantitatively project the degree to which such 
voluntary programs for more expensive, higher efficiency equipment 
would modify the market.
    Bulk Government purchases and early replacement incentive programs. 
DOE also considered, but did not analyze, the potential of bulk 
Government purchases and early replacement incentive programs as 
alternatives to the proposed standards. Bulk purchases would have very 
limited impact on improving the overall market efficiency of WICF 
equipment because they are a negligible part of the total. In the case 
of replacement incentives, several policy options exist to promote 
early replacement, including a direct national program of consumer 
incentives, incentives paid to utilities to promote an early 
replacement program, market promotions through equipment manufacturers, 
and replacement of government-owned equipment. In considering early 
replacements, DOE estimates that the energy savings realized through a 
one-time early replacement of existing stock equipment does not result 
in energy savings commensurate to the cost to administer the program. 
Consequently, DOE did not analyze this option in detail.

C. Proposed Standard

    ``When considering proposed standards, the new or amended energy 
conservation standard that DOE adopts for any type (or class) of walk-
in coolers and freezers shall be designed to achieve the maximum 
improvement in energy efficiency that the Secretary of Energy 
determines is technologically feasible and economically justified. (42 
U.S.C. 6313(f)(4)(A)) In determining

[[Page 55872]]

whether a standard is economically justified, the Secretary must 
determine whether the benefits of the standard exceed its burdens to 
the greatest extent practicable, considering the seven statutory 
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) 
The new or amended standard must also ``result in significant 
conservation of energy.'' (42 U.S.C. 6295(o)(3)(B) and 6316(a))
    DOE considered the impacts of standards at each TSL, beginning with 
the maximum technologically feasible level, to determine whether that 
level met the evaluation criteria. If the max tech level was not 
justified, DOE then considered the next most efficient level and 
undertook the same evaluation until it reached the highest efficiency 
level that is both technologically feasible and economically justified 
and saves a significant amount of energy.
    DOE discusses the benefits and/or burdens of each TSL in the 
remainder of this section. DOE bases its discussion of each TSL on 
quantitative analytical results such as national energy savings, net 
present value (discounted at 3 and 7 percent), emissions reductions, 
industry net present value, life-cycle cost, and consumers' installed 
price increases. Beyond the quantitative results, DOE also considers 
other burdens and benefits that affect economic justification, 
including how technological feasibility, manufacturer costs, and 
impacts on competition may affect the economic results presented.
    DOE has included a table below that presents a summary of the 
results of DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. Section V.B 
presents the estimated impacts of each TSL on commercial customers and 
manufacturers, and subgroups thereof, as well as the Nation.

                             Table V-51--Summary of Results for WICF Refrigeration Systems and Envelope Components, TSLs 1-6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Category                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     National Full-Fuel Cycle Energy Savings (quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total-All...............................................            4.49            4.61            4.73            5.39            5.74            6.61
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        NPV of Consumer Benefits (2012$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate........................................            21.4            21.1            20.6            24.3            23.3           -46.6
7% discount rate........................................             7.8             7.6             7.1             8.6             7.9           -29.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Industry Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Industry NPV (2012$ million)..................       -60 to -1       -44 to 11     -108 to -23        -77 to 0     -134 to -19     -657 to 924
Change in Industry NPV (%)..............................         -7 to 0         -5 to 1       -13 to -3         -9 to 0       -16 to -2      -77 to 109
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (MMt)...............................................           248.2           255.2           261.4           298.0           317.5           365.5
NOX (kt)................................................           369.9           379.6           389.6           443.8           473.0           544.8
Hg (t)..................................................             0.5             0.5             0.6             0.6             0.7             0.8
SO2 (kt)................................................           316.0           325.1           332.7           379.5           404.3           465.3
N2O (kt)................................................             5.4             5.5             5.7             6.4             6.9            7.90
N2O (kt CO2 eq)@........................................         1,600.0         1,634.5         1,687.2         1,917.5         2,044.5         2,357.9
CH4 (kt)................................................        1,188.84        1,222.70        1,251.90        1,427.56        1,521.10        1,750.57
CH4 (kt CO2 eq)@........................................       29,720.25       30,566.82       31,296.66        35,688.0       38,026.65       43,763.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Value of Cumulative Emissions Reduction *
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2012$ billion) *...................................   1.56 to 22.89   1.62 to 23.65   1.64 to 24.07   1.88 to 27.52   2.00 to 29.31   2.41 to 33.68
NOX--3% discount rate (2012$ million)...................             460             477             483             553             589             676
NOX--7% discount rate (2012$ million)...................             202             211             211             243             259             296
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 LCC Savings (2012$) **
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Refrigeration Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
DC.M.I ***..............................................             280             611             280             611             611             611
DC.M.O ***..............................................           1,048           1,577           1,117           1,509           1,608           1,608
DC.L.I ***..............................................             505           1,117             505           1,117           1,080           1,080
DC.L.O ***..............................................           1,328           2,001           1,328           2,001           1,994           1,994
MC.M....................................................           1,715           1,724           1,715           1,724           1,715           1,715
MC.L....................................................           1,849           2,061           1,849           2,061           1,849           1,849
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Envelope Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M....................................................              16               0              -9               8             -22          -2,139
SP.L....................................................             122               0             -66              72            -140          -1,890
FP.L....................................................              66               0              -4              30             -65          -1,653
DD.M....................................................             239             228             239             228             222          -2,650
DD.L....................................................             217             200             -12             200             198          -1,717
PD.M....................................................               2               0               2               0               0            -884
PD.L....................................................              74               0             -16              52             -52            -665
FD.M....................................................               3               0               3               1               0          -1,157

[[Page 55873]]

 
FD.L....................................................             152               0              28             136             -32          -1,337
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  PBP (years) [dagger]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Refrigeration Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
DC.M.I ***..............................................             3.2             4.4             3.2             4.4             4.4             4.4
DC.M.O ***..............................................             1.3             2.5             1.8             2.0             3.0             3.0
DC.L.I ***..............................................             2.8             2.7             2.8             2.7             3.1             3.1
DC.L.O ***..............................................             1.2             2.3             1.2             2.3             2.8             2.8
MC.M....................................................             0.6             0.5             0.6             0.5             0.6             0.6
MC.L....................................................             2.5             0.4             2.5             0.4             2.5             2.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Envelope Components
--------------------------------------------------------------------------------------------------------------------------------------------------------
SP.M....................................................             3.8             N/A             6.8             4.5             9.0           146.4
SP.L....................................................             2.9             N/A             7.4             3.6            10.0            43.0
FP.L....................................................             3.5             N/A             6.0             4.5             8.0            48.7
DD.M....................................................             2.1             2.2             2.1             2.2             2.2            37.6
DD.L....................................................             N/A             N/A             6.0             N/A             N/A            18.5
PD.M....................................................             4.5             N/A             4.5             5.5             6.0            78.7
PD.L....................................................             4.3             N/A             6.2             4.7             7.0            18.3
FD.M....................................................             4.5             N/A             4.5             5.4             5.9            81.5
FD.L....................................................             3.8             N/A             5.8             2.9             6.5            21.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Distribution of Consumer LCC Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  All Medium and Low Temperature Refrigeration Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Net Cost (%)........................................               0               0               0               0               1               1
    No Impact (%).......................................               0               0               0               0               0               0
    Net Benefit (%).....................................             100             100             100             100              99              99
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          All Medium and Low Temperature Panels
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Net Cost (%)........................................              11               0              76              28              93             100
    No Impact (%).......................................               0             100               0               0               0               0
    Net Benefit (%).....................................              89               0              24              72               7               0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      All Medium and Low Temperature Display Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Net Cost (%)........................................               0               0               4               0               0             100
    No Impact (%).......................................               0               0               0               0               0               0
    Net Benefit (%).....................................             100             100              96             100             100               0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      All Medium and Low Temperature Passage Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Net Cost (%)........................................              23               0              39              45              67             100
    No Impact (%).......................................               0             100               0               0               0               0
    Net Benefit (%).....................................              77               0              61              55              33               0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      All Medium and Low Temperature Freight Doors
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Net Cost (%)........................................              16               0              39              28              65             100
    No Impact (%).......................................               0             100               0               0               0               0
    Net Benefit (%).....................................              84               0              61              72              35               0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
** For LCCs, DOE did not consider variability of input parameters and used fixed input values. For the panels the unit of analysis is 100 ft\2\, for
  other items it is a single unit of a refrigeration system or a door.
*** For DC refrigeration systems, results include both capacity ranges.
[dagger] For PBPs, DOE did not consider variability of input parameters and used fixed input values.
\@\ CO2eq is the quantity of CO2 that would have the same global warming potential (GWP).

    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements. This undervaluation suggests that 
regulation that promotes energy efficiency can produce significant net 
private gains (as well as producing social gains by, for example, 
reducing pollution). There is evidence that consumers undervalue future 
energy savings as a result of (1) a lack of information, (2) a lack of 
sufficient salience of the long-term or aggregate

[[Page 55874]]

benefits, (3) a lack of sufficient savings to warrant accelerating or 
altering investments in energy saving equipment, (4) excessive focus on 
the short term, in the form of inconsistent weighing of future energy 
cost savings relative to available returns on other investments; (5) 
computational or other difficulties associated with the evaluation of 
relevant tradeoffs; and (6) a divergence in incentives (e.g., renter 
versus building owner; builder versus home buyer). Other literature 
indicates that with less than perfect foresight and a high degree of 
uncertainty about the future, it may be rational for consumers to trade 
off these types of investments at a higher than expected rate between 
current consumption and uncertain future energy cost savings. Some 
studies suggest that this seeming undervaluation may be explained in 
certain circumstances by differences between tested and actual energy 
savings, or by uncertainty and irreversibility of energy investments. 
There may also be ``hidden'' welfare losses to customers if newer 
energy efficient equipment is an imperfect substitute for the less 
efficient equipment it replaces. In the abstract, it may be difficult 
to say how a welfare gain from correcting potential under-investment in 
energy conservation compares in magnitude to the potential welfare 
losses associated with no longer purchasing equipment or switching to 
an imperfect substitute, both of which still exist in this framework.
    While DOE is not prepared at present to provide a fully 
quantifiable framework for estimating the benefits and costs of changes 
in consumer purchase decisions due to an energy conservation standard, 
DOE has posted a paper that discusses the issue of consumer welfare 
impacts of appliance energy efficiency standards, and potential 
enhancements to the methodology by which these impacts are defined and 
estimated in the regulatory process.\35\ DOE is committed to developing 
a framework that can support empirical quantitative tools for improved 
assessment of the consumer welfare impacts of appliance standards. DOE 
welcomes comments on how to more fully assess the potential impact of 
energy conservation standards on consumer choice and how to quantify 
this impact in its regulatory analysis in future rulemakings. In 
particular, DOE requests comment on whether there are features or 
attributes of the more energy efficient walk-in coolers and walk-in 
freezers that manufacturers would produce to meet the standards in this 
proposed rule that might affect the welfare, positively or negatively, 
of consumers who purchase WICFs.
---------------------------------------------------------------------------

    \35\ Alan Sanstad, Notes on the Economics of Household Energy 
Consumption and Technology Choice. Lawrence Berkeley National 
Laboratory. 2010. http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf
---------------------------------------------------------------------------

    First, DOE considered TSL 6, the max tech level for WICF 
refrigeration systems and the covered envelope components combined 
together. TSL 6 would save an estimated 6.61 quads of energy through 
2073, an amount DOE considers significant. For the Nation as a whole, 
DOE projects that TSL 6 would have a negative NPV for consumers, i.e., 
result in increased costs of $29.2 billion, using a discount rate of 7 
percent. The emissions reductions at TSL 6 are 365.5 MMt of 
CO2, up to 545 kt of NOX, 465 kt of 
SO2, and up to 0.8 tons of Hg. These reductions are valued 
from $2.41 to $33.68 billion for CO2. For NOX the 
emissions reductions are valued at $296 million at a discount rate of 7 
percent.
    At TSL 6, DOE projects that consumers of WICF envelope components 
will experience an increase in LCC, ranging from $665 (low temperature 
passage door) to $2,650 (medium temperature display door) compared to 
the baseline. For refrigeration systems, however, DOE estimates that 
consumers would experience a decrease in LCC ranging from $611 to 
$1,994.
    At TSL 6, manufacturers expect diminished profitability due to 
large increases in product costs, capital investments in equipment and 
tooling, and expenditures related to engineering and testing. The 
projected change in INPV ranges from a decrease of $657 million to an 
increase of $924 million based on DOE's manufacturer mark-up scenarios. 
The upper bound of $924 million is considered an optimistic scenario by 
manufacturers because it assumes manufacturers can fully pass on 
substantial increases in product costs. DOE recognizes the risk of 
large negative impacts on industry if manufacturers' expectations 
concerning reduced profit margins are realized. TSL 6 could reduce the 
walk-in refrigeration, panel, and door INPV by up to 77 percent, if the 
most negative impacts are realized.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL 6, DOE finds that the benefits to the Nation of TSL 
6 (i.e., energy savings and emissions reductions (including 
environmental and monetary benefits)) are small compared to the burdens 
(i.e., a decrease of $29.2 billion in NPV and a decrease of 77 percent 
in INPV). Because the burdens of TSL 6 far outweigh the benefits, TSL 6 
is not economically justified. Therefore, DOE is not proposing to adopt 
TSL 6.
    DOE then considered TSL 5, which combines refrigeration systems and 
envelope components at the highest efficiency level for each that would 
generate positive NPV to the Nation. TSL 5 would likely save an 
estimated 5.74 quads of energy through 2073, an amount DOE considers 
significant. For the Nation as a whole, DOE projects that TSL 5 would 
result in a net increase of $7.9 billion in NPV, using a discount rate 
of 7 percent. The estimated emissions reductions at TSL 5 are 317.5 MMt 
of CO2, up to 473 kt of NOX, 404 kt of 
SO2, and up to 0.7 tons of Hg. These reductions are valued 
from $2.00 to $29.31 billion for CO2. For NOX the 
emissions reductions are valued at $259 million at a discount rate of 7 
percent.
    At TSL 5, DOE projects that the customers of WICF equipment will 
experience an increase in LCC for panels and low temperature passage 
and freight doors and either unchanged or decreased LCC for display 
doors and medium temperature passage and freight doors. For the 
refrigeration systems, DOE estimates that the consumers would 
experience a decrease in LCC ranging from $611 to $1,994.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$134 million to a decrease of $19 million. At TSL 5, DOE recognizes the 
risk of negative impacts if manufacturers' expectations concerning 
reduced profit margins are realized. If the negative end of the range 
of impacts is reached as DOE expects, TSL 5 could result in a net loss 
of 16 percent in INPV to the walk-in cooler and freezer industry. 
Additionally, DOE is concerned about TSL 5 causing disproportionate 
burdens on small business panel manufacturers, as explained in the 
Regulatory Flexibility analysis in section VI.B.4.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL 5, DOE finds that the benefits to the Nation at TSL 
5 (i.e., energy savings and emissions reductions (including 
environmental and monetary benefits)) are too low compared to the 
burdens (i.e., a decrease of 16 percent in INPV for the walk-in cooler 
and freezer industry with disproportionate impacts on the panel 
industry). Because the burdens of TSL 5 outweigh the benefits, TSL 5 is 
not economically justified. Therefore, DOE is not proposing TSL 5.
    Next, DOE considered TSL 4, which combines the refrigeration 
systems at the maximum NPV level with the envelope components also at 
the maximum NPV level. TSL 4 would

[[Page 55875]]

likely save an estimated 5.39 quads of energy through 2073, an amount 
DOE considers significant. For the Nation as a whole, DOE projects that 
TSL 4 would result in a net increase of $8.6 billion in NPV, using a 
discount rate of 7 percent. The estimated emissions reductions at TSL 4 
are 298 MMt of CO2, up to 444 kt of NOX, 379.5 kt 
of SO2, and up to 0.6 tons of Hg. These reductions are 
valued from $1.88 to $27.52 billion for CO2. For 
NOX the emissions savings are valued at $243 million at a 
discount rate of 7 percent.
    At TSL 4, DOE projects that consumers of WICF equipment will 
experience a decrease of LCC for all equipment classes. At TSL 4, the 
projected change in INPV ranges from a decrease of $77 million to an 
increase of $0.01 million. At TSL 4, DOE recognizes the risk of 
negative impacts if manufacturers' expectations concerning reduced 
profit margins are realized. If the negative end of the range of 
impacts is reached as DOE expects, TSL 4 could result in a net loss of 
9 percent of INPV to walk-in manufacturers.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL 4, DOE tentatively believes that setting levels for 
both the refrigeration system and envelope components at TSL 4 
represents the maximum improvement in energy efficiency that DOE's 
analysis projects to be technologically feasible and economically 
justified. TSL 4 is technologically feasible because the technologies 
required to achieve these levels are already in existence. TSL 4 is 
economically justified because the benefits to the Nation (i.e., 
increased energy savings of 5.39 quads, emissions reductions including 
environmental and monetary benefits of, for example, 298 MMt of carbon 
dioxide emissions reduction with an associated value of up to $27.52 
billion at a discount rate of 3 percent, and an increase of $8.6 
billion in NPV) outweigh the costs (i.e., a decrease of 9 percent in 
INPV).
    Therefore, DOE has tentatively decided to propose the adoption of 
energy conservation standards at TSL 4 for WICF refrigeration systems 
and the considered envelope components. DOE may re-examine this level 
depending on the nature of the information it receives during the 
comment period and make adjustments to its final levels in response to 
that information.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that today's standards address are as follows:
    (1) There is a lack of consumer information and/or information 
processing capability about energy efficiency opportunities in the 
walk-in cooler and freezer market.
    (2) There is asymmetric information (one party to a transaction has 
more and better information than the other) and/or high transactions 
costs (costs of gathering information and effecting exchanges of goods 
and services).
    (3) There are external benefits resulting from improved energy 
efficiency of walk-in coolers and freezers that are not captured by the 
users of such equipment. These benefits include externalities related 
to environmental protection that are not reflected in energy prices, 
such as reduced emissions of greenhouse gases.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
today's rule and that the Office of Information and Regulatory Affairs 
(OIRA) in the Office of Management and Budget (OMB) review this rule. 
DOE presented to OIRA for review the proposed rule and other documents 
prepared for this rulemaking, including the RIA, and has included these 
documents in the rulemaking record. The assessments prepared pursuant 
to Executive Order 12866 can be found in the technical support document 
for this rulemaking.
    DOE has also reviewed this proposed regulation pursuant to 
Executive Order 13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 
2011). EO 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. To the extent permitted by law, 
agencies are required by Executive Order 13563 to: (1) Propose or adopt 
a regulation only upon a reasoned determination that its benefits 
justify its costs (recognizing that some benefits and costs are 
difficult to quantify); (2) tailor regulations to impose the least 
burden on society, consistent with obtaining regulatory objectives, 
taking into account, among other things, and to the extent practicable, 
the costs of cumulative regulations; (3) select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity); 
(4) to the extent feasible, specify performance objectives, rather than 
specifying the behavior or manner of compliance that regulated entities 
must adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
DOE believes that today's NOPR is consistent with these principles, 
including the requirement that, to the extent permitted by law, 
benefits justify costs and that net benefits are maximized.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) for 
any rule that by law must be proposed for public comment, unless the 
agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by Executive Order 13272, ``Proper Consideration of Small 
Entities in Agency Rulemaking,'' 67 FR 53461 (August. 16, 2002), DOE 
published procedures and policies on February 19, 2003 to ensure that 
the potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site (http://energy.gov/gc/office-general-counsel).

[[Page 55876]]

    For manufacturers of walk-in coolers and freezers, the Small 
Business Administration (SBA) has set a size threshold, which defines 
those entities classified as ``small businesses'' for the purposes of 
the statute. DOE used the SBA's small business size standards to 
determine whether any small entities would be subject to the 
requirements of the rule. 65 FR 30836, 30848 (May 15, 2000), as amended 
at 65 FR 53533, 53544 (Sept. 5, 2000) and codified at 13 CFR part 
121.The size standards are listed by North American Industry 
Classification System (NAICS) code and industry description and are 
available at http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf. Walk-in cooler and freezer 
manufacturing is classified under NAICS 333415, ``Air-Conditioning and 
Warm Air Heating Equipment and Commercial and Industrial Refrigeration 
Equipment Manufacturing.'' The SBA sets a threshold of 750 employees or 
fewer for an entity to be considered as a small business for this 
category.
    DOE determined that it could not certify that the proposed rule, if 
promulgated, would not have a significant effect on a substantial 
number of small entities that manufacture WICF panels and doors. 
Therefore, DOE has prepared an IRFA (sections VI.B.1 through VI.B.6 
below) for this rulemaking. The IRFA describes potential impacts on 
small businesses associated with walk-in cooler and freezer energy 
conservation standards.
1. Reasons for the Proposed Rule
    Title III of the Energy Policy and Conservation Act of 1975, as 
amended, (EPCA or the Act) sets forth a variety of provisions designed 
to improve energy efficiency. Part B of Title III (42 U.S.C. 6291-6309) 
provides for the Energy Conservation Program for Consumer Products 
Other Than Automobiles. The National Energy Conservation Policy Act 
(NECPA), Public Law 95-619, amended EPCA to add Part C of Title III, 
which established an energy conservation program for certain industrial 
equipment. (42 U.S.C. 6311- 6317) (For purposes of codification in 
Title 42 of the U.S. Code, these parts were subsequently redesignated 
as Parts A and A-1, respectively, for editorial reasons.) Section 312 
of the Energy Independence and Security Act of 2007 (EISA 2007) further 
amended EPCA by adding certain equipment to this energy conservation 
program, including walk-in coolers and walk-in freezers (collectively 
``walk-in equipment'' or ``walk-ins''), which are the subject of this 
rulemaking. (42 U.S.C. 6311(1), (20), 6313(f) and 6314(a)(9)) The 
proposed rule would establish energy conservation standards for walk-in 
coolers and walk-in freezers.
2. Objectives of, and Legal Basis for, the Proposed Rule
    EPCA provides that DOE must publish performance-based standards for 
walk-in coolers and walk-in freezers that achieve the maximum 
improvement in energy that is technologically feasible and economically 
justified. (42 U.S.C. 6313(f)(4)(A)) However, in general, DOE may not 
adopt any standard that would not result in the significant 
conservation of energy. (42 U.S.C. 6295(o)(3)) (Regarding provisions 
contained only in the consumer products section of the U.S. Code, DOE 
is proposing to apply those provisions to walk-in coolers and walk-in 
freezers in the same manner.) Moreover, DOE may not prescribe a 
standard: (1) For certain products, including walk-in coolers and 
freezers, if no test procedure has been established for the product; or 
(2) if DOE determines by rule that the proposed standard is not 
technologically feasible or economically justified. (42 U.S.C. 
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is 
economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens after receiving comments on the proposed 
standard. (42 U.S.C. 6295(o)(2)(B)(i)) To determine whether economic 
justification exists, DOE reviews comments received and conducts 
analysis to determine whether DOE must make this determination, and by 
considering, to the greatest extent practicable, the seven factors set 
forth in 42 U.S.C.6295(o)(2)(B) (see section II of this preamble).
    EPCA also states that the Secretary may not prescribe a standard if 
interested persons have established by a preponderance of the evidence 
that the standard is likely to result in the unavailability in the 
United States of any covered product type (or class) of performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as those generally 
available in the United States. (42 U.S.C. 6295(o)(4)) Further 
information concerning the background of this rulemaking is provided in 
chapter 1 of the TSD.
3. Description and Estimated Number of Small Entities Regulated
    DOE used available public information and information from 
confidential interviews to identify potential small manufacturers. 
DOE's research involved industry trade association membership 
directories (including AHRI and NAFEM), the NSF Section 7 certification 
database, individual company Web sites, and marketing research tools 
(e.g., Dun and Bradstreet reports) to create a list of companies that 
manufacture or sell walk-in cooler or freezer panels, doors, and 
refrigeration systems covered by this rulemaking. DOE also asked 
stakeholders and industry representatives if they were aware of any 
other small manufacturers during manufacturer interviews and at 
previous DOE public meetings. DOE reviewed the publicly available data 
and contacted select companies on its list, as necessary, to determine 
whether they met the SBA's definition of a small business manufacturer 
of WICF equipment. DOE screened out companies that did not offer 
products covered by this rulemaking, did not meet the definition of a 
``small business,'' or are foreign owned and operated.
    Based on this information, DOE identified 52 panel manufacturers 
and found 42 of the identified panel manufacturers to be small 
businesses. As part of the MIA interviews, the Department interviewed 
nine panel manufacturers, including three small business operations. 
During MIA interviews, multiple manufacturers claimed that there are 
``hundreds of two-man garage-based operations'' that produce WICF 
panels in small quantities. They asserted that these small 
manufacturers do not typically comply with EISA 2007 standards and do 
not obtain UL or NSF certifications for their equipment. DOE was not 
able to identify these small businesses and did not consider them in 
its analysis. Based on the purported number of small panel 
manufacturers and the potential scope of the impact (as described in 
section VI.B.4 below), DOE could not certify that the proposed 
standards would not have a significant impact on a substantial number 
of small businesses with respect to the panel industry.
    DOE identified 59 walk-in door manufacturers. Fifty-five of those 
produce solid doors and four produce display doors. Of the fifty-five 
solid door manufacturers, fifty-two produce panels as their primary 
business and are considered in the category of panel manufacturers 
above. The remaining three solid door manufacturers are all considered 
to be small businesses. Of the four display door manufacturers, two are 
considered small businesses. Therefore, of the seven manufacturers that 
exclusively produce WICF doors (three producing solid doors and four 
producing display doors), DOE determined that five are small

[[Page 55877]]

businesses. As part of the MIA interviews, the Department interviewed 
six door manufacturers, including four small business operations. Based 
on the large proportion of small door manufacturers in the door market 
and the potential scope of the impact (as described in section VI.B.4 
below), DOE could not certify that the proposed standards would not 
have a significant impact on a large number of small businesses with 
respect to the door industry.
    DOE identified nine refrigeration system manufacturers in the WICF 
industry. Based on publicly available information, two of the 
manufacturers are small businesses. One small business focuses on large 
warehouse refrigeration systems, which are outside the scope of this 
rulemaking. However, at its smallest capacity, this company's units can 
be sold to the walk-in market. The other small business specializes in 
building evaporators and unit coolers for a range of refrigeration 
applications, including the walk-in market. As part of the MIA 
interviews, the Department interviewed five refrigeration 
manufacturers, including the two small business operations. Both small 
businesses expressed concern that the rulemaking would negatively 
impact their businesses and one small business indicated it would exit 
the walk-in industry as a result of any standard that would directly 
impact walk-in refrigeration system energy efficiency. However, due to 
the small number of small businesses that manufacture WICF 
refrigeration systems and the fact that only one of two focuses on WICF 
refrigeration as a key market segment and constitutes a very small 
share of the overall walk-in market, DOE certifies that the proposed 
standards would not have a significant impact on a substantial number 
of small businesses with respect to the refrigeration equipment 
industry.
4. Description and Estimate of Compliance Requirements
    Given the significant role of small businesses in the walk-in panel 
and walk-in door industries, DOE provides a detailed analysis of the 
impacts of the proposed standard on these industries below.
Panels
    In the walk-in industry, panel manufacturers typically use the same 
production lines to manufacture all three equipment classes (SP.M, 
SP.L, and FP.L). The equipment class with the most stringent standard 
drives conversion costs. The design options considered include reducing 
heat loss through the panel frame (typically by using high density 
polyurethane framing materials or by moving to a frameless design), 
increasing the thickness of panels, and incorporating vacuum-insulated 
technology.
    Small manufacturers tend to be at a disadvantage when adapting to a 
new standard requiring fixed cost investments. Small manufacturers may 
have greater difficulty obtaining credit or may obtain less favorable 
terms than larger competitors when capital expenditures are necessary 
to meet the standard. Additionally, product testing costs stemming from 
the energy conservation standard tend to be fixed and do not scale with 
sales volume. As a result, these product conversion costs would be the 
same in absolute terms for small and large panel manufacturers. The 
small businesses would have to recoup these over smaller sales volumes, 
leading to higher per unit costs and potentially putting them at a 
pricing disadvantage. The projected conversion cost impacts on panel 
manufacturers are shown in Table VI-1 and Table VI-2 below.

                                          Table VI-1--Impacts of Conversion Costs on a Small Panel Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Capital conversion cost
                                                         as a percentage of    Product conversion cost   Total conversion cost    Total conversion cost
                                                           annual capital         as a percentage of       as a percentage of       as a percentage of
                                                            expenditures          annual R&D expense         annual revenue      annual operating income
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                      565                      122                        9                      242
TSL 2...............................................                        0                        0                        0                        0
TSL 3...............................................                     1695                      230                       26                      669
TSL 4...............................................                      565                      122                        9                      242
TSL 5...............................................                     1695                      230                       26                      669
TSL 6...............................................                     5461                      995                       87                     2262
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                          Table VI-2--Impacts of Conversion Costs on a Large Panel Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Capital conversion cost
                                                         as a percentage of    Product conversion cost   Total conversion cost    Total conversion cost
                                                           annual capital         as a percentage of       as a percentage of       as a percentage of
                                                            expenditures          annual R&D expense         annual revenue      annual operating income
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                       22                        5                        0                        9
TSL 2...............................................                        0                        0                        0                        0
TSL 3...............................................                       66                        9                        1                       26
TSL 4...............................................                       22                        5                        0                        9
TSL 5...............................................                       66                        9                        1                       26
TSL 6...............................................                      213                       39                        3                       88
--------------------------------------------------------------------------------------------------------------------------------------------------------

    At the proposed standard (TSL 4), the engineering analysis suggests 
that manufacturers would shift to high density rails for all products 
to achieve the minimum U-factors. The capital conversion costs would be 
565% of the typical annual capital expenditures for a small 
manufacturer while only 22% of the typical annual capital expenditures 
for a large manufacturer. The product conversion costs would be 122% of 
the typical small manufacturer's annual R&D budget and only 5% of the 
typical large manufacturer's annual R&D budget.
    In addition to these conversion cost impacts, small manufacturers 
typically have a significant price disadvantage for raw materials, such 
as foaming agents. Any standard that requires small

[[Page 55878]]

manufacturers to use more insulation or add a different foam 
formulation for high density rails will accentuate the difference in 
material costs for large manufacturers versus small manufacturers.
    Based on the large number of small panel manufacturers and the 
potential scope of the impact (as described in section VI.B.2 below), 
DOE could not certify that the proposed standards would not have a 
significant impact on a substantial number of small businesses with 
respect to the panel industry.
Doors
    For the walk-in door industry, DOE identified seven small 
manufacturers that produce doors as their primary product, as described 
in section VI.B.4. Three companies produce solid doors and four 
companies produce display doors.
    In the solid door market, all three manufacturers of customized 
passage doors and freight doors are small. The potential impacts on 
these three manufacturers are illustrated in Table VI-3.

                                       Table VI-3--Impacts of Conversion Costs on a Small Solid Door Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Capital conversion cost
                                                         as a percentage of    Product conversion cost   Total conversion cost    Total conversion cost
                                                           annual capital         as a percentage of       as a percentage of       as a percentage of
                                                            expenditures          annual R&D expense         annual revenue      annual operating income
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                       52                       47                        2                       25
TSL 2...............................................                        0                        0                        0                        0
TSL 3...............................................                      626                       47                        5                       63
TSL 4...............................................                      157                       47                        2                       25
TSL 5...............................................                      626                       47                        5                       63
TSL 6...............................................                     4086                      142                       27                      369
--------------------------------------------------------------------------------------------------------------------------------------------------------

    At the proposed standard (TSL 4), the engineering analysis suggests 
that manufacturers would shift to high density frames to achieve the 
minimum energy consumption for all solid doors. Additionally, for low-
temperature passage doors, manufacturers would need to incorporate 
enhanced windows to reduce heat transmission; manufacturers of low-
temperature freight doors would need to add controls to minimize anti-
sweat heater energy usage. The capital conversion costs would be 157% 
of the typical annual capital expenditures for a small manufacturer and 
the product conversion costs would be 47% of the typical manufacturer's 
annual R&D budget.
    In the display door market, two of the four manufacturers are 
small. If conversion costs for display door manufacturers were large, 
the small manufacturers could be at a disadvantage due to the fixed 
investments necessary for capital conversion and product conversion 
costs. However, as illustrated in Table VI-4, conversion costs for 
display door manufacturers are negligible for most TSLs. This is 
because the considered design options primarily consist of component 
swaps and component additions. To make these design changes, no costly 
equipment or tooling is necessary. As a result, the conversion costs do 
not cause small businesses to be at a significant disadvantage relative 
to larger businesses when adapting to the proposed standard.

                                      Table VI-4--Impacts of Conversion Costs on a Small Display Door Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Capital conversion cost
                                                         as a percentage of    Product conversion cost   Total conversion cost    Total conversion cost
                                                           annual capital         as a percentage of       as a percentage of       as a percentage of
                                                            expenditures          annual R&D expense         annual revenue      annual operating income
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                        0                        2                        0                        0
TSL 2...............................................                        0                        2                        0                        0
TSL 3...............................................                        0                        2                        0                        0
TSL 4...............................................                        0                        2                        0                        0
TSL 5...............................................                        0                        2                        0                        0
TSL 6...............................................                      501                       19                        3                       20
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                      Table VI-5--Impacts of Conversion Costs on a Large Display Door Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Capital conversion cost
                                                         as a percentage of    Product conversion cost   Total conversion cost    Total conversion cost
                                                           annual capital         as a percentage of       as a percentage of       as a percentage of
                                                            expenditures          annual R&D expense         annual revenue      annual operating income
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                        0                        0                        0                        0
TSL 2...............................................                        0                        0                        0                        0
TSL 3...............................................                        0                        0                        0                        0
TSL 4...............................................                        0                        0                        0                        0
TSL 5...............................................                        0                        0                        0                        0
TSL 6...............................................                       88                        3                        0                        4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    At the proposed standard (TSL 4), the engineering analysis suggests 
that manufacturers would need to purchase more efficient components, 
such as LED lights, and incorporate anti-sweat heater controllers. 
There are no anticipated

[[Page 55879]]

capital conversion costs, and product conversion costs appear to be 
manageable for both small and large businesses door manufacturers.
    Based on the number of small door manufacturers and the potential 
scope of the impact on solid door manufacturers, DOE could not certify 
that the proposed standards would not have a significant impact on a 
significant number of small businesses with respect to the walk-in door 
industry.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being considered today.
6. Significant Alternatives to the Proposed Rule
    The primary alternatives to the proposed rule considered by DOE are 
the other TSLs besides the one being considered today, proposed TSL 4. 
DOE explicitly considered the role of small businesses in its selection 
of TSL 4 rather than TSL 5. Though TSL 5 results in greater energy 
savings for the country, the standard would place excessive burdens on 
manufacturers, including small manufacturers, of walk-in refrigeration, 
panels, and doors. In particular, DOE considered the increase in 
conversion costs and potential negative impacts on small businesses 
that occurred between TSL 4 and TSL 5 for the solid door and panel 
industries, which have a significant number of small businesses. As 
another alternative to the proposed standard, DOE also considered lower 
TSLs; in particular, TSL 1, which does not set standards for panels and 
non-display doors. Chapter 12 of the TSD contains additional 
information about the impact of this rulemaking on manufacturers.
    In addition to the other TSLs considered, alternatives to the 
proposed rule include the following policy alternatives: (1) No new 
regulatory action, (2) commercial consumer rebates, and (3) commercial 
consumer tax credits. Chapter 17 of the TSD associated with this 
proposed rule includes a report referred to in Section VI.A in the 
preamble as the regulatory impact analysis (RIA). The energy savings of 
these regulatory alternatives are one to two orders of magnitude 
smaller than those expected from the standard levels under 
consideration. The range of economic impacts of these regulatory 
alternatives is an order of magnitude smaller than the range of impacts 
expected from the standard levels under consideration.

C. Review Under the Paperwork Reduction Act

    Manufacturers of walk-in coolers and freezers must certify to DOE 
that their products comply with any applicable energy conservation 
standards. In certifying compliance, manufacturers must test their 
products according to the DOE test procedures for walk-in coolers and 
freezers, including any amendments adopted for those test procedures. 
DOE has established regulations for the certification and recordkeeping 
requirements for all covered consumer products and commercial 
equipment, including walk-in coolers and freezers. 76 FR 12422 (March 
7, 2011). The collection-of-information requirement for the 
certification and recordkeeping is subject to review and approval by 
OMB under the Paperwork Reduction Act (PRA). This requirement has been 
approved by OMB under OMB control number 1910-1400. Public reporting 
burden for the certification is estimated to average 20 hours per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    DOE has prepared a draft environmental assessment (EA) of the 
impacts of the proposed rule pursuant to the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.), the regulations of the 
Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's 
regulations for compliance with the National Environmental Policy Act 
of 1969 (10 CFR part 1021). This assessment includes an examination of 
the potential effects of emission reductions likely to result from the 
rule in the context of global climate change, as well as other types of 
environmental impacts. The draft EA has been incorporated into the NOPR 
TSD as chapter 15. Before issuing a final rule for walk-in coolers and 
freezers, DOE will consider public comments and, as appropriate, 
determine whether to issue a finding of no significant impact (FONSI) 
as part of a final EA or to prepare an environmental impact statement 
(EIS) for this rulemaking.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism'' 64 FR 43255 (Aug. 10, 1999), 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the products that are the subject of today's proposed 
rule. See 42 U.S.C. 6316(h)(1)(A)(2), 42 U.S.C. 6316(h)(2)(B), and 42 
U.S.C. 6316(h)(3). No further action is required by Executive Order 
13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' imposes on Federal agencies the general duty 
to adhere to the following requirements: (1) Eliminate drafting errors 
and ambiguity; (2) write regulations to minimize litigation; and (3) 
provide a clear legal standard for affected conduct rather than a 
general standard and promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically 
requires that Executive agencies make every reasonable effort to ensure 
that the regulation: (1) Clearly specifies the preemptive effect, if 
any; (2) clearly specifies any effect on existing Federal law or 
regulation; (3) provides a clear legal standard for affected conduct 
while promoting simplification and burden reduction; (4) specifies the 
retroactive effect, if any; (5) adequately defines key terms; and (6) 
addresses other important issues affecting clarity and general 
draftsmanship under any guidelines issued by the Attorney General. 
Section 3(c) of Executive Order 12988 requires Executive agencies to 
review regulations in light of applicable standards in section 3(a) and 
section

[[Page 55880]]

3(b) to determine whether they are met or it is unreasonable to meet 
one or more of them. DOE has completed the required review and 
determined that, to the extent permitted by law, this proposed rule 
meets the relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a proposed ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy 
statement is also available at http://energy.gov/gc/office-general-counsel.
    Although today's proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more on the private sector. Specifically, the proposed rule will 
likely result in a final rule that could require expenditures of $100 
million or more. Such expenditures may include: (1) Investment in 
research and development and in capital expenditures by walk-in cooler 
and freezer manufacturers in the years between the final rule and the 
compliance date for the new standards, and (2) incremental additional 
expenditures by customers to purchase higher-efficiency walk-in coolers 
and freezers, starting at the compliance date for the applicable 
standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the proposed rule. 2 U.S.C. 1532(c). The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the NOPR and the ``Regulatory 
Impact Analysis'' section of the TSD for this proposed rule respond to 
those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. 2 U.S.C. 1535(a). DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the proposed rule unless DOE publishes 
an explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 
6313(f)(4)(A), today's proposed rule would establish energy 
conservation standards for walk-in coolers and walk-in freezers that 
are designed to achieve the maximum improvement in energy efficiency 
that DOE has determined to be both technologically feasible and 
economically justified. A full discussion of the alternatives 
considered by DOE is presented in the ``Regulatory Impact Analysis'' 
section of the TSD for today's proposed rule.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859 (Mar. 18, 1988), that this regulation would not 
result in any takings that might require compensation under the Fifth 
Amendment to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to 
review most disseminations of information to the public under 
guidelines established by each agency pursuant to general guidelines 
issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 
2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 
2002). DOE has reviewed today's NOPR under the OMB and DOE guidelines 
and has concluded that it is consistent with applicable policies in 
those guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' 66 FR 28355 
(May 22, 2001) requires Federal agencies to prepare and submit to OIRA 
at OMB a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgates or is expected to lead to promulgation of 
a final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that today's regulatory action, which 
sets forth energy conservation standards for walk-in coolers and 
freezers, is not a significant energy action because the proposed 
standards are not likely to have a significant adverse effect on the 
supply, distribution, or use of energy, nor has it been designated as 
such by the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on the proposed rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR

[[Page 55881]]

2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific 
information shall be peer reviewed by qualified specialists before it 
is disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as scientific information the 
agency reasonably can determine will have, or does have, a clear and 
substantial impact on important public policies or private sector 
decisions. 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs or projects. The ``Energy Conservation Standards Rulemaking 
Peer Review Report'' dated February 2007 has been disseminated and is 
available at the following Web site: www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

VII. Public Participation

A. Attendance at the Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this notice. If 
you plan to attend the public meeting, please notify Ms. Brenda Edwards 
at (202) 586-2945 or Brenda.Edwards@ee.doe.gov. Please note that 
foreign nationals visiting DOE Headquarters are subject to advance 
security screening procedures. Any foreign national wishing to 
participate in the meeting should advise DOE as soon as possible by 
contacting Ms. Edwards to initiate the necessary procedures. Please 
also note that those wishing to bring laptops into the Forrestal 
Building will be required to obtain a property pass. Visitors should 
avoid bringing laptops, or allow an extra 45 minutes. Persons can 
attend the public meeting via webinar.
    Webinar registration information, participant instructions, and 
information about the capabilities available to webinar participants 
will be published on DOE's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/30. Participants 
are responsible for ensuring their systems are compatible with the 
webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this notice. The request and advance copy of statements must be 
received at least one week before the public meeting and may be 
emailed, hand-delivered, or sent by mail. DOE prefers to receive 
requests and advance copies via email. Please include a telephone 
number to enable DOE staff to make follow-up contact, if needed.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. After the public meeting, interested parties may 
submit further comments on the proceedings as well as on any aspect of 
the rulemaking until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will allow, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this notice. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this notice.
    Submitting comments via regulations.gov. The regulations.gov Web 
page will require you to provide your name and contact information. 
Your contact information will be viewable to DOE Building Technologies 
staff only. Your contact information will not be publicly viewable 
except for your first and last names, organization name (if any), and 
submitter representative name (if any). If your comment is not 
processed properly because of technical difficulties, DOE will use this 
information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to regulations.gov information for which disclosure 
is

[[Page 55882]]

restricted by statute, such as trade secrets and commercial or 
financial information (hereinafter referred to as Confidential Business 
Information (CBI)). Comments submitted through regulations.gov cannot 
be claimed as CBI. Comments received through the Web site will waive 
any CBI claims for the information submitted. For information on 
submitting CBI, see the Confidential Business Information section.
    DOE processes submissions made through regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or mail. 
Comments and documents submitted via email, hand delivery, or mail also 
will be posted to regulations.gov. If you do not want your personal 
contact information to be publicly viewable, do not include it in your 
comment or any accompanying documents. Instead, provide your contact 
information in a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via mail or hand 
delivery or courier, please provide all items on a CD, if feasible. It 
is not necessary to submit printed copies. No facsimiles (faxes) will 
be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. According to 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 via 
email, postal mail, or hand delivery or courier two well-marked copies: 
One copy of the document marked confidential including all the 
information believed to be confidential, and one copy of the document 
marked non-confidential with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person that would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
1. Component Level Standards
    In this NOPR, DOE proposes to set separate standards for the 
panels, display doors, non-display doors, and refrigeration system of a 
walk-in, but is not proposing to establish an overall performance 
standard for the envelope or for the walk-in as a whole. DOE requests 
that interested parties submit comments about this approach. See 
section III.A for further details.
2. Market Performance Data
    As part of the market assessment, DOE collects information that 
provides an overall picture of the market for the walk-in coolers and 
freezers. DOE's analysis of market data uses catalogue and performance 
data to determine the number of products on the market at varying 
efficiency levels. However, WICF equipment has not previously been 
rated for efficiency by manufacturers, nor has an efficiency metric 
been established for the equipment. DOE requests that interested 
parties submit market performance data to help inform DOE's analysis. 
See section IV.A for further details.
3. Definitions
    In this NOPR, DOE proposes to amend the existing definition of 
display door and to add definitions of passage door and freight door, 
as follows.
    DOE proposes to amend the existing definition of display door to 
include all doors that are composed of 50 percent or more glass or 
another transparent material. This amendment is intended to classify 
passage doors that are mostly composed of glass as display doors 
because the utility and construction of glass passage doors more 
closely resemble that of a display door. DOE proposes the following 
amended definition of display door: ``Display door means a door that--
(1) is designed for product display; or (2) has 50 percent or more of 
its surface area composed of glass or another transparent material.'' 
The amended definition would affect both the test procedure (by 
potentially subjecting a broader range of equipment to testing) and the 
energy conservation standards. DOE requests comment on the proposed 
definition of display door.
    DOE is also proposing a definition for passage doors in order to 
differentiate passage doors from freight doors. Passage doors are 
mostly intended for the passage of people and small machines such as 
hand carts. DOE proposes the following definition of passage door: 
``Passage door means a door that is used as a means of access for 
people and is less than 4 feet wide and 8 feet tall.'' DOE requests 
comment on the proposed definition of passage door.
    Freight doors tend to be larger than passage doors and are 
typically used to allow machines, such as forklifts, into walk-ins. DOE 
is proposing a definition of ``freight door'' to distinguish it from a 
passage door. DOE proposes the following definition of freight door: 
``Freight door means a door that is not a passage door and is equal to 
or larger than 4 feet wide and 8 feet tall.'' DOE requests comment on 
the proposed definition of freight door.
    See section IV.A.1 for further information on the definitions.

[[Page 55883]]

4. Equipment Included in the Rulemaking
    DOE proposes not to include certain types of equipment in the 
rulemaking analysis. DOE identified three types of panels used in the 
walk-in industry: display panels, floor panels, and non-floor panels. 
Based on its research, DOE determined that Display panels, typically 
found in beer caves (walk-ins used for the display and storage of beer 
or other alcoholic beverages often found in a supermarket) make up a 
small percentage of all panels currently present in the market. 
Therefore, because of the extremely limited energy savings potential 
currently projected to result from amending the requirements that these 
panels must meet, DOE is not proposing standards for walk-in display 
panels in this NOPR. Also, DOE is declining to set a performance-based 
standard for walk-in cooler floor panels. All other types of panels, 
freezer floor and non-floor, will be subject to a performance standard. 
DOE requests comment on this approach and requests market data to 
better understand the market share of display panels and walk-in cooler 
floor panels.
    DOE also proposes not to include blast freezer refrigeration 
systems, which are designed to quickly freeze food and then store it at 
a holding temperature, in this rulemaking analysis. DOE received 
comments regarding the performance difference and the higher energy 
consumption of blast freezers as compared to storage freezers. DOE 
questions whether blast freezer refrigeration systems would be less 
efficient than storage freezers and seeks information regarding whether 
blast freezers would face difficulty in complying with DOE's proposed 
standards. Furthermore, if blast freezers cannot comply with those 
proposed standards, DOE requests test procedure data confirming the 
same. See section IV.A.2 for details.
5. Type of Refrigerant Analyzed
    DOE based its analysis on refrigeration equipment using R404A, a 
hydrofluorocarbon (HFC) refrigerant, as it is widely used in the walk-
ins industry. DOE received comments supporting the use of HFC 
refrigerants, but also suggested considering refrigerants with lower 
global warming potential (GWP) due to the shift in the marketplace 
toward these products. DOE acknowledges that there are government-wide 
efforts to reduce emissions of HFCs, and such actions are being pursued 
both through international diplomacy as well as domestic actions. DOE, 
in concert with other relevant agencies, will continue to work with 
industry and other stakeholders to identify safer and more sustainable 
alternatives to HFCs while evaluating energy efficiency standards for 
this equipment. DOE requests comment on the extent of current use or 
future availability of lower GWP refrigerants and asks manufacturers 
and chemical producers to submit data related to the ability of 
equipment (existing or redesigned) using HFC alternative refrigerants 
to meet the proposed standard. See section IV.A.2.b for further 
details. DOE also requests data and evidence to support estimates of 
the cost of any incremental technology or equipment redesign that may 
be needed in order to compensate for any energy efficiency losses 
associated with the use of alternative refrigerants to meet the 
standards proposed in this notice.
6. Refrigeration Classes
    DOE has proposed separate classes for dedicated condensing 
refrigeration systems and unit coolers connected to multiplex 
condensing systems. However, DOE does not propose to create separate 
classes for dedicated packaged systems (where the unit cooler and 
condensing unit are integrated into a single piece of equipment) and 
dedicated split systems (where the unit cooler and condensing unit are 
separate pieces of equipment connected by refrigerant piping). Due to 
the small market share of packaged systems, DOE proposes to base the 
standard for dedicated condensing systems on an analysis of split 
systems. DOE requests comment on its proposal not to consider dedicated 
packaged systems and dedicated split systems as separate classes, and 
specifically asks whether this proposal would unfairly disadvantage any 
manufacturers.
    In addition, DOE proposes one standard level for high-capacity 
equipment and another for low-capacity equipment within the dedicated 
condensing category (because the compressor is covered only for DC 
systems). High- and low-capacity equipment would thus also be 
considered different equipment classes, with the classes divided at a 
threshold of 9,000 Btu/h. DOE requests comment on this proposal, 
particularly the capacity threshold between high- and low-capacity 
equipment.
    See section IV.A.3.b for details about the refrigeration system 
equipment classes.
7. Cycle Efficiency
    DOE considered design options manufacturers could use to improve 
cycle efficiency; for example, economizer cooling. In the screening 
analysis, DOE screened out economizer cooling based on utility to the 
consumer, one of the four screening criteria. Specifically, economizer 
cooling is not effective in areas of the country where the temperature 
does not drop below a walk-in's temperature. DOE did not identify any 
other options to improve cycle efficiency beyond what was already 
considered. However, DOE realizes that there may be other methods and 
designs manufacturers could use to improve cycle efficiency and 
requests specific recommendations on such methods and designs, as well 
as how they could be incorporated into the analysis of standard levels. 
See section IV.B.2.b for details.
8. Envelope Representative Sizes
    DOE used three different panel sizes to represent the variation in 
panels within each equipment class. DOE determined the sizes based on 
market research and calculated the impact of size on the test metric, 
U-factor. DOE requests comment on the representative sizes used in the 
analysis and whether other sizes should be considered.
    Similar to panels, DOE used three different sizes to represent the 
differences in doors within each class for walk-in display and non-
display doors. The sizes of the doors were determined by market 
research, and can be found in section IV.C.1.a for display and non-
display doors. DOE requests comment on the representative equipment 
sizes analyzed in the proposed analysis. See section IV.C.1.a for 
further details.
9. Performance Data for Envelope Components
    DOE's engineering model separately analyzes panels, display doors, 
and non-display doors. The models estimate the performance of the 
baseline equipment and levels of performance above the baseline 
associated with specific design options that are added cumulatively to 
the baseline equipment. Results for performance of all components can 
be found in appendix 5A of the TSD. DOE requests comment on the 
performance data and requests any data manufacturers can provide about 
the performance of panels, display doors, or non-display doors and 
their design options. See section IV.A for further details.
10. Refrigeration Metric
    The refrigeration energy model calculates the annual energy 
consumption and the Annual Walk-In Energy Factor (AWEF) of walk-in

[[Page 55884]]

coolers and freezers at various performance levels using a design 
option approach. AWEF is the ratio of the total heat, not included in 
the heat generated by the operation of the refrigeration system, 
removed, in Btu, from a walk-in box during a one-year period of usage 
to the total energy input of refrigeration systems, in watt-hours, 
during the same period. DOE proposes using AWEF as the metric to set 
standards for the refrigeration system and requests comment on this 
proposal. See section IV.C.2.a for further details.
11. Manufacturing Markups
    DOE calculated the manufacturer's selling price of the walk-in 
cooler and freezer equipment by multiplying the manufacturer's 
production cost by a markup and adding the equipment's shipping cost. 
The markup affects the manufacturer's selling price, which is a 
critical input to the downstream economic analyses. DOE calculated an 
average markup for panels to be 32 percent, for display doors to be 50 
percent, for non-display doors to be 62 percent, and for refrigeration 
to be 35 percent. DOE requests comment on the proposed markups. See 
section IV.C.3.d for further details.
12. Envelope Component Shipping Prices
    DOE has found through its research that most panel, display door, 
and non-display door manufacturers use less than truck load freight to 
ship their respective components. DOE also found that typically none of 
the manufacturers mark up the shipments for profit, and instead include 
the cost of shipping as part of the price quote. DOE has conducted its 
analysis accordingly and requests comment on the shipping prices found 
in chapter 5 of the NOPR TSD. See section IV.C.3.e for further details.
13. Panel and Door Baseline Assumptions
    In the NOPR analysis, DOE used wood framing members as the baseline 
framing material in panels. DOE's analysis assumes the typical wood 
frame completely borders the insulation and is 1.5 inches wide. DOE 
requests comment on its baseline specifications for walk-in panels, 
specifically the assumptions about framing material and framing 
dimensions.
    DOE assumed that the baseline non-display doors are constructed in 
a similar manner to baseline panels. Baseline non-display doors consist 
of wood framing materials 1.5 inches wide that completely border 
foamed-in-place polyurethane insulation. For non-display doors, DOE 
also proposes to include a 2.25 ft\2\ window that conforms to the 
standards set by EPCA on all non-display passage doors regardless of 
the passage door's size. DOE analyzed two different size windows for 
non-display freight doors. DOE assumed that a small freight door has a 
2.25 ft\2\ window and that both medium and large freight doors have 4 
ft\2\ windows. DOE requests comment on the baseline specifications for 
non-display doors, specifically on the size of the windows included in 
the baseline door.
    DOE made several assumptions about baseline display doors in its 
analysis. First it assumed that baseline display cooler doors are 
composed of two panes of glass with argon gas fill and hard coat low-e 
coating. Second, DOE assumed that the baseline cooler display door 
requires 2.9 W/ft\2\ of anti-sweat heater wire and does not have a 
heater wire controller. Baseline display freezer doors in DOE's 
analysis are composed of three panes of glass, argon gas, and soft coat 
low-e coating. Third, DOE assumed that baseline freezer doors use 15.23 
W/ft\2\ of anti-sweat heater wire power and require an anti-sweat 
heater wire controller. Finally, DOE assumed that each baseline door is 
associated with one fluorescent light with an electronic ballast, and 
that a door shorter than 6.5 feet has a 5-foot fluorescent bulb and a 
door equal to or taller than 6.5 feet has a 6-foot fluorescent bulb. 
DOE requests comment on the baseline assumptions for display cooler and 
freezer doors. In particular, DOE requests data illustrating the energy 
or power consumption of anti-sweat heaters found on cooler and freezer 
display doors.
    See section IV.C.4.a for further details on the baseline 
assumptions.
14. Condensing Unit and Unit Cooler Components
    In its analysis of baseline equipment, DOE included all necessary 
components of the refrigeration system that came from the manufacturer. 
However, DOE has tentatively decided against including components in 
its engineering analysis that are not specifically part of the unit 
cooler or condensing unit; for example, refrigerant piping connecting a 
unit cooler to a multiplex condensing system. DOE assumes that these 
are not included in the manufacturer's selling price of the equipment, 
and would be supplied by the contractor upon installation. DOE requests 
comment on this assumption. See section IV.C.4.b for further details.
15. Refrigeration Temperature Difference Assumption
    In determining appropriate temperature set points, DOE considered 
information from various sources in formulating its assumptions: 
Comments, research, and confidential and non-confidential discussions 
with manufacturers and other parties. DOE notes that the ambient 
temperature specified in the test procedure is 90 or 95 degrees for 
indoor and outdoor condensing units, respectively. Given that the 
system must maintain a reasonable temperature difference (TD) between 
the SCT and the ambient temperature, the SCT during the test procedure 
would be higher than the 90-95 degree assumption recommended. Even 
though the set point during actual use may be lower, equipment is 
rated--and evaluated for meeting the standard--at the test procedure 
rating points. DOE requests comment on this assumption, particularly 
whether the TDs for baseline and higher efficiency equipment are 
appropriate. See section IV.C.4.b for further details.
16. Panel Design Options
    In the proposed engineering analysis for walk-in panels, DOE 
included design options that increase the baseline insulation 
thickness, change the baseline insulation material from foam-in-place 
polyurethane to a hybrid of polyurethane and VIP, change the baseline 
framing material from wood to high-density polyurethane, and eliminate 
a non-floor-panel's framing material. DOE proposes that floor panels 
must retain some type of framing material, and that high-density 
polyurethane framing materials found in a panel have the same 
dimensions as the wood framing materials. DOE requests comment on the 
design options for panels, including the specifications for high-
density polyurethane framing materials, manufacturer conversion costs 
for increasing the baseline panel thickness, and any estimated changes 
in repair, maintenance, or installation costs. DOE also requests 
comment on the technological feasibility of the panel options analyzed 
and whether the design options selected would cause any lessening of 
the utility or the performance of the walk-ins. See section IV.C.5.a 
for further details.
17. Display and Non-Display Door Design Options
    The design options that DOE proposes for display doors include 
improved glass packs, anti-sweat heater controls for cooler doors, LED 
lighting, and lighting sensors. DOE does not propose

[[Page 55885]]

anti-sweat heater controls for freezer display doors because baseline 
freezer doors are required to have a controller due to the amount of 
power consumed by the anti-sweat heater wire. DOE requests comment on 
the proposed design options, specifically any heat transfer data for 
the improved glass packs detailed in chapter 5 of the TSD.
    The design options that DOE proposes for non-display doors include 
increased insulation thickness, changing the insulation material from 
baseline to a hybrid of polyurethane and VIP, changing the baseline 
framing material from wood to high-density polyurethane, improving the 
window's glass pack, and adding an anti-sweat heater wire controller to 
the door. DOE requests comment on the proposed design options for non-
display doors, and specifically requests comment on the manufacturer 
conversion investments required to update product designs and 
manufacturing lines in order to product compliant products; information 
regarding any changes in repair, maintenance, or installation costs of 
the window improvements detailed in chapter 5 of the TSD. DOE also 
requests comment on the technological feasibility of the panel options 
analyzed and whether the design options selected would cause any 
lessening of the utility or the performance of the walk-ins.
    See section IV.C.5.a and chapter 5 of the TSD for further details 
on the display and non-display door design options.
18. Refrigeration System Design Options
    DOE is proposing to include the use of improved condenser coils as 
a design option, wherein the condenser coil increases by a certain 
percentage from its original size. After performing analytical 
calculations, DOE tentatively believes that increasing the coil size of 
the condenser would not require an increase in the coil size of the 
evaporator. However, DOE requests comment on this assumption, 
particularly from manufacturers that currently utilize larger condenser 
coils.
    DOE is proposing to use high-efficiency condenser fan motors as a 
design option, and it is critical to accurately estimate the input 
power due to the energy savings associated with this option. DOE 
calculated the input power from the efficiency ratings provided. 
However, DOE received comments that this approach may not provide an 
accurate method to measure input power and requests feedback on how it 
should determine input power.
    DOE also considered a design option which modulates or adjusts the 
speed of the evaporator fans when the compressor is off. DOE is aware 
of the potential effects of evaporator fan control on food safety but 
has tentatively concluded that the controls it analyzed are limited (to 
50 percent fan cycling or 50 percent fan speed when the compressor is 
off) such that food temperatures could be adequately maintained in 
either control case. DOE requests comment from interested parties as to 
whether food temperatures would be adequately maintained in the 
specific control cases it has analyzed, and, if not, what would be an 
appropriate control strategy. DOE particularly requests any data 
interested parties can provide to show the relationship between fan 
controls and food temperatures. DOE also seeks information on whether 
other components may be necessary to ensure food temperatures would be 
adequately maintained, such as extra thermostats located in certain 
areas of the walk-in.
    DOE has adjusted its analysis of the floating head pressure design 
option after taking commenters' recommendations into account. DOE 
included components and analytical changes with respect to fan power, 
temperature differences, and SCT in response to stakeholder comments. 
DOE requests comment on its revised assumptions and implementation of 
this option, particularly regarding the cost to implement various 
floating head pressure control schemes and the energy savings that 
would be achieved. DOE requests comment on the technological 
feasibility of the panel options analyzed and whether the design 
options selected would cause any lessening of the utility or the 
performance of the walk-ins. DOE also requests information on any 
changes in repair, maintenance, or installation costs associated with 
the technologies needed to meet the proposed standards.
    See section IV.C.5.b and chapter 5 of the TSD for further details 
on the refrigeration system design options.
19. Relative Equipment Sizing
    In the Energy Use Analysis, DOE calculates the expected energy 
consumption of the covered equipment, as installed. To do so, DOE makes 
certain assumptions about the relative sizing of refrigeration systems 
with envelopes, which determines how often the compressor runs during a 
day, which in turn affects the energy use of the equipment. For the 
NOPR analysis, DOE assumed that the runtime of the refrigeration system 
is 13.3 hours per day for coolers and 15 hours per day for freezers at 
full design point capacity and requests comment on this assumption. See 
section IV.E.1 for further details.
20. Equipment Price Trends
    DOE assumes in its price forecasts for this NOPR that the real 
prices of walk-in cooler and freezer equipment decrease slightly over 
time. DOE performed price trends sensitivity calculations to examine 
the dependence of the analysis results on different analytical 
assumptions. DOE invites comment on methods to improve its equipment 
price forecasting, as well as any data supporting alternate methods. 
For more details, see section IV.F.1.
21. Refrigerant Charge Maintenance Costs
    DOE received comments on maintenance costs associated with 
refrigerant leakage and refrigerant charge and assumed a certain 
maintenance cost for the refrigeration system. DOE requests that 
interested parties submit data on refrigerant charge maintenance costs. 
See section IV.F.6 for further details.
22. Compliance Date of Standards
    DOE's proposed standards will apply to products that are 
manufactured beginning on the date 3 years after the final rule is 
published unless DOE determines, by rule, that a 3-year period is 
inadequate, in which case DOE may extend the compliance date for that 
standard by an additional 2 years. (42 U.S.C. 6314(f)(4)(B)) DOE 
proposes to provide 3 years for compliance with this standard, but 
seeks comment on whether it should consider a longer compliance date as 
authorized, and, if so, by how much. See section IV.F.9 for details.
23. Base-Case Efficiency Distributions
    To accurately estimate the share of consumers who would likely be 
impacted by a standard at a particular efficiency level, DOE's LCC 
analysis considers the projected distribution of product efficiencies 
that consumers purchase under the base case (i.e., the case without new 
energy efficiency standards). DOE examined the range of standard and 
optional equipment features offered by refrigeration manufacturers and 
estimated that for refrigeration systems, 75 percent of the equipment 
sold under the base case would be at DOE's assumed baseline level--that 
is, the equipment would comply with the existing standards in EPCA, but 
have no additional features that improve efficiency. The remaining 25 
percent of equipment would have features that would increase its 
efficiency to a level commensurate with

[[Page 55886]]

the first design option in each equipment class. For envelope 
components, all base case shipments are assumed to have only a single 
EPCA-compliant efficiency level except for cooler display doors. For 
cooler display doors, shipments in the base case would be a mix of 80 
percent EPCA-compliant equipment and 20 percent higher efficiency 
equipment. For both refrigeration systems and envelope components, DOE 
assumed that the base-case energy efficiency distribution would remain 
constant throughout the forecast period. DOE requests comment on its 
assumptions about base-case efficiency distributions. See sections 
IV.F.10 and IV.G.2 for details.
24. Trial Standard Level Equations
    In this NOPR, DOE proposes standard levels for different classes of 
refrigeration systems. DOE expressed the AWEF for large capacity 
dedicated condensing systems as a single value and expressed the AWEF 
for the small capacity dedicated condensing systems as a linear 
equation normalized to the system gross capacity. DOE calculated a 
single minimum AWEF for each class of multiplex condensing systems. The 
methodology DOE used to develop the AWEF values and equations is 
detailed in appendix 10D of the TSD. DOE requests comment on the AWEF 
equations and the methodology for determining them. In particular, DOE 
asks interested parties to submit data on how the efficiency of typical 
refrigeration systems varies by capacity. Based on comments and 
additional data DOE receives on the NOPR, DOE may consider other 
methods of calculating the minimum AWEF associated with the TSLs for 
each equipment class. See section V.A.2 for details.
25. Proposed Standard
    In this NOPR, DOE proposes TSL 4 as the energy conservation 
standard for equipment covered under this rulemaking. DOE proposes this 
standard because it tentatively believes that it represents the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified, and that the benefits outweigh the burdens. For 
a full description of the benefits and burdens of TSL 4, see section 
V.C.
    We seek comment, information and data on whether other combinations 
of standards for refrigeration units, panels, or doors can improve 
energy efficiency that is technologically feasible and economically 
justified, taking into consideration effects on the manufacturers and 
the end users of walk-in coolers and freezers.
26. Product Attributes
    DOE requests comment on whether there are features or attributes of 
the more energy efficient walk-in coolers and freezers that 
manufacturers would produce to meet the standards in this proposed rule 
that might lessen the utility or performance of these products in 
current uses (i.e., restaurants, food service providers, grocery stores 
and convenience stores). An example of such an effect might be that 
grocers or restaurant operators would change where, how, how much and 
for how long food items would be stored or whether thicker panels would 
detrimentally reduce the refrigerated area of a walk-in making higher 
efficiency panels less desirable. DOE requests comment specifically on 
how any such effects should be weighed in the choice of standards for 
these walk-in coolers and freezers for the final rule.
27. Impact of Amended Standards on Future Shipments
    DOE welcomes stakeholder input and estimates on the effect of 
amended standards on future walk-in cooler and freezer shipments. We 
are seeking information on what factors drive the demand for walk-in 
coolers and freezers and whether those factors are likely to remain 
unchanged in the relevant analytic time period of 30 years. For 
example, a commenter submitted that 70 percent of all restaurants and 
90 percent of all small restaurants fail due to insufficient up-front 
capital. In light of this information, are there better ways and data 
to project future shipments of walk-in coolers and freezers than the 
current method which is based on the number of buildings projected to 
house walk-in coolers and freezers? DOE also welcomes input and data on 
the demand elasticity estimates used in the analysis.
28. Learning Impacts on Price Forecast for Future Shipments
    Currently, DOE projects future prices by subtracting the cost 
reductions associated with learning effects from the cost associated 
with the amended standards. DOE analyzes learning effects using PPI, a 
quality adjusted index of wholesale prices, as a proxy for price of 
commercial refrigerators. DOE is seeking input, and price data that 
could be used in place of PPI. Also DOE is seeking input on the 
magnitude of the price data and the cause of those price changes.
29. Analytic Timeline
    For this rulemaking, DOE analyzed the effects of this proposal 
assuming that the walk-in coolers and freezers would be available to 
purchase starting 2017 until 2047 and includes the useful life of the 
last unit sold, extending the analysis to 2073. DOE also undertook a 
sensitivity analysis using nine rather than 30 years of product 
shipments. The choice of a 30-year period is consistent with the DOE 
analysis for other products and commercial equipment. The choice of a 
9-year period is a proxy for the timeline in EPCA for the review of 
certain energy conservation standards and potential revision of and 
compliance with such revised standards. We are seeking input, 
information and data on whether there are ways to refine the analytic 
timeline further.
    In particular, given that walk-in coolers and freezers are largely 
used by the food service industry, convenience stores and small 
grocers, we are seeking information on whether the turnover rates in 
the food service industry, convenience stores and small grocers affects 
the useful life of walk-in coolers and freezers.
30. Markets for Used Walk-In Coolers and Freezers
    DOE is seeking information on whether there is a significant market 
for used walk-in coolers and freezers. Given the high turnover rate of 
food service industry (e.g., a commenter noted 70 to 90 percent failure 
rates for restaurants), we are seeking to understand whether it is 
reasonable to assume that the useful life of the refrigeration system 
would be 12 years and other components 15 years due to active used 
equipment markets.
31. Small Businesses
    During the Framework and preliminary analysis public meetings, DOE 
received many comments regarding the potential impacts of amended 
energy conservation standards on small business manufacturers of walk-
in coolers and freezers. DOE notes that the small businesses could be 
disproportionately affected by this standard because of the cost of 
testing, potential increase in materials and potential difficulty in 
obtaining financing. DOE seeks comment and, in particular, data, in its 
efforts to quantify the impacts of this rulemaking on small business 
manufacturers.
32. Rebound Effect
    DOE assumed a rebound factor of one, or no effect, because walk-ins 
must cool their contents at all times and it is not possible for 
consumers to operate them more frequently. A rebound effect occurs when 
users operate higher efficiency equipment more frequently and/or for 
longer durations, thus offsetting estimated energy savings. DOE

[[Page 55887]]

seeks comment on this assumption and whether other factors should be 
considered in the rebound effect, such as a decision to buy a larger 
system due to increased lifetime costs savings, or money saved in 
electricity bills with more efficient walk-in coolers and freezers 
being used for other electricity consuming activities.
33. Update to Social Cost of Carbon Values
    DOE solicits comment on the application of the new SCC values used 
to determine the social benefits of CO2 emissions reductions over the 
rulemaking analysis period. The rulemaking analysis period covers from 
2017 to 2046 plus an additional 15 years to account for the lifetime of 
the equipment purchased between 2017 and 2046. In particular, the 
agency solicits comment on the agency's derivation of SCC values after 
2050 where the agency applied the average annual growth rate of the SCC 
estimates in 2040-2050 associated with each of the four sets of values.
34. Cumulative Regulatory Burdens
    The agency seeks input on the cumulative regulatory burden that may 
be imposed on industry either from recently implemented rulemakings for 
this product class or other rulemakings that affect the same industry.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's 
proposed rule.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Imports, Intergovernmental relations, 
Reporting and recordkeeping requirements.

    Issued in Washington, DC, on August 29, 2013.
Mike Carr,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
part 431 of chapter II of title 10, of the Code of Federal Regulations, 
as set forth below:

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 431 continues to read as follows:

    Authority: 42 U.S.C. 6291-6317.

0
2. Section 431.302 is amended by revising the definition for ``Display 
door'' and adding, in alphabetical order, definitions for ``Freight 
door'' and ``Passage door'' to read as follows:

Sec.  431.302  Definitions concerning walk-in coolers and freezers.

* * * * *
    Display door means a door that:
    (1) Is designed for product display; or
    (2) Has 75 percent or more of its surface area composed of glass or 
another transparent material.
* * * * *
    Freight door means a door that is not a display door and is equal 
to or larger than 4 feet wide and 8 feet tall.
* * * * *
    Passage door means a door that is not a freight or display door.
* * * * *
0
3. In Sec.  431.304, revise paragraph (a) to read as follows:

Sec.  431.304  Uniform test method for the measurement of energy 
consumption of walk-in coolers and walk-in freezers.

    (a) Scope. This section provides test procedures for measuring, 
pursuant to EPCA, the energy consumption of walk-in coolers and walk-in 
freezers.
* * * * *
0
4. In Sec.  431.306, revise paragraph (a)(3), and add paragraphs (c), 
(d), (e), and (f) to read as follows:

Sec.  431.306  Energy conservation standards and their effective dates.

    (a) * * *
    (3) Contain wall, ceiling, and door insulation of at least R-25 for 
coolers and R-32 for freezers, except that this paragraph shall not 
apply to:
    (i) Glazed portions of doors not to structural members and
    (ii) A walk-in cooler or walk-in freezer component if the component 
manufacturer has demonstrated to the satisfaction of the Secretary in a 
manner consistent with applicable requirements that the component 
reduces energy consumption at least as much as if such insulation 
requirements of subparagraph (a)(3) were to apply.
    (b) * * *
    (c) Walk-in cooler and freezer panels.
    [GRAPHIC] [TIFF OMITTED] TP11SE13.007
    

[[Page 55888]]

    (d) Walk-in cooler and freezer display doors.

----------------------------------------------------------------------------------------------------------------
                                                                                 Equations for maximum energy
           Class descriptor                            Class                        consumption (kWh/day)*
----------------------------------------------------------------------------------------------------------------
Display Door, Medium Temperature......  DD.M                                 0.049 x Add + 0.39
Display Door, Low Temperature.........  DD.L                                 0.33 x Add + 0.38
----------------------------------------------------------------------------------------------------------------
*Add represents the surface area of the display door.

    (e) Walk-in cooler and freezer non-display doors.

----------------------------------------------------------------------------------------------------------------
                                                                                Equations for maximum energy
         Class descriptor                           Class                          consumption (kWh/day)*
----------------------------------------------------------------------------------------------------------------
Passage Door, Medium Temperature.  PD.M                                    0.0032 x And + 0.22
Passage Door, Low Temperature....  PD.L                                    0.14 x And + 4.0
Freight Door, Medium Temperature.  FD.M                                    0.0073 x And + 0.082
Freight Door, Low Temperature....  FD.L                                    0.11 x And + 5.4
----------------------------------------------------------------------------------------------------------------
* And represents the surface area of the non-display door.

    (f) Walk-in cooler and freezer refrigeration systems.

----------------------------------------------------------------------------------------------------------------
                                                                              Equations for minimum AWEF (Btu/W-
           Class descriptor                            Class                                 h)*
----------------------------------------------------------------------------------------------------------------
Dedicated Condensing, Medium            DC.M.I, h Capacity.
Dedicated Condensing, Medium            DC.M.I, >= 9,000                     6.90
 Temperature, Indoor System, >= 9,000
 Btu/h Capacity.
Dedicated Condensing, Medium            DC.M.O, h Capacity.
Dedicated Condensing, Medium            DC.M.O, >= 9,000                     12.21
 Temperature, Outdoor System, >= 9,000
 Btu/h Capacity.
Dedicated Condensing, Low Temperature,  DC.L.I, h Capacity.
Dedicated Condensing, Low Temperature,  DC.L.I, >= 9,000                     3.63
 Indoor System, >= 9,000 Btu/h
 Capacity.
Dedicated Condensing, Low Temperature,  DC.L.O, h
 Capacity.
Dedicated Condensing, Low Temperature,  DC.L.O, >= 9,000                     6.15
 Outdoor System, >= 9,000 Btu/h
 Capacity.
Multiplex Condensing, Medium            MC.M                                 10.74
 Temperature.
Multiplex Condensing, Low Temperature.  MC.L                                 5.53
----------------------------------------------------------------------------------------------------------------
* Q represents the system gross capacity as calculated by the procedures set forth in AHRI 1250.

[FR Doc. 2013-21530 Filed 9-10-13; 8:45 am]
BILLING CODE 6450-01-P
```