EE-RM/STD-98-440M / 

### November 15, 2000 Memorandum to Docket Subject: Correspondence on Central Air Conditioner Rulemaking Analyses Regarding. Request from ACEEE Background: The Department posted to the public web site the spreadsheet computer programs used in conducting the engineering and economic analyses which provide the basis for the proposed rule for Central Air Conditioners and Heat Pumps. The spreadsheet programs were intended foruse ofthe interested parties to facilitate review ofthe underlying assumptions made bythe Department and, ifso desired, to modify those assumptions and to view the resulting data. Discussion: The American Council for an Energy Efficient Economy (ACEEE) requested assistance from the Department in preparing their comments for the proposed rule. The ACEEE requested that DOE perform Life Cycle Cost (LCC) andNational Energy Savings/Net Present Value (NES/NPV) analyses using the Department's spreadsheet models with input assumptions that differed from those used in the analyses leading to the proposed rule. Attachment 1consists oftwo parts: a) the ACEEE request; and b) the Department's response to the ACEEE request. Attachment 2 isthe November 3, 2000 letter from Ted Rees, President of the Air-Conditioning & Refrigeration Institute (ARI) to Dan Reicher, Assistant Secretary, Energy Efficiency and Renewable Energy commenting on the ACEEE analysis.

Michael E. McCabe



### . -.. =~ .: EE-RM/STD-98-440 

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November 15, 2000 Memorandum to Docket Subject: Correspondence on CentralAir ConditionerRulemaking Analyses Regarding " Request from ACEEE Background: The Departmentposted to the public web site the spreadsheet computerprograms used in conducting the engineering and economic analyses which provide the basis for the proposed rule for Central Air Conditioners and Heat Pumps. The spreadsheetprograms were intended for use ofthe interested parties to facilitate review ofthe underlying assumptions made bythe Department and, ifso desired, to modify those assumptions and to viewthe resulting data. ' Discussion: The American Council for an Energy EfficientEconomy (ACEEE) requested assistance from the Department inpreparing their comments for the proposed rule. The ACEEE requested that DOEperform Life Cycle Cost (LCC) and National Energy SavingslNet Present

- Value (NESINPV) analyses using the Department's spreadsheet models with input assumptions that differed from those used inthe analyses leading to the proposed rule. Attachment 1 consists oftwo parts: a) the ACEEE request; and b) the Department'sresponse to the ACEEE request. Attachment 2 is the November 3,2000 Jetter from Ted Rees, President of the Air-Conditioning 

### & Refrigeration Institute (ARl) to Dan Reicher, Assistant 8ecretary,EnergyEfficiency,;and
.. Renewable Energy commenting on the ACEEE analysis.

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. ,.-..... ';. Michael E. McCabe , .

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### EE-RM/STD-98-44Q4 )7
Attachment 1;part (a)ofletter to docket 

### Efficiency Advocates Request for Alternative Scenarios for DOE CentralAir Conditioner and Heat PumpRulemaking A. Please conduct a revised lifecycle cost-analysis using the following assumptions.

- :- 1.Start with thereverse engineering analysis 2. Increase average marginal air conditioning electricity prices by 1.36 cents/kWh. This figure is based on the differential between summer and annual average wholesale electric prices for four regional power systems in 1999 and 2000 (average differential of 1.86 cents/kWh) minus the summer average marginal retail price difference used in the DOE analysis (-0.5 cents/kWh). Details will be provided in ACEEE's written comments. [Note: we are also considering scenarios with higher (2X) and lower (0.5X) adders so it would be best model this in ways that the adder can be easily changed]. 3.Apply emerging technology cost reduction estimates to SEER 13

- 15 per DOE's analysis on page 4-37 in the TSD. The SEER 14 and 15 numbers are important because they affect theNES, GRIM, and employment analyses. 4. Reduce the manufacturing cost ofall models (baseline and higher efficiency),by- :- 0.84%/year from the base year ofthe analysis data (1998). Over the past five years, Census Bureau Current Industrial Reports data indicates that the real cost ofair conditioners has declined by 1.7% annually. To be conservative, we suggest that DOE

- :--: model annual cost reductions athalfthis level. [Note: we are also considering scenarios. : with higher (2X) and lower (0.5X) annual rates so it would be best model this in ways - : that the rate can be easily changed]. '; ~; : - 

### B. In addition to "A", conduct a lifecycle cost analysis with the following additional change.,
. Adjust the energy savings analysis to show an improvement in SEER as follows:

- Split AC Split HP. Pkgd AC. & Pkgd HP SEER 11 Model as SEER 12.2 Model as SEER 12.5 SEER 12 Model as SEER 12.96 Model as SEER 13.6
. SEER 13 Model as SEER 13.68 Model as SEER 14.7 SEER 14 Model as SEER 14.36 Model as SEER 15.8- These adjustments are based on data in Neal 1998 (copypreviously submitted) on savings with TXVs and data in the TSD Appendix B on the percent ofunits that do not presently

### use TXVs at different SEER levels. Add the cost ofTXVs to the reverse engineering cost estimates to the extent these costs are not already incorporated. 

### C. Review the inputs to the utility analysis and revise the kW savings per unit to reflect a baseline peak demand of2.75 kW (details to be provided in ACEEE's written comments) and peak savings relative to the baseline as follows:..
- :: % Reduction from Baseline
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### Attachment 

### 1;part(a) of letter to docket :,
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### Efficiency Advocates Request for Alternative Scenarios for DOE CentralAirConditioner and HeatPump Rulemaking A. Please conduct a revised lifecycle cost-analysis using the following assumptions. 1. Start withthe reverse engineering analysis 2. Increase average marginal air conditioning electricity prices by 1.36 centslkWh. This figure is based onthe differential between summer and annual average wholesale electric prices for four regional power systems in 1999 and 2000 (average differential of 1.86 centslkWh) minus the summer average marginal retail price difference used inthe DOE analysis (-0.5 centslkWh). Details will be provided in ACEEE's written comments. [Note: we are also considering scenarios with higher (2X) and lower (0.5X) adders so it would be bestmodel this in ways that the adder canbe easily changed]. 3. Apply emerging technology cost reduction estimates to SEER 13

- 15 per DOE's
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. analysis onpage 4-37 inthe TSD. The SEER 14 and 15 numbers are important because'.

- they affect theNES, GRIM, and employment analyses. 4. Reduce the manufacturing cost ofall models (baseline and higher efficiency)

### ,bye0.84%/year from the base year ofthe analysis data (1998). Overthe past five years, Census Bureau Current Industrial Reports data indicates that the real cost ofair
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conditioners has declined by 1.7% annually. To be conservative,**w.e.~ugges~** thatDOE
. model annual cost reductions at halfthis level. [Note: we are also considering**,scenario&',::;",~** with higher (2X) and lower (0.5X) annual rates so 

### itwould be bestmodel thisiIi ways',.**~** :'
...,:: ':',,,' that the rate canbe easily changed].
. ,.""" B. Inaddition to "A", conduct a lifecycle cost analysis with the following additional change
.. Adjustthe energy savings analysis to show an improvement in SEER as follows: SEER 11 SEER 12 SEER 13 SEER 14 SplitAC Split HP, Pkgd AC,& Pkgd HP Model as SEER 12.2 Model as SEER 12.5 Model as SEER 12.96 Model as SEER 13.6 Model as SEER 13.68 Model as SEER 14.7 ' Model as SEER 14.36 Model as SEER 15.8 . ':'-

. '.'. These adjustments are based ondata inNeal 1998 (copy previously subIilitted)pnsavings .,"" with TXVs and data inthe TSD Appendix B onthe percent ofunits that do not preseQ.t}y" ' use TXVs at different SEER levels. Add the cost ofTXVs to the reverse engineering cost estimates to the extentthese costs are not already incorporated.

,C. Review the inputs to the utility analysis and revise the kW savings perunit .to reflect**~** baseline peak demand of2.75 kW (details to be provided 

### in ACEEE's written**comme~ts)and,** peak savings relative to the baseline as follows: ',
.. : :;,'1 ::;(. ,:'

. '-' % Reduction from Baseline ' " , "**t~:;' i'i·=:.::'~**  :'**~.!:~f~**..**~** :."-'._.' .":-" 1 ; .••.-.

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### SEER 11 7% SEER 12 14% SEER 13 20% SEER 14 Examine ARI database to calculate median EER atthis SEER These percent savings are based on the differences in median EER levels shown in Table ' 4.27 ofthe TSD. D. Conduct scenarios for NES, GRIM, and employment using scenarios "A" and "B" described above. In these scenarios include a SEER 14 trial standard. E. Conduct NES runs for the following fouralternative scenarios, using the assumptions from scenario "A" and scenario "B": 1.A SEER 12 standard effective 1/1/05 followed by a SEER 14 standard effective 1/1/10. 2. A SEER 11 standard effective 1/1/04 followed by a SEER 13 standard effective 1/1/07. 3.A SEER 12 standard effective 1/1/04 followed by a SEER 13 standard effective 1/1/07. 4. A SEER 12 standard for the northern halfofthe U.S. and a SEER 13 standard forthe: southern halfofthe U.S. Forpurposes ofthis analysis, define Southto include the : following Census Bureau regions: South Atlantic, East South Central, West South Central, and the southern halfofthe Western region (e.g. including CA, NV, UT, CO, AZ andNM). :

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SEER 11 SEER 12 SEER 13 SEER 14 7% 14% 20% Examine ARI database to calculate median EERatthis SEER These percent savings are based on the differences in median EERlevels shown in Table; 4.27 ofthe TSD. D. Conduct scenarios for NES, GRIM, and employmentusing scenarios "A" and "B" described. above. Inthese scenarios include a SEER 14 trial standard. E. ConductNES runs for the following four alternative scenarios, using the assumptions from scenario "A" and scenario "B": 

### 1. A SEER 12 standard effective 111105 followed by a SEER 14 standard effective 111110. 2. A SEER 11 standard effective 111104 followed by a SEER 13 standard effective 111107. ': 3. A SEER 12 standard effective 111104 followed by a SEER 13 standard effective 

### lIii07; .' ". ': ' 4. A SEER 12 standard for the northern halfofthe U.S. and a SEER 13 standard'for the "'::;':::' ,.. southern halfofthe U.S. Forpurposes ofthis analysis, define Southto include the'..
. ....--, following Census Bureau regions: SouthAtlantic, East South Central, West South . - .. . ".. ' . Central, and the southern halfofthe Western region (e.g. including CA, NV, UT, CO,**~ -_~.**  '7. c andNM). - .

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